When I first stumbled across a campaign contribution from Bain Construction to Steve Ortega while reviewing Ortega’s financial disclosure it stood out to me for three reasons. First, it was because instead of an individual’s name it was a company’s name. Second because it did not have the standard “LLC” of a company that is allowed to give corporate donations to politicians in the State of Texas. Finally, it stood out to me because large contractors almost always outgrow their sole-proprietor status and convert to corporations in order to protect their personal assets. Bain Construction is a significant business concern in the region and does business with both the City of El Paso and the Water Utilities, among others. I was curious as to why they weren’t incorporated.
After doing some research I realized that at best, the Steve Ortega Campaign missed the origin of the campaign contribution and would rectify the situation once they became aware of it, or at worst they knew exactly what was going on and it didn’t care.
I felt that Steve Ortega, as an attorney, knew better than anyone what the laws are in relation to corporate donations, especially after he strongly advocated against the recall petitions filed by Pastor Brown by using the corporate donation doctrine.
When the Steve Ortega Campaign first responded to me they stated that after discussing the particular check with the Texas Ethics Commission and “in accordance with guidance from the Texas Ethics Commission lawyer” they had decided to return the money. The campaign also added that they “had self-reported” themselves to the Ethics Commission.
Great, I thought, that’s the end of that issue. After all, they seemed to have reached the same conclusion as I had about whether the entity is a corporation or not. They had taken action and the matter was now closed.
Imagine my surprise when in my morning’s Facebook inbox I receive another email from the Steve Ortega Campaign where they let me know they have decided to keep the money after all.
I assume, but have no way to verify it, that the emails sent to me are either sent from Steve Ortega himself, or under his authority, so I take them as his official position.
The message stated that the Steve Ortega “team researched the issue further and the Bain Construction” check that they received was from a LLC. Therefore they were keeping the money.
This action raised several questions for me. It was a dead issue and all of sudden it became an issue again.
But first, there are a couple of things that need clarification.
The first is whether in light of the Supreme Court’s ruling in Citizens United v. Federal Election Commission the question of whether corporate donations to campaigns are legal in Texas. My reading, as a non-attorney, of the Texas Ethics Commission clarification of the August 12, 2010 Ethics Advisory Opinion No. 489 it still illegal for corporations to give directly to political candidates.
The second question is whether a Limited Liability Company (LLC) is able to give a political contribution to a candidate. I’ve already covered the complexities of corporate designations so I will limit my commentary to the following.
My research into Bain Construction ended up showing that there seems to be one Bain Construction company, without the corporate designation properly registered in El Paso to conduct business. This company is owned by Bain Enterprises, LLC.
The Steve Ortega Campaign reinforces this when they write the company that gave them the money is a LLC. I also consulted the city records and came across a city contract between the city and Bain Enterprises, LLC dba Bain Construction. DBA, stands for “doing business as” and it ties perfectly with the records at the County.
Without looking at the actual check and relying on the financial disclosure form filed by the Steve Ortega Campaign I can only conclude that the check the campaign accepted was drawn on a check titled “Bain Construction”. I sent a follow up message asking for clarification to the Steve Ortega Campaign at about six this morning. Six hours later I have not received a response, although yesterday’s response was prompt.
I also faxed a request to Bain Construction at about nine in the morning asking for clarification. I do not know if the appropriate person received the request or not. Regardless, three hours later I have not received a response from Scott C. Bain.
Therefore I am working on the assumption that the check is drawn from a bank account owned by Bain Enterprises, LLC doing business as Bain Construction. This would explain why the Steve Ortega Campaign listed the contribution as coming from “Bain Construction” while also being a LLC, as per Ortega’s campaign message letting me know that they would be keeping the check.
So what’s the problem?
As far as I can tell there is only one entity in the State of Texas that is related to Bain Construction and is a LLC. It is Bain Enterprises, LLC. According to the state records, Bain Enterprises, LLC is wholly owned by Bain Construction, Inc., an entity prohibited from contributing to a political campaign, according to my understanding of the Texas Ethics Commission rulings.
I also consulted the Texas Ethics Commission to get a better understanding of this. According to Ethics Advisory Opinion No. 383, dated December 12, 1997 they conclude that “a limited liability company owned in whole or in part by a corporation is subject to the restrictions” against political contributions to candidates.
From all of the information I have been able to compile it appears to me that the Bain Construction contribution of $500 from April 23, 2013 to Steve Ortega violates the prohibition against corporate donations to candidates, such as Steve Ortega.
What I find most interesting is why the about face from the Steve Ortega Campaign?
At first, they were returning the money after consulting an attorney from the Ethics Commission and even went so far as to “self-report” themselves to the Commission. Then, an about face, they claim that further research indicates that they can keep the check after all.
Steve Ortega is a lawyer and there are many lawyers supporting his candidacy. The amount of money, $500, is less than one percent of his total take during the last reporting period. It’s not like they need the $500.
So why the about face?
Speculating, there are many reasons for this. They range from arrogance to a cover up.
If my assumptions are correct then returning the money is problematic for the Steve Ortega Campaign. My understanding of the legal process is that a legal violation cannot be cured by reversing the action. Take for example, if someone steals an Apple. If they then return it was it illegal to begin with? The violation has occurred even if the individual returns the Apple uneaten.
In this case the penalties for accepting a corporate contribution are considered a third-degree felony and other candidates can sue and demand restitution from the Steve Ortega Campaign for twice the amount of the contribution plus other penalties. And, not only is Steve Ortega subject to the possible penalties but also are Scott C. Bain, the owner of Bain Construction, and anyone else that helped Steve Ortega manage his political contributions.
Could this be the reason for the about face?
Finally, as always, our local media is nowhere to be found on this issue, even though it is important to the community. In the case of the El Paso Times, if this had been an issue of any other candidate it would have been front-page news yesterday and today.