As COVID spiked in Texas, lawmakers escaped to Maui for corporate-backed confab on financial system

AUSTIN — At least two state lawmakers decamped to Hawaii the week before Thanksgiving for a conference funded by corporate sponsors, just as public health officials urged Americans to call off or downsize their holiday gatherings due to the coronavirus.

Rep. Lyle Larson of San Antonio and Sen. Larry Taylor of Friendswood, both Republicans, confirmed to The Dallas Morning News that they attended the meeting at a luxury hotel in Maui the week of Nov. 16. Hosted by the Independent Voter Project, a San Diego-based nonprofit, this year’s conference reportedly brought together at least 50 people, including about 20 state legislators from California and Texas, to discuss ways to restart the economy during the pandemic.

Ethics watchdogs have long criticized the four-day confab as an industry backed tropical getaway masquerading as a policy conference. This year, organizers were hit with even harsher criticism for not cancelling the conference amid the surge in COVID-19 cases.

And now, Independent Voter Project chairman Dan Howle and the lawmakers who attended his event in the recent past have a different problem on their hands.

After scouring years of financial documents, The News found that potentially tens of thousands of dollars in expenses the Independent Voter Project covered for Texas legislators to attend its last three conferences were never disclosed. Critics of Texas ethics laws say this lapse reveals how loosely the state’s rules are followed and proves they should be tightened.

Howle, who defended holding the conference during the pandemic, said he told legislators they would have to disclose expenses paid by his organization. But at least five lawmakers who attended in recent years dispute this claim, alleging Howle is blaming them to cover his mistake. Failing to disclose these expenses is a violation of state ethics laws, which require either the host or the public official to report the benefit.

Larson, who has attended the conference for the last three years, is among those now amending the ethics filings in an effort to avoid fines. His staff said he had no idea about the disclosure lapse before The News reached out.

“If we had been on notice [the Independent Voter Project was] no longer reporting expenses, we would have reported it properly,” Lynlie Wallace, Larson’s chief of staff, said in a text message. “He will not attend any conference or event held by this group in the future.”

The Independent Voter Project’s annual conference has long been a favorite target of ethics watchdogs in California.

Held for more than a decade, the invitation-only event bills itself as a way for lawmakers from different states to swap ideas on issues like energy and education policy. His ultimate goal, Howle told The Sacramento Bee in 2015, is to help fix the “horrible” legislative process where sound bites prevail over true learning.

Founded in 2006, the Independent Voter Project says its purpose is to “re-engage nonpartisan voters and promote nonpartisan election reforms.” The group authored the California ballot initiative that instituted a system in which the top two candidates, regardless of party, secure a spot in the general election.

As a 501(c)4, the Independent Voter Project can be politically active as long as that’s not its primary purpose. The IRS does not require these nonprofits to disclose their donors. The group reported $1.1 million in contributions and grants in 2018, federal tax filings show.

In past years, the Independent Voter Project’s industry and corporate sponsors included Dallas-based AT&T, Pepsico and Walmart. Howle is a former director of state government relations for pharmaceutical giant Eli Lilly and Company, another of the group’s backers.

Howle defended his decision to hold the conference despite the pandemic, telling Fox News the group relies on the donations it receives there. Industry reps and corporate sponsors have paid up to $10,000 each to attend the event in the past, although Howle reduced the fees this year, The San Francisco Chronicle reported.

When enjoying the shade or fruit be thankful for the one that planted the tree.

Be safe and be thankful for who and what you have in your life this week.

— Lyle Larson (@RepLyleLarson) November 21, 2020

While most of the legislators who are invited to the conference hail from California, at least 15 Texas legislators from both parties have attended over the years.

Usually the nonprofit foots the hotel bill at the beachfront Fairmont Kea Lani, where rooms run upwards of $600 a night, and sometimes also picks up airfare and other costs. Many legislators have brought their spouses, whose expenses are also often covered.

