Original Petition Request For Declatory Judgment and Request For Equitable Relief

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Plaintiffs Original Petition

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CAUSE NO. _____________
EMPOWER TEXANS, INC., AND IN THE DISTRICT COURT
MICHAEL QUINN SULLIVAN,
Plaintiffs,
v. OF TRAVIS COUNTY, TEXAS
THE STATE OF TEXAS ETHICS

COMMISSION, AND NATALIA LUNA
ASHLEY, IN HER CAPACITY AS
INTERIM EXECUTIVE DIRECTOR OF
THE TEXAS ETHICS COMMISSION,
Defendants. ____ JUDICIAL DISTRICT
PLAINTIFFS ORIGINAL PETITION, REQUEST FOR DECLARATORY JUDGMENT,
AND REQUEST FOR EQUITABLE RELIEF
TO THE HONORABLE STATE DISTRICT COURT JUDGE:
COME NOW Plaintiffs Empower Texans, Inc. (EMPOWER) and Michael Quinn
Sullivan (Sullivan) and file Plaintiffs Original Petition, Request for Declaratory Judgment,
and request for Equitable Relief, and complain as follows:
A. Discovery-Control Plan
1. Plaintiff intends to conduct discovery under Level 3 of Texas Rule of Civil
Procedure 190.4 because the matter before this Court is legally complex.
B. Parties
2. Plaintiff Empower Texans, Inc. is a Texas Nonprofit Corporation with offices
located in Travis County, Texas.
3. Plaintiff Michael Quinn Sullivan is an individual who resides in Travis County,
Texas. He is a member of the Board of Directors and President of EMPOWER.
4. Defendant The State of Texas Ethics Commission (TEC) is the governmental
agency charged with administering and enforcing the provisions of the Texas Election Code and
4/30/2014 6:09:50 PM
Amalia Rodriguez-Mendoza
District Clerk
Travis County
D-1-GN-14-001252
D-1-GN-14-001252
53RD
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Texas Government Code at issue in this case, including initiating civil enforcement actions or
referring matters to the appropriate prosecuting attorney for criminal prosecution. The Texas
Ethics Commission is located at 201 East 14th Street, 10th Floor, Austin, Texas 78701.
5. Defendant Natalia Luna Ashley (Ashley) is the Interim Executive Director of
the Texas Ethics Commission. She is sued in her official capacity. Ashley may be served at the
Texas Ethics Commission at 201 East 14th Street, 10th Floor, Austin, Texas 78701.
C. Jurisdiction and Venue
6. This Court has jurisdiction over the claims arising under the Texas Government
Code. TEX. GOVT CODE ANN. 571.137(d)(West) (A respondent has the right to quash a
subpoena as provided by law.).
7. Venue is proper in this Court because defendants Natalia Luna Ashley and TEC
are located in this County.
8. Additionally, a substantial part of the events giving rise to this claim occurred in
this County.
D. Facts
9. EMPOWER was incorporated on or about April 14, 2006. See Exhibit 1. On
November 7, 2006, EMPOWER began doing business using the name Texans for Fiscal
Responsibilitythroughout the State of Texas. See Exhibit 2. On January 6, 2007, EMPOWER
was granted, pursuant to its application to the Internal Revenue Service, tax exempt status under
Internal Revenue Code 501(c)(4). See Exhibit 3.
10. From its inception, EMPOWER has been a direct advocacy entity that has as its
primary purpose the informing of voters, taxpayers and elected officials about policy solutions
that are consistent with the principles of individual liberty and free markets, while working to
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build support for those policies among key constituencies (voters) to create and sustain a system
of strong fiscal stewardship within all levels of Texas government, ensuring the greatest amounts
of economic and personal liberty, and promoting public policies that provide individuals with the
freedom to use their strengths and talents in pursuit of greater opportunities. EMPOWER
accomplishes it goal by direct communications with voters through direct mail, email, and social
media. See Exhibit 4 (Texas Monthly, Jan 2013). It also holds numerous town hall meetings,
including several involving leading fiscal conservatives such as Governor Perry, Attorney
General Abbott, and members of the Texas Legislature.
11. EMPOWER provides high-valued and very important endorsements of certain
Texas state-level candidates that identify with, follow and promote a conservative fiscal agenda.
EMPOWER also recognizes those public officials who emulate this in their public service by
bestowing fiscal accountability awards.
12. EMPOWER distributes weekly email newsletters to over 50,000 addresses,
chiefly outlining government policy that has economic implications at the state level.
13. Additionally, Plaintiff Sullivan, EMPOWERs President, is frequently quoted in
print media sources in major Texas markets such as the Houston Chronicle, Dallas Morning
News and the Austin American Statesman.
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Sullivan is a weekly guest on radio programs
throughout the State of Texas and the Empower Texans Facebook site has over 68,000 fans on
its Facebook site (the Facebook site uses the Texans for Fiscal Responsibility name), has posted
over 170 YouTube videos that have thousands upon thousands of views, and over 5,000 Twitter
followers (the Twitter handle is @EmpowerTexans). Furthermore, Plaintiff EMPOWERs staff
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For example, a Westlaw Texas newspaper and magazine search of the phrase Texans for Fiscal
Responsibility results in over 210 articles that mention the organization, its purpose from almost all of the major
newspapers in Texas to such sources as the New York Times and U.S. News & World Reports.
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has been invited to give hundreds of speeches before groups and organizations around the State
of Texas. It is through these forms of media that EMPOWER communicates regularly with its
members.
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14. Sullivan, a current journalist and former newspaper reporter, was employed as
President of EMPOWER beginning in April 2006, a position that he currently holds. Sullivan is
also a member of the Board of Directors of EMPOWER.
15. During the 2007 Regular Session of the Texas Legislature, EMPOWER engaged
in direct mailing efforts to voters calling on Legislators to return a tax surplus that was in excess
of $13 billion and worked to uphold reforms to the Childrens Health Insurance Program. At the
conclusion of the 2007 Legislature, EMPOWER mailed a scorecard to voters grading legislators
on their Fiscal Responsibility Index, a compilation of factors based upon bill authorship and each
Legislators vote on legislation, to registered voters throughout Texas. Scorecarding is an
important accountability measure that EMPOWER continues to this day.
16. Following the 2007 Texas Legislative Session, Sullivan formed Empower Texans
PAC, a Texas general purpose political committee. See Exhibit 5. This PAC, which is a
separate and distinct legal entity not under the direct operation or control of EMPOWER, has
periodically received and disclosed contributions from EMPOWER for administrative and
overhead expenses.
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Furthermore, Empower Texans PAC continues operations today and
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Members of EMPOWER are those individuals who have filled out a form providing their name and
personal information such as phone numbers and physical address, and their email addresses. Effectively, these
members are subscribers.
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A corporation is generally prohibited from making a contributing to a general purpose political committee.
Tex. Elec. Code 253.094. However, as an exception to the prohibition, a corporation is allowed to contribute to a
general purpose committee for statutorily authorized overhead type expenses associated with operating a committee.
Tex. Elec. Code 253.100.
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complies with all state and federal campaign finance regulations.
4
The PAC discloses all of its
donors and expenditures as well as candidates and measures it supports or opposes.
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Despite
constant protestations of Plaintiffs, Defendant TEC regularly confuses the disclosed activities of
Empower Texans PAC with those of EMPOWER.
17. In January 2010 the U.S. Supreme Court issued an opinion in Citizens United v.
Federal Election Comn, 558 U.S. 310 (2010) which had the effect of invalidating Texas
longstanding ban against corporate electioneering activity.
18. After Citizens United, the 82nd Legislature of Texas passed House Bill 2359 to
amend the Election Code to incorporate the TECs advisory opinion regarding changes to the
constitutionality of the code. H.B. No. 2359, 82nd Leg. (Tex. 2011). In relevant part, the bill
repealed all sections of the code prohibiting a single corporation from making direct campaign
expenditures.
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19. Beginning in 2012, Plaintiff EMPOWER, through its board of directors, mindful
of the major purpose limitations on it as a 501(c)(4) organization, chose to authorize the
corporate funds to be used for independent expenditures for political activity. See Exhibit 6.
The corporation discloses all of its expenditures as well as candidates and measures it supports or
opposes.
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No sworn complaints have been filed against Empower Texans PAC with the Texas Ethics Commission.
5
See http://www.ethics.state.tx.us/php/filer.php?acct=00061927GPAC on the Texas Ethics Commission
website for a complete list of all filings made by Empower Texans PAC.
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The Texas Ethics Commission in its Advisory Opinion number 489 (2010) states that the phrase
independent expenditure is interchangeable with the phrase direct campaign expenditure in Texas law for the
purpose of determining the effects of Citizens United v. FEC, 558 US 310 (2010) upon Title 15 of the Texas
Election Code. This oddity must be kept in mind since direct campaign expenditure has a different meaning in
federal jurisprudence.
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20. On April 20, 2012, sworn complaints SC-3120485 and SC-3120486 were filed by
State Representatives Jim Keffer and Vicki Truitt with the TEC against EMPOWER,
(EMPOWER Complaints) and included allegations relating to the alleged failure to report
direct campaign expenditures by a person not acting in concert with another person, and, in the
alternative, the alleged failure to file a campaign treasurer appointment and campaign finance
reports by a general-purpose committee. The complaints, identically filled out by an agent of
Representative Keffer, were based only upon information and belief. See Exhibit 7 and 8,
respectively.
21. Also on April 20, 2012, sworn complaints SC-3120487 and SC-3120488, were
filed by State Representatives Jim Keffer and Vicki Truitt with Defendant TEC against Plaintiff
Michael Quinn Sullivan, in his individual capacity, (Sullivan Complaints) and included
allegations that Mr. Sullivan failed to register as lobbyist for calendar years 2010 and 2011 as
required by TEX. GOVT CODE 305.003.
22. Similar to the EMPOWER Complaints, those complaints were based upon
informationandbelief. See Exhibit 9 and 10, respectively.
23. On or about June 5, 2012, Plaintiffs filed verified denials of all the allegations
made by Representatives Jim Keffer and Vicki Truitt. In those verified denials, Plaintiffs
requested that the TEC conduct a preliminary review hearing and subpoena Representatives Jim
Keffer and Vicki Truitt to appear at the preliminary review hearing to give testimony.
24. On April 8, 2013, Defendant TEC, despite not having voted to expand their
investigation beyond the original complaints, propounded eight (8) pages of questions on
Plaintiff Michael Quinn Sullivan. See Exhibit 11.
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25. On April 23, 2013, Defendant TEC further propounded four questions on
EMPOWER, including a request for the name and address of each person that made a
contribution to [Empower Texans, Inc.] during the period from January 1, 2011, to December 31,
2011[and]the date and amount of the contribution. See Exhibit 12.
26. On May 10, 2013, Plaintiffs responded to the questions propounded by TEC and,
along with interposing objections, asserted their statutory and constitutional rights. See Exhibits
13 and 14.
27. On June 26, 2013, Defendant TEC delivered a Public Inspection Request to
Plaintiff EMPOWER requesting copies of the application for tax-exempt status filed with the
Internal Revenue Service along with the annual information returns for 2010, 2011, and 2012.
See Exhibit 15.
28. On July 2, 2013, Plaintiff Michael Quinn Sullivan received two subpoenas to
appear and give testimony at a preliminary review hearing on August 8, 2013 for all four (4)
complaints.
29. On July 25, 2013, EMPOWER responded to the Public Inspection Request of
TEC.
30. On August 8, 2013, TEC conducted a preliminary hearing, presided over by
Defendant Jim Clancy, on both the EMPOWER and Sullivan Complaints. In compliance with
the TECs subpoena, Sullivan, represented by counsel, appeared at the preliminary review
hearing.
31. On August 21, 2013, TEC issued a subpoena in the Sullivan Complaints to
Plaintiff Michael Quinn for production of documents. See Exhibit 16.
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32. On September 9, 2013, Plaintiffs filed Objections and Responses to Defendant
TECs subpoenas of documents.
33. On October 29, 2013, TEC conducted a second preliminary hearing on the
Sullivan Complaints wherein they subpoenaed Representative Jim Keffer, Vicki Truitt, Steve
Bresnen, and Plaintiffs to appear and give testimony.
34. October 30, 2013, Defendant TEC conducted a second preliminary review hearing
on the EMPOWER Complaints wherein they subpoenaed Representative Jim Keffer, Vicki
Truitt, Steve Bresnen, and Plaintiffs to appear and give testimony.
35. On November 4, 2013, Defendant TEC met and voted to propose a settlement
only of the Sullivan Complaints for a $500.00 civil penalty for 2010 and 2011, each, and the
retroactive registering and filing the required monthly lobby disclosures for each month of 2010
and 2011.
36. On November 13, 2013, Sullivan rejected the settlement offer of TEC because
accepting the TECs settlement offer would require Sullivan to: 1) acquiesce in the position of
TEC that his activities constituted lobbying; 2) agree that the state statutory definition of
lobbying is constitutionally narrow; 3) unconstitutionally require him to pay the state a lobby fee
of $750 before he communicates with public officials; and 4) subject him to possible criminal
prosecution.
37. On January 28, 2014, the TEC issued a Notice of Formal Hearing on the
EMPOWER Complaints citing that there is insufficient credible evidence of violations of
laws administered and enforced by the commission. Additionally, TEC issued a Notice of
Formal Hearing on the Sullivan Complaints to be heard at the same time.
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38. On February 12, 2014 a Pre-Hearing Conference on both the EMPOWER and
Sullivan Complaints was held by TEC. Plaintiffs participated in the conference and objected to
the lack of procedural rules governing the process and infringement of Plaintiffs due process
rights.
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39. At the conference Defendant members of the TEC voted unanimously to issue
two subpoenas, one to each Plaintiff, requesting the production documents by March 5, 2014.
Additionally, Defendants set a schedule whereby pre-hearing motions by Plaintiff will not be
heard until March 14, 2014 meaning Plaintiffs have no recourse to the subpoenas that were
issued.
40. The subpoenas issued by the TEC and served on Plaintiffs ordered the production
an overly-broad, sweeping array of largely irrelevant documents, as a federal court would later
recognize and acknowledge.
41. Here it is notable that Sullivan and other EMPOWER staff write articles and
columns for both EMPOWER and other entities on fiscal and political issues involving the State
of Texas. He relies on sources from the Legislature and elsewhere in state and local government.
The TEC is clearly attempting to out any source that has contacted Plaintiff or had
communications with him so that these sources may be silenced. This is the very definition of an
impermissible chilling effect.
42. On February 13, 2014 TEC voted to propose new rules regarding what constitutes
a campaign contribution for purposes of reporting under the Texas Election Code. The purposed
rule would encompass contributions that are made to a non-profit corporation that elected to
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Although statutorily required to do so by TEX. GOVT CODE 571.131(c), the TEC has failed and refused to
adopt rules governing the process of conducting a formal hearing. A true and correct copy of the transcript of the
hearing is attached as Exhibit 17 and is incorporated by reference as if set out fully herein.
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make a direct campaign expenditure and would require the reporting of those contributions. See
Exhibit 18.
43. Plaintiffs filed suit in Federal Court on February 26, 2014 complaining of the
Defendants various violations of the Plaintiffs constitutional rights.
44. On March 20, 2014 a hearing was held in front of the Honorable United States
District Court Judge Samuel Sparks on Plaintiffs application for Temporary Restraining
Order/Preliminary Injunction.
45. Judge Sparks, while finding that subpoenas that are the subject of the instant suit
were absurd and overbroad, questioned whether the Court had jurisdiction over this matter
under the Younger
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abstention doctrine, and as that doctrine is applied by Geier v. Missouri
Ethics Commn, 715 F.3d 674, 678 (8th Cir. 2013). Exhibit 19 at p. 31, l. 10-16, p. 45, l. 13-16
(March 20, 2014 Hearing Transcript).
46. In an action that was expressly as a result of, and in response, to this hearing on
March 20, 2014, on April 3, 2014 the TEC withdrew the original subpoenas and issued two (2)
new subpoenas.
47. With this second set of subpoenas, the TEC appears to attempt to address the
NAACP v. Alabama
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problem which existed in the first subpoenas by allowing limited redaction,
but then the TEC takes to opportunity to for the first time expressly require the production of
attorney/client documents, documents from non-parties to this litigation, documents from a non-
party PAC and vast classifications of documents that are not reasonably calculated to lead to the
discovery of otherwise admissible evidence. See Exhibits 20 and 21.
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Younger v. Harris, 401 U.S. 37, 91 S. Ct. 746, 27 L. Ed. 2d 669 (1971).
9
NAACP v. Alabama, 357 U.S. 449, 46263, 78 S.Ct. 1163, 117172 (1958).
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48. Regardless, on April 3, 2014, during the hearing in the TEC, John Moore
(Moore), counsel for the TEC testified and counseled the TEC to ignore the Constitution:
You are determining in this hearing whether Mr. Nixons clients
violated those statutes, the election code, the lobby code, the lobby act, or
not. Thats what you are here to determine. Thats what the case is here
for. Its not to determine whether something is constitutional or not.
Mr. Nixon has other remedies for that if he wants to do those.
The case before you is based on the evidence. Is there a violation
of the acts? Thats all you have to determine. Our subpoenas -- I
understand Judge Sparks complaint was, it says any and all. Thats too
broad for me. For some judges it is, for some judges it isnt.
We made the effort through our attorneys, through the attorney
generals office in the litigation to make the subpoenas more specific, and
they are more specific. They give Mr. Nixon definitions. We are not
asking for him to produce the definitions. We are asking for him to
produce the documents that are listed. We are not asking -- if he has
privileged information he wants to object to the production of, he has
the ability to do that. Instead, he hides behind its not constitutional.
Well, again, he has another forum to hear that in.
Exhibit 22 at 37:25-38:25 (April 3, 2014 TEC hearing transcript) (emphasis added).
49. The TEC followed Moores advice, and withdrew the original subpoenas and,
over the objection of counsel for Plaintiffs, issued the substantially more invasive and plainly
unconstitutional subpoenas. See Exhibit 22 at 54:15-55:5 and 66:13-67:11 (April 3, 2014 TEC
hearing transcript); see also Exhibit 20, 21.
50. The revised subpoenas are infirm and violate the Plaintiffs constitutional rights
as follows:
a. The Subpoenas requests all information from both a non-profit
(Internal Revenue Code 501(c)(4)) and its related non-party
PAC;
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10
The amended subpoenas include the following definition:
Empower Texans means Empower Texans, Inc., including but not limited to Empower Texans
doing business as Texans for Fiscal Responsibility; any other affiliated or subsidiary entities to
Empower Texans;.
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b. The Subpoenas expressly request attorney/client privileged
documents
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;
c. The Subpoenas require the creation of non-existent email list[s];
d. The Subpoenas now request: statements or charts of organization;
telephone and personnel directories; press releases; web page
content and postings; announcements; notices; statements of
procedure and policy; biographies and personnel files; individual
appointment calendars and schedules; card files; diaries; records of
email; telephone logs; routing slips; records or evidence of
incoming and outgoing telephone calls; itineraries; activity
reports; travel vouchers and accounting; bank records; accounting
and bookkeeping records and materials; financial records and
statements; external or internal correspondence; cables; telexes;
teletypes; telegrams; telecopies; verbal or written
communications; memoranda; letters; messages; reports; plans;
forecasts; summaries; briefing materials; studies; notes; working
papers; graphs; maps; charts; diagrams; agendas; minutes;
transcripts, records, or summaries of any meeting, conversation,
conference or communication; and all attachments to any of the
items set forth in this paragraph.
51. Plaintiffs filed a Motion to Quash with the TEC. See Exhibit 23 (Motion to
Quash in the TEC).
Exhibits 20 and 21 at Definition 21 (emphasis added).
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The amended subpoenas include the following definitions:
Document means every writing or record of whatever type and description in the possession,
custody or control of Michael Quinn Sullivan (including all writings and records that have been
transferred from Michael Quinn Sullivan to his accountants, attorneys, or consultants), however
made, and includes all handwritten, typed, printed, recorded, transcribed, taped, filmed, graphic- or
sound-reproduction material, magnetic cards or cartridges, optical storage devices, and computer
records, printouts, runs, cards, tapes, or disks (together with all programming instructions and other
material necessary for their use).
**********
Empower Texans; and any and all of officers, directors, employees, attorneys, representatives,
agents, or any other persons acting on behalf of any such entity, including but not limited to
Michael Quinn Sullivan, Austin Kerr, and Dustin Matocha.
Exhibits 20 and 21 at Definition 14 and 21 (emphasis added).
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52. On April 25, 2014, the Federal Court dismissed that action taking the TECs
allegations as true holding that the Plaintiffs may bring the instant action:
The third element of the Younger abstention doctrine asks whether
Plaintiffs had, or will have, an opportunity to present their federal claims in
the state proceedings. Juidice v. Vail, 430 U.S. 327, 337 (1977). Plaintiffs
failure to avail themselves of such opportunities does not mean that the state
procedures were inadequate. Id. In this case, there are (or were) adequate
opportunities for Plaintiffs to present their constitutional claims. A formal
hearing before the TEC is subject to the procedural protections of the Texas
Administrative Procedure Act. TEX. GOVT CODE 571.139(c); see also id.
2001.051.202. Plaintiffs may appeal any adverse final decision rendered by
the TEC, and receive a trial de novo in which their constitutional challenges
may be litigated. See id. 2001.171.173.
With respect to the subpoenas in particular, Plaintiffs could have
also moved for a protective order (i.e., moved to quash) in the district
court. Id. 571.137(d) (A respondent has the right to quash a subpoena as
provided by law.).
Exhibit 24 at 6 (April 25, 2014, Hon. Sparks Order) (emphasis added)
53. It is further an issue of constitutional dimension which now affects and violates
the Plaintiffs rights in the TEC prosecutions that the TEC has not adopted rules of procedure,
rules of evidence or appellate rules (including mandamus or interlocutory appeal).
54. The exhibits attached to this Petition are as follows:
Exhibit No. Date Description
Exhibit 1 4/14/06 Articles of Incorporation of Empower Texans, Inc.
Exhibit 2 11/7/06 Assumed Name Certificate of Empower Texans, Inc.
Exhibit 3 1/6/07 501(c)(4) letter
Exhibit 4 1/13 Texas Monthly article
Exhibit 5 7/12/07 Appointment of Treasurer of Empower Texans PAC
Exhibit 6 12/31/11 First Direct Campaign Expenditure of Empower Texans PAC
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Exhibit 7 4/20/12 Keffer complaint against Empower Texans
Exhibit 8 4/20/12 Truitt complaint against Empower Texans
Exhibit 9 4/20/12 Keffer complaint against Sullivan
Exhibit 10 4/20/12 Truitt complaint against Sullivan
Exhibit 11 4/8/13 TEC Questions for Sullivan
Exhibit 12 4/23/13 TEC Questions for Empower
Exhibit 13 5/10/13 Empower Texans Response to TEC Questions
Exhibit 14 5/10/13 Sullivans Response to TEC Questions
Exhibit 15 6/26/13 Public Inspection Request from TEC
Exhibit 16 8/21/13 TEC subpoena to Sullivan
Exhibit 17 2/12/14 TEC hearing transcript
Exhibit 18 2/13/14 TEC proposed rule
Exhibit 20 4/3/14 TEC subpoena to Empower Texans
Exhibit 21 4/3/14 TEC subpoena to Sullivan
Exhibit 23 4/21/14 Sullivans and Empower Texans Motion to Quash
Exhibit 24 4/25/14 Order
Exhibit 26 1/28/17 Notice of Formal Hearing
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E. Causes of Action
COUNT I
Motion for Protective Order/Motion to Quash TEC subpoenas
55. The Plaintiffs reallege the preceding paragraphs.
56. Plaintiffs move this Court to issue a protective order and quash the TEC
subpoenas as provided by the Texas Government Code. See TEX. GOVT CODE ANN.
571.137(d) (West) (A respondent has the right to quash a subpoena as provided by law.); see
also Exhibit 24 at 7 (April 25, 2014, Hon. Sparks Order) (With respect to the subpoenas in
particular, Plaintiffs could have also moved for a protective order (i.e., moved to quash) in the
district court.).
57. Specifically, the revised TEC subpoenas are infirm and violate the Plaintiffs
constitutional rights as follows:
a. The Subpoenas requests all information from both a non-profit
(Internal Revenue Code 501(c)(4)) and its related non-party
PAC;
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b. The Subpoenas expressly request attorney/client privileged
documents
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;
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The amended subpoenas include the following definition:
Empower Texans;
Exhibit A1 at Definition 21 (emphasis added).
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The amended subpoenas include the following definitions:
Document means every writing or record of whatever type and description in the possession,
custody or control of Michael Quinn Sullivan (including all writings and records that have been
transferred from Michael Quinn Sullivan to his accountants, attorneys, or consultants), however
made, and includes all handwritten, typed, printed, recorded, transcribed, taped, filmed, graphic- or
sound-reproduction material, magnetic cards or cartridges, optical storage devices, and computer
records, printouts, runs, cards, tapes, or disks (together with all programming instructions and other
material necessary for their use).
**********
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c. The Subpoenas require the creation of non-existent email list[s];
d. The Subpoenas request: statements or charts of organization;
telephone and personnel directories; press releases; web page
content and postings; announcements; notices; statements of procedure
and policy; biographies and personnel files; individual appointment
calendars and schedules; card files; diaries; records of email; telephone
logs; routing slips; records or evidence of incoming and outgoing
telephone calls; itineraries; activity reports; travel vouchers and
accounting; bank records; accounting and bookkeeping records
and materials; financial records and statements; external or internal
correspondence; cables; telexes; teletypes; telegrams; telecopies;
verbal or written communications; memoranda; letters; messages;
reports; plans; forecasts; summaries; briefing materials; studies; notes;
working papers; graphs; maps; charts; diagrams; agendas; minutes;
transcripts, records, or summaries of any meeting, conversation,
conference or communication; and all attachments to any of the
items set forth in this paragraph.
58. Accordingly, this Court should quash the TECs subpoenas.
COUNT II
Declaratory Judgment
60. Declare that Plaintiffs or any respondent in an action by the TEC may move this
Court to issue a protective order and quash the TEC subpoenas as provided by the Texas
Government Code. See TEX. GOVT CODE ANN. 571.137(d) (West).
COUNT III
Fourth Amendment, Article I, Section 9 of the Texas Constitution /Warrantless Search
62. The TEC is a state actor.
Empower Texans; and any and all of officers, directors, employees, attorneys, representatives,
agents, or any other persons acting on behalf of any such entity, including but not limited to
Michael Quinn Sullivan, Austin Kerr, and Dustin Matocha.
Exhibit A1 at Definition 14 and 21 (emphasis added).
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63. The complaints in this case are based only upon information and belief and
there is no finding of probable cause against either Plaintiff. See Exhibit 7, 8, 9 and 10.
64. Both the Fourth Amendment of the United States Constitution and Article I,
Section 9 of the Texas Constitution forbid unreasonable searches and seizures.
65. The TEC is attempting to obtain materials without a warrant by subpoena from
the Plaintiffs which may be used in the criminal prosecution of the Plaintiffs.
66. The Texas Government Code provides:
On a motion adopted by an affirmative vote of at least six commission
members, the commission may initiate civil enforcement actions and refer
matters to the appropriate prosecuting attorney for criminal
prosecution.
TEX. GOVT CODE ANN. 571.171 (West)(emphasis added).
67. Texas law on this matter is well established:
Warrantless searches are unreasonable per se unless they fall under
one of a few specific exceptions. See Reasor v. State, 12 S.W.3d 813, 817
(Tex.Crim.App.2000); Brimage v. State, 918 S.W.2d 466, 500
(Tex.Crim.App.1996); see also Mincey v. Arizona, 437 U.S. 385, 390, 98
S.Ct. 2408, 57 L.Ed.2d 290 (1978). Three exceptions to this rule include
instances where: 1) the defendant voluntarily consented to the search. See
Reasor, 12 S.W.3d at 818; 2) certain exigent circumstances justify a
warrantless search. See Colburn v. State, 966 S.W.2d 511, 519
(Tex.Crim.App.1998); Brimage, 918 S.W.2d at 50001; and 3) the state
performs a protective sweep incident to arrest. See Reasor, 12 S.W.3d at
81617; see also Maryland v. Buie, 494 U.S. 325, 336, 110 S.Ct. 1093,
108 L.Ed.2d 276 (1990).
Torrez v. State, 34 S.W.3d 10, 14-15 (Tex. App.Houston [14
th
Dist.] 2000)(emphasis added).
68. It is notable that in the notice regarding the complaints against EMPOWER, the
TEC found:
The Texas Ethics Commission (the commission) held a preliminary review
hearing on August 8, 2013, October 29, 2013, and October 30, 2013, to
consider sworn complaints SC-3120485 and SC-3120486. After deliberation,
the commission determined that based on the evidence presented to the
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commission during the hearing there is insufficient credible evidence of
violations of laws administered and enforced by the commission.
Therefore, the commission has set a formal hearing in connection with sworn
complaints SC-3120485 and SC-3120486.
Exhibit 25.
69. Notwithstanding this finding, the TEC also set this matter for a formal hearing
and issued the overbroad subpoena(s) as to EMPOWER that are the subject of this suit.
70. The subpoenas further operate like prohibited general warrants. See Elliott v.
State, 681 S.W.2d 98, 103 (Tex. App. 1984) affd, 687 S.W.2d 359 (Tex. Crim. App. 1985)
(The Fourth Amendment prohibits general warrants which fail to particularly describe the
property to be seized.).
71. The TECs warrantless searches (subpoenas) are unreasonable per se and should
be quashed.
COUNT IV
Due Process and/or Due Course of the Law of the Land
73. It is uncontested that the TEC has failed and refused to enact formal procedural
rules as directed by the Texas Legislature in September 1993, but instead, the TEC propounds,
changes and defines (or re-defines) its own rules during hearings, blatantly disregarding
recognized standards of law and justice, to meet its own ends and purposes. TEX. GOVT CODE
571.131(c) (The commission shall adopt rules governing discovery, hearings, and related
procedures consistent with this chapter and Chapter 2001.) (Effective September 1, 1993).
74. The due course of law guarantee of the Texas Constitution provides:
No citizen of this State shall be deprived of life, liberty, property,
privileges or immunities, or in any manner disfranchised, except by the
due course of the law of the land.
___________________________________
19
TEX. CONST. ART. I, 19. The Texas due course clause is nearly identical to the federal due
process clause, which provides:
No State shall make or enforce any law which shall abridge the privileges
or immunities of citizens of the United States; nor shall any State deprive
any person of life, liberty, or property, without due process of law; ....
U.S. Const. amend. XIV, 1.
75. While the Texas Constitution is textually different in that it refers to due course
rather than due process, we regard these terms as without meaningful distinction. Mellinger v.
City of Houston, 68 Tex. 37, 3 S.W. 249, 25253 (1887).
76. Due process under Texas law at a minimum requires notice and an opportunity to
be heard at a meaningful time and in a meaningful manner.
77. For the TEC to conduct a hearing in a meaningful manner, according to the Texas
legislature, requires the establishment of procedural rules. See TEX. GOVT CODE 571.131(c)
(The commission shall adopt rules governing discovery, hearings, and related procedures
consistent with this chapter and Chapter 2001.) (Effective September 1, 1993).
78. Accordingly, any hearing in front of the TEC without the adoption of procedural
rules violates Plaintiffs Due Process rights.
F. Injunctive Relief
80. The Plaintiffs respectfully move the Court to grant them injunctive relief,
including, but not limited to, a temporary restraining order, preliminary injunction and
permanent injunction restraining the enforcement of the subpoenas issued by the TEC.
___________________________________
20
81. Plaintiffs move this Court to issue a protective order and quash the TEC
subpoenas as provided by the Texas Government Code. See TEX. GOVT CODE ANN.
571.137(d) (West).
G. Jury Demand
82. Plaintiffs demand a jury trial and tenders the appropriate fee with this petition.
H. Conditions Precedent
83. All conditions precedent to Plaintiffs claim for relief have been performed or
have occurred.
I. Request for Disclosure
84. Under Texas Rule of Civil Procedure 194, Plaintiffs request that Defendants
disclose, within 50 days of the service of this request, the information or material described in
Rule 194.2.
J. Prayer
NOW THEREFORE Plaintiffs respectfully pray that the Court issue citation for
Defendants to appear and answer, and that Plaintiffs be awarded a judgment against Defendants
for the following:
a. Issue a protective order and quash the TEC subpoenas as provided
by the Texas Government Code. See TEX. GOVT CODE ANN.
571.137(d) (West).
b. Declare that Plaintiffs or any respondent in an action by the TEC
may move this Court to issue a protective order and quash the TEC
subpoenas as provided by the Texas Government Code.
c. The TECs warrantless searches (subpoenas) are unreasonable per
se, and should be quashed.
d. Hold that any hearing in front of the TEC without the adoption of
procedural rules violates Plaintiffs Due Process rights.
___________________________________
21
e. Grant their costs of this action, including reasonable attorneys
fees, pursuant to TEX. CIV. PRAC. & REM.CODE 37.009, and any
other applicable authority; and
f. Grant such other relief as Plaintiffs may be just and equitable,
whether in equity or in law.
Respectfully submitted,
BEIRNE, MAYNARD &PARSONS, L.L.P.
/s/ James E. Trey Trainor, III
James E. Trey Trainor, III
State Bar No. 24042052
Austin, Texas 78701
Telephone: (512) 623-6700
Facsimile: (512) 623-6701
Email ttrainor@bmpllp.com
Joseph M. Nixon
1300 Post Oak Blvd., Suite 2300
Houston, Texas 77056
Telephone: (713) 871-6809
Facsimile: (713) 960-1527
Email jnixon@bmpllp.com
ATTORNEYS FOR PLAINTIFFS
1940257v.9 IMANAGE 106087
EXHIBITS PART 1 OF 2
(DUE TO VOLUME OF EXHIBITS, THEY WILL
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CAUSE NO. _____________
EMPOWER TEXANS, INC., AND IN THE DISTRICT COURT
MICHAEL QUINN SULLIVAN,
Plaintiffs,
v. OF TRAVIS COUNTY, TEXAS

COMMISSION, AND NATALIA LUNA
ASHLEY, IN HER CAPACITY AS
INTERIMEXECUTIVE DIRECTOR OF
THE TEXAS ETHICS COMMISSION,
Defendants. ____ JUDICIAL DISTRICT
EXHIBITS PART 2 OF 2
Respectfully submitted,
BEIRNE, MAYNARD & PARSONS, L.L.P.
/s/ James E. Trey Trainor, III
James E. Trey Trainor, III
Austin, Texas 78701
Telephone: (512) 623-6700
Facsimile: (512) 623-6701
Email ttrainor@bmpllp.com
Joseph M. Nixon
1300 Post Oak Blvd., Suite 2300
Telephone: (713) 871-6809
Facsimile: (713) 960-1527
Email jnixon@bmpllp.com
ATTORNEYS FOR PLAINTIFFS
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Prehearing Conference, 2/12/2014
In the Matter of Empower Texans, Inc.
www.advanceddepositions.com | 855-811-3376
Advanced Depositions
1
TEXAS ETHICS COMMISSION
SWORN COMPLAINTS SC-3120485 AND SC-3120486
IN THE MATTER OF ) BEFORE THE
)
EMPOWER TEXANS, INC. DBA ) TEXAS ETHICS COMMISSION
TEXANS FOR FISCAL )
RESPONSIBILITY, )
)
RESPONDENT )
and
)
MICHAEL Q. SULLIVAN, ) TEXAS ETHICS COMMISSION
)
RESPONDENT )
______________________________________________________
PREHEARING CONFERENCE
FEBRUARY 12, 2014
______________________________________________________
On the 12th of February, 2014, the following
proceedings came on to be heard in the above-entitled
and numbered causes before the TEXAS ETHICS COMMISSION,
held at the Texas State Capitol, Room E1.010, Austin,
Texas 78711.
Proceedings reported by NASHAWN MENELEY, CSR
in and for the State of Texas by machine shorthand.
EXHIBIT 17
2 (Pages 2 to 5)
2
1 A P P E A R A N C E S:
2 TEXAS ETHICS COMMISSION:
3 HONORABLE JIM CLANCY, Chair
HONORABLE PAUL W. HOBBY, Vice Chair
4 HONORABLE HUGH C. AKIN
HONORABLE WILHELMINA DELCO
5 HONORABLE TOM HARRISON
HONORABLE BOB LONG
6 HONORABLE TOM RAMSAY
HONORABLE CHASE UNTERMEYER
7
MS. NATALIA LUNA ASHLEY, Interim Executive
8 Director/Special Counsel
9 FOR THE COMMISSION:
10 MR. JOHN MOORE and
MR. IAN STEUSLOFF
11 TEXAS ETHICS COMMISSION
Attorneys at Law
12 201 E. 14th Street
Sam Houston Building, 10th Floor
13 Austin, Texas 78701
PHONE: (512) 463-5800
14
FOR THE RESPONDENTS:
15
MR. JOSEPH M. NIXON
16 BEIRNE, MAYNARD & PARSONS
Attorneys at Law
17 1300 Post Oak Boulevard, Suite 2500
18 PHONE: (713) 623-0887
19 AND
20 MR. TREY TRAINOR
BEIRNE, MAYNARD & PARSONS
21 Attorneys at Law
401 W. 15th Street, Suite 845
22 Austin, Texas 78701
PHONE: (512) 623-6753
23
ALSO PRESENT:
24
MS. MELISSA RAMOS
25 MS. MARGIE CASTELLANOS
3
1 CHAIR CLANCY: Good afternoon,
2 everyone. Welcome to the February 12th meeting of the
3 Texas Ethics Commission. We're here today for a
4 prehearing conference on Sworn Complaints 3120485,
5 3120486, 3120487 and 3120488.
6 Can I have announcements from the
7 counsel, please?
8 MR. MOORE: Chairman Clancy,
9 Commissioners, my name is John Moore. I'm the director
10 of enforcement for the Ethics -- Texas Ethics
11 Commission representing the Staff in Complaints 3120485
12 and 086.
