Texas housing agency resists reforms as conflict of interest questions pile up

Three months after a Dallas Morning News investigation found that a Texas housing board member voted for deals that benefited his law firm, the agency has not taken new steps to guard against conflicts of interest.

Dallas lawyer Paul Braden stepped down from the board in April, two days after The News first asked him about his votes on 13 low-income housing projects. His employer, Norton Rose Fulbright, earned $2 million in legal fees on the deals. Gov. Greg Abbott requested that Braden resign, his spokeswoman said.

New records show Braden voted for eight other projects that brought the firm an additional $1.8 million.

Norton Rose Fulbright and Braden declined an interview request and said he had received assurances from top officials at the Texas Department of Housing and Community Affairs that there was no conflict.

The agency’s executive director, Bobby Wilkinson, and other housing officials declined to answer questions about Braden’s most recent votes. They previously said Braden had done nothing unethical.

The agency’s decision to not tighten conflict of interest rules comes after scandals going back decades. In the late 1990s, a board member was charged with using her position to steer deals to developers who were her business partners. After a jury trial in 2000, she was sentenced to seven years in federal prison. Housing advocates and state legislators have repeatedly rewritten laws to bolster the agency’s ethics rules.

John Henneberger, a housing advocate based in Austin, said no board member should benefit financially from their decisions on the board.

“It’s a little discouraging to hear the agency say they don’t see that as a problem,” he said.

Votes, then fees

The housing agency approves as many as 150 projects each year to build or renovate apartments for low-income households. Many of those deals depend on funds from bonds awarded to cities or counties through a state lottery system.

If the agency doesn’t approve a particular proposal, the bond award typically expires. That scenario can kill or delay projects because there’s no guarantee the city or county will get new bonds.

Braden’s firm did legal work on bonds for cities and counties around the state, including projects he voted for as a housing board member, records show.

Most of those passed without any opposition or questions. But Braden’s vote was critical for five of the deals, because without him present, the board wouldn’t have had enough members to hold a vote.

One deal in 2018 generated lengthy debate on whether to grant new loan terms for a developer who wanted to build senior apartments in Fort Worth. Braden offered a solution and the deal passed. Braden’s firm earned $225,000.

The News’ first story detailed Braden’s votes on deals backed with a different set of bonds. The agency said it didn’t matter if Braden voted against one of those deals, because his firm had a contract to work on those bonds no matter which project they were used for. If one project died, the firm would still earn fees on the next deal.

State law requires board members to disclose and abstain from voting on any “personal or private interest” in matters before the board. The Texas Ethics Commission found in 1996 that the law applied to a housing board member who stood to win a construction contract if the board approved a deal.

Along with fees for projects that didn’t require a board vote, Norton Rose Fulbright has earned a total of at least $5.4 million from projects since Braden joined the board in 2017.

Norton Rose Fulbright and the agency said Braden stepped down to avoid even the appearance of a conflict of interest.