Between 2011 and 2017, the Independent Voter project spent nearly $80,000 to bring these legislators and their families to Hawaii, according to lobbying disclosures filed with the Texas Ethics Commission. Some legislators paid for part or all of their expenses using campaign contributions.

“It’s a substantive program,” said Rep. Travis Clardy, a Nacogdoches Republican who attended in 2016. Clardy said learning how Californians approached certain policies reinforced for him that Texas is “on the right course.”

Rep. Poncho Nevarez, an Eagle Pass Democrat who went in 2017, said it encouraged a bipartisan exchange of ideas.

But ethics watchdogs have long criticized the conference, calling it a junket that hands lobbyists a captive audience of state lawmakers.

Howle said in 2019 that lobbying is prohibited at the event, a claim its critics call laughable.

“That seems completely unenforceable,” said Anthony Gutierrez, executive director of Common Cause Texas. If corporate interests can’t talk shop, he asked, “Why are you going at all?”

Prior to 2018, the Independent Voter Project had a registered lobbyist that disclosed who went and how much was spent on dining, airfare and lodging. In 2016 and 2017 alone, the group doled out more than $37,000 to bring seven Texas lawmakers and their family to the event.

But the group has not disclosed these details since 2018.

Under state ethics rules, lawmakers can accept free lodging and transportation to attend an event such as a fact finding mission or a policy conference if they are speakers. But those expenses must be disclosed, either by the lawmaker as a contribution or honorarium, or by a lobbyist representing the organization who footed the cost.

Lawmakers who file incomplete reports can be fined and entities or individuals who lobby state officials without being properly registered can be fined or even charged with a misdemeanor.

Howle said he regularly conducted business in Texas prior to 2018 as an employee of Eli Lilly and the decision to engage a lobbyist to represent the Independent Voter Project was made “out of an abundance of caution and full transparency.” The group has not had a lobbyist since 2018, Howle added, because it did not have “any business or legislative activity” in Texas in that time.

Calls to its former lobbyist, who also represents Eli Lilly in Texas, were not returned. Howle declined to provide a list of the lawmakers who were invited to the last three conferences.

The News identified at least five legislators who attended these meetings. In addition to Larson and Taylor, who attended this year, Sen. Carol Alvarado (D-Houston), Rep. Oscar Longoria (D-Mission) and Rep. Dade Phelan, the presumptive speaker of the Texas House, attended in recent years.

Alvarado, Longoria and Phelan (R-Beaumont) did not attend this year.

Rep. Lyle Larson, R-San Antonio, shown here sitting in the Texas House, attended a conference in Maui the week before Thanksgiving as coronavirus cases surged across Texas.

Howle said that beginning in 2018, the Independent Voter Project sent expense letters to lawmakers’ staff detailing what conference costs were covered by the group. He provided a blank copy of one such letter, which said, “The Independent Voter Project does not report these expenses; it is the sole responsibility of the Legislator.”

But the lawmakers who The News identified as having attended since 2018 said they had no record of ever receiving the letters. In fact, Larson and Taylor said they received their 2018 and 2019 expense letters just yesterday.

Additional lawmakers may have attended since 2018 who The News was unable to identify through existing disclosures.

All five said they will amend their annual financial statements to correct the oversight. They have two weeks from discovering an unintentional omission to do so and avoid penalties, unless a complaint is filed against them.

“Conference organizers failed to disclose that they had ceased reporting expenses of the event,” Alvarado said in a statement, calling them “negligent in their duties” and saying she has “taken actions to clean up their mistake by amending my report to include this event in order to ensure that transparency for the public is achieved.”

Enrique Marquez, Phelan’s director of communications, said conference organizers failed to disclose the expenses as they had promised. Phelan has already amended his reports.

Lawmakers can also use political contributions to attend conferences like this. Before The News reached Larson, he had already disclosed he used campaign funds this year to pay for his flight on United Airlines. The Independent Voter Project paid for the hotel, he said.