13 MR. STEUSLOFF: And I am Ian
14 Steusloff. I'm assistant general counsel with the
15 Texas Ethics Commission, also representing the
16 Commission regarded Sworn Complaints 3120487 and
17 3120488.
18 MR. NIXON: Mr. Chairman,
19 Commissioners, my name is Joe Nixon and I'm here with
20 Trey Trainor. We are present on behalf of the
21 Respondents.
22 CHAIR CLANCY: Counsel, thank you.
23 The Commission has issued a notice of a formal hearing
24 scheduled for April 3rd of 2014 in these four matters.
25 In order that that hearing may be conducted in an
4
1 orderly way, as well as that subpoenas might be issued
2 in accordance with our rules and statutes, we've asked
3 for this -- this conference.
4 Specifically, what I'd like to let
5 you-all know is that we need to know how long this
6 hearing is going to take to ensure that the evidence is
7 fairly presented and the issues are fully provided and
8 we need to make sure that we have time scheduled for
9 that purpose. We also need to know who are the
10 witnesses that are going to be testifying, the
11 exhibits, and given the amount of material in this
12 case, we're going to need to have that in advance of
13 the hearing so the commissioners have an opportunity to
14 review it. We would like to know whether there's going
15 to be any pre-trial motions and then a deadline for
16 filing those so that if -- if it's necessary to
17 schedule some time in advance of the formal hearing to
18 consider those pre-trial motions, we can find that
19 time; when the deadline for the parties to have their
20 settlement conference is; and then, finally, the
21 issuance of subpoenas for documents and witnesses
22 necessary to go forward on the formal hearing.
23 Now, I understand that the parties
24 have conferred previously regarding some matters, but
25 what I do want to do is we have a podium today so that
5
1 each side will be able to present their positions
2 regarding each of these items, but what I'd like to
3 know first is have the parties been able to agree to
4 any structure for what the Commission has set up for
5 April 3rd? Mr. Moore.
6 MR. MOORE: We met with Mr. Nixon and
7 Mr. Trainor last week. They graciously hosted us in
8 their offices. We discussed some of the issues we have
9 in terms of -- under -- under the APA, there are, of
10 course, discovery tools that both sides can use. We
11 have not conducted formal discovery in this matter.
12 So, we -- we discussed, basically, a potential timeline
13 for purposes of the hearing on April 3rd and I have
14 roughed one out that I'll present to the commissioners
15 when we get to that.
16 We talked a little bit about time,
17 what we thought it was going to take and -- and we --
18 we didn't agree on an exact number of days but both
19 sides, I think, indicated it probably will take several
20 days to do the hearings. They can't be done together.
21 They have to be done separately. So, the Commission's
22 going to have to decide how that should be done.
23 Although there are common witnesses in the cases, there
24 are also witnesses who are not in common in the cases
25 and the issues are not the same. So, the Commission is
EXHIBIT 17
3 (Pages 6 to 9)
6
1 going to -- we agree that the Commission is going to
2 have to try these -- these separate -- separate
3 proceedings.
4 CHAIR CLANCY: Is there an agreement
5 on the amount of time that you need to present your
6 case?
7 MR. MOORE: No, there isn't. We
8 just -- we just had a general idea that it was going to
9 take us several days total to do it. That's because
10 we -- and, again, I -- we would like to give -- I'd
11 like to give you time, sir, but the issue is -- is
12 if -- as we go through formal discovery, we may
13 discover more witnesses and -- and more documents that
14 will take us more time to go through. So, that's the
15 challenge we have is making an estimate before we've
16 gone through all the -- the rigors of doing
17 interrogatories and production and disclosure and those
18 type of things that are allowed under the Rules of
19 Civil Procedure.
20 CHAIR CLANCY: Is there anything that
21 is actually agreed between the parties, other than the
22 fact that you believe you need two hearings?
23 MR. MOORE: As to time?
24 CHAIR CLANCY: Anything else.
25 MR. MOORE: Well, first of all, we
7
1 have agreed that the notice will be sent by e-mail in
2 the case, that we're not going to go through the
3 certified mail process. We've agreed to exchange
4 witnesses with -- a list of witnesses. We didn't set a
5 date for that, but we can set that in terms of this
6 hearing. We agreed to send a list of exhibits to the
7 other side pursuant to an agreed upon schedule, if we
8 can get that today. Let's see.
9 MR. STEUSLOFF: We also agreed that we
10 were going to send to Mr. Nixon and Mr. Trainor a list
11 of specific stipulations that we were going to request
12 them to agree to.
13 MR. NIXON: If I may, Mr. Chairman?
14 CHAIR CLANCY: Yes, sir.
15 MR. NIXON: Mr. Moore would love to
16 tell you that we would agree to more, except that
17 there's a fundamental problem that I think the
18 Commission is hamstrung with and that is in 1993, the
19 Texas Legislature asked the Commission to adopt a set
20 of formal rules by which it would conduct formal
21 hearings and, to date, the Commission has only adopted
22 two rules, one -- one regarding venues during the --
23 and the Commission has chosen the venue to be itself
24 and then another rule with regard to just signing the
25 final order; but as far as a process by which a formal
8
1 hearing is to be conducted, the Commission has failed
2 to adopt any rules. The Commission is required to
3 adopt rules, not only by 571.131(c), it also -- the --
4 Article X of the Government Code, it requires it to
5 adopt similar rules and sets out the process by which
6 it is required to adopt rules.
7 So, here we have a fundamental
8 problem. Without a set of rules, we don't know how to
9 proceed in representation of our client and the -- and
10 the Ethics Commission doesn't really know how to
11 proceed in the prosecution of a case because there --
12 there are -- there are no guidelines. For example, the
13 Commission's not adopted what set of -- of evidentiary
14 standards. One of the things we talked about is, you
15 know, how do we apply the -- if the Commission were to
16 adopt the Rules of Evidence, the Texas Rules of
17 Evidence as it applied in district court, how are they
18 to be applied? Who is -- who is to be the
19 decision-maker? Is it the Commission as a whole? How
20 do we make a decision when two -- only two of the six
21 commissioners are licensed attorneys and have any
22 training or understanding of what the Rules of Evidence
23 are? How is the Commission to make any determination
24 on any -- any motions? Is it through the Chair? Is it
25 through the entire Commission? How will this have an
9
1 opportunity to be heard?
2 Oddly enough, as we stand today, one
3 of the issues that was brought up by Mr. Moore in
4 our -- in our meeting is what inference, if any, may
5 the Commission take if the Respondent chooses not to
6 testify? Because there is a -- there -- there is in
7 certain circumstances an inference that can be drawn in
8 a civil matter, the question is is this a civil matter
9 or is this a quasi-criminal process? What jurisdiction
10 is this? So, it -- can an inference be made?
11 Oddly enough, the Ethics Commission
12 itself in its rules has a rule stating that a
13 respondent need not -- not -- and, I'm sorry, not in
14 its rules, but in the statute, has a -- has a -- has a
15 statutory provision where the respondent need not
16 testify. The Commission to date has not adopted any
17 rules with regard to whether or not it may adopt an
18 inference and what it -- what inference is that going
19 to be.
20 Now, oddly enough, if you go look at
21 the caselaw, an inference on a -- on a -- in a civil
22 case of an individual not testifying is that of a
23 suspicion. A suspicion in the law is deemed to be less
24 than a scintilla. So, those lawyers among us know that
25 a scintilla, minute -- minutest part of evidence, but
EXHIBIT 17
4 (Pages 10 to 13)
10
1 it does not raise -- it does not get to a -- to the
2 level of preponderance. The statute says you have to
3 make a decision based upon the preponderance of the
4 evidence.
5 So, if this body were now to adopt a
6 set of evidentiary standards or evidentiary rules that,
7 for example, gave itself an inference where one does
8 not currently exist, that would be the application of
9 an ex post facto law. That would be a substantive
10 change in the rules and the process that would apply in
11 this case that has not yet been applied in any case.
12 So, the failure to have any rules, I
13 think, prohibits this body from proceeding forward with
14 a formal hearing until rules are adopted. You just
15 can't go forward. Because in and of itself, the
16 failure to adopt a rule is essentially a rule, meaning
17 that we're just going to go on the fly. We have no
18 expectation of what this body may consider, may admit
19 into evidence, may rule on, the fairness of giving us
20 equity and a right to defend ourselves. The failure to
21 have any rules is of itself a due process violation.
22 So, if you go forward without rules, we have a due
23 process violation. And if we immediately adopt rules,
24 well, you can't do that because there's a specific
25 process by which you have to adopt rules.
11
1 The Administrative Code says that
2 agencies must adopt rules by, as you know, posting them
3 in the Register, the Texas Register. They have to
4 have -- have a notice comment period and -- and that is
5 the Administrative Codes, Section 2001.004 and 5,
6 which says: A state agency rule, order or decision
7 made or issued after January 1st, 1976 is not valid or
8 effective against a person or party and may not be
9 invoked by an agency until the agency has indexed the
10 rule, order or decision and made it available for
11 public inspection as required under this chapter. 2006
12 goes on to talk about how the agency then goes through
13 the formal process of adopting rules and, in fact, the
14 legislature is serious enough about it, the process
15 of -- of requiring agencies to go through the formal
16 process of adopting rules that further in the Code at
17 2001.038, it's stated that the validity or app --
18 applicability of a rule, including an emergency rule
19 adopted under Section 2001.034, may be determined in an
20 action for declaratory judgment if it is alleged the
21 rule or its threatened application interferes with or
22 impairs or threatens to interfere with or impair a
23 legal right or privilege of the plaintiff. Legal right
24 or privilege of the plaintiff, of course, is due
25 process.
12
1 So, without a set of rules adopted by
2 the Commission in a formal rule adopting authority, the
3 Commission may not proceed in prosecution of a case
4 against the respondent, either respondent. The failure
5 to do so is a deprivation of due process. The failure
6 to adopt rules that alters a legal right or remedy of
7 the Respondent is an ex post facto problem. Quite
8 frankly, we didn't come to this determination until we
9 were preparing for this hearing when we realized that
10 there were no rules. In meeting with Mr. -- Mr. Moore
11 and Mr. Steusloff, we realize that they know that, too.
12 So, Respondent is not going to agree
13 to a set of -- to a set of procedures or processes that
14 do not require the Commission to adopt a set of rules
15 and, therefore, you know, I would ask the Commission
16 postpone your hearings, adopt some rules, and then we
17 can get back on the saddle; but until then, I mean, our
18 choices are to immediately go to state district court
19 and -- and have proceedings enjoined.
20 Now, I would tell you also that the
21 problem is more serious than just the applicability of
22 this situation to us. My understanding is this is the
23 first in the history of the Ethics Commission, a formal
24 contested gloves on formal hearing --
25 CHAIR CLANCY: No, it isn't.
13
1 MR. NIXON: -- and maybe no one raised
2 this issue before, but we're raising it now but you've
3 got a lot of complaints pending. You have a process
4 and you adopted rules with regard to preliminary
5 hearings; but with regard to formal hearings, you've
6 not, which creates -- which creates a major hole, I
7 think, for the Ethics Commission and that being that
8 everybody with a preliminary hearing, if they chose,
9 they simply say, "I want a formal hearing," and then be
10 in a situation of making the same argument that you're
11 adopting rules in the middle of the game which may
12 change their rights.
13 So, sadly, this is probably not the
14 situation that anybody wanted to find themselves in but
15 this is a -- this is the correct situation of the law.
16 You have -- under Rule 12 of the Commission rules, you
17 have two rules regarding contested hearings.
18 So, you know, my clients do not choose
19 to agree to proceed by agreement to a set of standards.
20 We're going to -- we're going to proceed pursuant to
21 our statutory rights. So, we looked at this and just
22 so that everybody knows, Rule 12, Sworn Complaints,
23 Section 12.117 under Formal Hearings says, venue and
24 Section 12.119 is Resolution after a Formal Hearing;
25 but between picking where you're going to have it and
EXHIBIT 17
5 (Pages 14 to 17)
14
1 the order that you sign, there's nothing else in
2 between.
3 So, I don't know if you've got any
4 questions or how we -- or how it is that we -- we
5 proceed from here.
6 CHAIR CLANCY: Thank you, sir. You'll
7 have a seat.
8 Let me advise counsel, just -- I'll
9 tell you where we are, Mr. Moore. Okay. And then --
10 and then we can proceed with the rest of this hearing.
11 The first is that the formal hearing
12 is a commission hearing meeting and the Chair presides
13 over that commission meeting. Just so you-all
14 understand, while I will issue the evidentiary rulings
15 and the like, if -- if you are unhappy with those, you
16 will have the opportunity to throw the red flag and go
17 to the videotape and you can ask my fellow
18 commissioners whether they agree with the Chair's
19 ruling on -- on that issue. And, so --
20 MR. NIXON: Is that --
21 CHAIR CLANCY: -- other than the --
22 MR. NIXON: -- is that process in the
23 rules, Mr. Chairman?
24 CHAIR CLANCY: No, sir. That process
25 is the -- the -- the nature of how the Commission makes
15
1 its decisions. So, yes, that is how the Commission has
2 its meetings.
3 MR. NIXON: And is that in statute?
4 CHAIR CLANCY: Well, let me -- let
5 me -- let me finish my -- my explanation to counsel of
6 what's going on. Okay?
7 So, the first thing is that the Chair
8 will preside over the meeting and if you disagree with
9 a -- a legal ruling of the Chair, you're permitted,
10 just like you did in the preliminary hearing, to take
11 that question to the full Commission and they'll have
12 the opportunity to discuss it, just like we do in every
13 of other open meetings.
14 The second thing is -- is that this is
15 a civil matter. The rules are clear in that regard.
16 And it's also clear that at a formal hearing, the
17 Administrative Practices Act applies. It is only where
18 the Administrative Practices Act is not sufficient that
19 the agency has the capability of issuing rules to -- to
20 clarify under its rule-making authority and,
21 admittedly, at this point, the number of rules that
22 we've passed are minimal but the Administrative
23 Practices Act is not and it has everything that we need
24 to do to go forward, including the standard of review,
25 which will be the preponderance of the evidence for any
16
1 evidentiary determinations in findings of fact, as well
2 as the Rules of Evidence that apply. The Texas Rules
3 of Evidence apply and the Texas Rules of Evidence apply
4 as modified by the Administrative Practices Act,
5 specifically the reasonable reliance exception that may
6 or may not apply to certain evidentiary rulings under
7 the Administrative Practice Act.
8 The last thing I want to address is
9 the issue with regard to the Fifth Amendment, right
10 of -- against self-incrimination. The Administrative
11 Practices Act rules that all the privileges that apply
12 at law apply in this proceeding and one of those is the
13 Fifth Amendment privilege.
14 While the Commission states that a
15 respondent need not testify, there are times when the
16 Commission has the right to subpoena witnesses and to
17 subpoena documents and when it determines that that
18 testimony is necessary and has issued a subpoena for
19 that purpose, then the Commission is seeking
20 information from that person and that person has the
21 right to take the Fifth Amendment, right against
22 self-incrimination, and he also has the right to suffer
23 the negative inference from -- from doing such a --
24 taking such action.
25 MR. NIXON: And what is that
17
1 inference, Mr. Chairman?
2 CHAIR CLANCY: So, what I'm -- what
3 I'm trying to advise you of is that is where we stand.
4 And, Mr. Nixon, the -- what I would hope that counsel
5 will do with regard to that, if it happens, is provide
6 the appropriate briefing, when a witness in a civil
7 matter takes a Fifth Amendment right against
8 self-incrimination, what weight does that have on the
9 evidentiary record that's before the Commission.
10 Now, before we get to that, I want to
11 get to our specific issue. Okay. It may be,
12 Mr. Nixon, that there are a series of pre-trial motions
13 that you wish to, you know, revise or challenge or
14 further brief with regard to what we've discussed thus
15 far but I want to -- I want to advise counsel for the
16 Commission and the counsel for Empower Texas and
17 Mr. Sullivan that it is not our -- we're not going to
18 wait on this case. It has been pending for two years.
19 Okay. We are going to approve subpoenas that are
20 issued for good cause and we're going to move forward
21 to a formal hearing.
22 Now, Mr. Moore, I know you have not
23 had an extensive amount of time to live with this file
24 but your agency has. Okay. And we're not going to
25 start from ground zero over this matter. The other
EXHIBIT 17
6 (Pages 18 to 21)
18
1 thing that I'm a little concerned about but I'm willing
2 to consider more is the necessity for multi-day,
3 multi-hearings on the two different matters. The
4 Commission reserved over six days for preliminary
5 review hearings in this matter and much of what was
6 done in the second hearing for the second case was
7 repetitious from what was done in the first hearing in
8 the first case. And while I understand that we have a
9 different defendant or a different respondent and that
10 we have some different issues with regard to findings
11 in fact and conclusions of law, the witnesses were the
12 same and so were many of the underlying supporting
13 documents.
14 And, so, while I realize that there
15 will be different post finding of fact and conclusions
16 of law in each matter, I would be reluctant to have two
17 entirely different proceedings for which we need to
18 issue different subpoenas, or we need to open again and
19 those things. Okay.
20 MR. NIXON: Mr. -- Mr. Chairman --
21 CHAIR CLANCY: So, with that said --
22 let me finish my introduction and then we can -- we can
23 move forward.
24 In order for us to determine how long
25 we think this is going to be, okay, what I -- what
19
1 would be very helpful for the Commission right now is
2 for the Commission staff to say how many witnesses do
3 you have on your witness list and if I can make this a
4 little more simple, Cases 3120487 and 3120488 consist
5 of allegations that PAC -- that a PAC has not been
6 properly -- done its filings and for -- for shorthand,
7 I'm going to call that the PAC case. Okay. And
8 allegations in 3120485 and 3120486 that Mr. Moore is
9 representing the Commission in has to do with -- I got
10 that wrong?
11 MR. STEUSLOFF: Yes, sir.
12 CHAIR CLANCY: Okay. Mr. Steusloff
13 has a case that involves failure to register as a
14 lobbyist and that is 487 and 488. Mr. Moore has the
15 cases for failing to report as a PAC and that's 485 and
16 486. And, so, what I'm going to start with is I'd like
17 to know the witnesses that you need to call and which
18 ones of those you need to subpoena in Mr. Steusloff's,
19 the lobby case. Please begin.
20 MR. STEUSLOFF: At present,
21 Mr. Chairman, we -- there are five specific individuals
22 that -- that we think are necessary for this case.
23 There may be other witnesses and we're not certain
24 right now which additional persons we would call; but
25 for -- but right now we would call Mr. Sullivan; we
20
1 would call Empower Texans or -- or a representative or
2 designee of Empower Texans; we would also call the two
3 complainants, Representative Jim Keffer and Ms. Vicki
4 Truitt; we would also call Mr. Steve Bresnen and
5 Mr. William Greenhaw.
6 CHAIR CLANCY: I'm sorry. The last
7 name is?
8 MR. STEUSLOFF: William Greenhaw.
9 CHAIR CLANCY: Now, with regard to the
10 Empower Texas corporation, what -- what areas of
11 inquiry is this person going to have to be able to
12 respond to?
13 MR. STEUSLOFF: They would need to be
14 able to primarily provide documents that -- that are in
15 the possession, custody, or control of Empower Texans.
16 CHAIR CLANCY: So, you're referring to
17 a custodian of records for Empower Texas?
18 MR. STEUSLOFF: It could be a
19 custodian of records or some other individual who
20 has -- has access to those records.
21 CHAIR CLANCY: Okay. Now, on the PAC
22 case, Mr. Moore, which witnesses do you envision
23 calling and which of those do you require a subpoena to
24 compel their attendance to the formal hearing?
25 MR. MOORE: Well, the -- besides the
21
1 Respondent, the four individuals that Mr. Steusloff
2 mentioned, the two complainants, Mr. Bresnen and
3 Mr. Greenhaw, I don't believe I'm going to need to
4 subpoena them. They've agreed to appear. I will need
5 to subpoena the corporation. Therefore, I would
6 probably need to subpoena Mr. Sullivan as the
7 president, the custodian of records, and probably
8 somebody who has knowledge of the financial dealings of
9 the corporation because we're talking about political
10 contributions and expenditures.
11 CHAIR CLANCY: Okay.
12 MR. MOORE: In addition, I have a list
13 of Empower Texans staff that I was thinking of -- of
14 calling as witnesses, Andrew Kerr, who's the former
15 executive director. My understanding, though, is he's
16 out of the country; so, it be will be a little hard to
17 get ahold of him by subpoena, but Dustin Matoch --
18 Matocha. It's M-a-t-o-c-h-a.
19 MR. NIXON: Matocha.
20 MR. MOORE: Thank you. I apologize
21 for -- for --
22 MR. NIXON: That's fine.
23 CHAIR CLANCY: If you'd spell that,
24 please, for the court reporter.
25 MR. MOORE: Yeah. M-a-t-o-c-h-a.
EXHIBIT 17
7 (Pages 22 to 25)
22
2 MR. MOORE: He is the current
3 executive director. Morgan Williamson, who's the
4 communications coordinator; Nathan Ofe, O-f-e.
5 MR. TRAINOR: Ofe.
6 MR. MOORE: Ofe, who is the
7 developmental director and, Rick Peralez, who's in the
8 accounting area.
9 CHAIR CLANCY: Who's the developmental
10 director?
11 MR. MOORE: Nathan O-f-e.
12 CHAIR CLANCY: And then the last one?
13 MR. MOORE: Rick Peralez. It's
14 P-e-r-a-l-e-z.
15 CHAIR CLANCY: Now, I understand that
16 your complaint addresses periods of time in 2011?
17 MR. MOORE: Yes, sir, it does.
18 CHAIR CLANCY: Are any of those
19 witnesses employees back in 2011?
20 MR. MOORE: I haven't been able to do
21 the discovery on that part of it yet, sir. I haven't
22 seen that in the file. So, that is where I have to
23 limit it to is for that period.
25 MR. MOORE: That's why I said I
23
1 haven't decided -- you wanted the list of witnesses and
2 I wanted to make sure you had a full list, so --
3 CHAIR CLANCY: Well, and I will tell
4 you that one of the purposes of this meeting is giving
5 the lead time for the hearing, you know, you need a
6 vote of six of these eight commissioners for good cause
7 shown to issue subpoenas. So, just with regard to
8 witnesses, is it correct that you believe there's good
9 cause for all of those people to be subpoenaed --
10 MR. MOORE: Yes, sir. I do have --
11 CHAIR CLANCY: -- and to testify at
12 the hearing?
13 MR. MOORE: In fact, I do have a
14 written motion for that to give to you at the time that
15 you would like to consider it.
16 CHAIR CLANCY: Now's the time.
17 MR. MOORE: Okay. Thank you.
18 CHAIR CLANCY: Have you provided that
19 motion to counsel?
20 MR. MOORE: No. I just brought it
21 with me.
22 CHAIR CLANCY: Well, please provide it
23 to counsel.
24 Mr. Nixon, the -- the question of the
25 Commission is going to be what witnesses do you require
24
1 to be subpoenaed and are there any that you believe
2 there is not good cause to subpoena on the list of the
3 Commission?
4 MR. NIXON: Before I answer the
5 question --
7 MR. NIXON: -- I need to make sure
8 that the Commission understands that the Respondents
9 object to further proceedings on the basis of lack of
10 due process.
11 CHAIR CLANCY: Noted.
12 MR. NIXON: Okay. I also want to
13 point out to the Commission that your description of
14 how the Commission attempts to make rulings on evidence
15 with the Chair, with an appeal to the body, is not in
16 the rules. That is a brand new rule.
17 CHAIR CLANCY: Well, sir, let me --
18 let me just do this and I -- I look forward to your
19 pre-trial motions on -- on all those different issues.
20 What I was trying to do is address where we were now.
21 At this moment what I need to hear from the Respondent
22 is the witnesses that they intend to call and the
23 witnesses that the Commission has asked to be
24 subpoenaed that they feel should not be subpoenaed
25 because there's no good cause.
25
1 MR. NIXON: Mr. Clancy, you and I went
2 around on this with regard to our anti-staff motion
3 pursuant to -- to Civil Practice & Remedies Code
4 Chapter 27. I really don't want to do that but -- and
5 I don't understand why the Commission seems to be
6 afraid of receiving the Respondents' objections to the
7 lack of due process. I don't under -- I don't -- I
8 don't appreciate and don't -- I'm not able to
9 comprehend the fear of the -- of the words that the
10 Commission seems to have, but --
11 CHAIR CLANCY: Sir, there's no fear of
12 the words.
13 MR. NIXON: Well, then I -- then I
14 don't understand why you won't let me go ahead and --
15 don't -- you are reluctant to allow me to -- to --
16 CHAIR CLANCY: Well, the reason is
17 because we had an opportunity for you to discuss where
18 we were and I listened to you hear that and I told you
19 where we were.
20 MR. NIXON: I want to --
21 CHAIR CLANCY: And, so, now what we're
22 dealing with in this procedure is we're talking about
23 witnesses.
24 MR. NIXON: All right. You've asked
25 me for -- this is a very good example. You've asked me
EXHIBIT 17
8 (Pages 26 to 29)
26
1 for a list of our witnesses.
3 MR. NIXON: Under what statutory
4 authority do you have the ability to do that?
5 CHAIR CLANCY: Under the
6 Administrative Practices Act.
7 MR. NIXON: What section?
8 CHAIR CLANCY: The section that allows
9 us to proceed under that act and --
10 MR. NIXON: Actually, no, you don't.
11 CHAIR CLANCY: -- have witnesses --
12 MR. NIXON: You don't. Under Section
13 571.131, a formal hearing requires that the Commission
14 shall provide to the complainant, if any, and to the
15 respondent a list of proposed witnesses. There's no
16 requirement that the respondent provide to the
17 Commission a list of its proposed witnesses. Instead,
18 Section 571.131(c) says the Commission shall adopt
19 rules governing discovery hearings and related
20 procedures consistent with this chapter and Chapter
21 2001. In 2001, there's no requirement for the
22 respondent to provide a list -- list of witnesses.
23 Instead, the respondent, under 2001, is not required to
24 testify. So --
25 CHAIR CLANCY: Mr. Nixon, listen to
27
1 me. I've got eight commissioners. We've got to set
2 aside time. We have to come to Austin. We have to
3 schedule days for your client to have his due process
4 rights, to have his matters heard. I can't do that if
5 I don't know how many witnesses you're going to call.
6 And, so --
7 MR. NIXON: I appreciate your --
8 CHAIR CLANCY: -- in the --
9 MR. NIXON: -- dilemma.
10 CHAIR CLANCY: -- in the way of
11 proceedings in an ordinarily way in this civil
12 administrative proceeding, I'm going to insist on us
13 knowing who the witnesses are going to be.
14 MR. NIXON: Mr. --
15 CHAIR CLANCY: And, so, that's the way
16 it is.
17 MR. NIXON: Mr. Chairman, I appreciate
18 that request. Mr. Chairman, I hope you and the other
19 commissioners appreciate the fact that this is a
20 perfect example of the problem that you have when since
21 1993 the Commission has not adopted rules. We are
22 today, today, just now, being informed of how the
23 Commission is choosing to go forward and rather than
24 taking a -- taking a step and saying -- you admit that
25 the Commission has failed to adopt rules. And, rather
28
1 than saying, yeah, you're right, we need to address
2 that problem, we have -- we have now three or four
3 examples of brand new rules that I was unaware of
4 moments ago when the hearing started and that is
5 unfair.
6 The law of the State of Texas, the law
7 of this country is that people have to be afforded due
8 process. Due process requires the knowledge of the
9 rules before the procedure begins. Mr. Chairman, I --
10 I appreciate the Ethics Commission's desire to do this
11 expeditiously but combining two separate entities into
12 one hearing for the Commission's convenience when the
13 complaints are different, the entities are different,
14 and the legal issues are different is an example of the
15 lack of due process being afforded our clients and I
16 would urge the Commission to reconsider proceeding on
17 that basis.
18 CHAIR CLANCY: Mr. Nixon, which
19 witnesses does your client need to have subpoenas
20 issued for them?
21 MR. NIXON: Mr. Chairman, if -- if --
22 I do not have to disclose that to the Commission at
23 this time and we will reserve our clients' rights to
24 call as our witnesses witnesses at the time.
25 CHAIR CLANCY: Well, let me separate
29
1 two things. First of all, if you're going to subpoena
2 witnesses, this Commission has to do it. Okay?
3 MR. NIXON: I appreciate that.
4 CHAIR CLANCY: All right. So,
5 separate that from your other due process argument but
6 the first one is which witnesses do you need us to
7 issue subpoenas to come testify?
8 MR. NIXON: It's -- it's -- putting
9 aside -- putting aside the -- the issue on who has the
10 authority to issue subpoenas, as I understand, is --
11 is -- as I heard Mr. Moore, I do not believe that we
12 have any witnesses beyond the list of those who he --
13 he said, with the two complainants.
14 CHAIR CLANCY: Are there any witnesses
15 that he has requested that you feel there is not good
16 cause for them to have a subpoena issued for their
17 testimony?
18 MR. TRAINOR: Yes.
19 MR. NIXON: Yes.
20 CHAIR CLANCY: Which ones are those?
21 MR. NIXON: Every staff member of
22 Empower Texans.
23 CHAIR CLANCY: Starting with Mr. Kerr?
24 MR. NIXON: All of them. All of them.
25 CHAIR CLANCY: The five of them?
EXHIBIT 17
9 (Pages 30 to 33)
30
1 MR. NIXON: Yes.
2 CHAIR CLANCY: What about the
3 corporate representative of those two entities?
4 MR. NIXON: Well, there -- we have
5 another very interesting situation. Again, there is
6 nothing either in 571 or 2001 that allows or requires
7 someone to designate a corporate representative. All
8 we have is a situation where a respondent is -- need
9 not be required to testify and both codes recognize
10 that. You -- you have asserted that it's a Fifth
11 Amendment issue. There may be other amendments,
12 particular -- particularly, the First Amendment.
13 CHAIR CLANCY: Well, let's talk about
14 the staffers first, the real people.
15 MR. NIXON: What is -- what is it that
16 you want to get out of the staff?
17 CHAIR CLANCY: If -- the Commission
18 has stated that those are necessary for this
19 proceeding.
20 MR. NIXON: Under what basis are they
21 necessary?
22 CHAIR CLANCY: Well, what I'm asking
23 you is on what basis are they not necessary?
24 MR. NIXON: No, no, no. It's his
25 burden, not mine. That's why I ask the question.
31
1 CHAIR CLANCY: All right.
2 MR. NIXON: Under what basis are they
3 necessary?
4 CHAIR CLANCY: Well, let's -- let's
5 get this one taken care of because we're making some
6 progress. If you'll have a seat.
7 Mr. Moore, why do we need Mr. Kerr,
8 Mr. Matocha and Mr. Peralez and the other two gentlemen
9 to testify?
10 MR. MOORE: Since I haven't gone
11 through formal discovery, I have to -- I have to
12 determine -- have to call them as witnesses to
13 determine if they have any personal knowledge of the
14 allegations against the Respondent. They are employees
15 of the Respondent. They have personal knowledge -- I
16 assume they have personal knowledge. I don't have
17 evidence yet to that, but I may -- I'm giving them as a
18 list of wit -- potential witnesses because they may
19 have personal knowledge of the situation that will shed
20 light on the facts and allow the Commission to come to
21 the decision.
22 CHAIR CLANCY: All right. Thank you,
23 sir. Mr. Nixon, any reply to that?
24 MR. NIXON: Personal knowledge of what
25 facts that needs -- the Commission needs to prove?
32
1 CHAIR CLANCY: Okay. Anything else?
2 MR. NIXON: Well -- well -- well, I
3 want the Commission to be aware of the United States
4 Supreme Court case of NAACP versus the State of
5 Alabama, 1958 case, in which the State of Alabama was
6 trying to do exactly the same thing that the Ethics
7 Commission is trying to do here, find out the
8 membership and the donorship of the NAACP. The NAACP
9 refused and the State of Alabama sought injunctive
10 relief. The Supreme Court, after several years of
11 litigation in the State of Alabama, decided that the --
12 that it was time for them to rule and they -- they
13 struck down the proceedings of the State of Alabama
14 saying that those proceedings were violative of their
15 rights of the NAACP.
16 Now, when you ask what facts are you
17 trying to prove, why do you need any of these people,
18 what was the purpose of any of these people, I have not
19 heard a reason. What we heard is I don't know what
20 they know and I won't know what they know until I talk
21 to them. That's not a good enough reason under any
22 circumstance.
23 CHAIR CLANCY: I thought the reason
24 was they were employees of your client.
25 MR. NIXON: Right. That's not a
33
1 reason to depose somebody.
2 CHAIR CLANCY: Involved in its
3 activities.
4 MR. NIXON: So?
5 CHAIR CLANCY: That wasn't the reason?
6 MR. NIXON: Well, what do they know?
7 What do they know? What do you think -- what role do
8 they play that they know? Instead, you know, I want to
9 make this Commission aware of what the Supreme Court
10 addressed in 1958. So, this has been the law of the
11 land for more than 50 years. It is hardly a novel
12 perception that compelled disclosure of affiliation
13 with groups engaged in advocacy may constitute an
14 effective restraint on the freedom of association, as
15 the forms of government action, in the cases above,
16 were thought likely to produce upon a particular
17 constitutional right there -- there involved. This
18 court has recognized a vital relationship between
19 freedom of association and privacy in one's
20 associations.
21 So, what facts do they need Mr. Kerr
22 to disclose? Who's a member? What does he do? Isn't
23 that the fundamental issue? This court -- this
24 Commission has previously ruled formally that there is
25 insufficient evidence as it relates to the preliminary
EXHIBIT 17
10 (Pages 34 to 37)
34
1 hearing to find a violation. The violation that they
2 were trying to find, that's been alleged, is that this
3 entity, Empower Texans, is somehow acting outside the
4 bounds of the Election Code and what is the information
5 sought, who their donors are and who their members are.
6 You cannot make a determination under
7 the Election Code without disclosing the donors and the
8 members. That is the information sought to be obtained
9 from the staff in direct violation of the law of this
10 country for more than 50 years, so -- almost 56 years.
11 So, the question I have, Mr. Chairman and members, is
12 it isn't good enough to state: I want his deposition
13 because I need to know what he knows. You need to
14 state why you need his deposition and state a -- a
15 constitutionally permissible reason to obtain
16 information which you think that he might know within
17 his job function.
18 And, so, once again, we come -- we
19 come around to the circle of the problem of the failure
20 of the Ethics Commission since 1993 to adopt more
21 formal rules, once again, due process. In any civil
22 court, you got to come up with a better reason than I
23 need to know what he knows. In any civil court, you'd
24 have to enunciate a clear reason as to what the
25 specific knowledge this person has as it relates to his
35
1 job duties. So, deposing the entire staff of Empower
2 Texans is not a permissible reason under the --
3 under -- in a state district court and is certainly not
4 a permissible reason in light of the NAACP versus
5 Alabama.
6 CHAIR CLANCY: All right. Sir, I just
7 have to ask you a couple questions. Do the Respondents
8 have any witnesses to be called during this proceeding?
9 MR. NIXON: The Respondents do not
10 choose to disclose their witness list at this time,
11 absent -- absent an adopted rule of this Commission --
12 CHAIR CLANCY: Are -- are the
13 Respondents aware --
14 MR. NIXON: -- that requires --
15 CHAIR CLANCY: -- that that may
16 prevent them from calling these surprise witnesses --
17 MR. NIXON: Is that a --
18 CHAIR CLANCY: -- at the formal
19 hearing?
20 MR. NIXON: Is that a new rule?
21 CHAIR CLANCY: No, sir.
22 MR. NIXON: That's not in the rules.
23 CHAIR CLANCY: Sir, under the
24 Administrative Practice Act, we're going to have a -- a
25 reasonable, orderly proceeding and in order to do that,
36
1 we need to know who the witnesses are.
2 MR. NIXON: Can you help me, Mr. --
3 Mr. Chairman, identify what section of the
4 Administrative Practices Act requires the Respondent to
5 disclose his rules at this time -- to disclose his
6 witnesses at this time?
7 CHAIR CLANCY: The ones that allow the
8 Commission to conduct an orderly hearing under the
9 Administrative Practice Act.
10 MR. NIXON: Well, the Administrative
11 Practice Act also -- if you're adopting the
12 Administrative Practices Act, Mr. Chairman --
13 CHAIR CLANCY: We're not adopting it.
14 We're required to use it.
15 MR. NIXON: Okay. Well, then use all
16 of it, please. Use the section that requires you to
17 adopt rules.
19 MR. NIXON: I mean, you can't pick and
20 choose which statute you want to have apply to you. I
21 find it very ironic that the -- that the agency created
22 by the people of the State of Texas and placed into the
23 Texas Constitution for the purpose of making sure that
24 elected officials and certain other people of authority
25 in this state comply with certain rules is itself not
37
1 following any rules.
2 CHAIR CLANCY: Sir, let me -- let me
3 just -- let me -- let me just --
4 MR. NIXON: They're being made up
5 today.
6 CHAIR CLANCY: Okay. Let me -- let me
7 just get a little bit of control over what we're trying
8 to do. Okay?
9 On January 28th, we sent out a Notice
10 of Prehearing Conference for the matters that were
11 going to be discussed today and it is my intention to
12 follow this letter and this notice and go through those
13 matters. Now, sir, I understand that you have some due
14 process arguments and, so, if you have any other due
15 process arguments or any more due process arguments, I
16 want to give you the opportunity right now to make them
17 to your heart's content for all eight of us to hear so
18 that we can then go and continue the items on the
19 Notice of Prehearing Conference that I sent you two
20 weeks ago. Okay? So, the floor is yours.
21 MR. NIXON: Mr. -- Mr. Chairman,
22 you've heard me make the argument and I am -- and
23 you -- and you -- as we've adopted -- as the Chair has
24 come up with new procedures throughout this hearing
25 today, you've heard me object to -- to each of them
EXHIBIT 17
11 (Pages 38 to 41)
38
1 and -- and -- and I don't intend to have this be the
2 only opportunity that I remind the Commission that its
3 authority to enforce rules first needs to be applied to
4 itself.
5 CHAIR CLANCY: Mr. Nixon, have you
6 briefed this issue?
