In an update regarding the sworn complaint filed in February 2015 against then-Austin councilmember Don Zimmerman, Najvar Law Firm issued the following press release today:
Don Zimmerman Exonerated as TEC Drops Inquiry Based on 2015 Complaint Filed by Political Opponent
AUSTIN, TEX.—The Texas Ethics Commission (TEC) has now resolved all enforcement efforts related to Zimmerman’s 2014 payment to his wife for campaign work without any finding that a violation occurred and without any fine.
Soon after Zimmerman took his seat on the Council, Bill Aleshire, the former Democratic Travis County Judge, filed a complaint with the TEC alleging that Zimmerman had paid his wife $2,000 “from political contributions” for campaign work in violation of the Election Code. The relevant statute provides that a candidate “may not knowingly make…a payment from a political contribution” to the candidate’s spouse or dependent child “if the payment is made for personal services rendered by…the spouse or dependent child.” Tex. Elec. Code § 253.041(a). Zimmerman has confirmed that his wife Jennifer worked tirelessly for the campaign, helping with fundraising, proofreading, blockwalking and organizing volunteers. He estimated the value of her work at a minimum of $10,000, and he was embarrassed to pay her only $2,000.
The TEC initially demanded a $5,000 fine to settle the complaint. However, in March, Najvar Law Firm (NLF) submitted a legal memorandum explaining why the TEC had no authority to find a violation in these circumstances or issue a fine of any amount. NLF explained that the TEC’s analysis was faulty because it relied on one particular accounting method (“first in-first out” or FIFO), but ignored the fact that, under “last in-first out” (LIFO) accounting, Zimmerman’s campaign always retained sufficient funds from his initial deposit of personal funds to cover the payment to Jennifer. There is no requirement in any Texas law or TEC rule governing the tracing of funds within a campaign account, and therefore there was no basis for the TEC to retroactively impose one particular method to find a violation.
Moreover, even if there were no personal funds left in the account under any accounting method, NLF explained that the payment still would be permissible because Zimmerman was entitled to $20,000 in reimbursement on his loans to the campaign. In effect, Zimmerman had a claim on the entire amount in the campaign account due to his entitlement to repayment for his loans. He could have written a check directly to “Don Zimmerman” for the entire balance in the account. There can be no basis for finding that a candidate “knowingly” made a payment “from political contributions” where the candidate is owed reimbursement from the account. NLF pointed out that the TEC had endorsed this very principle in prior advisory opinions, but was ignoring it here.
“In the end, the TEC did the right thing, recognizing that there was no basis in the law to support finding a violation in these circumstances,” said NLF principal attorney Jerad Najvar. “But we only got to this point because we pushed back and explained the law to the TEC. That shouldn’t be necessary. The TEC should be mindful that not every candidate is able to retain a campaign finance specialist to defend them, and the agency has a responsibility to proceed with more caution, especially since everything it does impacts fundamental rights of speech and association.”
Jerad Najvar practices political and appellate law and is founder of the Najvar Law Firm, PLLC in Houston. He served as co-counsel to Shaun McCutcheon in McCutcheon v. FEC, in which the U.S. Supreme Court struck down the federal aggregate contribution limits, and lead counsel in Catholic Leadership Coalition v. Reisman, in which the Fifth Circuit Court of Appeals struck down a waiting period on Texas PACs.