By Jennifer Bendery, GalleryWatch.com
Austin, TX –
Citing concerns regarding conflict of interest, personal bankruptcy and legal troubles, Rep. Lon Burnam (D-Fort Worth) made a guest appearance at today's Employees Retirement System of Texas (ERS) Board meeting to request that Bill Ceverha resign immediately and that his service on the board be an agenda item at the next ERS Board meeting.
A week after sending a letter to the ERS Board Chair and Vice Chair calling for Ceverha's resignation, Burnam on Wednesday outlined six reasons why his service as a board member at the $20 billion agency needs to be added to the agenda of the next ERS Board meeting.
First, Ceverha has a conflict of interest with his service as an ERS Board Member and his for-profit lobby practice, said Burnam. In 2003, House Speaker Tom Craddick (R-Midland) appointed Ceverha to the ERS Board, he said, and that same year, Ceverha disclosed to the Texas Ethics Commission that he lobbied for Henry "Bud" Smith. According to Ceverha's testimony during a civil lawsuit involving his role as treasurer for U.S. Rep. Tom DeLay's (R-TX) political action committee, TRMPAC, Ceverha said his work for Smith "has to do with the ability for pension funds to ensure the life of the retirees and produce significant income to the pension fund at the time the retiree dies," said Burnam.
During the 2003 Legislative Session, then-Rep. Kenny Marchant introduced a bill that would have allowed the state to take out life insurance policies on retired state employees without their knowledge, Burnam continued. The bill was brought to Marchant by Smith, Ceverha's lobby client. So that means that in 2003, Ceverha lobbied the Legislature on a financial matter that would have directly impacted ERS, he said. "How is this not a conflict of interest?" asked Burnam. By his own admission, Ceverha acknowledged lobbying for a client "who wanted Texas pension funds to invest in a dead peasant insurance scheme," he said.
Second, Burnam said that Section 815.0031 of the Government Code indicates that a person may not serve as a trustee to a board "if the person is required to register as a lobbyist under Chapter 305 because of the person's activities for compensation on behalf of a business or an association related to the operation of the board." According to documents filed with the Texas Ethics Commission, Ceverha registered as a lobbyist in 2003, 2004, and 2005, said Burnam, which means Ceverha's lobby practice disqualifies him from serving as an ERS Board Member.
Third, Burnam said one of Ceverha's lobby clients is Louis Beecherl, who made a $20,000 contribution to Craddick two months after Craddick appointed Ceverha to the ERS Board. "This is unseemly at best," said the Fort Worth legislator.
Fourth, Burnam said it is simply "not good public policy to have a bankrupt lobbyist managing a $20 billion portfolio." ERS trustees have a "fiduciary duty," he said. "Is it unreasonable to ask Texans to trust their financial futures to a man who has shown himself unable to manage his own fiscal affairs?"
Fifth, a state district judge ruled in a civil case that Ceverha violated Texas' campaign finance and elections laws while acting as treasurer of TRMPAC. The judge issued a $196,000 judgment against Ceverha, said Burnam, which was the first judgment against any single individual regarding the same allegations that resulted in the criminal indictments of DeLay, three of his top lieutenants, TRMPAC and the Texas Association of Business. "That alone should suffice" as a reason for Ceverha's resignation, he said.
Finally, Burnam said "the stack of letters" requesting that Ceverha resign from his board position is growing. Requests for his resignation have come from Rep. Pete Gallego (D-Alpine), a letter from Rep. Jim Dunnam (D-Waco), the Texas AFL-CIO, the Texas State Employees Union and the government watchdog group Texas for Public Justice. In addition, Common Cause last week submitted a request for public information from ERS regarding information about Ceverha's conflicts of interest, said Burnam.
Ceverha should step down "before the credibility of the board is irreparably damaged," Burnam concluded.
Moments later, Ceverha sat down at the front microphone to defend himself. He stated that Burnam "doesn't know me or my family" and that it is "too bad" that Burnam went to the press instead of directly to him to discuss concerns about his past activities.
Ceverha said there are "no conflicts" with his service as an ERS Board Member and as a lobbyist. He said he was a registered lobbyist in early 2003 and, at that time, "knew nothing" about Craddick's plan to appoint him to the ERS Board. By the time he began serving on the board, which was Aug. 26, 2003, Ceverha said he had cut ties to all lobbyists. With regard to claims that he worked with lobbyists with an interest in ERS activities, he said he hopes people would think he has "more integrity than that."
As for personal bankruptcy, Ceverha said he paid $800,000 in legal fees when hit with a civil lawsuit alleging that he engaged in improper campaign contributions while serving as treasurer for TRMPAC. Anyone can file a civil suit for any number of "preposterous reasons," he said, and you can either choose to "ignore it or defend yourself." Ceverha noted that there has been no final judgment in the case. "It's not appropriate to say the judge ruled that I broke the law," he said. The judge "simply awarded money to the plaintiffs."
Ceverha asked that ERS staff and executive director Ann Fuelberg investigate the claims made by Burnam and report back in the next board meeting if there is a conflict of interest related to him serving on the board. Board Chair Carolyn Gallagher said she would ask them to do so.
After his testimony, Ceverha approached Burnam in the back of the room and greeted him with a handshake, which was then followed by heated words between the two. Ceverha asked why Burnam went to the press instead of directly to him to voice his concerns. Burnam said all records point to Ceverha's wrongdoings and that Ceverha, along with Craddick, is "ethically challenged."