7 MR. NIXON: Mr. Chairman, I have -- I
8 am -- I have -- I have a brief on this issue and I'm
9 prepared --
10 CHAIR CLANCY: Have you provided that
11 to counsel for the Commission?
12 MR. NIXON: We are prepared to provide
13 that, but -- but --
14 CHAIR CLANCY: Has counsel for the
15 Commission had the opportunity to respond to that
16 brief?
17 MR. NIXON: Mr. -- Mr. Chairman, the
18 issue of whether or not it needed to be briefed or
19 brought up to the Commission was not ripe until the
20 Commission started adopting new rules today.
21 CHAIR CLANCY: And, in fact, I mean,
22 one of the things that we have on this Notice of
23 Prehearing Conference -- Conference is No. 8, Motions,
24 and if you have a motion that we need to abate or
25 dismiss or stop this entire proceeding because you're
39
1 unhappy with the specifically identified rules for
2 formal hearings, then we need to brief that and address
3 it.
4 MR. NIXON: Well -- well, if you --
5 CHAIR CLANCY: But -- but in your
6 argument at this time, I'm prevented from accomplishing
7 the rest of our agenda for today. So, that's why I
8 just want to -- I understand you have arguments and I
9 understand you can brief them and the way we do that is
10 you brief them, they reply, you respond, and we get to
11 review.
12 MR. NIXON: Oddly -- Oddly,
13 Mr. Chairman, we would have loved to have involved
14 ourselves in the process, except that this Commission
15 had not adopted any rules prior to today for that
16 happening, in fact, has not adopted any rules today.
17 The last time we filed a prehearing motion to the
18 Commission, a Motion to Dismiss, pursuant to Chapter 27
19 of the Civil Practice and Remedies Code, Commission
20 declined to hear it.
21 So, based upon our prior experience,
22 we didn't know, since there were no rules of process,
23 whether or not filing a -- a specific written motion
24 would be heard by the Commission, would be in order
25 because the Commission has no rules. So, we're kind of
40
1 at a Catch-22 and so is the Commission as far as that
2 goes. And -- and, quite frankly, I really wish the
3 Commission would take a serious look at where it is and
4 what's the -- what -- and if it's not right, don't
5 force it to go forward, just stop and say, you know,
6 it's not right, let's back up, make it right and then
7 proceed. Because anything -- anything short of that is
8 a violation of due process and those issues are briefed
9 and we are prepared to file those briefs with
10 jurisdictions who do have rules and procedures.
11 CHAIR CLANCY: Do you -- do you
12 consider this to be some sort of motion to dismiss or
13 how -- what is the motion going to say?
14 MR. NIXON: Well, the -- the --
15 CHAIR CLANCY: Because I would like to
16 put it on the calendar, make sure that we get to do
17 this in an orderly way.
18 MR. NIXON: The interesting thing --
19 the interesting thing, Mr. Chairman, is that there is
20 no process for us to file motions.
21 CHAIR CLANCY: Sure, there is. That's
22 why we're having this meeting right here today.
23 MR. NIXON: No. We're having a
24 hearing and we've responded to the Commission's
25 hearing.
41
1 CHAIR CLANCY: Well, it's a prehearing
2 conference.
3 MR. NIXON: But there is no -- there's
4 no set of rules or guidelines. The Commission is
5 required by statute to follow the statute in adopting
6 rules. You cannot just make them up. You can't --
7 particularly, the Commission whose sole purpose it is
8 to make sure everybody else is following the rules
9 can't just make up its own as it goes.
10 CHAIR CLANCY: Well, I'm just going to
11 call them pre-trial motion.
12 MR. NIXON: There's --
13 CHAIR CLANCY: When -- when do you
14 think you can be prepared --
15 MR. NIXON: That's my point.
16 CHAIR CLANCY: -- to file those?
17 MR. NIXON: That's my point,
18 Mr. Chairman. You do not have a process by which
19 anybody can file a pre-trial motion.
20 CHAIR CLANCY: We're -- we are trying
21 to set a date for that -- for the Commission to meet
22 and consider your motions.
23 MR. NIXON: Well, Mr. Chairman, I'm
24 going to insist that the Commission follow the statute
25 it chose to adopt, Section 10 of the Administrative
EXHIBIT 17
12 (Pages 42 to 45)
42
1 Code, and post -- create rules, post them in the Texas
2 Register, allow for public comment, and formally adopt
3 them. And when that's done, we'll be able to prepare a
4 motion -- whatever motion that may be appropriate under
5 those set of rules because we're not going to waive our
6 rights and acquiesce in following agreed to or made
7 up or --
8 CHAIR CLANCY: How does waiver apply?
9 MR. NIXON: -- impromptu made rules.
10 CHAIR CLANCY: How does waiver apply?
11 How does waiver apply to this proceeding?
12 MR. NIXON: Well, any kind of
13 acquiescence in a process, other than what's stated in
14 statute, could be deemed to be a known relinquishment
15 of right.
16 CHAIR CLANCY: So -- so then I have
17 two questions. If I set a date for filing of this
18 motion to be named later, are you going to file it or
19 are you going to say that would be waiver by filing it?
20 MR. NIXON: It could be deemed to be
21 waiver. It could be deemed to be waiver and I don't
22 want to be -- I don't want to be in a situation where
23 some other jurisdiction at some point says: Well, you
24 were right but you waived it by filing a motion.
43
1 MR. NIXON: I want -- I want the -- I
2 want the Commission to clearly recognize the situation
3 it's in right here. And it's -- it's okay -- this
4 isn't this Commission, these eight people's problem.
5 This is a 20-year-old problem. In 1993, the statute
6 that says: Please adopt some rules was passed. A lot
7 of people have gone on before you. You can -- you can
8 pass the buck to them, but I do think that the
9 appropriate thing to do is to say, we have a -- we have
10 a problem, we need to address it responsibly, address
11 it and then proceed.
12 CHAIR CLANCY: But I thought you said
13 if we passed a rule, it would be ex post facto?
14 MR. NIXON: If you -- it could well
15 be --
16 CHAIR CLANCY: So, if we pass a
17 rule --
18 MR. NIXON: -- if you change the --
19 CHAIR CLANCY: -- it's ex post facto
20 and your client is dismissed.
21 MR. NIXON: That could be. It could
22 be, not in all circumstance --
23 CHAIR CLANCY: So, you're asking us to
24 pass a rule that would dismiss your client from these
25 complaints?
44
1 MR. NIXON: If you pass a rule that
2 changed the substantive rights that my client has now,
3 yes. That's the problem the Commission --
4 CHAIR CLANCY: See, that's why I think
5 we're going to stick with the Administrative Practices
6 Act.
7 MR. NIXON: Well, the --
8 CHAIR CLANCY: I think we're going to
9 stick with it.
10 MR. NIXON: You have to take it all
11 then.
12 CHAIR CLANCY: We do take it all.
13 MR. NIXON: All -- even the part that
14 says you have to go through the formal process of
15 adopting rules.
16 CHAIR CLANCY: Right. Very good.
17 MR. NIXON: Because the
18 Administrative Practices -- the -- the -- Section 4 of
19 the Administrative Practices Act requires you to adopt
20 rules. I think you can see the situation you find
21 yourself in.
22 CHAIR CLANCY: Well, I can see the
23 situation that you're trying to put us in.
24 MR. NIXON: No. I -- look, it wasn't
25 our responsibility to adopt your rules.
45
1 CHAIR CLANCY: I think we've got
2 rules. All right. Counsel, we're going to take a
3 short break, but I want you to -- I want you to just
4 refresh yourselves with the items that we're going to
5 take up.
6 Mr. Moore, I had a brief opportunity
7 to review your motion. One of the challenges, Counsel,
8 is that we have eight commissioners and, so, they're
9 going to need to have copies of those motions for
10 everyone to review.
11 MR. MOORE: I have copies.
12 CHAIR CLANCY: But I notice from your
13 motion that there are some names on here that were not
14 in the list that you discussed with me just in -- in
15 this hearing. And, so, whether, you know, Tim Dunn and
16 Lee Dunn and Luke Dunn are folks that you are asking
17 this Commission to subpoena, that's -- that's an
18 important question.
19 MR. MOORE: Not at this time.
21 MR. MOORE: And I do have copies for
22 the rest of the Commissioners.
23 CHAIR CLANCY: Now, we've addressed
24 the issuance of subpoenas and the list of witnesses.
25 What we need to do next is we need to do the -- the
EXHIBIT 17
13 (Pages 46 to 49)
46
1 documents to the extent that they're going to be
2 subpoenaed for the production of documents and we need
3 to address the timing for when those will be -- will be
4 completed.
5 With regard to factual and legal
6 issues, we're going to be seeking a deadline for
7 proposed findings of fact and conclusions of law. With
8 regard to stipulations, we're going to want those to be
9 admitted sometime prior to the formal hearing. The --
10 the identification exchange of documentary evidence and
11 whether that evidence is going to be agreed, I'll need
12 to know the timeline for that. I'm particularly
13 concerned that the Commission have the opportunity to
14 have the evidence in time to review it. There's a lot
15 of documentary evidence in this case and it is too hard
16 to track the credibility of the witnesses while you're
17 flipping through 6-inch binders. So, we're going to
18 have to have that in advance as well. Whether or not
19 there will be any agreements regarding admissibility or
20 pre-admissibility of those documents, that would be
21 helpful. A time for motions that does not interfere
22 with the time when we have subpoenaed citizens to come
23 testify, but we can give the parties an opportunity to
24 be heard and to make their arguments and for the
25 Commission to issue rulings. Whether there is -- the
47
1 actual order of presentation, specifically time limits,
2 there is -- there is an important factor in making sure
3 that each party has enough time, but that this -- this
4 proceeding doesn't become unnecessarily repetitious or
5 unnecessarily irrelevant.
6 And then the last item is anything
7 that we can -- we can get to to figure out whether this
8 is a one-day proceeding or a two-day proceeding. I
9 know my fellow commissioners would be very reluctant to
10 think that after we've heard all this evidence in the
11 preliminary review hearing and you're going to present
12 some of it again that it's going to take us a week to
13 hear these matters. So, we're going to take a
14 ten-minute recess and then we'll come back.
15 Counsel, if you would get out your
16 calendars and -- and look at where we are in terms of
17 accomplishing those 13 items in the notice, it would be
18 helpful. We're in recess for ten minutes.
19 (Proceedings in recess.)
20 CHAIR CLANCY: We're going to go back
21 on the record here in just a moment. There we go.
22 What I would like -- before we
23 continue with the rest of this prehearing conference,
24 I'd like to hear from -- from Mr. Steusloff regarding
25 the Commission's position on what rules apply to the
48
1 formal hearing and whether or not we're capable of
2 going forward.
3 MR. STEUSLOFF: Well, Mr. --
4 Mr. Chairman, the -- there are statutes in Chapter 571
5 of the Government Code regarding formal hearings and,
6 specifically, Section 571.139 of the Government Code
7 states that Subchapter C to H, Chapter 2001 apply only
8 to a formal hearing under the subchapter, the
9 resolution of a formal hearing, and the appeal of a
10 final order of the Commission and only to the extent
11 consistent with this chapter and the statutes in those
12 subchapters applying to formal hearings also set the
13 standards that apply in contested case hearings, such
14 as the Rules of Evidence and the Texas Rules of Civil
15 Procedure and -- and, so, based on those statutes, our
16 position is that there are formal -- there are official
17 rules under which the Commission can proceed but the
18 Commission may also adopt separate rules provided that
19 they are consistent with those other rules.
20 CHAIR CLANCY: Do you agree that a
21 formal hearing is an open meeting of the Commission?
22 MR. STEUSLOFF: Under the Open
23 Meetings Act, yes.
24 CHAIR CLANCY: And -- and do you agree
25 that the Commission is required to follow Robert's
49
1 Rules or similar rules regarding how it conducts those
2 meetings?
3 MR. STEUSLOFF: There's a Commission
4 rule that states that the -- the Robert's Rules do
5 apply. I'm not sure the extent to which they would
6 apply in a -- in a formal hearing. I haven't -- I
7 haven't specifically looked at that.
8 CHAIR CLANCY: Well, what I was --
9 what I was trying to address there is, obviously,
10 the -- the ultimate decision of the Commission as a
11 result of the formal hearing is voted on by
12 Commissioners. You know, we, basically, move and --
13 and second and vote to approve a formal decision. Is
14 it correct that we could do that for the entire process
15 of evidentiary rulings and everything else?
16 MR. STEUSLOFF: That the -- that the
17 full Commission can vote on those issues?
18 CHAIR CLANCY: Yes.
19 MR. STEUSLOFF: I -- I believe that
20 they can. I mean, I haven't -- I haven't seen any --
21 any -- any laws that state to the contrary.
22 CHAIR CLANCY: And, I guess, what I
23 was -- was trying to speak to there, Mr. Nixon, was
24 just like we were in the preliminary hearing, you had
25 asked -- I made some sort of ruling and you had asked
EXHIBIT 17
14 (Pages 50 to 53)
50
1 whether it was the opinion of the entire Commission, if
2 that was correct, and the Commission then voted whether
3 or not to support the Chair's ruling on that matter.
4 So, I think it's -- I think it would
5 be possible for a party to, you know, request a
6 Commission vote on every evidentiary ruling and other
7 procedural matter as a process of going through,
8 consistent with our -- our Open Meetings Act, not some
9 separate -- separate rule.
10 MR. NIXON: Well, Mr. Chairman,
11 it's -- it's one of the reasons why we've asked for
12 copies of the transcripts because my recollection of
13 that --
14 CHAIR CLANCY: Might be different.
15 MR. NIXON: -- was different. I think
16 the Chair asked --
17 CHAIR CLANCY: Let me -- just pause
18 for just a second --
19 MR. NIXON: -- the Commission to vote.
20 CHAIR CLANCY: -- because I want to
21 hear from Mr. Moore briefly, if you have any -- do you
22 have anything to add to what Mr. Steusloff said?
23 MR. MOORE: Just briefly. One, under
24 the statute, you are the presiding officer and the
25 presiding officer has the ability to run the meetings
51
1 of the agency. So, in that inherent power, you have
2 the ability, of course, to make the rulings.
3 I agree with Mr. Steusloff, the APA --
4 it's not the rules that apply here as such. It's the
5 statutes. The APA is the governing statute. It is the
6 standard for due process under the law. It's the
7 minimum that's required in a contested case hearing.
8 It's the minimum. It's not what -- what's given in in
9 addition by an agency in a process. Also point out
10 that even -- even the agency that does most of these
11 contested hearings, the State Office of Administrative
12 Hearings, they have an extensive set of rules; however,
13 they also have a escape rule which allows a hearing
14 officer in a contested case hearing to run the hearing
15 in what -- whatever manner they need to do to consider
16 it to be a fair hearing.
17 The issue here is a fair hearing and
18 if the process we're giving them -- due process is
19 given them under the APA, which is the Texas Rules of
20 Evidence, Rules of Civil Procedure for purposes of
21 discovery, preponderance of the evidence standard in
22 the hearing, I think we've complied with what's
23 required under the law.
24 CHAIR CLANCY: Okay. Mr. Nixon,
25 please.
52
1 MR. NIXON: Yes. I think Mr. Moore
2 brought up a very important point and that is the State
3 Office of -- of Administration has adopted, his words,
4 an extensive set of rules, including a stated rule that
5 allows the Commission so adjudge, to -- to proceed in a
6 different process without -- but that's a stated rule.
7 That's a stated rule adopted under formal guidelines.
8 We've made a list. It's almost eight
9 or ten new rules that this Commission has adopted here
10 today. The newest, I guess, we go to either 9 or 11,
11 is that somehow the Commission can proceed to have a
12 hearing under Robert's Rules of Order and that anytime
13 you make a ruling we have to go ask the Commission to
14 make a vote on it. I mean, I'm stunned. Robert's
15 Rules of Order applies to how the agency proceeds
16 through a published agenda. It does not apply to how
17 the agency proceeds through a contested case. The
18 rules -- the law that -- that this Commission
19 recognizes that it's bound by requires the Commission
20 to adopt formal rules to do exactly what it's doing.
21 Mr. Chairman, we don't dis --
22 necessarily disagree that -- whether the rules
23 enunciated or thought about today are good rules. They
24 may all be fine. I think you're trying to apply us
25 where the Rules of Civil Procedure as -- as best you
53
1 can to this situation and those have been vetted and
2 applied well in civil cases. The problem is that
3 they've not been formally adopted by this Commission
4 before today. So, we're kind of continually making
5 them up as we go, which is a fundamental problem
6 because at one point do you make a rule that's
7 inherently unfair?
8 Well, I'll give you an example:
9 Trying the two cases simultaneously. And you said,
10 well, we've heard a lot of this before, we don't need
11 to have a repetition. But I don't believe this is the
12 same eight members of the Commission that heard the
13 preliminary review. Is there a new member to this
14 Commission since then?
15 COMMISSIONER DELCO: Really it's an
16 old member returning.
17 MR. NIXON: I'm not going to comment
18 on that.
19 COMMISSIONER DELCO: Thank you.
20 MR. NIXON: The -- well, certainly one
21 commissioner has not heard the preliminary evidence.
22 That's an unfair rule, what you just said. We're
23 not -- we're going to do them together and we're not
24 going to repeat what we already heard and we're going
25 to condense the time frame. You know, not in Texas --
EXHIBIT 17
15 (Pages 54 to 57)
54
1 under the Civil Rules of Civil Procedure, there's no
2 condensation. This isn't a federal court where a judge
3 gets to say you get 15 minutes.
4 CHAIR CLANCY: Yeah. Let me -- let me
5 be very clear. I did not say we're going to take
6 notice or -- of anything that came before. What I --
7 what I said is it's the will of the Commission that
8 when we saw the evidence that the parties put on
9 before, we do not believe that this is a week-long
10 case. That's what I'm saying.
11 MR. NIXON: Oh, I appreciate -- I
12 appreciate that, except -- except that, remember, the
13 Ethics Commission has the burden of proof and with
14 regard to one commissioner has not heard any evidence
15 before.
16 CHAIR CLANCY: Well, with regard to
17 this proceeding, the evidence they've heard in the
18 preliminary hearing means nothing. Okay. We're
19 talking about an evidentiary record under a different
20 standard, under different rules that are going to be
21 heard at the formal hearing.
22 MR. NIXON: Right. And --
23 CHAIR CLANCY: So, I'm -- I'm just --
24 MR. NIXON: Let's get back -- let's
25 get back to the basics.
55
1 CHAIR CLANCY: I just want to make
2 that part clear.
3 MR. NIXON: The State Office of
4 Administrative Hearings has adopted formal rules that
5 are extensive. The Ethics Commission has not. The
6 Ethics Commission cannot proceed to hear this case
7 under the Robert's Rules of Order. That's inapplicable
8 to contested hearings. This body has decided to
9 make -- or the Chair -- and I haven't heard a vote by
10 anybody -- has -- has enunciated eight or nine, ten new
11 rules just today, one of which we take high exception
12 to, and that is trying them both together and assuming
13 that your -- that the entire Commission is aware. This
14 is a completely different body. Even though it only
15 has one new member, it's a completely different body.
16 That member might have influence on others and when you
17 go to deliberate, you may not have heard her comments
18 in your deliberation. It's unfair for us to just
19 assume that she's going to agree to you -- and, quite
20 frankly, it's kind of unfair to her. So, I would
21 not -- I would -- I mean, that's the kind of example of
22 the -- the dilemma that we find ourselves in today.
23 And I think -- I think the Commission
24 is finally coming around to the fact because you had
25 the -- the fore -- the good thought to ask the
56
1 Commission lawyers kind of what they thought. But due
2 process requires, even at a minimum, under the
3 Administrative Procedures and Practices Act that rules
4 of an agency be adopted formally. If you're going to
5 accept part of the statute, you got to accept all of
6 the statute. This -- this agency cannot pick and
7 choose which portions of which statute it wants to
8 apply. That's -- that's -- that's the dilemma that we
9 find ourselves in and I want the Chair and the members
10 of the Commission to recognize this.
11 While my clients are the -- are the
12 ones to have brought forth this issue to the
13 Commission, we aren't the ones who created this
14 problem. We didn't -- It wasn't our duty to ask you to
15 adopt rules at any point since 1993. I know it's
16 frustrating for the -- for the Chair and for the
17 Commission but, remember, this -- this is not our
18 problem to have fixed.
19 CHAIR CLANCY: It's not frustrating,
20 Mr. Nixon. It's not frustrating.
21 MR. NIXON: Well, I would -- I mean --
22 CHAIR CLANCY: Do you have anything
23 further on this issue?
24 MR. NIXON: I mean --
25 CHAIR CLANCY: Can we move through our
57
1 agenda?
2 MR. NIXON: We can --
4 MR. NIXON: -- to the -- to the extent
5 we -- we'll be happy to -- happy to discuss other
6 things. I'm certain we're going to be revisiting this
7 issue throughout the afternoon.
8 CHAIR CLANCY: Yes, sir. What I would
9 prefer is that we revisit it at our pre-trial motions
10 hearing, which I think we're going to get a date on and
11 we're going to brief it and we're going to disseminate
12 it. It's going to be very well done. All right.
13 We've talked about subpoenas of
14 witnesses. The next issue I would like to talk to you
15 is subpoena of documents. Commission, what documents
16 do you require subpoenas for?
17 MR. STEUSLOFF: Mr. Chairman, there
18 are a number of -- of documents that are at issue in
19 these complaints and we -- we have requested a number
20 of documents from the Respondent, as well as from
21 Empower Texans. They have refused to provide any
22 documents and we -- and, specifically, we believe that
23 in their possession may -- there may be a number of
24 documents that were sent by Mr. Sullivan to members of
25 the legislature specifically with the intent to -- to
EXHIBIT 17
16 (Pages 58 to 61)
58
1 lobby and we would like to --
2 CHAIR CLANCY: Do you have of a
3 list --
4 MR. STEUSLOFF: -- obtain those
5 documents.
6 CHAIR CLANCY: -- of those items?
7 MR. STEUSLOFF: A list of the
8 documents, well, the --
9 CHAIR CLANCY: A list of the documents
10 that you request that the Commission issue subpoenas to
11 obtain.
12 MR. STEUSLOFF: I do have a motion
13 for -- to request a subpoena duces tecum, as well as
14 subpoenas for the five individuals that --
15 CHAIR CLANCY: Have you shared that
16 with opposing --
17 MR. STEUSLOFF: -- are previously
18 mentioned.
19 CHAIR CLANCY: -- counsel?
20 MR. STEUSLOFF: I have not. I have
21 not yet -- not yet filed --
22 CHAIR CLANCY: Would you share that
23 with opposing counsel and with us?
24 MR. STEUSLOFF: Certainly.
25 CHAIR CLANCY: Counsel, do you have a
59
1 similar document of the -- the -- the documents that
2 you seek for the Commission to subpoena today?
3 MR. NIXON: Not having any rules to
4 follow, no. We didn't know what rules you were going
5 to -- to apply. Claim surprise, even at -- even with
6 the -- even at the request of the Commission.
7 CHAIR CLANCY: Well --
8 MR. NIXON: Under what rules are
9 they -- are they seeking to subpoena --
10 CHAIR CLANCY: Well, let me tell
11 you --
12 MR. NIXON: -- documents?
13 CHAIR CLANCY: -- where we're at.
14 Okay. We're at Notice of Prehearing Conference Item
15 No. 1, Issuance of Subpoenas. And, as you know, under
16 a formal hearing, the Commission is permitted to issue
17 subpoenas necessary to obtain witnesses and documents
18 for the formal hearing and so -- provided there's good
19 cause shown. And that's what we're here to address.
20 I -- I'm sorry you didn't have a copy of this earlier.
21 MR. NIXON: No, no, no. It's --
22 it's -- it's how do we respond to that particular
23 issue. Obviously, I mean, under the Rules of Civil
24 Procedure and Evidence, any respondent to a subpoena
25 would have the right to file objections or to move to
60
1 quash a subpoena that was overly broad or not in
2 compliance with the Rules of Procedure and Evidence.
3 Just because the Commission may have
4 the right to subpoena doesn't give the Commission the
5 right to ask for those things that are either
6 privileged or protected by Constitution, statute, or
7 rule but the -- since this -- since this body doesn't
8 have a defined and identifiable rule, set of rules
9 which describe that, it's not possible to either, one,
10 produce a document that says this is what we'd like to
11 be subpoenaed because we don't know what rules the
12 Commission is utilizing, or respond to a subpoena in
13 order to make appropriate objections and protect the
14 rights of the Respondent.
15 That's -- and we're going to be
16 continually frustrated today with this issue because
17 the Commission doesn't have rules. And, so, what rules
18 do we -- what rules do we make objections to?
19 CHAIR CLANCY: And, Mr. Nixon, you can
20 say we don't have rules. We got rules. Okay?
21 MR. NIXON: I see that they are
22 developing --
23 CHAIR CLANCY: You can say we don't.
24 MR. NIXON: -- as we go along.
25 CHAIR CLANCY: We have rules. We have
61
1 rules.
2 MR. NIXON: I -- I see --
3 CHAIR CLANCY: One of those rules is
4 the issuance of subpoenas for good cause shown. So,
5 you can continue to say that, you can brief it, but I'm
6 not going to let you continue to say it as if it's
7 true.
8 MR. NIXON: What is good cause
9 under -- un -- for this agency to consider? How is
10 good cause defined?
11 CHAIR CLANCY: Well, let me -- let me
12 go back to what we have here and -- before us. Do you
13 have any objection to -- in the lobby case production
14 of e-mails between the Michael Sullivan e-mails and
15 members of the Texas legislature?
16 MR. NIXON: Yes. Pursuant to statute,
17 Section 1 -- 571.131(b) where it says the Respondent
18 may not be compelled to give evidence or testimony that
19 violates the Respondent's rights against
20 self-incrimination under the United States Constitution
21 or the Texas Constitution.
22 CHAIR CLANCY: And, so, your --
23 MR. NIXON: And --
24 CHAIR CLANCY: It's your position --
25 MR. NIXON: And further --
EXHIBIT 17
17 (Pages 62 to 65)
62
1 CHAIR CLANCY: I'm sorry. I don't
2 mean to talk over you, sir.
3 MR. NIXON: Yes. And, further, under
4 the Administrative Code where it says there was -- all
5 privileges apply, so -- so -- so, those appropriate
6 privileges that which -- that my client has either
7 under the First Amendment of the Constitution or under
8 any other statute to provide anything. Now, I -- I --
9 we responded in detail setting out these arguments.
10 This is not new -- should not be new to the Commission
11 or its staff because we responded in detail. So,
12 when -- when you hear counsel for the Commission state,
13 we asked for these earlier and didn't get anything, no,
14 no, no, no. We formally responded setting forth the
15 appropriate objection. The Commission staff failed to
16 have the objections ruled upon by the Commission.
17 CHAIR CLANCY: Well, that's what we're
18 here for today.
19 MR. NIXON: Well, but -- but those
20 aren't part of this Commission's agenda.
21 CHAIR CLANCY: Well, and those were a
22 different subpoena for a different proceeding.
23 MR. NIXON: Well, that's the point.
24 So, I don't want to hear anymore today from the
25 Commission staff that they had asked for something
63
1 earlier to which we didn't respond.
3 MR. NIXON: And I know why the
4 Commission staff did not ask the Commission to rule on
5 our objections. It's because the Commission doesn't
6 have any rules on which to make a decision. That's why
7 they didn't bring forth those objections to the
8 Commission for a ruling previously.
9 CHAIR CLANCY: All right. Any other
10 documents, other than e-mails from the ad -- the e-mail
11 addresses set forth here in Paragraphs 1, 2 for Michael
12 Quinn Sullivan and Paragraphs 1, 2 for Empower Texans,
13 Inc.?
14 MR. STEUSLOFF: Not at this time, no,
15 sir.
16 CHAIR CLANCY: And, Mr. Moore, do you
17 have any documents that you wish to be subpoenaed for
18 the formal hearing?
19 MR. MOORE: Yes, sir. They're
20 contained in my motion, also.
21 CHAIR CLANCY: Okay. Because that's
22 the one that is along with the names of the witnesses?
23 MR. MOORE: Yes, sir. And, basically,
24 I'm looking for written communications concerning --
25 CHAIR CLANCY: Can you direct us to
64
1 the right paragraph?
2 MR. MOORE: Yeah. It's Page 3, the
3 paragraph that's numbered 1. That's where it starts.
5 MR. MOORE: All written communications
6 from Empower Texans on behalf of Empower Texans
7 supporting and opposing candidates, officeholders, or
8 measures in Texas, as well as any communications
9 regarding the solicitation and acceptance of, as well
10 as the use of political contributions and making
11 political expenditures and then including, but not
12 limited to, communications from certain e-mail
13 addresses.
14 And then 2: All written documentation
15 or communications and articles published by Empower
16 Texans -- on Empower Texans' website supporting or
17 opposing candidates, officeholders and measures in
18 Texas, as well as any communications regarding the
19 solicitation and acceptance as well as the use of
20 political contributions and making political
21 expenditures.
22 So, it's outlined in -- in my -- in my
23 motion both for Empower Texans and Mr. Sullivan.
25 sir. Mr. Nixon, any response to the subpoenas in the
65
1 PAC case or the -- the requested subpoena for documents
2 in the PAC case?
3 MR. TRAINOR: This one's the PAC case.
4 MR. NIXON: Is this a different one?
5 MR. TRAINOR: That's the lobby case.
6 MR. NIXON: As I've not seen these
7 before --
8 CHAIR CLANCY: Sure.
9 MR. NIXON: As I've not seen these
10 before, may I have a moment to read them?
11 CHAIR CLANCY: Yes. Counsel, are
12 these the same ones that were requested in the previous
13 document request or is this the first time that we've
14 requested that information?
15 MR. STEUSLOFF: Mr. Chairman, in -- in
16 my cases, in the lobby cases, they're very similar.
17 The -- the primary differences between the documents
18 sought here and previous documents that were requested
19 are that we are now -- we're currently asking for
20 documents between January the 1st of 2010 and the end
21 of December 31st, 2011, which is the period at issue,
22 and they're limited to communications between
23 Mr. Sullivan and members or members elect of the
24 legislature. Previously the time period was a little
25 bit -- was a little bit different and we also included
EXHIBIT 17
18 (Pages 66 to 69)
66
1 communications between any executive representatives,
2 but that's -- but we've changed that.
3 CHAIR CLANCY: Very good. Mr. Nixon?
4 MR. NIXON: Yes. To both of these --
5 to both of these requests for subpoenas, we would
6 object on First Amendment grounds and refer the case,
7 of course, to the NCAA -- NAACP, excuse me, versus
8 State of Alabama. And in the -- and I would remind the
9 Commission that the Commission only has authority to
10 deal with those issues for which it has statutory
11 authority. And once constitutional issues are raised,
12 the Commission no longer has authority to make a ruling
13 on those. You do not have the ability to rule on
14 constitutional grounds. You have the ability to --
15 to -- to rule on the specific statutes.
16 CHAIR CLANCY: So, if I understand
17 your objection correctly, it's -- it's an assertion of
18 constitutional privilege?
19 MR. NIXON: That's -- that is -- that
20 is correct. I mean, look, what they're asking for,
21 they're ask -- they're asking for -- and let's -- let's
22 go on one -- beyond one more thing.
23 CHAIR CLANCY: But before we go onto
24 one other thing --
25 MR. NIXON: No, no, no. It's part of
67
1 the same thing. It's part of the same thing.
2 CHAIR CLANCY: Well, excuse me. I
3 just want to make sure that I understand the
4 constitutional privilege that you're claiming with
5 regard to the requests sought in this document subpoena
6 request.
7 MR. NIXON: Right. I've -- I've
8 enunciated it.
9 CHAIR CLANCY: Well, I'm -- I'm --
10 just one more time --
11 MR. NIXON: It's the First Amendment.
12 CHAIR CLANCY: -- with regard to this
13 document.
14 MR. NIXON: It's the right of
15 association and the right to participate.
16 CHAIR CLANCY: Okay. First --
17 MR. NIXON: You're -- they're
18 seeking -- they're seeking documents, internal e-mails,
19 and -- and communications with their -- with their
20 members, both of which are protected.
21 CHAIR CLANCY: Any other privileges
22 that you're asserting with regard to the response to
23 this document subpoena?
24 MR. NIXON: Statutory -- statutory
25 authority to assert any and all -- all privileges
68
1 pursuant to the Administrative Code.
2 CHAIR CLANCY: Right. But I need to
3 know --
4 MR. NIXON: All right. Now --
5 CHAIR CLANCY: -- which privilege so
6 we can rule on that today.
7 MR. NIXON: Oddly, you don't have the
8 authority to make rulings on constitutional assertions
9 because that is not within this body's jurisdiction.
10 You are limited only to interpret certain aspects of
11 the Election Code and --
12 CHAIR CLANCY: Well, let me clarify
13 it because --
14 MR. NIXON: -- the -- the statute
15 involving --
16 CHAIR CLANCY: -- I'm -- I'm -- I'm a
17 big believer in my limited power because it's very
18 limited. Okay? I'm just trying to rule on the
19 privilege objections for which we are permitted to rule
20 under the Administrative Practices Act and as of now,
21 the only privilege objection that I'm aware of is one
22 where you've alleged the First Amendment, freedom of
23 association right, is the privilege that you're
24 asserting to these written document subpoenas.
25 MR. NIXON: Well --
69
1 CHAIR CLANCY: Are there any other
2 privileges that you're arguing?
3 MR. NIXON: You know, without
4 having -- without having read through these documents
5 in detail because, you know, they're all -- they're
6 about ten pages each and -- and I don't know what they
7 all contain. When you asked the counsel for the
8 Commission if they were different, they said they were,
9 indeed, different, similar but different, and we
10 spent -- before we spent a great deal of time
11 formulating our objections. So, I would ask that the
12 Commission give us the opportunity to have sufficient
13 time to formulate objections. You know, it -- once
14 again, the lack of rules here puts us in a bind. I get
15 a ten-page motion to provide subpoenas and without
16 having had an opportunity, you want me to assert all
17 objections or privileges. It's unfair. It's
18 inappropriate. And -- and I don't think the Commission
19 ought to be putting the Respondent's in that.
20 If -- if -- if you -- if you really
21 want to make good rulings, you're going to have to give
22 us the opportunity to sit down and -- and make proper
23 and thorough objections. Now --
24 CHAIR CLANCY: Now, are there any
25 documents that you wish to subpoena from the Commission
EXHIBIT 17
19 (Pages 70 to 73)
70
1 or any other party, any other person?
2 MR. NIXON: As we learned in the
3 preliminary hearing, Mr. Bresnen used Mr. Greenhaw to
4 obtain -- to make Open Records Request and so the -- so
5 the chain, apparently, is Mr. Greenhaw making an Open
6 Records Request, then getting a lot of documents,
7 giving some portion of documents to Mr. Bresnen, who
8 then gave some portion of those documents -- and I
9 think, if the Chair will remember, there are 3 or 400
10 either documents or pages of documents that Mr. Bresnen
11 didn't produce to the Commission. So, one thing we
12 would want to know is all of the other documents that
13 were obtained pursuant to the Open Records Request.
14 CHAIR CLANCY: And this is from
15 Mr. Bresnen or from Mr. Greenhaw?
16 MR. NIXON: Well, I don't know who has
17 them, but we have --
18 CHAIR CLANCY: Would you like a
19 subpoena --
20 MR. NIXON: -- we have a serious --
21 CHAIR CLANCY: -- issued to both?
22 MR. NIXON: And that's -- that's the
23 other problem that we have. I mean, how is this -- how
24 is this Commission going to deal with the chain of
25 custody issue?
71
1 CHAIR CLANCY: Well, at the moment
2 we're dealing with the subpoena issue.
3 MR. NIXON: Yeah. Well, I want to see
4 what they got. I want to see what they got and what --
5 why they turned over what they turned over and what
6 they didn't -- what they didn't turn over.
7 CHAIR CLANCY: Now, are you seeking
8 subpoenas of Mr. Greenhaw and Mr. Bresnen?
9 MR. NIXON: You know, interestingly,
10 the Commission has a real serious chain of custody
11 problem and a real serious hearsay problem because if
12 the Commission doesn't do that, then you have a -- you
13 have a completeness issue and you have a hearsay issue.
14 So, the question is is the -- is the Commission going
15 to do that? I'm not sure I want to do the Commission's
16 work for it in this case.
17 CHAIR CLANCY: So, you don't want to
18 issue a subpoena for that purpose?
19 MR. NIXON: But I do want to -- I do
20 want to see what they didn't turn over and we will want
21 to depose Mr. Bresnen on why he didn't turn it over.
22 CHAIR CLANCY: I think we're -- I
23 think we're -- we're talking about subpoenas for the
24 formal hearing. We're talking about document subpoenas
25 in advance of the formal hearing. I don't think we're
72
1 in a position where, as I mentioned to Mr. Moore, we're
2 going to take this thing that's been going on for two
3 years and start over.
4 MR. NIXON: Can I -- I'm not sure I
5 understand what the -- what the Chairman means with
6 that comment.
7 CHAIR CLANCY: What I mean is you can
8 subpoena any witnesses you want to attend the formal
9 hearing and if we find good cause, we'll issue them.
10 You can ask for subpoenas for documents and if we find
11 good cause, we'll issue them for production prior to
12 the hearing.
13 MR. NIXON: Is a good cause standard
14 different from the normal standard of asking for
15 information that would lead to the discovery of
16 relevant information? Is it a higher standard or a
17 lessor standard?
18 CHAIR CLANCY: Why don't you tell us
19 what your position is and I'll ask the staff of the
20 Commission to say what their position is.
21 MR. NIXON: Well, the -- my
22 understanding, in 30 years of practicing law, is that
23 good cause is a higher standard than the standard of
24 you only need to seek information which will lead to
25 the discovery of relevant information.
73
1 CHAIR CLANCY: Do you agree with that
2 Commission staff?
3 MR. MOORE: I would agree that it's a
4 higher standard, but it's not that much higher. In
5 this case, good cause is, I think, laid out in the
6 complaint itself. I mean, it's -- his client has been
7 complained against and he needs to respond to that
8 complaint. So, that seems to be good enough cause to
9 me.