Like Larson, Longoria and Phelan said they won’t attend the Hawaii conference again. Howle brushed off their frustration.

“IVP has no problem if legislators from Texas no longer wish to attend,” he told The News.

It’s unclear whether the Texas Ethics Commission would determine that the group needs a lobbyist. The watchdog agency, which issues fines and other sanctions for those who violate state disclosure rules, rarely weighs in on specific cases unless a complaint is filed.

State rules require any individual or group that spends more than $780 per quarter on direct communications to influence legislation to register as a lobbyist. This includes anything intended to generate goodwill for the purpose of influencing future lawmaking.

Gutierrez from Common Cause Texas said this case underscores the problems in state law.

“It’s episodes like this that highlight why stronger ethics regulations and enforcement procedures are necessary,” he said. “There’s no entity that actually has the teeth to enforce these laws. There’s no self auditing process in most cases.”

“We’re just playing in the Wild West,” Gutierrez added.

Before the disagreement with these lawmakers, the Independent Voter Project was already criticized for not cancelling the meeting due to the pandemic.

Larson and Taylor said the conference got so much bad press this year, especially from California outlets, because The San Francisco Chronicle revealed just days earlier that California Gov. Gavin Newsom had attended a large dinner party that flouted his state’s safety guidelines. Newsom also urged residents not to travel out of state.

On Nov. 19, the day the conference ended, the Centers for Disease Control urged Americans to avoid traveling for Thanksgiving. Many cancelled their plans, but the holiday week was still the busiest for many airlines since the pandemic began.

In Texas, the coronavirus was so widespread by the end of the month that the White House Coronavirus Task Force warned the state is “in a very dangerous place.” But Texas Gov. Greg Abbott has not instituted similar restrictions on out of state travel, and resisted closing or rolling back business reopenings even further as virus cases surge.

Howle said he believed the event could be held safely under Hawaii’s rules, which require visitors to test negative for COVID-19 within 72 hours of arrival on the islands. The conference was held mostly indoors, according to multiple attendees, but everyone was made to wear masks and follow social distancing rules.

Howle told Politico: “At some point, you have to figure out a way for people to get back some semblance of a normal life.”

Sen. Larry Taylor, R-Friendswood, attended a conference in Maui the week before Thanksgiving as coronavirus cases surged across Texas.Sen. Larry Taylor, R-Friendswood, attended a conference in Maui the week before Thanksgiving as coronavirus cases surged across Texas.(Eric Gay / The Associated Press)

Taylor said he felt safe attending this year’s conference given the precautions. Indoor meetings were at a third of their usual capacity, he said, and attendees were required to wear a mask even while on the beach.

“As far as COVID goes, it just wasn’t a problem,” Taylor told The News.

Larson was less sure about his decision to go. In March, he was one of the few Republicans to publicly call on Abbott to institute a statewide shelter in place order and he has repeatedly urged his constituents to stay home. On Nov. 13, two days before Larson left for Hawaii, he again warned his social media followers to take the virus seriously.

Larson told The News he debated cancelling his trip but he ultimately decided to attend after pressure from conference organizers: “I changed my flight three times because I didn’t think it was a good idea.”

“I’ve been very vigilant as far as wearing masks and not socializing,” he added. “I don’t take the COVID issue lightly.”

Howle encouraged conference attendees to get tested upon their return from Hawaii, according to The Sacramento Bee.

But neither Larson nor Taylor were tested by the time The News spoke with them nearly a week after the conference. Both men said they felt fine.

“I do not think I picked it up in Hawaii at all,” he said.

Even after the disclosure dispute, Taylor is undecided about whether he will boycott the conference in future. If he’s going to get the virus, he said he would prefer to catch it now instead of after lawmakers convene for their biennial meeting in January so he isn’t forced to quarantine amid important debates.

“Personally, it would be nice to actually have COVID before we get to session. It’d be better for me,” he said. “But that hasn’t happened, unfortunately.”