Texas housing agency resists reforms as conflict of interest issues 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 took no further steps to guard against conflicts of interest.

Dallas attorney Paul Braden resigned from the board in April, two days after The news first asked him about his votes on 13 social housing projects. His employer, Norton Rose Fulbright, earned $2 million in legal fees on the transactions. Gov. Greg Abbott has asked Braden to step down, his spokeswoman said.

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

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

Agency executive director Bobby Wilkinson and other housing officials declined to answer questions about Braden’s latest votes. They previously said Braden had done nothing unethical.

Executive Director Bobby Wilkinson gives a report during a Texas Department of Housing and Community Affairs meeting at the John H. Reagan Building in Austin, Texas on Thursday, March 10, 2022.(Elias Valverde II / Personal photographer)

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

John Henneberger, an Austin-based housing advocate, said no council member should benefit financially from their decisions on council.

“It’s kind of disheartening to hear the agency say they don’t see this as a problem,” he said.

Votes, then fees

The Housing Authority approves up to 150 flat construction or renovation projects for low-income households each year. Many of these transactions depend on funds from bonds awarded to cities or counties through a state lottery system.

If the agency does not approve a particular proposal, the bond award generally expires. This scenario can kill or delay projects because there is no guarantee that the city or county will get new bonds.

Braden’s firm has done bond legal work for cities and counties across the state, including projects he voted on as a housing board member, records show.

Former board member Paul Braden listens as a report is given during a Texas department review...
Former board member Paul Braden listens as a report is presented during a meeting of the Texas Department of Housing and Community Affairs at the John H. Reagan Building in Austin, Texas on Thursday March 10, 2022.(Elias Valverde II / Personal photographer)

Most of them passed without any opposition or question. But Braden’s vote was critical for five of the deals, because without his presence, the board wouldn’t have had enough members to hold a vote.

A deal in 2018 sparked a long debate over whether to grant new loan terms to a developer who wanted to build seniors’ apartments in Fort Worth. Braden proposed a solution and the deal passed. Braden’s business made $225,000.

The news‘ The first story detailed Braden’s votes on deals backed by a different set of bonds. The agency said it didn’t matter if Braden voted against any of those deals because his company had a contract to work on those bonds, regardless of what project they were used for. If a project died, the company would still earn fees on the next transaction.

State law requires board members to disclose and refrain 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 ran to win a construction contract if the board approved a deal.

In addition to fees for projects that did not require a board vote, Norton Rose Fulbright has earned a total of at least $5.4 million from projects since Braden joined the board. administration in 2017.

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

Writer Shreya Vuttaluru contributed to this report.

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