10 CHAIR CLANCY: So, just so I
11 understand, counsel, do you wish to issue document
12 subpoenas to any person from this Commission?
13 MR. NIXON: The answer -- the answer
14 is yes. I want to see what it is that Mr. Bresnen or
15 Greenhaw or both received as a result of the Open
16 Records Request. I guess I want to see what
17 Mr. Greenhaw received as a result of the Open Records
18 Request and then I want to see what he gave to
19 Mr. Bresnen and then I want to -- then I want to see
20 what it is that Mr. Bresnen gave to the Commission and
21 then I want -- you know, and then I'm going to want to
22 subpoena the Commission's records, everything the
23 Commission has on file in its file.
24 CHAIR CLANCY: Everything it has in
25 its file?
EXHIBIT 17
20 (Pages 74 to 77)
74
1 MR. NIXON: Everything that it has in
2 its file.
3 CHAIR CLANCY: In a civil matter?
4 MR. NIXON: I'm entitled to it, yes.
5 And -- and you heard -- you heard -- you heard the
6 problem inherent in this situation. The Rules of
7 Evidence clearly state that -- that in a normal civil
8 case, which you said this is, anybody gets to discover
9 that which would lead to the admissibility of relevant
10 information. We are allowed under the APA to take
11 depositions of state agency staff and we are allowed to
12 have disclosed to us all information that is available
13 to you, including any exculpatory information. So,
14 what you heard Mr. Moore say, a complaint has been
15 filed; therefore, the Respondent has to defend himself.
16 I think that is a misstatement of the law.
17 CHAIR CLANCY: Can we hear from them,
18 when you're ready?
19 MR. NIXON: The -- the -- and that
20 is -- that's not good cause. That a complaint has been
21 filed is not good cause. Good cause has been
22 defined -- tried to be defined by the Texas Supreme
23 Court in a number of cases. What the heck is good
24 cause? They've had a really hard time defining it.
25 And, so, the question I have is what -- how does this
75
1 Commission define it? Does the Commission accept the
2 statement: A complaint has been filed and, therefore,
3 that's good cause?
4 You know, we're -- we -- I mean, how
5 do we defend ourselves? Is this what we've -- we've --
6 we've devolved into, anybody can file a complaint and
7 the burden then shifts to the Respondent to defend
8 themselves? That's not where we are or I should hope
9 that that's not where we are. So, in answer to your
10 question --
11 CHAIR CLANCY: Are you ready for them
12 to respond?
13 MR. NIXON: In answer to your
14 question, and I don't mean to -- to filibuster here,
15 but in answer to your question, what I want subpoenaed
16 and who do I want subpoenaed is I have a hard time
17 fully answering it because I don't know the process or
18 the rules by which the Commission will make a decision
19 because some of that just not -- is -- is ill-defined.
20 CHAIR CLANCY: Who wants to respond
21 first? Specifically, in the interest of time, we're
22 not going to talk about the -- the subpoenas to
23 Greenhaw and Bresnen. I want to know about the
24 subpoena to the Commission for their entire file in
25 this matter. What's your position on that?
76
1 MR. STEUSLOFF: Well, there are a
2 number of documents that we received from Mr. Bresnen
3 that we haven't provided to the Commission or to the
4 Respondent and I think many -- you know, many of those
5 documents we -- we wouldn't have an objection to
6 providing, but --
7 CHAIR CLANCY: Well, this isn't many
8 of the documents. This is --
9 MR. STEUSLOFF: Okay.
10 CHAIR CLANCY: -- all the documents.
11 MR. STEUSLOFF: Right. Well, and all
12 of the documents --
13 CHAIR CLANCY: What is your position
14 with regard to whether or not they are entitled to your
15 entire file?
16 MR. STEUSLOFF: I haven't fully
17 researched that issue, but I -- I believe that there
18 are some privileges and some other restrictions on --
19 on access to -- to the Commission's -- Commission's
20 documents.
21 CHAIR CLANCY: And, so, how would you
22 put that?
23 MR. STEUSLOFF: I'm sorry?
24 CHAIR CLANCY: How do you propose
25 limiting that?
77
1 MR. STEUSLOFF: Well, I suppose we
2 could look at -- at the -- at which privileges under
3 the law would -- would permit the Commission to
4 withhold those documents.
5 CHAIR CLANCY: Mr. Moore, do you have
6 anything to add?
7 MR. MOORE: There may be a few
8 documents that are confidential under law. There is
9 certain information that's confidential, Social
10 Security information --
11 CHAIR CLANCY: How do you respond to
12 his exculpatory argument, though? I mean, if it's
13 exculpatory evidence and we're in a criminal
14 proceeding, good or bad, you got to give it up.
15 MR. MOORE: Got to give it up,
16 absolutely.
17 CHAIR CLANCY: Is that what applies in
18 this case?
19 MR. MOORE: I believe so. I mean,
20 it -- our records are open.
21 CHAIR CLANCY: So, you don't have a
22 problem with the subpoena --
23 MR. MOORE: No. I have --
24 CHAIR CLANCY: -- for the Commission's
25 file?
EXHIBIT 17
21 (Pages 78 to 81)
78
1 MR. MOORE: We have no problem with
2 that at all.
3 CHAIR CLANCY: All right. Very good.
4 All right. Commissioners, the -- a couple things that
5 we've got to address.
6 MR. NIXON: To answer your --
7 CHAIR CLANCY: Do you have more
8 subpoenas?
9 MR. NIXON: Yeah. Just to make it
10 real clear, Mr. Bresnen and --
11 CHAIR CLANCY: Mr. Greenhaw and the
12 Commission?
13 MR. NIXON: And -- and those members
14 of the Commission that -- that had meetings and
15 discussions with Mr. Bresnen as relates to formulating
16 these complaints.
18 MR. NIXON: Okay. Even if it includes
19 the attorneys because they acted as investigators for
20 the Commission.
22 Commissioners, just to summarize, we are addressing
23 Item No. 1 of our 13 item agenda this afternoon. Okay.
24 And, so, I hope you've been taking careful notes but
25 I'd like to address some -- some issues. Okay.
79
1 I'm going to break the witness
2 subpoenas into two categories. The first is -- are
3 those folks that we have heard from previously and then
4 the second will be folks that we have not heard from
5 previously and, so, specifically, witness subpoenas for
6 the formal hearing for Feb -- April 3rd of Mr. Michael
7 Sullivan, the Empower Texas custodian of records,
8 Mr. Keffer, Ms. Truitt, Mr. Bresnen. Okay.
9 Is there a motion that the
10 Commission -- Commission issue a subpoena for those
11 witnesses to attend the formal hearing on February the
12 3rd?
13 COMMISSIONER RAMSAY: So move.
14 CHAIR CLANCY: Is there a second?
15 COMMISSIONER UNTERMEYER: Second.
16 CHAIR CLANCY: Second by Commissioner
17 Untermeyer. All in favor of issuing those subpoenas
18 say aye.
19 (All Commissioners replied aye.)
20 CHAIR CLANCY: Anyone opposed?
21 (No one opposed.)
22 CHAIR CLANCY: Okay. That motion is
23 carried.
24 There is a witness that both parties
25 asked about and that was a Mr. Greenhaw who we had not
80
1 heard from previously and it's been asked that he be
2 issued a subpoena to testify at our formal hearing. Is
3 there a motion to issue a subpoena to Mr. Greenhaw at
4 our formal hearing on April 3rd?
5 COMMISSIONER HARRISON: So move.
6 VICE CHAIR HOBBY: Second.
7 CHAIR CLANCY: A motion by
8 Commissioner Harrison, a second by Commissioner Hobby.
9 And all in favor say aye?
13 CHAIR CLANCY: Now, we have a list of
14 five names, specifically employees of the Empower Texas
15 corporation and I want to get their names correct.
16 Their names are Andrew Kerr, K-e-r-r; Dustin Matocha,
17 M-a-t-o-c-h-a; Morgan Williamson; Nathan Ofe, O-f-e;
18 and Rick Perales, P-e-r-a-l-e-s.
19 Is there any discussion regarding the
20 request to issue subpoenas for these five employees?
21 Mr. Hobby?
22 VICE CHAIR HOBBY: If I could direct a
23 question to Commission staff. So, the object of
24 subpoenaing these employees in the lobby case is to
25 learn about Mr. Sullivan's activities -- no -- in the
81
1 lobby case? In the -- in the PAC case, the object is
2 to learn about the activities of the organization
3 relative to whether or not they fit into a
4 general-purpose political committee or not? So,
5 they -- it's the same group of people but you're asking
6 them different questions?
7 MR. STEUSLOFF: Well, regarding the --
8 the lobby case, those aren't individuals that I'm
9 specifically seeking to subpoena.
10 VICE CHAIR HOBBY: Yes, sir.
11 MR. STEUSLOFF: I don't know who with
12 Empower Texans could appear to testify as a designee
13 for the corporation regarding the lobby cases, but I
14 don't know if any of those individuals, other than
15 Andrew Kerr, whose -- who, I believe, is currently in
16 England, I don't know if any of them specifically know
17 about Mr. -- about the activity at issue in the lobby
18 complaints.
19 VICE CHAIR HOBBY: So, those subpoenas
20 are only being requested in the PAC case?
21 MR. MOORE: That's correct.
22 VICE CHAIR HOBBY: Thank you.
23 CHAIR CLANCY: Okay. With regard to
24 subpoenas for Mr. Kerr, Matocha, Williamson, Ofe, and
25 Peralez in the PAC case, is there a motion that we
EXHIBIT 17
22 (Pages 82 to 85)
82
1 issue these subpoenas?
2 COMMISSIONER AKIN: So move.
3 COMMISSIONER LONG: Second.
5 Commissioner Akin, second by Commissioner Long. All in
6 favor of issuing subpoenas for these five witnesses say
7 aye.
9 CHAIR CLANCY: Anyone opposed say no.
11 CHAIR CLANCY: All right. Now, moving
12 now to the document subpoenas. Specifically with
13 regard to the document subpoenas, because of the number
14 of documents that are available in this case, I think
15 it's very important that the parties receive these
16 documents in advance of the hearing so that they have
17 an adequate time to prepare. The 21st day from today
18 would be March 5th. And since y'all need at least a
19 day to get these subpoenas correct, I would -- I would
20 propose that when we move for these we consider
21 production of these documents by March 6th, which is 21
22 days from tomorrow. So, for the purposes of these
23 motions, we'll be looking at production for those days.
24 Now, there are -- there are --
25 basically, there have been requests in the lobby case
83
1 and there have been requests in the PAC case.
2 Specifically, in the lobby case, the request has been
3 for written communications, okay, and this is set forth
4 in the motion, Paragraphs A 1 and A 2, B 1 and B 2.
5 Is there a motion that we issue
6 subpoenas for these documents in those four paragraphs
7 in this motion?
8 COMMISSIONER UNTERMEYER: So move.
9 COMMISSIONER LONG: I'll second it.
11 Commissioner Untermeyer and a second by Commissioner
12 Long. All in favor say aye.
16 CHAIR CLANCY: All right. Now, with
17 regard to the PAC case, in the PAC motion, there is
18 also a request for a subpoena from documents and this
19 is in Paragraphs A 1 and A 2 and Paragraphs B 1.
20 Is there a motion to subpoena these
21 documents in the PAC case?
22 COMMISSIONER RAMSAY: So move.
23 COMMISSIONER AKIN: Second.
24 CHAIR CLANCY: Moved by Commission
25 Ramsay, second by Commissioner Akin.
84
1 COMMISSIONER AKIN: Correct.
2 CHAIR CLANCY: All in favor say aye.
4 CHAIR CLANCY: All opposed?
5 (No one opposed.)
6 CHAIR CLANCY: We also have subpoenas
7 requested by the Respondent, specifically the documents
8 received through his Open Records Request by
9 Mr. Greenhaw, documents received through his Open
10 Request by Mr. Bresnen, as well as communications
11 between -- or transfer of those documents between
12 Mr. Greenhaw and Mr. Bresnen and transfer of those
13 documents between Mr. Bresnen and the Commission and
14 then the Commission's entire file on both these
15 matters.
16 So, with regard to the issuance of the
17 document subpoenas requested by the Respondent, is
18 there a motion that we issue those subpoenas?
19 COMMISSIONER LONG: Is that done
20 electronically or --
21 CHAIR CLANCY: No. The subpoena would
22 be issued to the responding person that holds the
23 documents. They would be prepared, I would sign it as
24 an order of the Commission -- subpoena of the
25 Commission and then they would be delivered the
85
1 subpoena and have that 21-day period to reply.
2 And, so, what we have there is we have
3 these Open Record Requests that have the communications
4 between the legislatures that have been referenced in
5 these proceedings and then we also have the
6 Commission's file.
7 COMMISSIONER LONG: And that was
8 probably what I was asking about, the Commission's
9 file, it might get large. I was just wondering if we
10 can do that electronically?
11 CHAIR CLANCY: Staff, is there -- have
12 we -- if we issue a subpoena to -- for the entire
13 Commission file on these two sworn complaints, is that
14 something that you can manage?
15 MR. MOORE: We can -- we can manage,
16 yes, sir.
17 CHAIR CLANCY: All right. Is there a
18 motion to issue these three document subpoenas?
19 COMMISSIONER AKIN: So moved.
20 CHAIR CLANCY: Commissioner Akin.
21 COMMISSIONER RAMSAY: Second.
22 CHAIR CLANCY: And a second by
23 Commissioner Ramsay. All right. All in favor say aye.
25 CHAIR CLANCY: All right. Very good.
EXHIBIT 17
23 (Pages 86 to 89)
86
1 Okay. Now, I'd ask that the
2 Commission look at their calendars for the month of
3 March. As the -- as folks can see, we have some time
4 challenges, as they say, and specifically I'd like you
5 to look at March 17th, 18th and 19th as possible days
6 for another prehearing conference on pending motions.
7 MR. NIXON: Mr. Chairman?
8 CHAIR CLANCY: Yes, sir?
9 MR. NIXON: So -- so that you and the
10 commissioners are aware, we are set for trial in Bexar
11 County in another case that's going to be a two-week
12 trial beginning March 17th.
14 MR. NIXON: That is absolutely going
15 to trial.
16 CHAIR CLANCY: Can you give us the
17 cause number of that matter?
18 MR. NIXON: In a moment. It's called
19 Empower Texans versus Brad White, et al. I don't
20 memorize cause numbers but --
21 CHAIR CLANCY: No. I -- I can
22 understand that.
23 COMMISSIONER RAMSAY: Maybe we should
24 subpoena -- subpoena Brad White.
25 MR. NIXON: We've already taken his
87
1 deposition; so, we're good.
2 CHAIR CLANCY: All right. What I'm --
3 what I'm trying to determine then, Commissioners, is
4 availability on March 14th, 17th, 18th or 19th for six
5 of us to participate in a hearing on pre-trial motions,
6 at least six of us.
7 COMMISSIONER RAMSAY: I'm good.
8 CHAIR CLANCY: How about on the 14th?
9 14th?
10 COMMISSIONER DELCO: I can't the 14th.
11 CHAIR CLANCY: Commissioner Delco
12 cannot make the 14th.
13 COMMISSIONER UNTERMEYER: I cannot
14 either.
15 COMMISSIONER LONG: It's problematic
16 for me, but 17th, 18th are fine.
17 COMMISSIONER DELCO: 17th, 18th are
18 fine.
19 COMMISSIONER LONG: I can do 17th,
20 18th.
22 MR. NIXON: Mr. Chairman, that's Cause
23 No. 2012-CI-08501 styled Empower Texans, Inc. versus
24 Brad White, et al, in the 407th District Court in Bexar
25 County.
88
1 CHAIR CLANCY: If there's any -- if
2 there's a need for us to go forward on the 14th, is
3 there any way that six commissioners can make
4 themselves available?
5 COMMISSIONER AKIN: I can be there.
6 CHAIR CLANCY: One, two, three. I can
7 make myself available. Anybody else on the 14th?
8 COMMISSIONER LONG: I can be there.
9 CHAIR CLANCY: Commissioner Long can
10 do it.
11 COMMISSIONER HARRISON: I can.
12 CHAIR CLANCY: One, two, three, four,
13 five. Okay. So, Commissioner Delco, Untermeyer or
14 Hobby?
15 COMMISSIONER UNTERMEYER: That's just
16 a one day?
17 CHAIR CLANCY: One day, one afternoon.
18 COMMISSIONER UNTERMEYER: The problem
19 is I'll have been in Washington the night before; so,
20 it's really a question of getting back.
21 CHAIR CLANCY: Travel?
22 COMMISSIONER LONG: Physically.
23 CHAIR CLANCY: So, perhaps, if -- if
24 need be, we can do it the afternoon of the 14th.
25 COMMISSIONER UNTERMEYER: In theory,
89
1 yes.
2 CHAIR CLANCY: Okay. All right. And
3 then -- and then everyone is good on the 17th; is that
4 correct?
5 COMMISSIONER DELCO: Yes.
6 COMMISSIONER UNTERMEYER: Yes.
7 COMMISSIONER LONG: Yes. But I -- I
8 mentioned that I could do it on the 18th. I can't on
9 the 18th.
10 CHAIR CLANCY: Okay. So, Counsel,
11 this is what we'll do: With regard to hearing on
12 pending motions, we'll conduct that hearing on the
13 afternoon of the -- oh, I'm sorry -- on the morning of
14 the 17th, subject to your trial calendar. Let me --
15 let me -- let me restate that because you -- you may go
16 down there and -- and not know. Let's do the afternoon
17 of the 17th; but subject to your -- your -- your trial
18 calendar, we'll also leave open the afternoon of the
19 14th. Okay. So, the afternoon of the 14th will also
20 be available for -- for discussion of these pre-trial
21 motions.
22 So, the two -- now, the -- the
23 challenges that we face then, okay, is that in order
24 for these issues to be properly briefed, I really want
25 there to be a -- a motion response reply, you know,
EXHIBIT 17
24 (Pages 90 to 93)
90
1 deadline. And, so, let's look at 6th, 27th. Okay.
2 Let's have those pre-trial motions filed by February
3 27th. Let's have responses to those motions completed
4 by March 6th. Let's have replies to those motions
5 completed by March 11th and then we'll either have the
6 hearing of the afternoon of the 14th or the afternoon
7 of the 17th, depending on the trial calendar.
8 COMMISSIONER LONG: Are we -- We are
9 saying that the 17th is more probable than the 14th?
10 CHAIR CLANCY: No. I would say the
11 14th is more probable, but my preference would be to
12 have all the commissioners present on the 14th.
13 MR. NIXON: We're absolutely going to
14 trial on that case.
15 CHAIR CLANCY: Right. So, if -- if --
16 if he's in a position where -- I mean, what we're
17 looking at is we're looking at the 14th in the
18 afternoon. Okay. And if -- if -- if that trial is
19 still set to go, I'm sure, you know, counsel will
20 advise us if something changes and then we can move it
21 to the 17th for con -- consideration by the full
22 commission. All right. So, that gives us a schedule
23 for the pre-trial motions.
24 I want to talk for just a second about
25 some of the other items on there and specifically as
91
1 the finders of fact and of law in this case, we really
2 want each party to submit proposed findings of fact,
3 conclusions of law. We want them to submit a list of
4 witnesses and we want them to exchange exhibits and for
5 those to be provided to the Commission as well. Now --
6 MR. NIXON: Mr. --
7 CHAIR CLANCY: -- if we look at
8 this hearing --
9 MR. NIXON: Mr. Chairman, I have -- I
10 have just a question --
12 MR. NIXON: -- to help me formulate
13 responses when we proceed forward.
14 I notice -- you know, we have a copy
15 of the original complaints and I note that the
16 subpoenas go well beyond the bounds of the original
17 complaints, the documents attached to the -- to the
18 original complaints. Was there a point in time when
19 the Commission voted to expand the nature of the
20 investigation?
21 CHAIR CLANCY: Excuse me? Was there
22 an issue of an additional sworn complaint that was
23 issued? Is that what you're asking?
24 MR. NIXON: No. Did the -- did the
25 Commission vote to expand the investigation of my
92
1 clients beyond the original complaints?
2 CHAIR CLANCY: I think the -- I think
3 the question is not one of voting as to what was
4 alleged in the complaint versus the facts that were
5 alleged in the complaint.
6 MR. NIXON: Well, the statute requires
7 the Commission to proceed on the complaint or to vote
8 to expand its investigation. Did the Commission vote
9 to expand its investigation?
10 CHAIR CLANCY: In -- in these two
11 particular claims?
12 MR. NIXON: Yes.
13 CHAIR CLANCY: The complaints are as
14 they are.
15 MR. NIXON: Okay. So, as a matter of
16 clarification then, why is it that the Commission is
17 seeking documents outside those attached to the
18 original two complaints?
19 CHAIR CLANCY: Because the allegations
20 in the complaint are that the Respondent was a lobbyist
21 during the period or that the Respondent operated as a
22 PAC during the period and the information --
23 MR. NIXON: Because of the evidence
24 attached to --
25 CHAIR CLANCY: -- that we're
93
1 considering are those things.
2 MR. NIXON: The complaints speak
3 quite -- they didn't -- they weren't just global
4 complaints. They were complaints stating that --
5 CHAIR CLANCY: Well, but I think --
6 MR. NIXON: -- violated -- they
7 violated a specific statute in this specific way.
8 CHAIR CLANCY: Yeah. Well, that's a
9 different issue.
10 MR. NIXON: No, it's the same issue.
11 This -- that's why -- that's why -- I just want to make
12 sure. I think you've answered my question that the
13 Commission has not voted to expand the complaint.
14 So --
15 CHAIR CLANCY: We have two pending
16 complaints that we're -- or four --
17 MR. NIXON: So, may I ask --
18 CHAIR CLANCY: -- that we're
19 considering.
20 MR. NIXON: -- under what -- under
21 what rule -- rule of this Commission do you seek to
22 have additional documents provided to you through
23 the -- through subpoenas? What rule did the Commission
24 adopt that would make my client -- put him on notice
25 that he would be subject to providing additional
EXHIBIT 17
25 (Pages 94 to 97)
94
1 information to the -- to the Commission?
2 CHAIR CLANCY: I think what we're
3 doing is we're -- we've gone through the process of --
4 of the parties requesting issuance of subpoenas for the
5 formal hearing and the issuance of documents for the
6 formal hearing and we've already addressed that. So, I
7 think we've passed that point at this point.
8 MR. NIXON: I mean, you -- in your
9 mind, you may well have and, indeed, in fact, you may
10 well have. I just need to make sure I had on the
11 record the fact that you were asking for information
12 beyond that which was asserted as violative of any
13 statute in the original complaints.
14 CHAIR CLANCY: I disagree with that
15 statement, sir. We -- the -- this formal hearing is
16 addressing two complaints regarding lobbying and
17 operating as a PAC during a -- during a specified
18 period.
19 MR. NIXON: No. I --
20 CHAIR CLANCY: And that's what the
21 formal hearing is going to be about.
22 MR. NIXON: The record will reflect
23 what it does. Thank you.
24 CHAIR CLANCY: Sure. All right. So,
25 with regard to proposed findings of fact, conclusions
95
1 of law, witnesses and documents, with an April 3rd
2 hearing date and a, perhaps, March 14th date, I really
3 think we're looking at March 20th, Counsel, for those
4 three things, March 20th for proposed findings of fact,
5 conclusions of law, witness statements and documents.
6 Yes, sir?
7 MR. NIXON: I'm going to -- that's --
8 that's in the middle of my trial.
9 CHAIR CLANCY: Well, and -- and to be
10 fair, in the preliminary hearings, you didn't offer one
11 document, I don't think, almost none. It seems like
12 it's going to be the Commission that has all the work
13 to do to provide this evidence. Is that some -- do you
14 have a different plan this time?
15 MR. NIXON: Well, understand, in the
16 preliminary hearing you found that there was
17 insufficient evidence to proceed to actually make a
18 ruling. That was the holding of this -- of this
19 Commission.
20 CHAIR CLANCY: I think I -- I'm --
21 MR. NIXON: And are you asserting
22 or --
23 CHAIR CLANCY: Well, let me --
24 MR. NIXON: -- that Mr. Sullivan
25 doesn't have the right to assert his rights?
96
1 CHAIR CLANCY: Mr. Nixon, let me --
2 let us both do better at using the Commission and the
3 Respondent and the Complainant rather than the personal
4 pronouns involved. Okay. I think that would be a more
5 appropriate way for us to address our roles.
6 MR. NIXON: I was responding to your
7 question, Mr. Chairman.
8 CHAIR CLANCY: And I -- and I -- and
9 I'm -- I'm recognizing that.
10 MR. NIXON: The Commission --
11 CHAIR CLANCY: And that's why I wanted
12 to address the issues of Respondent's evidence. Do you
13 envision providing many more documents this time than
14 last time?
15 MR. NIXON: Well, you've asked for us
16 to find -- provide you proposed findings of law and
17 conclusions of fact in the middle of my trial and I'm
18 telling you that that is a burden that is unfair for me
19 and my client. I can't do that. The entity for whom
20 I'm trying the case and that litigant deserves my full
21 attention to that matter at that time. It's a
22 fundamental problem with the lack of rules that this
23 Commission finds itself.
24 CHAIR CLANCY: Well, my hope is that
25 sometime between now and the -- you know, the month and
97
1 a half until that deadline, there will be some time in
2 your calendar or Mr. Trainor's calendar where they can
3 prepare those documents and if for some reason, that --
4 that imposes an unfair burden, I think it would be
5 appropriate to file some sort of pre-trial motion,
6 which we can consider on the 14th. But in terms of us
7 trying to move forward in the matter, we need to set
8 some deadlines for the orderly exchange of information
9 and a proper hearing on the 3rd.
10 MR. NIXON: I agree with you entirely,
11 entirely and thank you very much for trying. I wish we
12 had a foundation of rules in which to rely upon to do
13 this, one of which is what precedential effect, if any,
14 does the preliminary hearing or any evidence considered
15 by this Commission have as it relates to a formal
16 hearing? You've referred to it on several occasions
17 and just arighted us for not producing information at a
18 preliminary hearing and I'm very confused as to is this
19 a new beginning or is this a continuation of a
20 preliminary hearing?
21 CHAIR CLANCY: Well, that's -- to the
22 extent that there's any confusion, the -- the matters
23 in the confidential preliminary hearing are not
24 considered in the formal hearing. They're not. It's
25 starting over, brand new, brand new record.
EXHIBIT 17
26 (Pages 98 to 101)
98
1 MR. NIXON: Then why do you keep
2 referring to it?
3 CHAIR CLANCY: Well, the reason I
4 refer it to, Counsel, is because we have some
5 familiarity with the facts of this case. We -- we --
6 MR. NIXON: Some members of the
7 Commission do but not all.
8 CHAIR CLANCY: Well, but we've --
9 we've seen a series of witnesses. We've heard the
10 testimony. We have some idea of what the scope of this
11 problem is.
12 MR. NIXON: When --
13 CHAIR CLANCY: And what the scope of
14 the evidence is.
15 MR. NIXON: When you say "we," are you
16 referring to which --
17 CHAIR CLANCY: That's fair. The
18 Commission has some idea of the scope of this problem
19 and the scope of what the evidence is going to require.
20 MR. NIXON: This is a different
21 Commission today than it was then.
22 CHAIR CLANCY: Well, that's true, but
23 I'm really trying to address the fact that the
24 Commission sees this -- this problem as requiring a
25 certain amount of attention based on what we've learned
99
1 up till now. You know, we've had formal hearings that
2 are done in 30 minutes. We've had preliminary hearings
3 that take 15. And, so --
4 MR. NIXON: Is that -- are you
5 asserting that somehow or another we ought to not
6 defend our client fully?
7 CHAIR CLANCY: No, sir. I'm just
8 telling you that based on all the things that we know
9 about this case, I think we're agreeing to an orderly
10 schedule for processing. All right. Let me -- let
11 me go a little --
12 MR. NIXON: I commend --
13 CHAIR CLANCY: -- further now.
14 MR. NIXON: I commend the
15 Commission -- I commend the Chairman of the Commission
16 for trying to do that. I wish I knew what set of
17 guidelines you were utilizing as we went through.
18 CHAIR CLANCY: All right. Okay. The
19 last thing is -- is, perhaps, time limits and -- and
20 the Commission would like the parties to consider the
21 following time limits. Okay. That is one hour to open
22 and close for each side, four hours for the
23 introduction of evidence or cross examination as is
24 appropriate for each side.
25 MR. MOORE: Each side?
100
1 CHAIR CLANCY: And, so, that will give
2 us plenty of time, we think, to address these -- these
3 matters in a full and open way on the 3rd. We'll start
4 at 8:30 and we'll address the exhibits that have been
5 admitted and agreed to and the stipulations and then at
6 9:00 we'll begin with the openings of the parties and
7 we'll work until we get it done.
8 Now, if the parties would like to
9 change the order of the proceedings or enlarge the
10 time, that would also be something that would be
11 appropriate for briefing for consideration at our --
12 our next hearing on the 14th. Okay. Now, how does --
13 what is your initial response to that estimate of time
14 for the formal hearing, Commission staff?
15 MR. STEUSLOFF: Is that -- is that one
16 hour on --
17 CHAIR CLANCY: Both cases.
18 MR. STEUSLOFF: -- the lobby case, one
19 hour on the PAC case?
20 CHAIR CLANCY: Yep. You're not going
21 to double up. No. It's one hour combined.
22 MR. STEUSLOFF: Okay. For -- per
23 each -- each party?
24 CHAIR CLANCY: Combined.
25 MR. STEUSLOFF: Okay.
101
1 CHAIR CLANCY: It's a ten-hour day,
2 ten-hour hearing time day. That's what we're looking
3 at.
4 MR. MOORE: Given the time it took in
5 the preliminary hearing, it's probably going to be
6 reasonable.
7 CHAIR CLANCY: Counsel?
8 MR. NIXON: The first -- first issue
9 is my clients object that because they have the same
10 counsel, you're treating them as one entity. It's
11 inappropriate. They're entitled to be prosecuted
12 separately and defend themselves separately. So, no,
13 we object. The time requirement is very slight and
14 limits our ability to -- to defend ourselves. The
15 accusations, particularly, of the Commission as we
16 learned before and as set out in the complaints will
17 require more time to explain the activities of -- of
18 each of my clients and why they are not violative of
19 any statute, as well as whatever other exculpatory
20 evidence that we may be able to produce, but -- but
21 this is about -- this is about justice and not about
22 efficiency. You know, democracy is the worst form of
23 government, except every other kind. What we're
24 regulating here is speech. What the accusation is you
25 have contacted members -- elected members of the Texas
EXHIBIT 17
27 (Pages 102 to 105)
102
1 legislature without first filing forms with the State
2 of Texas and paying a fee. The question is a
3 fundamental question that belongs to all Texans: What
4 is their right to petition their government and how --
5 how does this statute limit that right.
6 I asked the Commission earlier to
7 please identify the specific conduct it found to be
8 violative of the statute. Remember that? Tell me, was
9 it the 7,000-signature petition that said vote for
10 somebody else for speaker, was it the score-carding, or
11 was it the e-mails that said we're going to grade you?
12 What specifically was it? When I asked Mr. Keffer that
13 on the stand, remember what he said? Well, it's not
14 anything specifically. It's everything together.
15 This Commission has a very, very
16 important decision to make. Mr. Chairman, you said
17 you'd love for there to be 26 million lobbyists in
18 Texas.
19 CHAIR CLANCY: No, I didn't.
20 MR. NIXON: All right. Well, we're
21 going to have a copy of that tape. And that's one of
22 the things that we're going to get out of this -- out
23 of this -- out of the file of the Commission is a copy
24 of those tapes and we'll have a chance to review that,
25 26 million lobbyists.
103
1 The lobby statute only benefits
2 registered lobbyists. It empowers them. It empowers
3 them because they are the ones who have access to their
4 elected officials. When other people seek to empower
5 Texans to have influence over their elected officials,
6 suddenly this agency, in at least one instance as a
7 result of a preliminary finding, wanted to -- wanted to
8 call that regulated speech of which it has authority to
9 regulate. You have to register and pay a fee to the
10 State of Texas before you're allowed to speak through
11 e-mails to elected officials. This is much more than a
12 four-hour combined or in that case, I guess, two
13 combined hearings. It is grossly unfair.
14 CHAIR CLANCY: It's ten hours.
15 MR. NIXON: Grossly unfair. I mean,
16 either -- if you want to regulate speech, it's going to
17 take you longer to make a better case and I'm going to
18 put on a vigorous defense and it's going to be more
19 than ten hours just for that one client; but to loop
20 them together, under what rule are you doing that?
21 CHAIR CLANCY: Counselor, I look
22 forward to your briefing on the -- on the 14th.
23 Commissioners, with regard to the
24 scheduling order, we have sort of two things we have to
25 agree to, okay, and that is for the Commission to have
104
1 a scheduling order that requires briefing of all
2 pre-trial motions to be completed and submitted by
3 February 27th, that responses occur by March 6th, that
4 replies be submitted by March 11th and that there be a
5 hearing at 1:00 p.m. on March 14th to consider those
6 pre-trial motions.
7 The other portion of our pre-trial
8 schedule or our pre-hearing schedule is that proposed
9 findings of fact and conclusions of law from each side,
10 a witness list from each side, and an exhibit list from
11 each side be exchanged and produced to commissioners by
12 March 20th. Is there a motion to approve such a
13 schedule?
14 COMMISSIONER UNTERMEYER: So moved.
15 COMMISSIONER RAMSAY: Second.
16 CHAIR CLANCY: Motion by Commissioner
17 Untermeyer and second by Commissioner Ramsay. All in
18 favor say aye.
20 CHAIR CLANCY: The last issue
21 addresses the timing of the hearing itself on February
22 3rd.
23 COMMISSIONER UNTERMEYER: February
24 3rd? April 3rd.
25 CHAIR CLANCY: I'm sorry. April 3rd
105
1 and that calls for the hearing to begin at 8:30, that
2 each side be giving -- be given at least one hour for
3 opening and closing argument and that it be given at
4 least four hours of direct or cross examination of the
5 witnesses in the case. Does the Commission approve
6 that time schedule for April 3rd?
7 COMMISSIONER RAMSAY: So moved,
8 Chairman.
9 COMMISSIONER DELCO: Second.
10 CHAIR CLANCY: Moved by Commissioner
11 Ramsay and second by Commission Delco. All in favor
12 say aye.
14 CHAIR CLANCY: All right. Anyone
15 opposed?
17 CHAIR CLANCY: All right. Now,
18 Counsel, the 13th item on this agenda is that we have
19 such other matters that will promote the orderly and
20 prompt conduct of the hearing. Are there any other
21 matters that need to be taken up at this hearing?
22 MR. NIXON: Yes.
23 CHAIR CLANCY: Let me start with
24 Commission staff and then we'll give you an
25 opportunity.
EXHIBIT 17
28 (Pages 106 to 109)
106
1 MR. STEUSLOFF: No, Mr. Chairman.
2 CHAIR CLANCY: All right. Sorry,
3 Mr. Nixon.
4 MR. NIXON: Thank you. The APA allows
5 the Commission to issue depositions of those people
6 involved in the investigation.
7 CHAIR CLANCY: I'm sorry?
8 MR. NIXON: I want to depose those
9 people involved with the -- with this agency in the
10 investigation of these complaints pursuant -- pursuant
11 to 2001.094 of the Government Code.
12 CHAIR CLANCY: Sir, I think we've
13 already moved past that item on subpoena of
14 witnesses --
15 MR. NIXON: Well, I --
16 CHAIR CLANCY: -- for the formal
17 hearing.
18 MR. NIXON: -- brought it up before
19 and told you before. You just didn't write it down and
20 didn't act. So, when you said is there anything else,
21 well, that is something else.
22 CHAIR CLANCY: All right. Anything
23 else?
24 MR. NIXON: Yeah. It's a
25 commission -- it's a commission to take the
107
1 depositions. The statute provides for commissions --
2 commissions and the reason -- the reason -- there's a
3 reason for that and that is subpoenas only are
4 effective for 150 miles but this is a state agency
5 having jurisdiction over the entire state. So, the
6 reason the statute refers to commissions is because the
7 commission allows the -- a peace officer in any part of
8 the state to serve the commission so it isn't just
9 limited, as a subpoena is, to 150 miles. It asks the
10 commission, but I want to take the depositions of those
11 people with the Ethics Commission involved in the
12 investigation of these complaints.
13 CHAIR CLANCY: Who are you referring
14 to?
15 MR. NIXON: Well, I -- I mean, that's
16 something I need to find out from the Ethics
17 Commission. So, but -- but my understanding is -- is
18 that it is --
19 CHAIR CLANCY: You don't have specific
20 names?
21 MR. NIXON: -- Mr. Steusloff and Mr. --
22 a Mr. Johnson, David -- and David Reisman -- Bresnen,
23 excuse me -- David Reisman -- excuse me, David Reisman.
24 CHAIR CLANCY: Commission staff, do
25 you have a response to that request to depose those
108
1 individuals?
2 MR. MOORE: As to the attorney, I
3 think it's attorney/client privilege and I don't think
4 it's -- Mr. -- Mr. Nixon is going to say that they're
5 investigators. They're acting as attorneys putting
6 together a case and we oppose any deposition of the
7 attorneys; Mr. Johnson is no longer with the agency,
8 and Mr. Steusloff, also; as to Mr. Reisman, he's no
9 longer with the agency either. So, anything that he
10 can testify to -- I'm not sure what he's there to
11 testify to and what kind of cause it would have here to
12 issue that type of commission for a deposition.
14 MR. MOORE: I haven't heard -- haven't
15 heard what he wants to hear from Mr. Reisman.
16 MR. NIXON: Well, it's always the
17 interesting situation when you have your attorney also
18 being your investigator. Here's how -- here's how I
19 imagine it works. I ask questions, if there's what
20 they think is attorney/client privileged information,
21 they can assert that privilege at which point then I
22 would file a motion to compel, you know, and allow this
23 body to rule on the motion to compel, but they would
24 have to assert that privilege as to each question they
25 believe to be privileged, but they cannot assert it as
109
1 a blanket privilege because they, in fact, did
2 investigate.
3 One of the things that we know is that
4 they had extensive conversations with Mr. Bresnen. I
5 want to know what the details of those conversations
6 are and, for example, I know that the agency itself or
7 the Commission itself provided an -- an agency
8 agreement for Mr. Bresnen to become the agent in fact
9 of Mr. Keffer for the purpose of trying to find some
10 fluidity in the control of documents. So, I want to
11 know the details of how that came about, why is the
12 agency acting on this behalf for a complainant in
13 creating an agency agreement with Mr. Bresnen.
14 Those are things that I'm entitled --
15 I'm entitled to find out because they go to -- they go
16 to motive. They will -- they will -- they go to any
17 kind of attitude or aspect that anybody may have in
18 interpretation of the information. Those are just
19 clear things. That's why most prosecutorial agencies
20 don't have the attorney also serving as the
21 investigator. It's a fundamental flaw with this agency
22 but otherwise you could talk to the investigator
23 individually, but there's -- but there is that problem
24 here.
25 CHAIR CLANCY: Commissioners, the
EXHIBIT 17
29 (Pages 110 to 113)
110
1 Respondent has requested the -- that we give him the
2 permission to depose Mr. Steusloff, Mr. Johnson and
3 Mr. Reisman. I'll entertain a motion to approve that
4 request or a motion to reject that request?
5 Which motion would you like to make,
6 Mr. Hobby?
7 VICE CHAIR HOBBY: I'm not making a
8 motion. I'm just going on record to say that I'm
9 still -- I haven't heard good cause and I can't vote in
10 favor of it. I heard your attempt at good cause and
11 good effort, but the -- to attack the agency -- the
12 agency is not your complainant. We're here to
13 comply -- to compare facts and law and the
14 investigative method in between is roughly irrelevant
15 to me. So, I haven't heard good cause yet to vote in
16 favor of such motion.
17 MR. NIXON: Commissioner Hobby, I'd
18 love to know what good cause is. Once again, we don't
19 have it defined in any rule here. I note that this
20 Commission found good cause a few moments ago as it
21 related to employees of Empower Texans and when asked
22 what they do, their response is, well, they're just
23 employees. One of the things you're going to find out
24 is that two or three of the people they asked -- two?
25 MR. TRAINOR: Three.
111
1 MR. NIXON: -- three people they asked
2 for weren't employees at the time, but that was good
3 cause enough for the Commission at that point. I want
4 to know what they -- what these people did in terms of
5 their investigation both to determine a violation of a
6 statute, as well as any exculpatory evidence. What did
7 they do to determine that there wasn't a violation of
8 the statute and as a -- as an investigator, you have a
9 duty to do both. That's good cause. What did you do,
10 what's in your file, let me go over the documents in
11 your file with you, why is it here, why is this
12 relevant, what does this matter to you? Those are fair
13 questions I get to ask of any investigator. That's a
14 lot more good cause than somebody now works for this
15 company and I don't know what they know that's why I
16 need to talk with them. There's a huge gulp between
17 what I just said and -- and what the Commission found
18 is good cause a moment ago.
19 VICE CHAIR HOBBY: Well, you've asked
20 me to articulate good cause. You've got the entire
21 Commission's file and if you find something in that
22 file that relates to the complaints and the facts
23 alleged in the complaints and you need to depose
24 somebody to develop what is, obviously, an impregnate
25 relevant question, that's good cause but I hadn't heard
112
1 that.
2 CHAIR CLANCY: All right. So --
3 MR. NIXON: May I have, Mr. Chairman,
4 a definition of good cause for the -- from this
5 Commission?
6 CHAIR CLANCY: I think the -- the good
7 cause that we're going to use is the one that's found
8 in the statute that enables us to issue subpoenas for
9 good cause.
10 MR. NIXON: How is that defined? It
11 just uses the word good cause. It doesn't make a
12 definition. The statute does not define good cause.
13 CHAIR CLANCY: Okay. Counsel?
14 MR. MOORE: Well, it is a challenge.
15 I understand that. Let's look at good cause, staff
16 requested information from the Respondent to begin with
17 in this whole process. The Respondent has resisted the
18 whole time. In and of itself, we -- we have -- the
19 issue of good cause is what's going to lead to relevant
20 evidence in the hearing and that's what I think good
21 cause is. Is there a reason for -- to obtain the
22 information to help determine whether the complaint is
23 valid or not.
24 CHAIR CLANCY: All right. Is there a
25 motion to find good cause to depose these three
113
1 witnesses that the Respondent has requested? All
2 right. Seeing none, I'll -- we'll move on to the next
3 step.
4 We have -- we have a lot of things to
5 do before the 3rd, a lot of work to get to. I'm
6 particularly concerned with subpoenas that have to be
7 issued tomorrow for documents and -- and as well as the
8 production of -- of additional documents to the
9 Respondent, but is there anything else that we need to
10 take up at this final pre-trial hearing -- pre-hearing
11 conference, commissioners?
12 MR. NIXON: I -- I have a question,
13 just -- just a matter of clarification. Did the
14 commissioners vote earlier to issue a subpoena to
15 depose Mr. Bresnen?
16 CHAIR CLANCY: No.
17 MR. NIXON: Will the Commission do so
18 at our request?
19 CHAIR CLANCY: Are you requesting that
20 at this time?
21 MR. NIXON: Yes.
22 CHAIR CLANCY: Commissioners, we have
23 voted to issue a subpoena to Mr. Bresnen to come
24 testify at the formal hearing and what the Respondent
25 is asking is asking an opportunity to conduct a
EXHIBIT 17
30 (Pages 114 to 117)
114
1 deposition in advance of that formal hearing where he
2 gets to ask questions that we would not be present at.
3 Okay.
4 Counsel, what's the necessity for the
5 deposition versus his testimony at trial?
6 MR. NIXON: Well, we've issued a
7 subpoena for his documents. I want to be able to go
8 over those documents with him, as I would in any normal
9 case. If we're going to follow --
10 CHAIR CLANCY: As you would in a
11 normal civil case.
12 MR. NIXON: Yes, as I would in a
13 normal civil case. Once -- once again, this is very --
14 this is very -- we have very odds that are --
15 circumstances here where we'll get documents but no
16 depositions, we'll get the Commission's file but not
17 the Commission -- not the investigatory individuals'
18 testimony with regard to what's in their file and why
19 it's there. I don't understand the Commission's
20 reluctance. The statute, of course, doesn't define
21 good cause. It just says "good cause." I'm -- I'm
22 puzzled by -- by the sometimes application of the Rules
23 of Procedure and sometimes non-application of the Rules
24 of Procedure. In any civil case I would get these
25 depositions easy, easy. I wouldn't even have to
115
1 explain. You're -- you're making an accusation against
2 my client. I get to -- I get to defend my client. So,
3 I -- so, I would have these things instantaneously
4 without any argument whatsoever. And, so --
5 CHAIR CLANCY: But that -- but
6 remember, Counsel, this is an administrative civil
7 proceeding for which you have the de novo right to
8 review and in a proceeding in the district court that's
9 going to have the Texas Rules of Civil Procedure
10 available, which will allow you to have all the
11 depositions you want.
12 MR. NIXON: So, but you're saying that
13 my client --
14 CHAIR CLANCY: And, so, in this -- in
15 this abbreviated administrative procedure, okay, we
16 have the right to determine the course of the hearing
17 and whether good cause is shown for certain -- in areas
18 of inquiry. And, so, that's what we're trying to do.
19 MR. NIXON: Mr. Chairman, I heard you
20 just say that you have predisposed this case against my
21 client and that whatever -- whatever rights that we
22 want to assert we have to assert in -- de novo in a
23 district court and I am very --
24 CHAIR CLANCY: No, no, no, no.
25 MR. NIXON: No. I am very aware --
116
1 CHAIR CLANCY: No, no, no.
2 MR. NIXON: -- that this Commission --
3 I am very aware that this Commission has vigorously
4 fought the de nova standard in the past and it's the
5 Commission's formal opinion today that the de novo
6 standard actually does -- does apply and that anything
7 done by this Commission is -- is completely irrelevant
8 if an appeal is taken and what you're also doing is
9 forcing my client to spend extra time and energy going
10 through your process defending itself in this
11 proceeding only to be told, well, you know, take up
12 this issue with a state district court judge and you
13 get a new shot. That's just more expense.
14 CHAIR CLANCY: Mr. Nixon, you need to
15 listen as well as you speak. Okay. What I told you
16 was that we have an administrative procedure for which
17 the Administrative Practices Act applies. The reason
18 that procedure applies is because your client has other
19 due process rights. You want to use all of the Rules
20 of Civil Procedure and all of the rights of appeal and
21 everything else in this procedure right here and that's
22 not how it works.
23 MR. NIXON: I don't know what the
24 rules are in this. We have made them up as we've gone
25 along today. That is what my point from the beginning.
117
1 Had I known, I would have restricted my arguments to
2 whatever formal rules the Commission had adopted since
3 1993; but since the Commission has failed to adopt any
4 rules since 1993, I was -- I have been uncertain
5 throughout the entire afternoon as to which -- which
6 set of arguments and which set of assertions of rights
7 of privileges were going to be valid and invalid and
8 depending on the Commission, we have different --
9 different viewpoints of -- of good cause between who's
10 making the motion and that's -- that's the fundamental
11 process, the lack of due process that we have here.
12 The lack of stated rules at the beginning has
13 diminished my client's ability to assert a defense.
14 Remember, everybody's -- the burden is
15 on the -- is on the Commission, not my -- we don't have
16 to prove our innocence and, yet, I mean -- I mean, why
17 wouldn't the Commission want to have the deposition of
18 the real complainant in this case? Why wouldn't you
19 want that? Why wouldn't that help the Commission reach
20 a determination? I'm puzzled but that there be any
21 thought process about that. I'm puzzled by why
22 wouldn't the Commission want to know what its
23 investigatory branch did in the prosecution of these
24 things. Why -- why wouldn't that help the Commission
25 reach a decision, unless the Commission may well be
EXHIBIT 17
31 (Pages 118 to 121)
118
1 predisposed to a decision already. That's -- that's
2 the problem. So, please, may have the deposition of
3 Mr. Bresnen?
4 CHAIR CLANCY: Mr. Nixon, we're
5 conducting the formal hearing under the Administrative
6 Practices Act. The Act gives us plenty of guidance:
7 guidance on rules of evidence, guidance on exclusion of
8 evidence, guidance on privilege, guidance on objections
9 to evidence, guidance on written evidence, guidance on
10 documentary evidence, guidance on cross examination,
11 guidance on witnesses, guidance on issuance of
12 subpoenas. We have lots of procedures. Okay. And one
13 of those is for me to ask the commissioners whether
14 they have determined whether good cause is shown to
15 issue depositions in this matter.
16 Is there a motion from the Commission
17 for that purpose?
18 VICE CHAIR HOBBY: Depositions
19 generally you mean?
20 CHAIR CLANCY: Deposition of
21 Mr. Bresnen as requested by the Respondent.
22 VICE CHAIR HOBBY: I'm -- I'm prepared
23 to allow it. I think he's a de facto complainant.
24 There are an interesting set of circumstances around
25 the filing of this, but I'll also say investigative
119
1 method and -- and motive are really not important to
2 me, speaking as one commissioner. If we went into the
3 motive of every complainant that filed sworn complaints
4 with this agency, we would be here a long, long time.
5 So, motive and investigative method are outside the
6 scope of my personal interest. I can't speak for the
7 whole commission; but with those limitations, I would
8 vote in favor of the deposition you request.
9 MR. NIXON: I would urge the
10 Commission to -- as it deliberates this issue to remind
11 itself of Section 2001.094 that says the Commission
12 shall issue deposition subpoenas when a party requests
13 it, Subsection A and B, the Commission shall authorize
14 the issuance of any subpoena necessary to require that
15 the witness appear and produce any books, et cetera, et
16 cetera. There's no requirement of good cause in that
17 portion of the Administrative Code.
18 CHAIR CLANCY: While we're addressing
19 this issue of depositions, does Commission staff have
20 any depositions that they intend to take? I mean, I
21 had hoped that the parties had talked before this
22 hearing about how we were going to proceed in an
23 orderly way and now it appears like we're trying to do
24 a whole new set of discovery here three weeks before.
25 I mean, are you seeking the deposition of Mr. Sullivan
120
1 as well?
2 MR. MOORE: No, sir.
3 CHAIR CLANCY: Okay. Mr. Hobby, you
4 have a motion?
5 VICE CHAIR HOBBY: I move that the
6 Respondent's motion to depose Mr. Bresnen be granted
7 with the limitations earlier articulated and that is we
8 will investigate the facts as they are alleged in the
9 complaint and not investigative method or motive or
10 things that are, in other words -- otherwise consuming
11 of this Commission's time but not within our inquiry.
12 CHAIR CLANCY: Is there a second?
13 COMMISSIONER UNTERMEYER: Second.
14 CHAIR CLANCY: Is there any discussion
15 on this motion? I will -- I'll just say that my
16 concern is that we're going down a path that will lead
17 to much more discovery. That's my concern.
18 All in favor of the motion say aye.
19 VICE CHAIR HOBBY: Aye.
20 COMMISSIONER HARRISON: Aye.
21 COMMISSIONER AKIN: Aye.
22 COMMISSIONER UNTERMEYER: Aye.
23 CHAIR CLANCY: All opposed say no.
24 COMMISSIONER RAMSAY: No.
25 COMMISSIONER LONG: No.
121
1 COMMISSIONER DELCO: No.
2 CHAIR CLANCY: Okay. Motion doesn't
3 carry, 4-4. All right. That concludes our work today.
4 MR. NIXON: Mr. Chairman, could we get
5 a confirmation on the record of -- of who voted which
6 way?
7 CHAIR CLANCY: Sure. The
8 commissioners who voted no were Commissioner Long,
9 Clancy, Delco and Ramsey. The commissioners who voted
10 yes were Commissioner Akin, Harrison, Hobby and
11 Untermeyer.
12 MR. NIXON: Thank you.
13 MR. BRESNEN: Mr. Chairman, may I --
14 may I ask a question?
15 CHAIR CLANCY: Sir, it's probably not
16 appropriate at this pre-hearing conference.
17 MR. BRESNEN: I just want to know if
18 I'm supposed to be here on the 14th or the 17th.
19 That's all.
20 CHAIR CLANCY: I think you're supposed
21 to be present when there's a subpoena.
22 MR. NIXON: Could Mr. Bresnen be
23 identified on the record so that you -- the court
24 reporter can identify who it was that made those
25 comments from the audience that was addressed by the
EXHIBIT 17
32 (Pages 122 to 124)
122
1 Chair?
3 sir. All right. I'll obtain a motion to adjourn this
4 pre-hearing conference.
5 COMMISSIONER UNTERMEYER: Move to
6 adjourn.
7 CHAIR CLANCY: Moved by Commissioner
8 Untermeyer.
9 COMMISSIONER HARRISON: Second.
10 CHAIR CLANCY: Second by Commissioner
11 Harrison. All in favor say aye.
13 CHAIR CLANCY: All right, Counsel, you
14 got a lot of work to do. See you on the 14th.
15
16
17
18
19
20
21
22
23
24
25
123
1 TEXAS ETHICS COMMISSION
2
3 )
EMPOWER TEXANS, INC. DBA ) TEXAS ETHICS COMMISSION
4 TEXANS FOR FISCAL )
RESPONSIBILITY, )
5 )
RESPONDENT )
6
and
7
8
9 )
MICHAEL Q. SULLIVAN, ) TEXAS ETHICS COMMISSION
10 )
RESPONDENT )
11 ______________________________________________________
12 REPORTER'S CERTIFICATION TO THE
13 PREHEARING CONFERENCE
14 FEBRUARY 12, 2014
_______________________________________________________
15
16 I, NASHAWN MENELEY, Certified Shorthand
17 Reporter in and for the State of Texas, do hereby
18 certify that the above and foregoing constitutes a true
19 and correct copy of the proceedings had in the
20 above-styled matter.
21 I further certify that I am neither counsel
22 for, related to, nor employed by any of the parties to
23 the action in which this hearing was taken, and further
24 that I am not financially or otherwise interested in
25 the outcome of the action.
124
1 Certified to by me this ____________ day of
2 ____________________, 2014.
3
4
5
6 _______________________________
NASHAWN MENELEY, Texas CSR 3351
7 Expiration Date: 12/31/15
Firm Registration No. 724
8 Advanced Depositions
17752 Skypark Circle, Suite 100
9 Irvine, CA 92614
(855) 811-3376
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
EXHIBIT 17
A
abate 38:24
abbreviated
115:15
ability 26:4
50:25 51:2
66:13,14
101:14 117:13
able 5:1,3 20:11
20:14 22:20
25:8 42:3
101:20 114:7
above-entitled
1:16
above-styled
123:20
absent 35:11,11
absolutely 77:16
86:14 90:13
accept 56:5,5
75:1
acceptance 64:9
64:19
access 20:20
76:19 103:3
accomplishing
39:6 47:17
accounting 22:8
accusation
101:24 115:1
accusations
101:15
acquiesce 42:6
acquiescence
42:13
act 15:17,18,23
16:4,7,11 26:6
26:9 35:24
36:4,9,11,12
44:6,19 48:23
50:8 56:3
68:20 106:20
116:17 118:6,6
acted 78:19
acting 34:3
108:5 109:12
action 11:20
16:24 33:15
123:23,25
activities 33:3
80:25 81:2
101:17
activity 81:17
actual 47:1
ad 63:10
add 50:22 77:6
addition 21:12
51:9
additional 19:24
91:22 93:22,25
113:8
address 16:8
24:20 28:1
39:2 43:10,10
46:3 49:9
59:19 78:5,25
96:5,12 98:23
100:2,4
addressed 33:10
45:23 94:6
121:25
addresses 22:16
63:11 64:13
104:21
addressing
78:22 94:16
119:18
adequate 82:17
adjourn 122:3,6
adjudge 52:5
Administration
52:3
administrative
11:1,5 15:17
15:18,22 16:4
16:7,10 26:6
27:12 35:24
36:4,9,10,12
41:25 44:5,18
44:19 51:11
55:4 56:3 62:4
68:1,20 115:6
115:15 116:16
116:17 118:5
119:17
admissibility
46:19 74:9
admit 10:18
27:24
admitted 46:9
100:5
admittedly
15:21
adopt 7:19 8:2,3
8:5,6,16 9:17
10:5,16,23,25
11:2 12:6,14
12:16 26:18
27:25 34:20
36:17 41:25
42:2 43:6
44:19,25 48:18
52:20 56:15
93:24 117:3
adopted 7:21
8:13 9:16
10:14 11:19
12:1 13:4
27:21 35:11
37:23 39:15,16
52:3,7,9 53:3
55:4 56:4
117:2
adopting 11:13
11:16 12:2
13:11 36:11,13
38:20 41:5
44:15
advance 4:12,17
46:18 71:25
82:16 114:1
Advanced 124:8
advise 14:8 17:3
17:15 90:20
advocacy 33:13
affiliation 33:12
afforded 28:7,15
afraid 25:6
afternoon 3:1
57:7 78:23
88:17,24 89:13
89:16,18,19
90:6,6,18
117:5
agencies 11:2,15
109:19
agency 11:6,9,9
11:12 15:19
17:24 36:21
51:1,9,10
52:15,17 56:4
56:6 61:9
74:11 103:6
106:9 107:4
108:7,9 109:6
109:7,12,13,21
110:11,12
119:4
agenda 39:7
52:16 57:1
62:20 78:23
105:18
agent 109:8
ago 28:4 37:20
110:20 111:18
agree 5:3,18 6:1
7:12,16 12:12
13:19 14:18
48:20,24 51:3
55:19 73:1,3
97:10 103:25
agreed 6:21 7:1
7:3,6,7,9 21:4
42:6 46:11
100:5
agreeing 99:9
agreement 6:4
13:19 109:8,13
agreements
46:19
ahead 25:14
ahold 21:17
Akin 2:4 82:2,5
83:23,25 84:1
85:19,20 88:5
120:21 121:10
al 86:19 87:24
Alabama 32:5,5
32:9,11,13
35:5 66:8
allegations 19:5
19:8 31:14
92:19
alleged 11:20
34:2 68:22
92:4,5 111:23
120:8
allow25:15
31:20 36:7
42:2 108:22
115:10 118:23
allowed 6:18
74:10,11
103:10
allows 26:8 30:6
51:13 52:5
106:4 107:7
alters 12:6
Amendment
16:9,13,21
17:7 30:11,12
62:7 66:6
67:11 68:22
amendments
30:11
amount 4:11 6:5
17:23 98:25
Andrew21:14
80:16 81:15
announcements
3:6
answer 24:4
73:13,13 75:9
75:13,15 78:6
answered 93:12
EXHIBIT 17
answering 75:17
anti-staff 25:2
anybody 13:14
41:19 55:10
74:8 75:6 88:7
109:17
anymore 62:24
anytime 52:12
APA5:9 51:3,5
51:19 74:10
106:4
apologize 21:20
app 11:17
apparently 70:5
appeal 24:15
48:9 116:8,20
appear 21:4
81:12 119:15
appears 119:23
applicability
11:18 12:21
application 10:8
11:21 114:22
applied 8:17,18
10:11 38:3
53:2
applies 15:17
52:15 77:17
116:17,18
apply 8:15 10:10
16:2,3,3,6,11
16:12 36:20
42:8,10,11
47:25 48:7,13
49:5,6 51:4
52:16,24 56:8
59:5 62:5
116:6
applying 48:12
appreciate 25:8
27:7,17,19
28:10 29:3
54:11,12
appropriate
17:6 42:4 43:9
60:13 62:5,15
96:5 97:5
99:24 100:11
121:16
approve 17:19
49:13 104:12
105:5 110:3
April 3:24 5:5
5:13 79:6 80:4
95:1 104:24,25
105:6
area 22:8
areas 20:10
115:17
arguing 69:2
argument 13:10
29:5 37:22
39:6 77:12
105:3 115:4
arguments
37:14,15,15
39:8 46:24
62:9 117:1,6
arighted 97:17
Article 8:4
articles 64:15
articulate
111:20
articulated
120:7
ASHLEY2:7
aside 27:2 29:9,9
asked 4:2 7:19
24:23 25:24,25
49:25,25 50:11
50:16 62:13,25
69:7 79:25
80:1 96:15
102:6,12
110:21,24
111:1,19
asking 30:22
43:23 45:16
65:19 66:20,21
72:14 81:5
85:8 91:23
94:11 113:25
113:25
asks 107:9
aspect 109:17
aspects 68:10
assert 67:25
69:16 95:25
108:21,24,25
115:22,22
117:13
asserted 30:10
94:12
asserting 67:22
68:24 95:21
99:5
assertion 66:17
assertions 68:8
117:6
assistant 3:14
association
33:14,19 67:15
68:23
associations
33:20
assume 31:16
55:19
assuming 55:12
attached 91:17
92:17,24
attack 110:11
attempt 110:10
attempts 24:14
attend 72:8
79:11
attendance
20:24
attention 96:21
98:25
attitude 109:17
attorney 108:2
108:17 109:20
attorney/client
108:3,20
attorneys 2:11
2:16,21 8:21
78:19 108:5,7
audience 121:25
Austin 1:18 2:13
2:22 27:2
authority 12:2
15:20 26:4
29:10 36:24
38:3 66:9,11
66:12 67:25
68:8 103:8
authorize
119:13
availability 87:4
available 11:10
74:12 82:14
88:4,7 89:20
115:10
aware 32:3 33:9
35:13 55:13
68:21 86:10
115:25 116:3
aye 79:18,19
80:9,10 82:7,8
83:12,13 84:2
84:3 85:23,24
104:18,19
105:12,13
120:18,19,20
120:21,22
122:11,12
B
B83:4,4,19
119:13
back 12:17
22:19 40:6
47:14,20 54:24
54:25 61:12
88:20
bad 77:14
based 10:3 39:21
48:15 98:25
99:8
basically 5:12
49:12 63:23
82:25
basics 54:25
basis 24:9 28:17
30:20,23 31:2
beginning 86:12
97:19 116:25
117:12
begins 28:9
behalf 3:20 64:6
109:12
BEIRNE2:16
2:20
believe 6:22 21:3
23:8 24:1
29:11 49:19
53:11 54:9
57:22 76:17
77:19 81:15
108:25
believer 68:17
belongs 102:3
benefits 103:1
best 52:25
better 34:22
96:2 103:17
Bexar 86:10
87:24
beyond 29:12
66:22 91:16
92:1 94:12
big 68:17
bind 69:14
binders 46:17
bit 5:16 37:7
65:25,25
blanket 109:1
BOB2:5
body 10:5,13,18
24:15 55:8,14
55:15 60:7
108:23
body's 68:9
books 119:15
Boulevard 2:17
bound 52:19
EXHIBIT 17
bounds 34:4
91:16
Brad 86:19,24
87:24
branch 117:23
brand 24:16
28:3 97:25,25
break 45:3 79:1
Bresnen 20:4
21:2 70:3,7,10
70:15 71:8,21
73:14,19,20
75:23 76:2
78:10,15 79:8
84:10,12,13
107:22 109:4,8
109:13 113:15
113:23 118:3
118:21 120:6
121:13,17,22
brief 17:14 38:8
38:16 39:2,9
39:10 45:6
57:11 61:5
briefed 38:6,18
40:8 89:24
briefing 17:6
100:11 103:22
104:1
briefly 50:21,23
briefs 40:9
bring 63:7
broad 60:1
brought 9:3
23:20 38:19
52:2 56:12
106:18
buck 43:8
Building 2:12
burden 30:25
54:13 75:7
96:18 97:4
117:14
C
C2:1,4 48:7
CA124:9
calendar 40:16
89:14,18 90:7
97:2,2
calendars 47:16
86:2
call 19:7,17,24
19:25 20:1,2,4
24:22 27:5
28:24 31:12
41:11 103:8
called 35:8
86:18
calling 20:23
21:14 35:16
calls 105:1
candidates 64:7
64:17
capability 15:19
capable 48:1
Capitol 1:18
care 31:5
careful 78:24
carried 79:23
carry 121:3
case 4:12 6:6 7:2
8:11 9:22
10:11,11 12:3
17:18 18:6,8
19:7,13,19,22
20:22 32:4,5
46:15 48:13
51:7,14 52:17
54:10 55:6
61:13 65:1,2,3
65:5 66:6
71:16 73:5
74:8 77:18
80:24 81:1,1,8
81:20,25 82:14
82:25 83:1,2
83:17,21 86:11
90:14 91:1
96:20 98:5
99:9 100:18,19
103:12,17
105:5 108:6
114:9,11,13,24
115:20 117:18
caselaw9:21
cases 5:23,24
19:4,15 33:15
53:2,9 65:16
65:16 74:23
81:13 100:17
CASTELLAN...
2:25
Catch-22 40:1
categories 79:2
cause 17:20 23:6
23:9 24:2,25
29:16 59:19
61:4,8,10 72:9
72:11,13,23
73:5,8 74:20
74:21,21,24
75:3 86:17,20
87:22 108:11
110:9,10,15,18
110:20 111:3,9
111:14,18,20
111:25 112:4,7
112:9,11,12,15
112:19,21,25
114:21,21
115:17 117:9
118:14 119:16
causes 1:17
certain 9:7 16:6
19:23 36:24,25
57:6 64:12
68:10 77:9
98:25 115:17
certainly 35:3
53:20 58:24
CERTIFICA...
123:12
certified 7:3
123:16 124:1
certify 123:18
123:21
cetera 119:15,16
chain 70:5,24
71:10
Chair 2:3,3 3:1
3:22 6:4,20,24
7:14 8:24
12:25 14:6,12
14:21,24 15:4
15:7,9 17:2
18:21 19:12
20:6,9,16,21
21:11,23 22:1
22:9,12,15,18
22:24 23:3,11
23:16,18,22
24:6,11,15,17
25:11,16,21
26:2,5,8,11,25
27:8,10,15
28:18,25 29:4
29:14,20,23,25
30:2,13,17,22
31:1,4,22 32:1
32:23 33:2,5
35:6,12,15,18
35:21,23 36:7
36:13,18 37:2
37:6,23 38:5
38:10,14,21
39:5 40:11,15
40:21 41:1,10
41:13,16,20
42:8,10,16,25
43:12,16,19,23
44:4,8,12,16
44:22 45:1,12
45:20,23 47:20
48:20,24 49:8
49:18,22 50:14
50:16,17,20
51:24 54:4,16
54:23 55:1,9
56:9,16,19,22
56:25 57:3,8
58:2,6,9,15,19
58:22,25 59:7
59:10,13 60:19
60:23,25 61:3
61:11,22,24
62:1,17,21
63:2,9,16,21
63:25 64:4,24
65:8,11 66:3
66:16,23 67:2
67:9,12,16,21
68:2,5,12,16
69:1,24 70:9
70:14,18,21
71:1,7,17,22
72:7,18 73:1
73:10,24 74:3
74:17 75:11,20
76:7,10,13,21
76:24 77:5,11
77:17,21,24
78:3,7,11,17
78:21 79:14,16
79:20,22 80:6
80:7,11,13,22
81:10,19,22,23
82:4,9,11
83:10,14,16,24
84:2,4,6,21
85:11,17,20,22
85:25 86:8,13
86:16,21 87:2
87:8,11,21
88:1,6,9,12,17
88:21,23 89:2
89:10 90:10,15
91:7,11,21
92:2,10,13,19
92:25 93:5,8
93:15,18 94:2
94:14,20,24
95:9,20,23
96:1,8,11,24
97:21 98:3,8
98:13,17,22
EXHIBIT 17
99:7,13,18
100:1,17,20,24
101:1,7 102:19
103:14,21
104:16,20,25
105:10,14,17
105:23 106:2,7
106:12,16,22
107:13,19,24
108:13 109:25
110:7 111:19
112:2,6,13,24
113:16,19,22
114:10 115:5
115:14,24
116:1,14 118:4
118:18,20,22
119:18 120:3,5
120:12,14,19
120:23 121:2,7
121:15,20
122:1,2,7,10
122:13
Chair's 14:18
50:3
Chairman 3:8
3:18 7:13
14:23 17:1
18:20 19:21
27:17,18 28:9
28:21 34:11
36:3,12 37:21
38:7,17 39:13
40:19 41:18,23
48:4 50:10
52:21 57:17
65:15 72:5
86:7 87:22
91:9 96:7
99:15 102:16
105:8 106:1
112:3 115:19
121:4,13
challenge 6:15
17:13 112:14
challenges 45:7
86:4 89:23
chance 102:24
change 10:10
13:12 43:18
100:9
changed 44:2
66:2
changes 90:20
chapter 11:11
25:4 26:20,20
39:18 48:4,7
48:11
CHASE2:6
choices 12:18
choose 13:18
35:10 36:20
56:7
chooses 9:5
choosing 27:23
chose 13:8 41:25
chosen 7:23
circle 34:19
124:8
circumstance
32:22 43:22
circumstances
9:7 114:15
118:24
citizens 46:22
civil 6:19 9:8,8
9:21 15:15
17:6 25:3
27:11 34:21,23
39:19 48:14
51:20 52:25
53:2 54:1,1
59:23 74:3,7
114:11,13,24
115:6,9 116:20
Claim59:5
claiming 67:4
claims 92:11
Clancy 2:3 3:1,8
3:22 6:4,20,24
7:14 12:25
14:6,21,24
15:4 17:2
18:21 19:12
20:6,9,16,21
21:11,23 22:1
22:9,12,15,18
22:24 23:3,11
23:16,18,22
24:6,11,17
25:1,11,16,21
26:2,5,8,11,25
27:8,10,15
28:18,25 29:4
29:14,20,23,25
30:2,13,17,22
31:1,4,22 32:1
32:23 33:2,5
35:6,12,15,18
35:21,23 36:7
36:13,18 37:2
37:6 38:5,10
38:14,21 39:5
40:11,15,21
41:1,10,13,16
41:20 42:8,10
42:16,25 43:12
43:16,19,23
44:4,8,12,16
44:22 45:1,12
45:20,23 47:20
48:20,24 49:8
49:18,22 50:14
50:17,20 51:24
54:4,16,23
55:1 56:19,22
56:25 57:3,8
58:2,6,9,15,19
58:22,25 59:7
59:10,13 60:19
60:23,25 61:3
61:11,22,24
62:1,17,21
63:2,9,16,21
63:25 64:4,24
65:8,11 66:3
66:16,23 67:2
67:9,12,16,21
68:2,5,12,16
69:1,24 70:14
70:18,21 71:1
71:7,17,22
72:7,18 73:1
73:10,24 74:3
74:17 75:11,20
76:7,10,13,21
76:24 77:5,11
77:17,21,24
78:3,7,11,17
78:21 79:14,16
79:20,22 80:7
80:11,13 81:23
82:4,9,11
83:10,14,16,24
84:2,4,6,21
85:11,17,20,22
85:25 86:8,13
86:16,21 87:2
87:8,11,21
88:1,6,9,12,17
88:21,23 89:2
89:10 90:10,15
91:7,11,21
92:2,10,13,19
92:25 93:5,8
93:15,18 94:2
94:14,20,24
95:9,20,23
96:1,8,11,24
97:21 98:3,8
98:13,17,22
99:7,13,18
100:1,17,20,24
101:1,7 102:19
103:14,21
104:16,20,25
105:10,14,17
105:23 106:2,7
106:12,16,22
107:13,19,24
108:13 109:25
112:2,6,13,24
113:16,19,22
114:10 115:5
115:14,24
116:1,14 118:4
118:20 119:18
120:3,12,14,23
121:2,7,9,15
121:20 122:2,7
122:10,13
clarification
92:16 113:13
clarify 15:20
68:12
clear 15:15,16
34:24 54:5
55:2 78:10
109:19
clearly 43:2 74:7
client 8:9 27:3
28:19 32:24
43:20,24 44:2
62:6 73:6
93:24 96:19
99:6 103:19
115:2,2,13,21
116:9,18
client's 117:13
clients 13:18
28:15,23 56:11
92:1 101:9,18
close 99:22
closing 105:3
Code 8:4 11:1,16
25:3 34:4,7
39:19 42:1
48:5,6 62:4
68:1,11 106:11
119:17
codes 11:5 30:9
combined
100:21,24
103:12,13
combining 28:11
EXHIBIT 17
come 12:8 27:2
29:7 31:20
34:18,19,22
37:24 46:22
47:14 113:23
coming 55:24
commend 99:12
99:14,15
comment 11:4
42:2 53:17
72:6
comments 55:17
121:25
commission 1:1
1:3,9,17 2:2,9
2:11 3:3,11,15
3:16,23 5:4,25
6:1 7:18,19,21
7:23 8:1,2,10
8:15,19,23,25
9:5,11,16 12:2
12:3,14,15,23
13:7,16 14:12
14:13,25 15:1
15:11 16:14,16
16:19 17:9,16
18:4 19:1,2,9
23:25 24:3,8
24:13,14,23
25:5,10 26:13
26:17,18 27:21
27:23,25 28:16
28:22 29:2
30:17 31:20,25
32:3,7 33:9,24
34:20 35:11
36:8 38:2,11
38:15,19,20
39:14,18,19,24
39:25 40:1,3
41:4,7,21,24
43:2,4 44:3
45:17 46:13,25
48:10,17,18,21
48:25 49:3,10
49:17 50:1,2,6
50:19 52:5,9
52:11,13,18,19
53:3,12,14
54:7,13 55:5,6
55:13,23 56:1
56:10,13,17
57:15 58:10
59:2,6,16 60:3
60:4,12,17
62:10,12,15,16
62:25 63:4,4,5
63:8 66:9,9,12
69:8,12,18,25
70:11,24 71:10
71:12,14 72:20
73:2,12,20,23
75:1,1,18,24
76:3 77:3
78:12,14,20
79:10,10 80:23
83:24 84:13,24
84:25 85:13
86:2 90:22
91:5,19,25
92:7,8,16
93:13,21,23
94:1 95:12,19
96:2,10,23
97:15 98:7,18
98:21,24 99:15
99:15,20
100:14 101:15
102:6,15,23
103:25 105:5
105:11,24
106:5,25,25
107:7,8,10,11
107:17,24
108:12 109:7
110:20 111:3
111:17 112:5
113:17 114:17
116:2,3,7
117:2,3,8,15
117:17,19,22
117:24,25
118:16 119:7
119:10,11,13
119:19 123:1,3
123:9
Commission's
5:21 8:13
28:10,12 40:24
47:25 62:20
71:15 73:22
76:19,19 77:24
84:14 85:6,8
111:21 114:16
114:19 116:5
120:11
commissioner
53:15,19,21
54:14 79:13,15
79:16 80:5,8,8
82:2,3,5,5 83:8
83:9,11,11,22
83:23,25 84:1
84:19 85:7,19
85:20,21,23
86:23 87:7,10
87:11,13,15,17
87:19 88:5,8,9
88:11,13,15,18
88:22,25 89:5
89:6,7 90:8
104:14,15,16
104:17,23
105:7,9,10
110:17 119:2
120:13,20,21
120:22,24,25
121:1,8,10
122:5,7,9,10
commissioners
3:9,19 4:13
5:14 8:21
14:18 23:6
27:1,19 45:8
45:22 47:9
49:12 78:4,22
79:19 80:10
82:8 83:13
84:3 85:24
86:10 87:3
88:3 90:12
103:23 104:11
104:19 105:13
109:25 113:11
113:14,22
118:13 121:8,9
122:12
commissions
107:1,2,6
committee 81:4
common 5:23,24
communicatio...
22:4 63:24
64:5,8,12,15
64:18 65:22
66:1 67:19
83:3 84:10
85:3
company 111:15
compare 110:13
compel 20:24
108:22,23
compelled 33:12
61:18
complainant
26:14 96:3
109:12 110:12
117:18 118:23
119:3
complainants
20:3 21:2
29:13
complained 73:7
complaint 22:16
73:6,8 74:14
74:20 75:2,6
91:22 92:4,5,7
92:20 93:13
112:22 120:9
complaints 1:1,7
3:4,11,16 13:3
13:22 28:13
43:25 57:19
78:16 81:18
85:13 91:15,17
91:18 92:1,13
92:18 93:2,4,4
93:16 94:13,16
101:16 106:10
107:12 111:22
111:23 119:3
123:1,7
completed 46:4
90:3,5 104:2
completely
55:14,15 116:7
completeness
71:13
compliance 60:2
complied 51:22
comply 36:25
110:13
comprehend
25:9
con 90:21
concern 120:16
120:17
concerned 18:1
46:13 113:6
concerning
63:24
concludes 121:3
conclusions
18:11,15 46:7
91:3 94:25
95:5 96:17
104:9
condensation
54:2
condense 53:25
conduct 7:20
36:8 89:12
102:7 105:20
113:25
conducted 3:25
EXHIBIT 17
5:11 8:1
conducting
118:5
conducts 49:1
conference 1:12
3:4 4:3,20
37:10,19 38:23
38:23 41:2
47:23 59:14
86:6 113:11
121:16 122:4
123:13
conferred 4:24
confidential
77:8,9 97:23
confirmation
121:5
confused 97:18
confusion 97:22
consider 4:18
10:18 18:2
23:15 40:12
41:22 51:15
61:9 82:20
97:6 99:20
104:5
consideration
90:21 100:11
considered
97:14,24
considering 93:1
93:19
consist 19:4
consistent 26:20
48:11,19 50:8
constitute 33:13
constitutes
123:18
Constitution
36:23 60:6
61:20,21 62:7
constitutional
33:17 66:11,14
66:18 67:4
68:8
constitutionally
34:15
consuming
120:10
contacted
101:25
contain 69:7
contained 63:20
content 37:17
contested 12:24
13:17 48:13
51:7,11,14
52:17 55:8
continually 53:4
60:16
continuation
97:19
continue 37:18
47:23 61:5,6
contrary 49:21
contributions
21:10 64:10,20
control 20:15
37:7 109:10
convenience
28:12
conversations
109:4,5
coordinator
22:4
copies 45:9,11
45:21 50:12
copy 59:20
91:14 102:21
102:23 123:19
corporate 30:3,7
corporation
20:10 21:5,9
80:15 81:13
correct 13:15
23:8 49:14
50:2 66:20
80:15 81:21
82:19 84:1
89:4 123:19
correctly 66:17
counsel 2:8 3:7
3:14,22 14:8
15:5 17:4,15
17:16 23:19,23
38:11,14 45:2
45:7 47:15
58:19,23,25
62:12 65:11
69:7 73:11
89:10 90:19
95:3 98:4
101:7,10
105:18 112:13
114:4 115:6
122:13 123:21
Counselor
103:21
country 21:16
28:7 34:10
County 86:11
87:25
couple 35:7 78:4
course 5:10
11:24 51:2
66:7 114:20
115:16
court 8:17 12:18
21:24 32:4,10
33:9,18,23
34:22,23 35:3
54:2 74:23
87:24 115:8,23
116:12 121:23
create 42:1
created 36:21
56:13
creates 13:6,6
creating 109:13
credibility 46:16
criminal 77:13
cross 99:23
105:4 118:10
CSR1:20 124:6
current 22:2
currently 10:8
65:19 81:15
custodian 20:17
20:19 21:7
79:7
custody 20:15
70:25 71:10
D
date 7:5,21 9:16
41:21 42:17
57:10 95:2,2
124:7
David 107:22,22
107:23,23
day 82:17,19
88:16,17 101:1
101:2 124:1
days 5:18,20 6:9
18:4 27:3
82:22,23 86:5
DBA1:3 123:3
de 115:7,22
116:4,5 118:23
deadline 4:15,19
46:6 90:1 97:1
deadlines 97:8
deal 66:10 69:10
70:24
dealing 25:22
71:2
dealings 21:8
December 65:21
decide 5:22
decided 23:1
32:11 55:8
decision 8:20
10:3 11:6,10
31:21 49:10,13
63:6 75:18
102:16 117:25
118:1
decision-maker
8:19
decisions 15:1
declaratory
11:20
declined 39:20
deemed 9:23
42:14,20,21
defend 10:20
74:15 75:5,7
99:6 101:12,14
115:2
defendant 18:9
defending
116:10
defense 103:18
117:13
define 75:1
112:12 114:20
defined 60:8
61:10 74:22,22
110:19 112:10
defining 74:24
definition 112:4
112:12
Delco 2:4 53:15
53:19 87:10,11
87:17 88:13
89:5 105:9,11
121:1,9
deliberate 55:17
deliberates
119:10
deliberation
55:18
delivered 84:25
democracy
101:22
depending 90:7
117:8
depose 33:1
71:21 106:8
107:25 110:2
111:23 112:25
113:15 120:6
deposing 35:1
deposition 34:12
34:14 87:1
108:6,12 114:1
EXHIBIT 17
114:5 117:17
118:2,20 119:8
119:12,25
depositions
74:11 106:5
107:1,10
114:16,25
115:11 118:15
118:18 119:19
119:20 124:8
deprivation 12:5
describe 60:9
description
24:13
deserves 96:20
designate 30:7
designee 20:2
81:12
desire 28:10
detail 62:9,11
69:5
details 109:5,11
determination
8:23 12:8 34:6
117:20
determinations
16:1
determine 18:24
31:12,13 87:3
111:5,7 112:22
115:16
determined
11:19 118:14
determines
16:17
develop 111:24
developing
60:22
developmental
22:7,9
devolved 75:6
differences
65:17
different 18:3,9
18:9,10,15,17
18:18 24:19
28:13,13,14
50:14,15 52:6
54:19,20 55:14
55:15 62:22,22
65:4,25 69:8,9
69:9 72:14
81:6 93:9
95:14 98:20
117:8,9
dilemma 27:9
55:22 56:8
diminished
117:13
direct 34:9
63:25 80:22
105:4
director 3:9
21:15 22:3,7
22:10
Director/Special
2:8
dis 52:21
disagree 15:8
52:22 94:14
disclose 28:22
33:22 35:10
36:5,5
disclosed 74:12
disclosing 34:7
disclosure 6:17
33:12
discover 6:13
74:8
discovery 5:10
5:11 6:12
22:21 26:19
31:11 51:21
72:15,25
119:24 120:17
discuss 15:12
25:17 57:5
discussed 5:8,12
17:14 37:11
45:14
discussion 80:19
89:20 120:14
discussions
78:15
dismiss 38:25
39:18 40:12
43:24
dismissed 43:20
disseminate
57:11
district 8:17
12:18 35:3
87:24 115:8,23
116:12
document 59:1
60:10 65:13
67:5,13,23
68:24 71:24
73:11 82:12,13
84:17 85:18
95:11
documentary
46:10,15
118:10
documentation
64:14
documents 4:21
6:13 16:17
18:13 20:14
46:1,2,20
57:15,15,18,20
57:22,24 58:5
58:8,9 59:1,12
59:17 63:10,17
65:1,17,18,20
67:18 69:4,25
70:6,7,8,10,10
70:12 72:10
76:2,5,8,10,12
76:20 77:4,8
82:14,16,21
83:6,18,21
84:7,9,11,13
84:23 91:17
92:17 93:22
94:5 95:1,5
96:13 97:3
109:10 111:10
113:7,8 114:7
114:8,15
doing 6:16 16:23
52:20 94:3
103:20 116:8
donors 34:5,7
donorship 32:8
double 100:21
drawn 9:7
duces 58:13
due 10:21,22
11:24 12:5
24:10 25:7
27:3 28:7,8,15
29:5 34:21
37:13,14,15
40:8 51:6,18
56:1 116:19
117:11
Dunn 45:15,16
45:16
Dustin 21:17
80:16
duties 35:1
duty 56:14 111:9
E
E2:1,1,12
e-mail 7:1 63:10
64:12
e-mails 61:14,14
63:10 67:18
102:11 103:11
E1.010 1:18
earlier 59:20
62:13 63:1
102:6 113:14
120:7
easy 114:25,25
effect 97:13
effective 11:8
33:14 107:4
efficiency
101:22
effort 110:11
eight 23:6 27:1
37:17 43:4
45:8 52:8
53:12 55:10
either 12:4 30:6
52:10 60:5,9
62:6 70:10
87:14 90:5
103:16 108:9
elect 65:23
elected 36:24
101:25 103:4,5
103:11
Election 34:4,7
68:11
electronically
84:20 85:10
emergency
11:18
employed
123:22
employees 22:19
31:14 32:24
80:14,20,24
110:21,23
111:2
empower 1:3
17:16 20:1,2
20:10,15,17
21:13 29:22
34:3 35:1
57:21 63:12
64:6,6,15,16
64:23 79:7
80:14 81:12
86:19 87:23
103:4 110:21
123:3
empowers 103:2
103:2
enables 112:8
energy 116:9
enforce 38:3
EXHIBIT 17
enforcement
3:10
engaged 33:13
England 81:16
enjoined 12:19
enlarge 100:9
ensure 4:6
entertain 110:3
entire 8:25 35:1
38:25 49:14
50:1 55:13
75:24 76:15
84:14 85:12
107:5 111:20
117:5
entirely 18:17
97:10,11
entities 28:11,13
30:3
entitled 74:4
76:14 101:11
109:14,15
entity 34:3 96:19
101:10
enunciate 34:24
enunciated
52:23 55:10
67:8
envision 20:22
96:13
equity 10:20
escape 51:13
essentially 10:16
estimate 6:15
100:13
et 86:19 87:24
119:15,15
Ethics 1:1,3,9,17
2:2,11 3:3,10
3:10,15 8:10
9:11 12:23
13:7 28:10
32:6 34:20
54:13 55:5,6
107:11,16
123:1,3,9
everybody 13:8
13:22 41:8
everybody's
117:14
evidence 4:6
8:16,17,22
9:25 10:4,19
15:25 16:2,3,3
24:14 31:17
33:25 46:10,11
46:14,15 47:10
48:14 51:20,21
53:21 54:8,14
54:17 59:24
60:2 61:18
74:7 77:13
92:23 95:13,17
96:12 97:14
98:14,19 99:23
101:20 111:6
112:20 118:7,8
118:9,9,10
evidentiary 8:13
10:6,6 14:14
16:1,6 17:9
49:15 50:6
54:19
ex 10:9 12:7
43:13,19
exact 5:18
exactly 32:6
52:20
examination
99:23 105:4
118:10
example 8:12
10:7 25:25
27:20 28:14
53:8 55:21
109:6
examples 28:3
exception 16:5
55:11
exchange 7:3
46:10 91:4
97:8
exchanged
104:11
exclusion 118:7
exculpatory
74:13 77:12,13
101:19 111:6
excuse 66:7 67:2
91:21 107:23
107:23
executive 2:7
21:15 22:3
66:1
exhibit 104:10
exhibits 4:11 7:6
91:4 100:4
exist 10:8
expand 91:19,25
92:8,9 93:13
expectation
10:18
expeditiously
28:11
expenditures
21:10 64:11,21
expense 116:13
experience
39:21
Expiration
124:7
explain 101:17
115:1
explanation 15:5
extensive 17:23
51:12 52:4
55:5 109:4
extent 46:1
48:10 49:5
57:4 97:22
extra 116:9
F
face 89:23
fact 6:22 11:13
16:1 18:11,15
23:13 27:19
38:21 39:16
46:7 55:24
91:1,2 94:9,11
94:25 95:4
96:17 98:23
104:9 109:1,8
facto 10:9 12:7
43:13,19
118:23
factor 47:2
facts 31:20,25
32:16 33:21
92:4 98:5
110:13 111:22
120:8
factual 46:5
failed 8:1 27:25
62:15 117:3
failing 19:15
failure 10:12,16
10:20 12:4,5
19:13 34:19
fair 51:16,17
95:10 98:17
111:12
fairly 4:7
fairness 10:19
familiarity 98:5
far 7:25 17:15
40:1
favor 79:17 80:9
82:6 83:12
84:2 85:23
104:18 105:11
110:10,16
119:8 120:18
122:11
fear 25:9,11
Feb 79:6
February 1:13
1:15 3:2 79:11
90:2 104:3,21
104:23 123:14
federal 54:2
fee 102:2 103:9
feel 24:24 29:15
fellow14:17
47:9
Fifth 16:9,13,21
17:7 30:10
figure 47:7
file 17:23 22:22
40:9,20 41:16
41:19 42:18
59:25 73:23,23
73:25 74:2
75:6,24 76:15
77:25 84:14
85:6,9,13 97:5
102:23 108:22
111:10,11,21
111:22 114:16
114:18
filed 39:17 58:21
74:15,21 75:2
90:2 119:3
filibuster 75:14
filing 4:16 39:23
42:17,19,24
102:1 118:25
filings 19:6
final 7:25 48:10
113:10
finally 4:20
55:24
financial 21:8
financially
123:24
find 4:18 13:14
32:7 34:1,2
36:21 44:20
55:22 56:9
72:9,10 96:16
107:16 109:9
109:15 110:23
111:21 112:25
finders 91:1
finding 18:15
103:7
EXHIBIT 17
findings 16:1
18:10 46:7
91:2 94:25
95:4 96:16
104:9
finds 96:23
fine 21:22 52:24
87:16,18
finish 15:5 18:22
Firm124:7
first 5:3 6:25
12:23 14:11
15:7 18:7,8
29:1,6 30:12
30:14 38:3
62:7 65:13
66:6 67:11,16
68:22 75:21
79:2 101:8,8
102:1
FISCAL1:4
123:4
fit 81:3
five 19:21 29:25
58:14 80:14,20
82:6 88:13
fixed 56:18
flag 14:16
flaw109:21
flipping 46:17
floor 2:12 37:20
fluidity 109:10
fly 10:17
folks 45:16 79:3
79:4 86:3
follow37:12
41:5,24 48:25
59:4 114:9
following 1:15
37:1 41:8 42:6
99:21
force 40:5
forcing 116:9
fore 55:25
foregoing
123:18
form101:22
formal 3:23 4:17
4:22 5:11 6:12
7:20,20,25
10:14 11:13,15
12:2,23,24
13:5,9,23,24
14:11 15:16
17:21 20:24
26:13 31:11
34:21 35:18
39:2 44:14
46:9 48:1,5,8,9
48:12,16,21
49:6,11,13
52:7,20 54:21
55:4 59:16,18
63:18 71:24,25
72:8 79:6,11
80:2,4 94:5,6
94:15,21 97:15
97:24 99:1
100:14 106:16
113:24 114:1
116:5 117:2
118:5
formally 33:24
42:2 53:3 56:4
62:14
former 21:14
forms 33:15
102:1
formulate 69:13
91:12
formulating
69:11 78:15
forth 56:12
62:14 63:7,11
83:3
forward 4:22
10:13,15,22
15:24 17:20
18:23 24:18
27:23 40:5
48:2 88:2
91:13 97:7
103:22
fought 116:4
found 95:16
102:7 110:20
111:17 112:7
foundation
97:12
four 3:24 21:1
28:2 83:6
88:12 93:16
99:22 105:4
four-hour
103:12
frame 53:25
frankly 12:8
40:2 55:20
freedom33:14
33:19 68:22
frustrated 60:16
frustrating
56:16,19,20
full 15:11 23:2
49:17 90:21
96:20 100:3
fully 4:7 75:17
76:16 99:6
function 34:17
fundamental
7:17 8:7 33:23
53:5 96:22
102:3 109:21
117:10
further 11:16
17:14 24:9
56:23 61:25
62:3 99:13
123:21,23
G
game 13:11
general 3:14 6:8
general-purpose
81:4
generally 118:19
gentlemen 31:8
getting 70:6
88:20
give 6:10,11
23:14 37:16
46:23 53:8
60:4 61:18
69:12,21 77:14
77:15 86:16
100:1 105:24
110:1
given 4:11 51:8
51:19 101:4
105:2,3
gives 90:22
118:6
giving 10:19
23:4 31:17
51:18 70:7
105:2
global 93:3
gloves 12:24
go 4:22 6:12,14
7:2 9:20 10:15
10:17,22 11:15
12:18 14:16
15:24 25:14
27:23 37:12,18
40:5 44:14
47:20,21 52:10
52:13 53:5
55:17 60:24
61:12 66:22,23
88:2 89:15
90:19 91:16
99:11 109:15
109:15,16
111:10 114:7
goes 11:12,12
40:2 41:9
going 4:6,10,12
4:14 5:17,22
6:1,1,8 7:2,10
7:11 9:18
10:17 12:12
13:20,20,25
15:6 17:17,19
17:20,24 18:25
19:7,16 20:11
21:3 23:25
27:5,12,13
29:1 35:24
37:11 40:13
41:10,24 42:5
42:18,19 44:5
44:8 45:2,4,9
46:1,6,8,11,17
47:11,12,13,20
48:2 50:7
53:17,23,24,24
54:5,20 55:19
56:4 57:6,10
57:11,11,12
59:4 60:15
61:6 69:21
70:24 71:14
72:2,2 73:21
75:22 79:1
86:11,14 90:13
94:21 95:7,12
98:19 100:20
101:5 102:11
102:21,22
103:16,17,18
108:4 110:8,23
112:7,19 114:9
115:9 116:9
117:7 119:22
120:16
good 3:1 17:20
23:6,8 24:2,25
25:25 29:15
32:21 34:12
44:16 52:23
55:25 59:18
61:4,8,10 66:3
69:21 72:9,11
72:13,23 73:5
73:8 74:20,21
74:21,23 75:3
EXHIBIT 17
77:14 78:3
85:25 87:1,7
89:3 110:9,10
110:11,15,18
110:20 111:2,9
111:14,18,20
111:25 112:4,6
112:9,11,12,15
112:19,20,25
114:21,21
115:17 117:9
118:14 119:16
governing 26:19
51:5
government 8:4
33:15 48:5,6
101:23 102:4
106:11
graciously 5:7
grade 102:11
granted 120:6
great 69:10
Greenhaw20:5
20:8 21:3 70:3
70:5,15 71:8
73:15,17 75:23
78:11 79:25
80:3 84:9,12
grossly 103:13
103:15
ground 17:25
grounds 66:6,14
group 81:5
groups 33:13
guess 49:22
52:10 73:16
103:12
guidance 118:6
118:7,7,8,8,9,9
118:10,11,11
guidelines 8:12
41:4 52:7
99:17
gulp 111:16
H
H48:7
half 97:1
hamstrung 7:18
happening 39:16
happens 17:5
happy 57:5,5
hard 21:16
46:15 74:24
75:16
Harrison 2:5
80:5,8 88:11
120:20 121:10
122:9,11
hear 24:21 25:18
37:17 39:20
47:13,24 50:21
55:6 62:12,24
74:17 108:15
heard 1:16 9:1
27:4 29:11
32:19,19 37:22
37:25 39:24
46:24 47:10
53:10,12,21,24
54:14,17,21
55:9,17 74:5,5
74:5,14 79:3,4
80:1 98:9
108:14,15
110:9,10,15
111:25 115:19
hearing 3:23,25
4:6,13,17,22
5:13 7:6 8:1
10:14 12:9,24
13:8,9,24
14:10,11,12
15:10,16 17:21
18:6,7 20:24
23:5,12 26:13
28:4,12 34:1
35:19 36:8
37:24 40:24,25
45:15 46:9
47:11 48:1,8,9
48:21 49:6,11
49:24 51:7,13
51:14,14,16,17
51:22 52:12
54:18,21 57:10
59:16,18 63:18
70:3 71:24,25
72:9,12 79:6
79:11 80:2,4
82:16 87:5
89:11,12 90:6
91:8 94:5,6,15
94:21 95:2,16
97:9,14,16,18
97:20,23,24
100:12,14
101:2,5 104:5
104:21 105:1
105:20,21
106:17 112:20
113:10,24
114:1 115:16
118:5 119:22
123:23
hearings 5:20
6:22 7:21
12:16 13:5,5
13:17,23 18:5
26:19 39:2
48:5,12,13
51:11,12 55:4
55:8 95:10
99:1,2 103:13
hearsay 71:11
71:13
heart's 37:17
heck 74:23
held 1:18
help 36:2 91:12
112:22 117:19
117:24
helpful 19:1
46:21 47:18
high 55:11
higher 72:16,23
73:4,4
history 12:23
Hobby 2:3 80:6
80:8,21,22
81:10,19,22
88:14 110:6,7
110:17 111:19
118:18,22
120:3,5,19
121:10
holding 95:18
holds 84:22
hole 13:6
HONORABLE
2:3,3,4,4,5,5,6
2:6
hope 17:4 27:18
75:8 78:24
96:24
hoped 119:21
hosted 5:7
hour 99:21
100:16,19,21
105:2
hours 99:22
103:14,19
105:4
Houston 2:12,17
huge 111:16
HUGH2:4
I
Ian 2:10 3:13
idea 6:8 98:10
98:18
identifiable 60:8
identification
46:10
identified 39:1
121:23
identify 36:3
102:7 121:24
ill-defined 75:19
imagine 108:19
immediately
10:23 12:18
impair 11:22
impairs 11:22
important 45:18
47:2 52:2
82:15 102:16
119:1
imposes 97:4
impregnate
111:24
impromptu 42:9
inapplicable
55:7
inappropriate
69:18 101:11
included 65:25
includes 78:18
including 11:18
15:24 52:4
64:11 74:13
indexed 11:9
indicated 5:19
individual 9:22
20:19
individually
109:23
individuals
19:21 21:1
58:14 81:8,14
108:1 114:17
inference 9:4,7
9:10,18,18,21
10:7 16:23
17:1
influence 55:16
103:5
information
16:20 34:4,8
34:16 65:14
72:15,16,24,25
74:10,12,13
77:9,10 92:22
94:1,11 97:8
97:17 108:20
109:18 112:16
112:22
EXHIBIT 17
informed 27:22
inherent 51:1
74:6
inherently 53:7
initial 100:13
injunctive 32:9
innocence
117:16
inquiry 20:11
115:18 120:11
insist 27:12
41:24
inspection 11:11
instance 103:6
instantaneously
115:3
insufficient
33:25 95:17
intend 24:22
38:1 119:20
intent 57:25
intention 37:11
interest 75:21
119:6
interested
123:24
interesting 30:5
40:18,19
108:17 118:24
interestingly
71:9
interfere 11:22
46:21
interferes 11:21
Interim2:7
internal 67:18
interpret 68:10
interpretation
109:18
interrogatories
6:17
introduction
18:22 99:23
invalid 117:7
investigate
109:2 120:8
investigation
91:20,25 92:8
92:9 106:6,10
107:12 111:5
investigative
110:14 118:25
119:5 120:9
investigator
108:18 109:21
109:22 111:8
111:13
investigators
78:19 108:5
investigatory
114:17 117:23
invoked 11:9
involved 33:2,17
39:13 96:4
106:6,9 107:11
involves 19:13
involving 68:15
ironic 36:21
irrelevant 47:5
110:14 116:7
Irvine 124:9
issuance 4:21
45:24 59:15
61:4 84:16
94:4,5 118:11
119:14
issue 6:11 13:2
14:14,19 16:9
17:11 18:18
23:7 29:7,9,10
30:11 33:23
38:6,8,18
46:25 51:17
56:12,23 57:7
57:14,18 58:10
59:16,23 60:16
65:21 70:25
71:2,13,13,18
72:9,11 73:11
76:17 79:10
80:3,20 81:17
82:1 83:5
84:18 85:12,18
91:22 93:9,10
101:8 104:20
106:5 108:12
112:8,19
113:14,23
116:12 118:15
119:10,12,19
issued 3:23 4:1
11:7 16:18
17:20 28:20
29:16 70:21
80:2 84:22
91:23 113:7
114:6
issues 4:7 5:8,25
9:3 18:10
24:19 28:14
40:8 46:6
49:17 66:10,11
78:25 89:24
96:12
issuing 15:19
79:17 82:6
item47:6 59:14
78:23,23
105:18 106:13
items 5:2 37:18
45:4 47:17
58:6 90:25
J
January 11:7
37:9 65:20
Jim2:3 20:3
job 34:17 35:1
Joe 3:19
John 2:10 3:9
Johnson 107:22
108:7 110:2
JOSEPH2:15
judge 54:2
116:12
judgment 11:20
jurisdiction 9:9
42:23 68:9
107:5
jurisdictions
40:10
justice 101:21
K
K-e-r-r 80:16
keep 98:1
Keffer 20:3 79:8
102:12 109:9
Kerr 21:14
29:23 31:7
33:21 80:16
81:15,24
kind 39:25 42:12
53:4 55:20,21
56:1 101:23
108:11 109:17
knew99:16
know4:5,5,9,14
5:3 8:8,10,15
9:24 11:2
12:11,15 13:18
14:3 17:13,22
19:17 23:5
27:5 32:19,20
32:20,20 33:6
33:7,8,8 34:13
34:16,23 36:1
39:22 40:5
45:15 46:12
47:9 49:12
50:5 53:25
56:15 59:4,15
60:11 63:3
68:3 69:3,5,6
69:13 70:12,16
71:9 73:21
75:4,17,23
76:4 81:11,14
81:16,16 89:16
89:25 90:19
91:14 96:25
99:1,8 101:22
108:22 109:3,5
109:6,11
110:18 111:4
111:15,15
116:11,23
117:22 121:17
knowing 27:13
knowledge 21:8
28:8 31:13,15
31:16,19,24
34:25
known 42:14
117:1
knows 13:22
34:13,23
L
lack 24:9 25:7
28:15 69:14
96:22 117:11
117:12
laid 73:5
land 33:11
large 85:9
law2:11,16,21
9:23 10:9
13:15 16:12
18:11,16 28:6
28:6 33:10
34:9 46:7 51:6
51:23 52:18
72:22 74:16
77:3,8 91:1,3
95:1,5 96:16
104:9 110:13
laws 49:21
lawyers 9:24
56:1
lead 23:5 72:15
72:24 74:9
112:19 120:16
learn 80:25 81:2
learned 70:2
98:25 101:16
leave 89:18
Lee 45:16
EXHIBIT 17
legal 11:23,23
12:6 15:9
28:14 46:5
legislature 7:19
11:14 57:25
61:15 65:24
102:1
legislatures 85:4
lessor 72:17
let's 7:8 30:13
31:4,4 40:6
54:24,24 66:21
66:21 89:16
90:1,2,3,4
112:15
letter 37:12
level 10:2
licensed 8:21
light 31:20 35:4
limit 22:23
102:5
limitations
119:7 120:7
limited 64:12
65:22 68:10,17
68:18 107:9
limiting 76:25
limits 47:1 99:19
99:21 101:14
list 7:4,6,10 19:3
21:12 23:1,2
24:2 26:1,15
26:17,22,22
29:12 31:18
35:10 45:14,24
52:8 58:3,7,9
80:13 91:3
104:10,10
listen 26:25
116:15
listened 25:18
litigant 96:20
litigation 32:11
little 5:16 18:1
19:4 21:16
37:7 65:24,25
99:11
live 17:23
lobby 19:19 58:1
61:13 65:5,16
80:24 81:1,8
81:13,17 82:25
83:2 100:18
103:1
lobbying 94:16
lobbyist 19:14
92:20
lobbyists 102:17
102:25 103:2
long 2:5 4:5
18:24 82:3,5
83:9,12 84:19
85:7 87:15,19
88:8,9,22 89:7
90:8 119:4,4
120:25 121:8
longer 66:12
103:17 108:7,9
look 9:20 24:18
40:3 44:24
47:16 66:20
77:2 86:2,5
90:1 91:7
103:21 112:15
looked 13:21
49:7
looking 63:24
82:23 90:17,17
95:3 101:2
loop 103:19
lot 13:3 43:6
46:14 53:10
70:6 111:14
113:4,5 122:14
lots 118:12
love 7:15 102:17
110:18
loved 39:13
Luke 45:16
LUNA2:7
M
M2:15
M-a-t-o-c-h-a
21:18,25 80:17
machine 1:21
mail 7:3
major 13:6
making 6:15
13:10 31:5
36:23 47:2
53:4 64:10,20
70:5 110:7
115:1 117:10
manage 85:14
85:15
manner 51:15
March 82:18,21
86:3,5,12 87:4
90:4,5 95:2,3,4
104:3,4,5,12
MARGIE2:25
material 4:11
Matoch 21:17
Matocha 21:18
21:19 31:8
80:16 81:24
matter 1:2,8
5:11 9:8,8
15:15 17:7,25
18:5,16 50:3,7
74:3 75:25
86:17 92:15
96:21 97:7
111:12 113:13
118:15 123:2,8
123:20
matters 3:24
4:24 18:3 27:4
37:10,13 47:13
84:15 97:22
100:3 105:19
105:21
MAYNARD
2:16,20
mean 12:17
36:19 38:21
49:20 52:14
55:21 56:21,24
59:23 62:2
66:20 70:23
72:7 73:6 75:4
75:14 77:12,19
90:16 94:8
103:15 107:15
117:16,16
118:19 119:20
119:25
meaning 10:16
means 54:18
72:5
measures 64:8
64:17
meet 41:21
meeting 3:2 9:4
12:10 14:12,13
15:8 23:4
40:22 48:21
meetings 15:2
15:13 48:23
49:2 50:8,25
78:14
MELISSA2:24
member 29:21
33:22 53:13,16
55:15,16
members 34:5,8
34:11 53:12
56:9 57:24
61:15 65:23,23
67:20 78:13
98:6 101:25,25
membership
32:8
memorize 86:20
MENELEY
1:20 123:16
124:6
mentioned 21:2
58:18 72:1
89:8
met 5:6
method 110:14
119:1,5 120:9
Michael 1:9
61:14 63:11
79:6 123:9
middle 13:11
95:8 96:17
miles 107:4,9
million 102:17
102:25
mind 94:9
mine 30:25
minimal 15:22
minimum51:7,8
56:2
minute 9:25
minutes 47:18
54:3 99:2
minutest 9:25
misstatement
74:16
modified 16:4
moment 24:21
47:21 65:10
71:1 86:18
111:18
moments 28:4
110:20
month 86:2
96:25
Moore 2:10 3:8
3:9 5:5,6 6:7
6:23,25 7:15
9:3 12:10 14:9
17:22 19:8,14
20:22,25 21:12
21:20,25 22:2
22:6,11,13,17
22:20,25 23:10
23:13,17,20
29:11 31:7,10
45:6,11,19,21
50:21,23 52:1
63:16,19,23
EXHIBIT 17
64:2,5 72:1
73:3 74:14
77:5,7,15,19
77:23 78:1
81:21 85:15
99:25 101:4
108:2,14
112:14 120:2
Morgan 22:3
80:17
morning 89:13
motion 23:14,19
25:2 38:24
39:17,18,23
40:12,13 41:11
41:19 42:4,4
42:18,24 45:7
45:13 58:12
63:20 64:23
69:15 79:9,22
80:3,7 81:25
82:4 83:4,5,7
83:10,17,20
84:18 85:18
89:25 97:5
104:12,16
108:22,23
110:3,4,5,8,16
112:25 117:10
118:16 120:4,6
120:15,18
121:2 122:3
motions 4:15,18
8:24 17:12
24:19 38:23
40:20 41:22
45:9 46:21
57:9 82:23
86:6 87:5
89:12,21 90:2
90:3,4,23
104:2,6
motive 109:16
119:1,3,5
120:9
move 17:20
18:23 49:12
56:25 59:25
79:13 80:5
82:2,20 83:8
83:22 90:20
97:7 113:2
120:5 122:5
moved 83:24
85:19 104:14
105:7,10
106:13 122:7
moving 82:11
multi-day 18:2
multi-hearings
18:3
N
N2:1
NAACP32:4,8,8
32:15 35:4
66:7
name 3:9,19
20:7
named 42:18
names 45:13
63:22 80:14,15
80:16 107:20
NASHAWN
1:20 123:16
124:6
NATALIA2:7
Nathan 22:4,11
80:17
nature 14:25
91:19
NCAA66:7
necessarily
52:22
necessary 4:16
4:22 16:18
19:22 30:18,21
30:23 31:3
59:17 119:14
necessity 18:2
114:4
need 4:5,8,9,12
6:5,22 9:13,15
15:23 16:15
18:17,18 19:17
19:18 20:13
21:3,4,6 23:5
24:7,21 28:1
28:19 29:6
30:8 31:7
32:17 33:21
34:13,13,14,23
36:1 38:24
39:2 43:10
45:9,25,25
46:2,11 51:15
53:10 68:2
72:24 82:18
88:2,24 94:10
97:7 105:21
107:16 111:16
111:23 113:9
116:14
needed 38:18
needs 31:25,25
38:3 73:7
negative 16:23
neither 123:21
new24:16 28:3
35:20 37:24
38:20 52:9
53:13 55:10,15
62:10,10 97:19
97:25,25
116:13 119:24
newest 52:10
night 88:19
nine 55:10
Nixon 2:15 3:18
3:19 5:6 7:10
7:13,15 13:1
14:20,22 15:3
16:25 17:4,12
18:20 21:19,22
23:24 24:4,7
24:12 25:1,13
25:20,24 26:3
26:7,10,12,25
27:7,9,14,17
28:18,21 29:3
29:8,19,21,24
30:1,4,15,20
30:24 31:2,23
31:24 32:2,25
33:4,6 35:9,14
35:17,20,22
36:2,10,15,19
37:4,21 38:5,7
38:12,17 39:4
39:12 40:14,18
40:23 41:3,12
41:15,17,23
42:9,12,20
43:1,14,18,21
44:1,7,10,13
44:17,24 49:23
50:10,15,19
51:24 52:1
53:17,20 54:11
54:22,24 55:3
56:20,21,24
57:2,4 59:3,8
59:12,21 60:19
60:21,24 61:2
61:8,16,23,25
62:3,19,23
63:3 64:25
65:4,6,9 66:3,4
66:19,25 67:7
67:11,14,17,24
68:4,7,14,25
69:3 70:2,16
70:20,22 71:3
71:9,19 72:4
72:13,21 73:13
74:1,4,19
75:13 78:6,9
78:13,18 86:7
86:9,14,18,25
87:22 90:13
91:6,9,12,24
92:6,12,15,23
93:2,6,10,17
93:20 94:8,19
94:22 95:7,15
95:21,24 96:1
96:6,10,15
97:10 98:1,6
98:12,15,20
99:4,12,14
101:8 102:20
103:15 105:22
106:3,4,8,15
106:18,24
107:15,21
108:4,16
110:17 111:1
112:3,10
113:12,17,21
114:6,12
115:12,19,25
116:2,14,23
118:4 119:9
121:4,12,22
non-application
114:23
normal 72:14
74:7 114:8,11
114:13
note 91:15
110:19
Noted 24:11
notes 78:24
notice 3:23 7:1
11:4 37:9,12
37:19 38:22
45:12 47:17
54:6 59:14
91:14 93:24
nova 116:4
novel 33:11
novo 115:7,22
116:5
Now's 23:16
number 5:18
15:21 57:18,19
EXHIBIT 17
57:23 74:23
76:2 82:13
86:17
numbered 1:17
64:3
numbers 86:20
O
O-f-e 22:4,11
80:17
Oak 2:17
object 24:9
37:25 66:6
80:23 81:1
101:9,13
objection 61:13
62:15 66:17
68:21 76:5
objections 25:6
59:25 60:13,18
62:16 63:5,7
68:19 69:11,13
69:17,23 118:8
obtain 34:15
58:4,11 59:17
70:4 112:21
122:3
obtained 34:8
70:13
obviously 49:9
59:23 111:24
occasions 97:16
occur 104:3
oddly 9:2,11,20
39:12,12 68:7
odds 114:14
Ofe 22:4,5,6
80:17 81:24
offer 95:10
Office 51:11
52:3 55:3
officeholders
64:7,17
officer 50:24,25
51:14 107:7
offices 5:8
official 48:16
officials 36:24
103:4,5,11
oh 54:11 89:13
okay 14:9 15:6
17:11,19,24
18:19,25 19:7
19:12 20:21
21:11 22:1,24
23:17 24:12
29:2 32:1
36:15,18 37:6
37:8,20 42:25
43:3 51:24
54:18 59:14
60:20 63:2,21
67:16 68:18
76:9 78:17,18
78:23,25 79:8
79:22 81:23
83:3 86:1
87:21 88:13
89:2,10,19,23
90:1,18 92:15
96:4 99:18,21
100:12,22,25
103:25 108:13
112:13 114:3
115:15 116:15
118:12 120:3
121:2
old 53:16
once 34:18,21
66:11 69:13
110:18 114:13
114:13
one's 33:19 65:3
one-day 47:8
ones 19:18 29:20
36:7 56:12,13
65:12 103:3
open 15:13
18:18 48:21,22
50:8 70:4,5,13
73:15,17 77:20
84:8,9 85:3
89:18 99:21
100:3
opening 105:3
openings 100:6
operated 92:21
operating 94:17
opinion 50:1
116:5
opportunity
4:13 9:1 14:16
15:12 25:17
37:16 38:2,15
45:6 46:13,23
69:12,16,22
105:25 113:25
oppose 108:6
opposed 79:20
79:21 80:11,12
82:9,10 83:14
83:15 84:4,5
105:15,16
120:23
opposing 58:16
58:23 64:7,17
order 3:25 7:25
11:6,10 14:1
18:24 35:25
39:24 47:1
48:10 52:12,15
55:7 60:13
84:24 89:23
100:9 103:24
104:1
orderly 4:1
35:25 36:8
40:17 97:8
99:9 105:19
119:23
ordinarily 27:11
organization
81:2
original 91:15
91:16,18 92:1
92:18 94:13
ought 69:19 99:5
outcome 123:25
outlined 64:22
outside 34:3
92:17 119:5
overly 60:1
P
P 2:1,1
P-e-r-a-l-e-s
80:18
P-e-r-a-l-e-z
22:14
p.m104:5
PAC19:5,5,7,15
20:21 65:1,2,3
81:1,20,25
83:1,17,17,21
92:22 94:17
100:19
Page 64:2
pages 69:6 70:10
paragraph 64:1
64:3
paragraphs
63:11,12 83:4
83:6,19,19
PARSONS 2:16
2:20
part 9:25 22:21
44:13 55:2
56:5 62:20
66:25 67:1
107:7
participate
67:15 87:5
particular 30:12
33:16 59:22
92:11
particularly
30:12 41:7
46:12 101:15
113:6
parties 4:19,23
5:3 6:21 46:23
54:8 79:24
82:15 94:4
99:20 100:6,8
119:21 123:22
party 11:8 47:3
50:5 70:1 91:2
100:23 119:12
pass 43:8,16,24
44:1
passed 15:22
43:6,13 94:7
path 120:16
PAUL2:3
pause 50:17
pay 103:9
paying 102:2
peace 107:7
pending 13:3
17:18 86:6
89:12 93:15
people 23:9 28:7
30:14 32:17,18
36:22,24 43:7
81:5 103:4
106:5,9 107:11
110:24 111:1,4
people's 43:4
Perales 80:18
Peralez 22:7,13
31:8 81:25
perception
33:12
perfect 27:20
period 11:4
22:23 65:21,24
85:1 92:21,22
94:18
periods 22:16
permissible
34:15 35:2,4
permission
110:2
permit 77:3
permitted 15:9
59:16 68:19
person 11:8
EXHIBIT 17
16:20,20 20:11
34:25 70:1
73:12 84:22
personal 31:13
31:15,16,19,24
96:3 119:6
persons 19:24
petition 102:4,9
PHONE2:13,18
2:22
Physically 88:22
pick 36:19 56:6
picking 13:25
placed 36:22
plaintiff 11:23
11:24
plan 95:14
play 33:8
please 3:7 19:19
21:24 23:22
36:16 43:6
51:25 102:7
118:2
plenty 100:2
118:6
podium4:25
point 15:21
24:13 41:15,17
42:23 51:9
52:2 53:6
56:15 62:23
91:18 94:7,7
108:21 111:3
116:25
political 21:9
64:10,11,20,20
81:4
portion 70:7,8
104:7 119:17
portions 56:7
position 47:25
48:16 61:24
72:1,19,20
75:25 76:13
90:16
positions 5:1
possession 20:15
57:23
possible 50:5
60:9 86:5
post 2:17 10:9
12:7 18:15
42:1,1 43:13
43:19
posting 11:2
postpone 12:16
potential 5:12
31:18
power 51:1
68:17
Practice 16:7
25:3 35:24
36:9,11 39:19
Practices 15:17
15:18,23 16:4
16:11 26:6
36:4,12 44:5
44:18,19 56:3
68:20 116:17
118:6
practicing 72:22
pre-admissibil...
46:20
pre-hearing
104:8 113:10
121:16 122:4
pre-trial 4:15,18
17:12 24:19
41:11,19 57:9
87:5 89:20
90:2,23 97:5
104:2,6,7
113:10
precedential
97:13
predisposed
115:20 118:1
prefer 57:9
preference
90:11
prehearing 1:12
3:4 37:10,19
38:23 39:17
41:1 47:23
59:14 86:6
123:13
preliminary
13:4,8 15:10
18:4 33:25
47:11 49:24
53:13,21 54:18
70:3 95:10,16
97:14,18,20,23
99:2 101:5
103:7
prepare 42:3
82:17 97:3
prepared 38:9
38:12 40:9
41:14 84:23
118:22
preparing 12:9
preponderance
10:2,3 15:25
51:21
present 2:23
3:20 5:1,14 6:5
19:20 47:11
90:12 114:2
121:21
presentation
47:1
presented 4:7
preside 15:8
president 21:7
presides 14:12
presiding 50:24
50:25
prevent 35:16
prevented 39:6
previous 65:12
65:18
previously 4:24
33:24 58:17
63:8 65:24
79:3,5 80:1
primarily 20:14
primary 65:17
prior 39:15,21
46:9 72:11
privacy 33:19
privilege 11:23
11:24 16:13
66:18 67:4
68:5,19,21,23
108:3,21,24
109:1 118:8
privileged 60:6
108:20,25
privileges 16:11
62:5,6 67:21
67:25 69:2,17
76:18 77:2
117:7
probable 90:9
90:11
probably 5:19
13:13 21:6,7
85:8 101:5
121:15
problem7:17
8:8 12:7,21
27:20 28:2
34:19 43:4,5
43:10 44:3
53:2,5 56:14
56:18 70:23
71:11,11 74:6
77:22 78:1
88:18 96:22
98:11,18,24
109:23 118:2
problematic
87:15
procedural 50:7
procedure 6:19
25:22 28:9
48:15 51:20
52:25 54:1
59:24 60:2
114:23,24
115:9,15
116:16,18,20
116:21
procedures
12:13 26:20
37:24 40:10
56:3 118:12
proceed 8:9,11
12:3 13:19,20
14:5,10 26:9
40:7 43:11
48:17 52:5,11
55:6 91:13
92:7 95:17
119:22
proceeding
10:13 16:12
27:12 28:16
30:19 35:8,25
38:25 42:11
47:4,8,8 54:17
62:22 77:14
115:7,8 116:11
proceedings
1:16,20 6:3
12:19 18:17
24:9 27:11
32:13,14 47:19
85:5 100:9
123:19
proceeds 52:15
52:17
process 7:3,25
8:5 9:9 10:10
10:21,23,25
11:13,14,16,25
12:5 13:3
14:22,24 24:10
25:7 27:3 28:8
28:8,15 29:5
34:21 37:14,15
37:15 39:14,22
40:8,20 41:18
42:13 44:14
EXHIBIT 17
49:14 50:7
51:6,9,18,18
52:6 56:2
75:17 94:3
112:17 116:10
116:19 117:11
117:11,21
processes 12:13
processing 99:10
produce 33:16
60:10 70:11
101:20 119:15
produced
104:11
producing 97:17
production 6:17
46:2 61:13
72:11 82:21,23
113:8
progress 31:6
prohibits 10:13
promote 105:19
prompt 105:20
pronouns 96:4
proof 54:13
proper 69:22
97:9
properly 19:6
89:24
propose 76:24
82:20
proposed 26:15
26:17 46:7
91:2 94:25
95:4 96:16
104:8
prosecuted
101:11
prosecution 8:11
12:3 117:23
prosecutorial
109:19
protect 60:13
protected 60:6
67:20
prove 31:25
32:17 117:16
provide 17:5
20:14 23:22
26:14,16,22
38:12 57:21
62:8 69:15
95:13 96:16
provided 4:7
23:18 38:10
48:18 59:18
76:3 91:5
93:22 109:7
provides 107:1
providing 76:6
93:25 96:13
provision 9:15
public 11:11
42:2
published 52:16
64:15
purpose 4:9
16:19 32:18
36:23 41:7
71:18 109:9
118:17
purposes 5:13
23:4 51:20
82:22
pursuant 7:7
13:20 25:3
39:18 61:16
68:1 70:13
106:10,10
put 40:16 44:23
54:8 76:22
93:24 103:18
puts 69:14
putting 29:8,9
69:19 108:5
puzzled 114:22
117:20,21
Q
quash 60:1
quasi-criminal
9:9
question 9:8
15:11 23:24
24:5 30:25
34:11 45:18
71:14 74:25
75:10,14,15
80:23 88:20
91:10 92:3
93:12 96:7
102:2,3 108:24
111:25 113:12
121:14
questions 14:4
35:7 42:17
81:6 108:19
111:13 114:2
Quinn 63:12
quite 12:7 40:2
55:19 93:3
R
R2:1
raise 10:1
raised 13:1
66:11
raising 13:2
RAMOS 2:24
Ramsay 2:6
79:13 83:22,25
85:21,23 86:23
87:7 104:15,17
105:7,11
120:24
Ramsey 121:9
reach 117:19,25
read 65:10 69:4
ready 74:18
75:11
real 30:14 71:10
71:11 78:10
117:18
realize 12:11
18:14
realized 12:9
really 8:10 25:4
40:2 53:15
69:20 74:24
88:20 89:24
91:1 95:2
98:23 119:1
reason 25:16
32:19,21,23
33:1,5 34:15
34:22,24 35:2
35:4 97:3 98:3
107:2,2,3,6
112:21 116:17
reasonable 16:5
35:25 101:6
reasons 50:11
receive 82:15
received 73:15
73:17 76:2
84:8,9
receiving 25:6
recess 47:14,18
47:19
recognize 30:9
43:2 56:10
recognized
33:18
recognizes 52:19
recognizing 96:9
recollection
50:12
reconsider 28:16
record 17:9
47:21 54:19
85:3 94:11,22
97:25 110:8
121:5,23
records 20:17,19
20:20 21:7
70:4,6,13
73:16,17,22
77:20 79:7
84:8
red 14:16
refer 66:6 98:4
referenced 85:4
referred 97:16
referring 20:16
98:2,16 107:13
refers 107:6
reflect 94:22
refresh 45:4
refused 32:9
57:21
regard 7:24 9:17
13:4,5 15:15
16:9 17:5,14
18:10 20:9
23:7 25:2 46:5
46:8 54:14,16
67:5,12,22
76:14 81:23
82:13 83:17
84:16 89:11
94:25 103:23
114:18
regarded 3:16
regarding 4:24
5:2 7:22 13:17
46:19 47:24
48:5 49:1 64:9
64:18 80:19
81:7,13 94:16
register 11:3,3
19:13 42:2
103:9
registered 103:2
Registration
124:7
regulate 103:9
103:16
regulated 103:8
regulating
101:24
Reisman 107:22
107:23,23
108:8,15 110:3
reject 110:4
related 26:19
110:21 123:22
relates 33:25
EXHIBIT 17
34:25 78:15
97:15 111:22
relationship
33:18
relative 81:3
relevant 72:16
72:25 74:9
111:12,25
112:19
reliance 16:5
relief 32:10
relinquishment
42:14
reluctance
114:20
reluctant 18:16
25:15 47:9
rely 97:12
Remedies 25:3
39:19
remedy 12:6
remember 54:12
56:17 70:9
102:8,13 115:6
117:14
remind 38:2
66:8 119:10
repeat 53:24
repetition 53:11
repetitious 18:7
47:4
replied 79:19
80:10 82:8
83:13 84:3
85:24 104:19
105:13 122:12
replies 90:4
104:4
reply 31:23
39:10 85:1
89:25
report 19:15
reported 1:20
reporter 21:24
121:24 123:17
REPORTER'S
123:12
representation
8:9
representative
20:1,3 30:3,7
representatives
66:1
representing
3:11,15 19:9
request 7:11
27:18 50:5
58:10,13 59:6
65:13 67:6
70:4,6,13
73:16,18 80:20
83:2,18 84:8
84:10 107:25
110:4,4 113:18
119:8
requested 29:15
57:19 65:1,12
65:14,18 81:20
84:7,17 110:1
112:16 113:1
118:21
requesting 94:4
113:19
requests 66:5
67:5 82:25
83:1 85:3
119:12
require 12:14
20:23 23:25
57:16 98:19
101:17 119:14
required 8:2,6
11:11 26:23
30:9 36:14
41:5 48:25
51:7,23
requirement
26:16,21
101:13 119:16
requires 8:4
26:13 28:8
30:6 35:14
36:4,16 44:19
52:19 56:2
92:6 104:1
requiring 11:15
98:24
researched
76:17
reserve 28:23
reserved 18:4
resisted 112:17
resolution 13:24
48:9
respond 20:12
38:15 39:10
59:22 60:12
63:1 73:7
75:12,20 77:11
responded 40:24
62:9,11,14
respondent 1:5
1:10 9:5,13,15
12:4,4,7,12
16:15 18:9
21:1 24:21
26:15,16,22,23
30:8 31:14,15
36:4 57:20
59:24 60:14
61:17 74:15
75:7 76:4 84:7
84:17 92:20,21
96:3 110:1
112:16,17
113:1,9,24
118:21 123:5
123:10
Respondent's
61:19 69:19
96:12 120:6
Respondents
2:14 3:21 24:8
25:6 35:7,9,13
responding
84:22 96:6
response 64:25
67:22 89:25
100:13 107:25
110:22
responses 90:3
91:13 104:3
responsibility
1:4 44:25
123:4
responsibly
43:10
rest 14:10 39:7
45:22 47:23
restate 89:15
restraint 33:14
restricted 117:1
restrictions
76:18
result 49:11
73:15,17 103:7
returning 53:16
review4:14
15:24 18:5
39:11 45:7,10
46:14 47:11
53:13 102:24
115:8
revise 17:13
revisit 57:9
revisiting 57:6
Rick 22:7,13
80:18
right 10:20
11:23,23 12:6
16:9,16,21,21
16:22 17:7
19:1,24,25
25:24 28:1
29:4 31:1,22
32:25 33:17
35:6 37:16
40:4,6,6,22
42:15,24 43:3
44:16 45:2,20
54:22 57:3,12
59:25 60:4,5
63:9 64:1,4,24
67:7,14,15
68:2,4,23
76:11 78:3,4
78:21 82:11
83:16 85:17,23
85:25 86:13
87:2 89:2
90:15,22 94:24
95:25 99:10,18
102:4,5,20
105:14,17
106:2,22 112:2
112:24 113:2
115:7,16
116:21 121:3
122:2,3,13
rights 13:12,21
27:4 28:23
32:15 42:6
44:2 60:14
61:19 95:25
115:21 116:19
116:20 117:6
rigors 6:16
ripe 38:19
Robert's 48:25
49:4 52:12,14
55:7
role 33:7
roles 96:5
Room1:18
roughed 5:14
roughly 110:14
rule 7:24 9:12
10:16,16,19
11:6,10,18,18
11:21 12:2
13:16,22 24:16
32:12 35:11,20
43:13,17,24
44:1 49:4 50:9
51:13 52:4,6,7
EXHIBIT 17
53:6,22 60:7,8
63:4 66:13,15
68:6,18,19
93:21,21,23
103:20 108:23
110:19
rule-making
15:20
ruled 33:24
62:16
rules 4:2 6:18
7:20,22 8:2,3,5
8:6,8,16,16,22
9:12,14,17
10:6,10,12,14
10:21,22,23,25
11:2,13,16
12:1,6,10,14
12:16 13:4,11
13:16,17 14:23
15:15,19,21
16:2,2,3,11
24:16 26:19
27:21,25 28:3
28:9 34:21
35:22 36:5,17
36:25 37:1
38:3,20 39:1
39:15,16,22,25
40:10 41:4,6,8
42:1,5,9 43:6
44:15,20,25
45:2 47:25
48:14,14,17,18
48:19 49:1,1,4
51:4,12,19,20
52:4,9,12,15
52:18,20,22,23
52:25 54:1,20
55:4,7,11 56:3
56:15 59:3,4,8
59:23 60:2,8
60:11,17,17,18
60:20,20,25
61:1,3 63:6
69:14 74:6
75:18 96:22
97:12 114:22
114:23 115:9
116:19,24
117:2,4,12
118:7
ruling 14:19
15:9 49:25
50:3,6 52:13
63:8 66:12
95:18
rulings 14:14
16:6 24:14
46:25 49:15
51:2 68:8
69:21
run 50:25 51:14
S
S 2:1
saddle 12:17
sadly 13:13
Sam2:12
saw54:8
saying 27:24
28:1 32:14
54:10 90:9
115:12
says 10:2 11:1,6
13:23 26:18
42:23 43:6
44:14 60:10
61:17 62:4
114:21 119:11
SC-3120485 1:1
123:1
SC-3120486 1:1
123:1
SC-3120487 1:7
123:7
SC-3120488 1:7
123:7
schedule 4:17
7:7 27:3 90:22
99:10 104:8,8
104:13 105:6
scheduled 3:24
4:8
scheduling
103:24 104:1
scintilla 9:24,25
scope 98:10,13
98:18,19 119:6
score-carding
102:10
seat 14:7 31:6
second 15:14
18:6,6 49:13
50:18 79:4,14
79:15,16 80:6
80:8 82:3,5
83:9,11,23,25
85:21,22 90:24
104:15,17
105:9,11
120:12,13
122:9,10
section 11:5,19
13:23,24 26:7
26:8,12,18
36:3,16 41:25
44:18 48:6
61:17 119:11
Security 77:10
see 7:8 44:4,20
44:22 60:21
61:2 71:3,4,20
73:14,16,18,19
86:3 122:14
Seeing 113:2
seek 59:2 72:24
93:21 103:4
seeking 16:19
46:6 59:9
67:18,18 71:7
81:9 92:17
119:25
seen 22:22 49:20
65:6,9 98:9
sees 98:24
self-incrimina...
16:10,22 17:8
61:20
send 7:6,10
sent 7:1 37:9,19
57:24
separate 6:2,2
28:11,25 29:5
48:18 50:9,9
separately 5:21
101:12,12
series 17:12 98:9
serious 11:14
12:21 40:3
70:20 71:10,11
serve 107:8
serving 109:20
set 5:4 7:4,5,19
8:8,13 10:6
12:1,13,13,14
13:19 27:1
41:4,21 42:5
42:17 48:12
51:12 52:4
60:8 63:11
83:3 86:10
90:19 97:7
99:16 101:16
117:6,6 118:24
119:24
sets 8:5
setting 62:9,14
settlement 4:20
share 58:22
shared 58:15
shed 31:19
shifts 75:7
short 40:7 45:3
shorthand 1:21
19:6 123:16
shot 116:13
shown 23:7
59:19 61:4
115:17 118:14
side 5:1 7:7
99:22,24,25
104:9,10,11
105:2
sides 5:10,19
sign 14:1 84:23
signing 7:24
similar 8:5 49:1
59:1 65:16
69:9
simple 19:4
simply 13:9
simultaneously
53:9
sir 6:11 7:14
14:6,24 19:11
22:17,21 23:10
24:6,17 25:11
26:2 31:23
35:6,21,23
37:2,13 57:8
62:2 63:15,19
63:23 64:25
81:10 85:16
86:8 91:11
94:15 95:6
99:7 106:12
120:2 121:15
122:3
sit 69:22
situation 12:22
13:10,14,15
30:5,8 31:19
42:22 43:2
44:20,23 53:1
74:6 108:17
six 8:20 18:4
23:6 87:4,6
88:3
Skypark 124:8
slight 101:13
Social 77:9
sole 41:7
solicitation 64:9
64:19
somebody 21:8
EXHIBIT 17
33:1 102:10
111:14,24
sorry 9:13 20:6
59:20 62:1
76:23 89:13
104:25 106:2,7
sort 40:12 49:25
97:5 103:24
sought 32:9 34:5
34:8 65:18
67:5
speak 49:23 93:2
103:10 116:15
119:6
speaker 102:10
speaking 119:2
specific 7:11
10:24 17:11
19:21 34:25
39:23 66:15
93:7,7 102:7
107:19
specifically 4:4
16:5 39:1 47:1
48:6 49:7
57:22,25 75:21
79:5 80:14
81:9,16 82:12
83:2 84:7 86:4
90:25 102:12
102:14
specified 94:17
speech 101:24
103:8,16
spell 21:23
spend 116:9
spent 69:10,10
staff 3:11 19:2
21:13 29:21
30:16 34:9
35:1 62:11,15
62:25 63:4
72:19 73:2
74:11 80:23
85:11 100:14
105:24 107:24
112:15 119:19
staffers 30:14
stand 9:2 17:3
102:13
standard 15:24
51:6,21 54:20
72:13,14,16,17
72:23,23 73:4
116:4,6
standards 8:14
10:6 13:19
48:13
start 17:25
19:16 72:3
100:3 105:23
started 28:4
38:20
starting 29:23
97:25
starts 64:3
state 1:18,21
11:6 12:18
28:6 32:4,5,9
32:11,13 34:12
34:14,14 35:3
36:22,25 49:21
51:11 52:2
55:3 62:12
66:8 74:7,11
102:1 103:10
107:4,5,8
116:12 123:17
stated 11:17
30:18 42:13
52:4,6,7
117:12
statement 75:2
94:15
statements 95:5
states 16:14 32:3
48:7 49:4
61:20
stating 9:12 93:4
statute 9:14 10:2
15:3 36:20
41:5,5,24
42:14 43:5
50:24 51:5
56:5,6,7 60:6
61:16 62:8
68:14 92:6
93:7 94:13
101:19 102:5,8
103:1 107:1,6
111:6,8 112:8
112:12 114:20
statutes 4:2 48:4
48:11,15 51:5
66:15
statutory 9:15
13:21 26:3
66:10 67:24,24
step 27:24 113:3
Steusloff 2:10
3:13,14 7:9
12:11 19:11,12
19:20 20:8,13
20:18 21:1
47:24 48:3,22
49:3,16,19
50:22 51:3
57:17 58:4,7
58:12,17,20,24
63:14 65:15
76:1,9,11,16
76:23 77:1
81:7,11 100:15
100:18,22,25
106:1 107:21
108:8 110:2
Steusloff's 19:18
Steve 20:4
stick 44:5,9
stipulations 7:11
46:8 100:5
stop 38:25 40:5
Street 2:12,21
struck 32:13
structure 5:4
stunned 52:14
styled 87:23
subchapter 48:7
48:8
subchapters
48:12
subject 89:14,17
93:25
submit 91:2,3
submitted 104:2
104:4
subpoena 16:16
16:17,18 19:18
20:23 21:4,5,6
21:17 24:2
29:1,16 45:17
57:15 58:13
59:2,9,24 60:1
60:4,12 62:22
65:1 67:5,23
69:25 70:19
71:2,18 72:8
73:22 75:24
77:22 79:10
80:2,3 81:9
83:18,20 84:21
84:24 85:1,12
86:24,24
106:13 107:9
113:14,23
114:7 119:14
121:21
subpoenaed
23:9 24:1,24
24:24 46:2,22
60:11 63:17
75:15,16
subpoenaing
80:24
subpoenas 4:1
4:21 17:19
18:18 23:7
28:19 29:7,10
45:24 57:13,16
58:10,14 59:15
59:17 61:4
64:25 66:5
68:24 69:15
71:8,23,24
72:10 73:12
75:22 78:8
79:2,5,17
80:20 81:19,24
82:1,6,12,13
82:19 83:6
84:6,17,18
85:18 91:16
93:23 94:4
107:3 112:8
113:6 118:12
119:12
Subsection
119:13
substantive 10:9
44:2
suddenly 103:6
suffer 16:22
sufficient 15:18
69:12
Suite 2:17,21
124:8
Sullivan 1:9
17:17 19:25
21:6 57:24
61:14 63:12
64:23 65:23
79:7 95:24
119:25 123:9
Sullivan's 80:25
summarize
78:22
support 50:3
supporting
18:12 64:7,16
suppose 77:1
supposed 121:18
121:20
Supreme 32:4
32:10 33:9
74:22
EXHIBIT 17
sure 4:8 23:2
24:7 36:23
40:16,21 41:8
47:2 49:5 65:8
67:3 71:15
72:4 90:19
93:12 94:10,24
108:10 121:7
surprise 35:16
59:5
suspicion 9:23
9:23
sworn 1:1,7 3:4
3:16 13:22
85:13 91:22
119:3 123:1,7
T
take 4:6 5:17,19
6:9,14 9:5
15:10 16:21
40:3 44:10,12
45:2,5 47:12
47:13 54:5
55:11 72:2
74:10 99:3
103:17 106:25
107:10 113:10
116:11 119:20
taken 31:5 86:25
105:21 116:8
123:23
takes 17:7
talk 11:12 30:13
32:20 57:14
62:2 75:22
90:24 109:22
111:16
talked 5:16 8:14
57:13 119:21
talking 21:9
25:22 54:19
71:23,24
tape 102:21
tapes 102:24
tecum58:13
tell 7:16 12:20
14:9 23:3
59:10 72:18
102:8
telling 96:18
99:8
ten 47:18 52:9
55:10 69:6
103:14,19
ten-hour 101:1,2
ten-minute
47:14
ten-page 69:15
terms 5:9 7:5
47:16 97:6
111:4
testify 9:6,16
16:15 23:11
26:24 29:7
30:9 31:9
46:23 80:2
81:12 108:10
108:11 113:24
testifying 4:10
9:22
testimony 16:18
29:17 61:18
98:10 114:5,18
Texans 1:3,4
20:1,2,15
21:13 29:22
34:3 35:2
57:21 63:12
64:6,6,16,16
64:23 81:12
86:19 87:23
102:3 103:5
110:21 123:3,4
Texas 1:1,3,9,17
1:18,19,21 2:2
2:11,13,17,22
3:3,10,15 7:19
8:16 11:3 16:2
16:3 17:16
20:10,17 28:6
36:22,23 42:1
48:14 51:19
53:25 61:15,21
64:8,18 74:22
79:7 80:14
101:25 102:2
102:18 103:10
115:9 123:1,3
123:9,17 124:6
thank 3:22 14:6
21:20 23:17
31:22 53:19
64:24 81:22
94:23 97:11
106:4 121:12
122:2
theory 88:25
thing 15:7,14
16:8 18:1 32:6
40:18,19 43:9
66:22,24 67:1
67:1 70:11
72:2 99:19
things 6:18 8:14
18:19 29:1
38:22 57:6
60:5 78:4 93:1
95:4 99:8
102:22 103:24
109:3,14,19
110:23 113:4
115:3 117:24
120:10
think 5:19 7:17
10:13 13:7
18:25 19:22
33:7 34:16
41:14 43:8
44:4,8,20 45:1
47:10 50:4,4
50:15 51:22
52:1,24 55:23
55:23 57:10
69:18 70:9
71:22,23,25
73:5 74:16
76:4 82:14
92:2,2 93:5,12
94:2,7 95:3,11
95:20 96:4
97:4 99:9
100:2 106:12
108:3,3,20
112:6,20
118:23 121:20
thinking 21:13
thorough 69:23
thought 5:17
32:23 33:16
43:12 52:23
55:25 56:1
117:21
threatened
11:21
threatens 11:22
three 28:2 85:18
88:6,12 95:4
110:24,25
111:1 112:25
119:24
throw14:16
till 99:1
Tim45:15
time 4:8,17,19
5:16 6:5,11,14
6:23 17:23
22:16 23:5,14
23:16 27:2
28:23,24 32:12
35:10 36:5,6
39:6,17 45:19
46:14,21,22
47:1,3 53:25
63:14 65:13,24
67:10 69:10,13
74:24 75:16,21
82:17 86:3
91:18 95:14
96:13,14,21
97:1 99:19,21
100:2,10,13
101:2,4,13,17
105:6 111:2
112:18 113:20
116:9 119:4
120:11
timeline 5:12
46:12
times 16:15
timing 46:3
104:21
today 3:3 4:25
7:8 9:2 27:22
27:22 37:5,11
37:25 38:20
39:7,15,16
40:22 52:10,23
53:4 55:11,22
59:2 60:16
62:18,24 68:6
82:17 98:21
116:5,25 121:3
told 25:18
106:19 116:11
116:15
TOM2:5,6
tomorrow82:22
113:7
tools 5:10
total 6:9
track 46:16
training 8:22
Trainor 2:20
3:20 5:7 7:10
22:5 29:18
65:3,5 110:25
Trainor's 97:2
transcripts
50:12
transfer 84:11
84:12
Travel 88:21
treating 101:10
Trey 2:20 3:20
trial 86:10,12,15
EXHIBIT 17
89:14,17 90:7
90:14,18 95:8
96:17 114:5
tried 74:22
true 61:7 98:22
123:18
Truitt 20:4 79:8
try 6:2
trying 17:3
24:20 32:6,7
32:17 34:2
37:7 41:20
44:23 49:9,23
52:24 53:9
55:12 68:18
87:3 96:20
97:7,11 98:23
99:16 109:9
115:18 119:23
turn 71:6,20,21
turned 71:5,5
two 6:22 7:22
8:20,20 13:17
17:18 18:3,16
20:2 21:2
28:11 29:1,13
30:3 31:8
37:19 42:17
53:9 72:2 79:2
85:13 88:6,12
89:22 92:10,18
93:15 94:16
103:12,24
110:24,24
two-day 47:8
two-week 86:11
type 6:18 108:12
U
ultimate 49:10
un 61:9
unaware 28:3
uncertain 117:4
underlying
18:12
understand 4:23
14:14 18:8
22:15 25:5,14
29:10 37:13
39:8,9 66:16
67:3 72:5
73:11 86:22
95:15 112:15
114:19
understanding
8:22 12:22
21:15 72:22
107:17
understands
24:8
unfair 28:5 53:7
53:22 55:18,20
69:17 96:18
97:4 103:13,15
unhappy 14:15
39:1
United 32:3
61:20
unnecessarily
47:4,5
Untermeyer 2:6
79:15,17 83:8
83:11 87:13
88:13,15,18,25
89:6 104:14,17
104:23 120:13
120:22 121:11
122:5,8
urge 28:16 119:9
use 5:10 36:14
36:15,16 64:10
64:19 112:7
116:19
uses 112:11
utilizing 60:12
99:17
V
valid 11:7
112:23 117:7
validity 11:17
venue 7:23
13:23
venues 7:22
versus 32:4 35:4
66:7 86:19
87:23 92:4
114:5
vetted 53:1
Vice 2:3 80:6,22
81:10,19,22
110:7 111:19
118:18,22
120:5,19
Vicki 20:3
videotape 14:17
viewpoints
117:9
vigorous 103:18
vigorously 116:3
violated 93:6,7
violates 61:19
violation 10:21
10:23 34:1,1,9
40:8 111:5,7
violative 32:14
94:12 101:18
102:8
vital 33:18
vote 23:6 49:13
49:17 50:6,19
52:14 55:9
91:25 92:7,8
102:9 110:9,15
113:14 119:8
voted 49:11 50:2
91:19 93:13
113:23 121:5,8
121:9
voting 92:3
W
W2:3,21
wait 17:18
waive 42:5
waived 42:24
waiver 42:8,10
42:11,19,21,21
want 4:25 13:9
16:8 17:10,15
17:15 24:12
25:4,20 30:16
32:3 33:8
34:12 36:20
37:16 39:8
42:22,22 43:1
43:1,2 45:3,3
46:8 50:20
55:1 56:9
62:24 67:3
69:16,21 70:12
71:3,4,15,17
71:19,20,20
72:8 73:14,16
73:18,19,19,21
73:21 75:15,16
75:23 80:15
89:24 90:24
91:2,3,4 93:11
103:16 106:8
107:10 109:5
109:10 111:3
114:7 115:11
115:22 116:19
117:17,19,22
121:17
wanted 13:14
23:1,2 96:11
103:7,7
wants 56:7
75:20 108:15
Washington
88:19
wasn't 33:5
44:24 56:14
111:7
way 4:1 27:10,11
27:15 39:9
40:17 88:3
93:7 96:5
100:3 119:23
121:6
we'll 42:3 47:14
57:5 72:9,11
82:23 89:11,12
89:18 90:5
100:3,4,6,7
102:24 105:24
113:2 114:15
114:16
we're 3:3 4:12
7:2 10:17 13:2
13:20,20 17:17
17:20,24 19:23
21:9 25:21,22
31:5 35:24
36:13,14 37:7
39:25 40:22,23
41:20 42:5
44:5,8 45:2,4
46:6,8,17
47:13,18,20
48:1 51:18
53:4,22,23,23
53:24 54:5,18
57:6,10,11,11
59:13,14,19
60:15 62:17
65:19 71:2,22
71:23,23,24,25
72:1 75:4,21
77:13 87:1
90:13,16,17
92:25 93:16,18
94:2,3 95:3
99:9 101:2,23
102:11,20,22
110:12 112:7
114:9 115:18
118:4 119:18
119:23 120:16
we've 4:2 6:15
7:3 15:22
17:14 27:1
37:23 40:24
45:1,23 47:10
50:11 51:22
52:8 53:10
EXHIBIT 17
57:13 65:13
66:2 75:5,5,6
78:5 86:25
94:3,6,7 98:8,9
98:9,25 99:1,2
106:12 114:6
116:24
website 64:16
week 5:7 47:12
week-long 54:9
weeks 37:20
119:24
weight 17:8
Welcome 3:2
went 25:1 99:17
119:2
weren't 93:3
111:2
whatsoever
115:4
White 86:19,24
87:24
WILHELMINA
2:4
William20:5,8
Williamson 22:3
80:17 81:24
willing 18:1
wish 17:13 40:2
63:17 69:25
73:11 97:11
99:16
wit 31:18
withhold 77:4
witness 17:6
19:3 35:10
79:1,5,24 95:5
104:10 119:15
witnesses 4:10
4:21 5:23,24
6:13 7:4,4
16:16 18:11
19:2,17,23
20:22 21:14
22:19 23:1,8
23:25 24:22,23
25:23 26:1,11
26:15,17,22
27:5,13 28:19
28:24,24 29:2
29:6,12,14
31:12,18 35:8
35:16 36:1,6
45:24 46:16
57:14 59:17
63:22 72:8
79:11 82:6
91:4 95:1 98:9
105:5 106:14
113:1 118:11
wondering 85:9
word 112:11
words 25:9,12
52:3 120:10
work 71:16
95:12 100:7
113:5 121:3
122:14
works 108:19
111:14 116:22
worst 101:22
wouldn't 76:5
114:25 117:17
117:18,19,22
117:24
write 106:19
written 23:14
39:23 63:24
64:5,14 68:24
83:3 118:9
wrong 19:10
X
X8:4
Y
y'all 82:18
yeah 21:25 28:1
54:4 64:2 71:3
78:9 93:8
106:24
years 17:18
32:10 33:11
34:10,10 72:3
72:22
Yep 100:20
you-all 4:5 14:13
Z
zero 17:25
0
086 3:12
1
1 59:15 61:17
63:11,12 64:3
78:23 83:4,4
83:19,19
1:00 104:5
10 41:25
100 124:8
10th 2:12
11 52:10
11th 90:5 104:4
12 1:13 13:16,22
123:14
12.117 13:23
12.119 13:24
12/31/15 124:7
12th 1:15 3:2
13 47:17 78:23
1300 2:17
13th 105:18
14th 2:12 87:4,8
87:9,10,12
88:2,7,24
89:19,19 90:6
90:9,11,12,17
95:2 97:6
100:12 103:22
104:5 121:18
122:14
15 54:3 99:3
150 107:4,9
15th 2:21
17752 124:8
17th 86:5,12
87:4,16,17,19
89:3,14,17
90:7,9,21
121:18
18th 86:5 87:4
87:16,17,20
89:8,9
1958 32:5 33:10
1976 11:7
1993 7:18 27:21
34:20 43:5
56:15 117:3,4
19th 86:5 87:4
1st 11:7 65:20
2
2 63:11,12 64:14
83:4,4,19
20-year-old 43:5
2001 26:21,21,23
30:6 48:7
2001.004 11:5
2001.034 11:19
2001.038 11:17
2001.094 106:11
119:11
2006 11:11
201 2:12
2010 65:20
2011 22:16,19
65:21
2012-CI-08501
87:23
2014 1:13,15
3:24 123:14
124:2
20th 95:3,4
104:12
21 82:21
21-day 85:1
21st 82:17
2500 2:17
26 102:17,25
27 25:4 39:18
27th 90:1,3
104:3
28th 37:9
3
3 64:2 70:9
30 72:22 99:2
3120485 3:4,11
19:8
3120486 3:5
19:8
3120487 3:5,16
19:4
3120488 3:5,17
19:4
31st 65:21
3351 124:6
3rd 3:24 5:5,13
79:6,12 80:4
95:1 97:9
100:3 104:22
104:24,24,25
105:6 113:5
4
4 44:18
4-4 121:3
400 70:9
401 2:21
407th 87:24
463-5800 2:13
485 19:15
486 19:16
487 19:14
488 19:14
5
5 11:5
50 33:11 34:10
512 2:13,22
56 34:10
571 30:6 48:4
571.131 26:13
571.131(b) 61:17
571.131(c) 8:3
26:18
571.139 48:6
EXHIBIT 17
5th 82:18
6
6-inch 46:17
623-0887 2:18
623-6753 2:22
6th 82:21 90:1,4
104:3
7
7,000-signature
102:9
713 2:18
724 124:7
77056 2:17
78701 2:13,22
78711 1:19
8
8 38:23
8:30 100:4 105:1
811-3376 124:9
845 2:21
855 124:9
9
9 52:10
9:00 100:6
92614 124:9
EXHIBIT 17
EXHIBIT 18
EXHIBIT 18
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LILY I. REZNIK, OFFICIAL COURT REPORTER
U.S. DISTRICT COURT, WESTERN DISTRICT OF TEXAS (AUSTIN)
1
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
EMPOWER TEXANS, INC. ) Docket No. A 14-CA-172 SS
AND MICHAEL QUINN SULLIVAN )
)
vs. ) Austin, Texas
)
THE STATE OF TEXAS ETHICS )
COMMISSION AND NATALIA LUNA )
ASHLEY, IN HER CAPACITY AS )
INTERIM EXECUTIVE DIRECTOR OF )
THE TEXAS ETHICS COMMISSION ) March 20, 2014
TRANSCRIPT OF MOTION HEARING
BEFORE THE HONORABLE SAM SPARKS
APPEARANCES:
For the Plaintiff: Mr. Joseph M. Nixon
Beirne, Maynard & Parsons
1300 Post Oak Boulevard, Suite 2500
For State of Texas: Mr. Gunnar P. Seaquist
Texas Attorney General's Office
P.O. Box 12548
Austin, Texas 78711
For Steven Bresnen: Mr. Anatole R. Barnstone
713 West 14th Street
Austin, Texas 78701
Court Reporter: Ms. Lily Iva Reznik, CRR, RMR
501 West 5th Street, Suite 4153
Austin, Texas 78701
(512)391-8792
Proceedings reported by computerized stenography, transcript
produced by computer.
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2
I N D E X
Direct Cross Redirect Recross
Witnesses:
Michael Q. Sullivan 5
E X H I B I T S
Offered Admitted
Plaintiff's
#1 14 14
Defendant's
(None.)
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09:01:48
09:01:49
09:02:02
09:02:09
09:02:13
09:02:15
09:02:23
09:02:28
09:02:32
09:02:41
09:02:48
09:02:52
09:02:59
09:03:00
09:03:04
09:03:09
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09:03:21
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09:03:32
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09:03:41
09:03:44
09:03:47
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THE COURT: Appears that only men are interested in
this lawsuit.
Okay. 14-CA-172, Empower Texans, Incorporated, Michael
Quinn Sullivan vs. The State of Texas Ethics Commission, et
cetera.
I have Mr. Bresnen's motion to intervene, late
yesterday afternoon. Of course, it doesn't help late yesterday
afternoon, as a result of the sequester, it takes us between one
and two days to get pleadings, unless we just sit there. And
with the docket -- the number-one docket in the country, my staff
doesn't sit there and look at the electronics every day to find
out which filings came in of the 3 or 400 cases in the civil
docket.
But we have, also, Professional Advocacy Association of
Texas requesting intervention. And then, we were very helped
much less at 6:47, when the Attorney General decided to join the
case and file its response. Actually, it's not filed because you
asked to exceed the page limits. I don't know if I ought to do
it or not, because, of course, it doesn't allow any assistance
whatsoever as to the state's position in this case in an
injunction. I don't know why it took the state so long. You
could have stated a position in ten pages, or five pages, or
three pages.
Did you really expect my staff and I to be here at 7:00
last night?
EXHIBIT 19
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09:03:51
09:03:52
09:03:52
09:03:54
09:03:56
09:03:57
09:03:58
09:04:01
09:04:04
09:04:06
09:04:08
09:04:11
09:04:15
09:04:18
09:04:24
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09:05:01
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09:05:10
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MR. SEAQUIST: No, your Honor. It was my
anticipation --
THE COURT: Well, no, no. I just asked you a simple
question and you answered it.
MR. SEAQUIST: The answer's no.
THE COURT: All right. I'll call for announcements.
MR. NIXON: Your Honor, Joseph Nixon for Empower
Texans. We're ready to proceed.
MR. SEAQUIST: Your Honor, Gunnar Seaquist on behalf of
defendants in this case, along with Amy Penn from the Attorney
General's Office. We're also ready to proceed.
MR. BARNSTONE: Anatole Barnstone for the Intervenor
Steve Bresnen.
THE COURT: Is there anybody here for Professional
Advocacy Association? All right.
All right. Counsel, Mr. Nixon, you may proceed.
MR. NIXON: Your Honor, would you like a brief
statement before --
THE COURT: What I'd like to be is on the beach right
now. I've been in trial for four weeks. I'm tired and I've
given you two hours. You can do it however you wish.
MR. NIXON: All right.
THE COURT: Do you intend to put on any evidence?
Let's have the evidence first.
MR. NIXON: Thank you, your Honor. Your Honor, we
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09:05:11
09:05:17
09:05:34
09:05:36
09:05:40
09:05:41
09:05:42
09:05:45
09:05:49
09:05:50
09:05:50
09:05:51
09:05:51
09:05:51
09:05:55
09:05:57
09:05:59
09:06:03
09:06:05
09:06:07
09:06:12
09:06:15
09:06:16
09:06:17
09:06:20
5
would like to call Michael Quinn Sullivan.
(Witness sworn.)
MR. NIXON: Your Honor, do you prefer I ask questions
from the podium?
THE COURT: That's the rule.
State your full name and spell your last.
THE WITNESS: Yes, sir. My name is Michael Quinn
Sullivan. My last name is spelled, S-U-L-L-I-V-A-N.
THE COURT: Your witness.
MICHAEL Q. SULLIVAN, called by the Plaintiff, duly sworn.
DIRECT EXAMINATION
BY MR. NIXON:
Q. Thank you, your Honor.
Mr. Sullivan, how are you employed?
A. I'm the President of Empower Texans.
Q. And what is Empower Texans?
A. Sir, we're a grassroots organization. We seek to inform
voters about issues in the state of Texas.
Q. When was Empower Texans formed?
A. The organization was incorporated in -- began in 2006.
Q. Does Empower Texans have a D/B/A?
A. Yes, sir. It does.
Q. And what is it?
A. Texans For Fiscal Responsibility.
Q. Can you describe for the Court your general daily
EXHIBIT 19
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09:06:28
09:06:29
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09:06:34
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09:06:41
09:06:43
09:06:44
09:06:46
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09:07:52
09:07:55
09:08:00
6
activities? What are your job duties and function as President
of Empower Texans?
A. Yes, sir. My responsibilities --
THE COURT: What materiality does that have on this
issue on the temporary injunction?
MR. NIXON: It has materiality on the issue of his
communication or alleged communications in that information which
is being sought by the Ethics Commission, which is
constitutionally protected.
THE COURT: Well, that's the allegation. It's not
constitutionally protected if he's a lobbyist. The Defendant
Commission gets, as I understand the pleadings today -- and I'll
admit, I have nothing from the state. It appeared that there
were two complaints filed that Mr. Sullivan and his organization
are unregistered lobbyists. I'm familiar with that.
Even as far as back as 25 years ago, before I took this
job, I had the pleasure of recommending when people ought to
register as lobbyists with my clients, and they seek on these two
complaints to get information so they could determine whether he
is a lobbyist and he should be registering what he's trying to
protect. And you've come in and said it's unconstitutional.
I don't know what your theory is as to where he's
unconstitutional, but that's what we're here for right now. What
he does, how he does it, or whatnot, he's already indicated his
purpose is to inform Texans of political issues.
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09:08:06
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09:08:23
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7
Now, that's close, isn't it?
MR. NIXON: No, sir.
THE COURT: All right.
MR. NIXON: It's just the opposite. That's what the
purpose of the question was to elicit. I could ask him directly.
Q. (BY MR. NIXON) Mr. Sullivan, are you a lobbyist?
A. No, sir, I'm not.
THE COURT: Well, I'm going to make that determination.
You don't have to ask that.
What I'm asking -- what I want to know is what we're
here for. What the materials that he's been subpoenaed, they
can't see to determine whether he's not a lobbyist. The state of
Texas has the right to determine whether he's a lobbyist, doesn't
it?
MR. NIXON: Not necessarily. Not at the application.
THE COURT: Well, I rule they do. Now, let's ask the
next question.
Let's find out what the materials are that he does not
want to see. The state of Texas has every right to determine
who's going to be a lobbyist in the state and influence the
people, the electorate, and the voters.
Q. (BY MR. NIXON) Mr. Sullivan, were you served with a
subpoena?
A. Through my attorney. Yes, sir.
Q. As a result of the complaint process filed --that was filed
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8
with the Texas Ethics Commission?
A. Yes, sir.
Q. Okay. We've attached copies of the subpoenas to your
complaint. But let me show you briefly, if I may, a copy of one
of the subpoenas. If we could switch to -- all right. Do you
have that on your screen in front of you?
A. Yes, sir.
Q. Okay. Is this a true and correct copy of the subpoena for
which you were served?
A. Yes, sir.
Q. Okay. I'm going to turn to the page 2 of the subpoena. And
let's look at paragraph No. 1.
It says, Michael Quinn Sullivan is commanded to produce
and permit inspection and copying of the following documents or
other tangible things to be used as evidence related to sworn
complaints. And it lists two complaints. Those are the
complaints against Empower Texans, are they not?
A. I believe that is correct. Yes, sir.
Q. Okay. It asks you, all written communications, including
e-mail, sent on or after January 1st, 2011, to or from you as
President of Empower Texans, on behalf of Empower Texans,
supporting or opposing candidates, officeholders, and measures in
Texas.
Do you have such information?
A. Yes, sir.
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9
Q. Can you describe for the Court what that information would
be?
A. Yes, sir. Those would be electronic communications. It
would be copies of letters, correspondence of -- copies of
outbound correspondence, as well as copies of inbound
correspondence.
Q. Do you have subscribers to Empower Texans?
A. Yes, sir, we do.
Q. Would this include e-mails to your subscribers?
A. Yes, sir, it would.
Q. Do you have donors to Empower Texans?
A. Yes, sir, we do.
Q. Would it include e-mails to your donors?
A. Yes, sir.
Q. Do you have sources that you use to -- for which you write
articles?
A. Yes, sir, I do.
Q. And post your articles on your web page?
A. That's correct.
Q. Do you have a web page?
A. Yes, sir. We do.
Q. And when we first came in and started your examination, a
copy of your web page was on the screen?
A. Yes, sir. It was.
Q. What is your web page address?
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A. The URL is Empowertexans.com.
Q. All right. Would the production of all of this information
by necessity require you to produce all your e-mails to your
subscribers, donors, and sources?
A. As I read the subpoena, yes, sir, I would have to offer up
all e-mails from my subscribers to my subscribers, from donors to
donors, from folks who pass on tips and other things.
Q. And this information would then go to the Ethics Commission
and be part of the public proceeding against the Ethics
Commission?
A. Yes, sir, it would.
Q. Would your political opponents have an opportunity to access
your -- all of those e-mails and know who your subscribers and
you donors and your sources are?
A. Yes, sir. My understanding, reading the subpoenas, that
anyone could then access that subscriber list, that donor list,
and do with it what they may.
THE COURT: What opponents would you have? Political
opponents?
THE WITNESS: There are any number of folks who don't
like what we do, sir. Various entities, various individuals. I
think an intervenor in this case would probably be one. Others
out there who have anonymously --
THE COURT: As I understand it, two intervenors, one is
trying to protect the constitutionality allegations with regard
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to present statutes regarding lobbyists; and the other is trying
to protect the process of the state in determining who's a
lobbyist upon a valid or an invalid complaint with the state's
received.
But when you say that your information would be public,
well, I'll get into that a little bit later. But the responses
being seen by your political opponents, I guess maybe you'd
better tell me, since you're not going to identify any of them --
usually I know who my opponents are. That's so vague, I don't --
I can't determine it. Any investigation by the Ethics Committee
with a subpoena is going to obtain information from somebody that
may have an opponent.
Can you give me a nature of who your opponent may be?
THE WITNESS: Well, sir, I think that -- yes, sir. I
think that, you know, powerful individuals like Jim Keffer, one
of the complainants in this case, has already demonstrated he
would love nothing more than to be able to shame, harass and
intimidate donors to our organization.
I think that there are any number of folks similarly
situated who would like to be able to have those -- the names of
subscribers so that they can say, ah, you're a bad person for
subscribing. You shouldn't receive that information from those
people. They're not a -- Vicki Truitt, one of the other
complaints, submitted a letter to the Wall Street Journal two
weeks ago in which she said, oh, these people shouldn't be
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protected because they're not objective.
By question is, who starts determining objectivity in
speech? Those are the kinds of people who would then want to use
the power of government. Use the power of --
THE COURT: All right. You may proceed.
Q. (BY MR. NIXON) Is the current Texas Speaker of the House one
of your opponents?
A. Yes, sir. I would classify that.
Q. All right. Mr. Sullivan, if I could, just take a moment, is
this a mailing that you received at your house?
A. Yes, sir. That is a piece of mail received at our home.
Q. Does it identify your organization as a house of cards?
A. That's what it says. Yes, sir.
Q. And it identifies people they think are associated with your
organization?
A. Yes, sir. They do.
Q. I know we can't see perfectly clear, but one of them is, in
fact, the one from -- second from the right is a minor.
A. At the time of that picture, that person was a minor. The
photograph identifies it as Daniel Greer. That is not Daniel
Greer. That is, in fact, his minor brother-in-law.
Q. And also, on the second from the left, it says -- it
identifies a person by the name of Jeff Sandefer. Is Jeff
Sandefer a member of your board?
A. No, sir. He is not.
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Q. Okay. Now, when you asked for donations, do you inform
donors that you're going to keep their information private?
A. Yes, sir, we do.
Q. When you have subscribers, do you tell your subscribers
you're going to keep your information private?
A. Yes, sir, we do.
Q. How many subscribers, approximately, do you have?
A. We have a couple of different subscriber lists I would point
to. One, our e-mail list. We have slightly over -- right at
100,000 people who have subscribed to our e-mail list.
Q. This morning, I looked at the Austin American-Statesman
circulation list. It's about the same size.
Are you -- do you produce information about the same
size to your subscriber list?
A. Yes, sir.
Q. And do you push information to them by way of e-mails and
posting information on your web page?
A. As well as social media. We have about 68,000 fans on
Facebook, which is about double what the Texas Tribune, for
example, has.
Q. And if we look at the back page of the same voter, this is
addressed to you, but this is a statement that these individuals
misrepresent facts and spread vicious attacks in an attempt to
control the Texas legislature.
Do you know who this was from?
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A. I do not, sir.
Q. Okay. Judge, I'd like to mark this as an exhibit and offer
-- admit it into evidence.
THE COURT: The clerk will assist you. Federal court,
counsel, next time, you should bring all exhibits premarked.
MR. NIXON: Judge, we'd offer Plaintiff's Exhibit 1
into evidence.
MR. SEAQUIST: No objection, Judge.
THE COURT: One is received without objection.
Q. (BY MR. NIXON) Mr. Sullivan, have you had an opportunity to
review web pages of other -- of your political opponents?
A. Yes, sir. There are web pages I'm familiar with. They're
similar to that. They're anonymous. But yes, sir, I'm familiar
with websites exist out there attacking us.
Q. Is one of those Texas Conservative Realty -- Reality
Wordpress.com?
A. Yes, sir, it is.
Q. Is another one Texasconservativepolitics.blogspot.com?
A. Yes, sir.
Q. And is a third one Impedetexas.com?
A. Yes, sir. That website is one that apparently
well-developed, professional website that is -- was at some point
pulled up in a Google alert. It's under development. I think
you go to that -- URL doesn't show up, but if you have the tekkie
guys dig around, they found that.
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Q. In fact, it has an opportunity -- a way to search the donors
from your PAC?
A. Yes, sir.
Q. Okay. All right. So let's go back to the subpoena. Let's
look at paragraph -- this second paragraph No. 1. Michael Quinn
Sullivan is also commanded to produce and permit inspection and
copying of the following documents and other tangible things as
it relates to two other complaints that end in 87 and 88.
Are those the complaints against you personally for
failure to register as a lobbyist?
A. I believe that is correct. Yes, sir.
Q. All right. It says, all written communication sent between
January 1st, 2010 and December 31st, 2011, to any member or
member-elect of the Texas legislature by, from, or on behalf of
Michael Quinn Sullivan.
Do you see that?
A. Yes, sir, I do.
Q. Okay. Do you have such information?
A. Yes, sir.
Q. Okay. I notice that there was no limitation on that being
in effort to influence legislation or any activity with
describing the lobbying. That's just any e-mail that you may
have sent to any member or member-elect of the legislature?
A. Yes, sir.
Q. Okay. Including, but not limited to, certain e-mail
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addresses?
A. Yes, sir.
Q. Do you have control -- access to control of those e-mail
addresses?
A. As the president of the organization, I have ultimate
control over all those things. Yes, sir.
Q. Does that also include all the information regarding from
your personal e-mail account?
A. In good faith, I would read it as such.
Q. Okay. Now, the paragraph No. 2 says, all written
communications including e-mails sent between January 1st and
December 1st to you from any member of or member-elect of the
legislature.
Do you have any such documents?
A. Yes, sir. I believe those do exist.
Q. Okay. Do you have documents under the other e-mail -- do
you have access and control over the other e-mail accounts?
A. Yes, sir.
Q. Okay. I know that they're not limited in subject matter to
anything having to do with any issue before the Texas
legislature.
A. Appears to be an unlimited request. Yes, sir.
Q. Yes. Okay.
Mr. Sullivan, do you consider yourself a member of the
media?
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A. Of the -- yes, sir.
Q. Are you aware that there is a media exception in the lobby
registration statute?
A. I am aware that that exists. Yes, sir.
Q. Okay. Mr. Sullivan, if you could, I'm going to hand you --
I'm going to show you what is Exhibit 18 attached to our
petition. It's a copy of another subpoena. Did you receive --
I'm sorry. I can't make this clearer.
Mr. Sullivan, did you receive this subpoena?
A. Yes, sir. I think through my attorney this subpoena was
received.
Q. All right. And I'd note that the subpoena references all
four complaints filed against you with the Ethics Commission?
A. Yes, sir.
Q. Okay. Mr. Sullivan, let's turn and look at the subpoena.
The first request, paragraph No. 1 says, Empower Texans is
commanded to produce and permit inspection.
As President of Empower Texans, do you have
authority -- any control over the documents that your entity
possesses?
A. Yes, sir.
Q. Is Empower Texans a 501(c)(4)?
A. Yes, sir, it is.
Q. Okay. It says, all written communications, including
e-mails, sent on or after January 1st, 2011 from Empower Texans
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on or on behalf of Empower Texans, supporting or opposing
candidates, officeholders, and measures in Texas.
Do you have such documentations?
A. I believe that such documents exist. Yes, sir.
Q. Do you have them electronically stored? Or do you have them
physically printed?
A. It would be a combination, sir.
Q. All right. Does Empower Texans endorse candidates?
A. Yes, sir. We do make endorsements.
Q. And how do candidates seek out your endorsements?
A. Candidates first have to seek out the endorsements. They
fill out a questionnaire. We then schedule an interview.
Q. Do they download the questionnaire on their own from your
web page?
A. To a degree. We do when filings are taking place, or we
will mail out the questionnaires kind of very broadly, and for us
that's where it kind of ends. If someone returns the
questionnaire, we then move forward. If they don't, we tend to
not keep pressuring them. We give them a chance. Then we have
an interview with the candidates. We also then go out to our
subscriber list and we seek input. We ask our subscriber list,
hey, what do you know about these candidates? Here are the
people running. What questions would you have? What do you know
about them?
That's particularly important in an open-seat race
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where you've got a challenger running who you've never -- who
we've never maybe had an opportunity to have any personal
interaction with.
Q. All right. And after the interview process, do you make
endorsements?
A. Yes, sir. We then consider making endorsements. We don't
make endorsements in every race. But at that point is then when
we start the internal consideration of who to endorse.
Q. Do you post your endorsements on your web page?
A. Yes, sir, we do.
Q. All right. Obviously that's just like what any major
newspaper might do in terms of its endorsement process?
A. I couldn't speak to any major --
MR. SEAQUIST: Objection. Foundation.
THE COURT: Foundation. Well, it was a comment, not a
question.
Q. (BY MR. NIXON) Is that -- Mr. Sullivan, you used to be a
reporter for the Associated Press, as I understand it?
A. Not the Associated Press. No, sir.
Q. For whom?
A. I was a reporter for the Denison Herald and then, a reporter
for the Brazosport Facts. I was also working for their
respective news entities. And I currently have a second job with
Breitbart News.
Q. And you are a reporter for Breitbart News?
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A. I'm currently a contributor of Breitbart News. Yes, sir.
THE COURT: I didn't catch that.
THE WITNESS: I'm contributor -- I'm currently also a
contributor to Breitbart News.
Q. (BY MR. NIXON) Contributor, do you mean a wordsmith
contributor?
A. Yes. I'm sorry. Yes, sir.
Q. All right. Are you familiar with the endorsement process
undertaken by various newspapers throughout the state?
A. Yes, sir.
Q. Is what did you do similar to what the newspapers do in
Texas?
A. Yes, sir. Most newspapers will offer out a -- they'll
invite the candidates in, the editorial board will interview
them. They'll have a discussion; then they will decide whether
or not to make an endorsement.
Q. All right. Let's continue on with a paragraph --
THE COURT: They make their money by selling papers and
advertisements, though, correct?
THE WITNESS: Yes, sir.
THE COURT: Okay. Let's go on to something relevant.
Q. (BY MR. NIXON) All right. Let's look at the second
paragraph, please. It says, all written documentation of
communications and articles published on the Empower Texans
website supporting or opposing candidates, officeholders, and
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measures in Texas.
Do you have such documentation?
A. Those documents are on our website, sir.
Q. All right. Would that include interoffice communication?
A. Again, this seems very broad to me in terms of what they're
looking for.
Q. Would it include information from your sources?
A. It absolutely would. Yes, sir.
Q. Would it include every version edit of the various articles
that you post on your web page?
A. Yes, sir, as well as articles that we don't post.
Q. All right.
THE COURT: Did you, sir, or your lawyers go meet with
the lawyers of the Commission to try to work on the subpoena?
THE WITNESS: Sir, it's my understanding that my
attorneys had been in communication with the Texas Ethics
Commission on the subpoenas both before they were submitted and
now since, sir.
Q. (BY MR. NIXON) The answer to that question is yes. I have.
And we were told the subpoenas were valid as served.
It says, as well as any communication regarding the
solicitation and acceptance of, as well as the use of political
contributions and making political expenditures from January 1st,
2011 until the present.
Now, are you familiar with the legal definition of
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political contributions or political expenditures?
A. I am, sir, based on our conversations.
Q. Okay. Political contributions are contributions received by
a campaign?
A. Right.
Q. To spend on that campaign. Does Empower Texans receive
political contributions?
A. No, sir.
MR. SEAQUIST: Judge, I'm going to object. That
misstates what the statute says. Specifically, the statute says
political contributions are contributions to a campaign or a
committee.
THE COURT: All right.
Q. (BY MR. NIXON) All right. Mr. Sullivan, does Empower Texans
have a political action committee?
A. There is a political action committee affiliated with
Empower Texans. Yes, sir.
Q. And does the political action committee accept campaign
contributions?
A. Yes, sir, it does.
Q. And does it report them?
A. Yes, it does.
Q. Does it make political expenditures?
Q. And it reports them?
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Q. And none of these complaints have anything to do about that.
A. No, sir.
Q. Okay. The complaint, as you understand, is that they want
to identify the 501(c)(4) as a political action committee as a
committee.
A. Yes. That appears to be what they're attempting to suggest.
Q. And in the attempt by redefining the 501(c)(4) as a
committee, didn't they claim that they have access to your donor
list?
A. That is how I read this in good faith, sir.
Q. So that's why they've used the term "political
contribution," as you've just heard their lawyer say?
MR. SEAQUIST: Judge, I'm going to object to leading.
THE COURT: Does that mean you're going to do it in the
future?
MR. SEAQUIST: No, your Honor. I do object to leading.
THE COURT: I sustain.
Q. (BY MR. NIXON) All right. Let's move on to political
expenditures. Does Empower Texans make political expenditures?
A. We do make expenditures. Yes, sir.
Q. Okay. And do you report those expenditures?
A. Yes, sir, we do.
Q. And those -- that's not at issue in this complaint either?
A. I do not believe it is. No, sir.
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Q. Okay. No one has complained -- to my understanding, there
is not a complaint with regard to your Empower Texans reporting
of its expenditures with the appropriate form with the Ethics
Commission?
MR. SEAQUIST: Objection. Leading.
THE COURT: Sustained.
Q. (BY MR. NIXON) All right. To your understanding, do either
of the complaints have any question with regard to the political
expenditures made by Empower Texans and reported to the Texas
Ethics Commission?
A. No, sir. They do not.
Q. Okay. Now, let's go to the second No. 1. It says, all
written communications, including e-mails sent between January
1st, 2010 and December 31st, 2011, to any member or member-elect
from the Texas legislature by, from, or on behalf of Michael
Quinn Sullivan.
Do you have such documentations?
A. I believe there are. Yes, sir.
Q. And from the e-mail addresses listed below?
A. Yes, sir. I believe there are.
Q. I know that there was no limitation in that description of
anything having to do with anything --
MR. SEAQUIST: Objection. Leading.
Q. (BY MR. NIXON) Is there a description in the --
THE COURT: You know, it's kind of wasting time. The
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subpoenas are in the record. I've looked at the subpoenas.
MR. NIXON: Yes, sir.
THE COURT: I'm more interested in any reason for
injunctive relief. I'm particularly interested in the Younger
doctrine because this is a quasi-judicial inquiry wherein Mr.
Sullivan and his corporation have an appeal to the state courts
or the federal courts, I guess, if there's jurisdiction, which
should be the state courts, on any decision. That concerns me
the most right now.
The second thing that concerns me is the breadth of the
subpoenas. I know of no courtroom in the land that those
subpoenas would be approved. The requests for documentation, I
want to hear from the state on that. Then those two things are
concerning me the most.
But the argument from the intervenors has basically
been, we know he's a lobbyist. Whether they know or not, I don't
know. And he's not registered and it's you, Ethics Committee,
that's responsible for making that determination, and they're
entitled to the information to make that determination. But what
they're entitled to do and what they're not might come into
whether or not injunctive relief is going to be granted. And
that's what we're here for.
We're going to have plenty of time to brief these
serious questions. But in this lawsuit, you understand, that
information is going to be forthcoming, because I can't make a
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determination over testimony like this. Do you understand?
MR. NIXON: Yes, sir.
THE COURT: Okay. So let's be concerned with whether
or not there's going to be a temporary injunction issued by this
court, notwithstanding what we're going to do in the lawsuit as
to whether or not it should be continued or dismissed, because
you haven't had the opportunity to do any briefing on it.
MR. NIXON: All right. Judge, if I can, if you'd like,
I could answer some of your questions just from me, if you'd like
to hear those responses right now.
We're not objecting to the Ethics Commission
prosecuting the complaints. We are only objecting to the
subpoenas asking for constitutionally protected information that
don't have anything to do with the prosecution or the complaints.
They are under color of state law asking -- they are violating
the First Amendment rights under color of state law by issuing
the subpoenas. We do not have any other place to go except here.
THE COURT: Well, that was my next question. Where
else could you go?
MR. NIXON: We don't. The subpoenas -- there is not a
process in state law that allows us to file objections, and to
hear those objections heard, and to appeal those objections to
the proper authorities. This is an oddly drafted statute with
oddly drafted rules, most of which are applied on the fly. When
the subpoenas were discussed at a hearing, I made my objections.
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The objections were overruled by the chair, and the Commission
voted to issue the subpoenas. So left us no other recourse but
to seek injunctive receive in a 1983 action.
We do not have the ability to appeal that decision to a
state court. They, on the other hand, the Ethics Commission, has
the ability --
THE COURT: Wait a minute. Any decision by the Ethics
Committee's appealable to the state district court.
MR. NIXON: The final decision on a determination of
whether there's been a violation, that's true. But once we
produce the information, the harm has been done. Once we
provided the information and it is now public, the $100,000 --
100,000 subscribers, the donors, the sources, the internal, all
if that information, once it's produced, is now public record,
and the damage has been done.
THE COURT: Won't that same information have to be
produced if it's determined by the Commission and upheld by the
state court?
MR. NIXON: No.
THE COURT: That Sullivan is a lobbyist?
MR. NIXON: No. No, because it still -- as the Court's
already held -- or not held, excuse me, has already indicated
that the subpoenas were so overly broad -- the issue of whether
or not you're a lobbyist is a factual determination based upon
the activities that you do and whether -- what you are engaged
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in. They have --
THE COURT: It seems to me the nature of the subpoena
is trying to find out some information about that.
MR. NIXON: If they asked us --
THE COURT: They're not going to ask you -- they're not
going to ask your client to reply after he makes a judgment call
as to what they're asking. He's not going to be -- he's not
going to determine himself what activities he believes are
prerequisite to being a lobbyist or what activities are not. The
subpoena calls for objective information of facts, and that's
where it is.
But let me hear from the state as to why these
subpoenas are so broad. First off, do you want to ask Mr.
Sullivan any questions?
MR. SEAQUIST: Judge, I have questions to ask Mr.
Sullivan, but I'd be happy to address the Court first, unless the
Court would like me to conduct the examination first.
And, Judge, I think an important point needs to be
made. There's been a lot of discussion this morning in terms of
the lobbyist allegations. And there is, indeed, a sworn
complaint on the lobbyist -- on whether Mr. Sullivan's activities
constitute lobbying. There is a separate complaint, however,
before the TEC that they have to investigate regarding whether or
not Empower Texans itself has engaged itself so as to fall within
the definition of a political committee. And so, many of the
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requests -- the requests were divided up that way.
So when you see requests here that are directed
specifically to communications with member-elects, legislators,
that does go to the lobbying issue and, frankly, is directly
probative as to whether or not Mr. Sullivan is communicating with
lobbyists for the purpose of influencing legislation.
The other question, though, Judge, is whether or not
Empower Texans has as a principal purpose either soliciting
political contributions or making campaign -- excuse me,
political expenditures. And as this court noted in its --
THE COURT: I'm familiar with what I write.
MR. SEAQUIST: Well, and as you know, Judge, the
definitions are tortured, but basically what it comes down to in
terms of the political action committee is, are they soliciting
contributions and are they making expenditures in connection with
campaigns for candidates or measures? And so, all of these
requests that you see that are trying to find out, what are the
activities that you are taking to oppose or support candidates?
What are the activities that you are engaging in for political
ballot measures?
The purpose of these requests is to try to -- in the
face of Mr. Sullivan refusing to provide any information, trying
to find out and find objective evidence to show that Empower
Texans does, indeed, fall within these statutory definitions and
thus, should be registering as a political committee with a
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campaign treasurer appointment and the disclosure reports that go
with that.
Your Honor, that falls -- I mean, Mr. Nixon's argument
is ultimately one under the First Amendment. And these subpoenas
directly relate to and are substantially related to the state's
interest not only ensuring information disclosed to the
electorate but, also, in investigating and gathering data --
THE COURT: Right now, I just have the issue of the
subpoenas.
MR. SEAQUIST: Yes, your Honor.
THE COURT: So I was wondering if either side was
intellectually honest and fair enough to sit down and get the
subpoena requests reasonable. These are not.
MR. SEAQUIST: Judge --
THE COURT: Now, whether they're unconstitutional is
another thing. But these are absurd. You're asking for the
cattle in the pen by asking everything in the pen, the dirt, the
mosquitoes, the ticks. The subpoenas are overbroad. Now,
whether or not that's constitutional or not, it seems to me that
intelligent people can sit down and get the information with
reasonable -- you know, the word "all" in every one of these.
One of them's a two-year period. Some of them are one-year
periods. "All," I can't even imagine if somebody gave me that
subpoena of all the orders I wrote in the last year to prove that
I was a federal judge or a bad one, one of the two. There's not
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much reasonableness.
Now, what is the position of the Ethics Committee, your
client, as to why they would not sit down and try to work with
the lawyer to get the appropriate information? Because he's a
smart guy. He knows, ultimately, he's going to be in the state
court or the federal court, and he wants to have a reasonable
position. The Ethics Committee, on the other hand, ought to
think about the same thing. They're not the final word. They
have an appeal to the state court.
And I'm not so sure so many of the administrative
appeals like that come to the federal court. Whether or not they
will in this case, I don't know. I don't read the future. But I
do know about the Younger doctrine. And since you have an appeal
to the state court at the end, probably that's not little of the
federal -- he can make the same arguments in the state court
constitutionally that he can make in this court.
But I haven't heard and I want a response -- although I
you may not be the person that was involved -- why a meeting
could not have been made and reasoned minds set forth the
information that was necessary. That happens all the time in
this court with a patent that's worth 4 or $500 million, and it's
done on a confidentiality order, which protects everybody. I
don't know if you have confidentiality orders or not, but you
certainly have a brain and you certainly can be more specific
than the breadth of these subpoenas, it seems to me.
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Now, that's what I want to hear from the state.
MR. SEAQUIST: Yes, your Honor.
Mr. Nixon indicated that we've had those discussions
and we have. And where the rubber meets the road on this, Judge,
and the Commission is willing to engage, I think, in reasonably
narrowing this. And, in fact, we have represented to them, to
the plaintiffs in this case, that we are not looking for the
identities of just charitable donors. The state is not here
seeking to force disclosure of mere charitable donors of
501(c)(4)s.
What we are looking for is the identity of political
contributors as defined by the statutes who would have to
otherwise be reported if, indeed, the plaintiffs are a political
committee. Where the sticking point has been, Judge, is that the
plaintiffs' position is that we are constitutionally unable to
have disclosed who their political contributors are. No matter
what the subpoenas say. And so, that's really the issue that we
need decided by the Court.
THE COURT: Well, I've already decided that pending in
the Fifth Circuit right now.
MR. SEAQUIST: Well, and I think not only that, Judge,
but the Supreme Court has decided the matter, as well. And so,
that has been sort of our confusion --
THE COURT: You argued that I'm correct because I
followed the Supreme Court, but it didn't exactly say that. It's
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an issue I don't know why it's taken them so long to determine.
But that issue is pending in the Supreme Court right now.
MR. SEAQUIST: And so --
THE COURT: There's no question in my mind that under
the present law, the political contributors are going to be
disclosed at some time under the appropriate procedures. But
that case has been up there for over a year.
MR. SEAQUIST: Your Honor, I do want to clarify. I
think there's also a misstatement as to the procedures available.
The procedures for the Texas Ethics Commission --
THE COURT: That's my next question, so that's fine.
MR. SEAQUIST: The procedures for the Texas Ethics
Commission do, in fact, allow for the plaintiffs or respondents
in that proceeding to file a motion to quash the subpoena, and
the Ethics Commission itself has no authority to enforce the
subpoena. So if the Ethics Commission wants that information,
they have to file it -- a petition in state court. And so, at
that point, if it's an overbreadth issue, if it's simply an
overbreadth issue --
THE COURT: Have they filled a motion to quash?
MR. SEAQUIST: They have not filed a motion to quash
yet.
THE COURT: So there is a procedure available to file a
motion to quash that would be determined by a district judge if
it went that far.
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MR. SEAQUIST: And just to be clear, Judge, the motion
to quash is determined by the Commission. However, ultimately,
if Mr. Sullivan decides that he doesn't agree with that decision
and doesn't produce the documents, then the Commission has to go
to the district court, and then, the district court judge decides
whether the subpoena is appropriately crafted.
Really, the question is -- that we see as being before
this court is the one that you've just discussed. And as the
Court points out, if it was just a matter of breadth, I think
that is a Younger issue. But when we're talking about the
constitutional power of -- or the constitutionality, First
Amendment of the statute, although that can still fall under
Younger, Younger as a prudential doctrine, and my clients are
comfortable having this court -- as you've pointed out, has
already ruled -- but having this court issue a ruling for us
that, in fact, it's not a matter of constitutional law, it may be
a matter of overbreadth.
THE COURT: Well, right now, I'm in the same position
as the Ethics Committee. I don't have the sufficient information
or evidence to make a determination whether or not they're
political contributors.
MR. SEAQUIST: Well, yes --
THE COURT: They don't want to give any of the
information. So that collision, maybe it's in this court. I
would think since we're dealing with state law, it should be in
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the state court.
MR. SEAQUIST: Well, and, Judge, we would defer to the
Court's ruling on that. And, of course, any final decision on
that would have to follow discovery, as the Court pointed out, to
elucidate these issues.
But the question -- one thing I want to make the Court
aware of in terms of the preliminary injunction proceedings
today, the Commission did meet on Monday, and out of deference to
this proceeding, voted to abate the administrative proceedings
pending a decision from this court as to whether to entertain the
case and if so, a final ruling. So at this point, there is no
threatened enforcement of the subpoenas. There is no threatened
enforcement of a proceeding. Everything is on hold, pending a
determination from this court.
So an injunction today is not necessarily in terms of
what the subpoenas are.
THE COURT: I take it, the Ethics Committee could meet
tomorrow, and then, you would come down here and ruin my Monday.
MR. SEAQUIST: Well, Judge, if the Court -- I think at
that point, the Ethics Committee is not going to meet until this
court says, I'm not going to take this case, or we're going to go
forward with discovery and decide on the merits. So if the Court
says, I'm not going to take the case, then I do think that the
Ethics Committee would then hold the vote, the proceedings would
go forward, and we'd ultimately end up in state court.
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THE COURT: So the state wants to find out if Empower
and Mr. Sullivan have political contributors. They think it is
constitutionally protected not to say. The Committee does not
think that that is accurate, but does not have the information to
know if they have political contributors or not, but by hearsay
and allegations, they believe they do. So that's the stalemate
until somebody gets some information.
In the federal court, you can have broader discovery
because nothing's public. You get a confidentiality order from
me, the information is presented, and whoever breaches the
confidentiality order goes to the Bureau of Prisons. It's pretty
safe and it's pretty accommodating. We have it every day in
patents cases, and trademark cases, and Lanham Act cases, and any
other cases.
But what you're telling me is that there is a procedure
in effect that a state district judge would make a determination
of whether the subpoenas should be complied with.
MR. SEAQUIST: If this court does not entertain that
case, then, yes, Judge.
THE COURT: I'm talking about the state law procedure.
MR. SEAQUIST: That is the normal process, Judge.
THE COURT: Okay. Now, where can I find that written
down?
MR. SEAQUIST: That is -- your Honor, it's in Chapter
5 --
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THE COURT: The cavalry's behind you.
MR. SEAQUIST: It's in Chapter 571.
MR. BARNSTONE: It's also in the APA, your Honor.
MR. SEAQUIST: So, your Honor, the provision allowing a
motion to quash to be filed is Texas election -- excuse me, Texas
Government Code 571.137, sub -- I apologize, Judge, sub (d). And
then, Judge, 571.137 also addresses the enforcement. And then,
the Texas Administrative Code, Chapter 2001.201 addresses --
that's also Texas Government Code -- addresses code enforcement
of the subpoena.
THE COURT: All right. So, Mr. Nixon, what is the
difficulty with the procedure?
MR. NIXON: Thank you, your Honor.
We have objected, and those objections were overruled
in the hearing for which the subpoenas were issued. There is not
in the rules of the Ethics Commission the ability to file a
motion to quash. And here's a very interesting situation where
we find ourselves.
THE COURT: I don't think it will ever change from
what's represented in this court. If it's in the government
code, it exists.
MR. NIXON: Oddly, the Ethics Commission has not
adopted any rules by which it --
THE COURT: I read that in your pleadings.
MR. NIXON: Yes, sir. All right. So here's where we
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are.
THE COURT: They're bound by the government code.
MR. NIXON: Here's where we are. So our motion to
quash, where do we appeal that?
THE COURT: They appeal it. You file a motion to
quash, they then make a determination.
MR. NIXON: To the Ethics Commission.
THE COURT: What?
MR. NIXON: That's where the appeal is, at the Ethics
Commission.
THE COURT: They make -- they make the decision that
you should comply, and then, you go to the district court.
MR. NIXON: We don't have that process. We are not
allowed to go to the --
THE COURT: Okay. Well, I'm going to look at
571.137(d) and 2001.201.
MR. NIXON: We are allowed a trial de novo in district
court at the conclusion of a final judgment from the Ethics
Commission. We get a --
THE COURT: Well, you're entitled to that, also.
MR. NIXON: Sure. But in the meantime, we are subject
-- pursuant to the wording of the subpoenas that they are
entitled to go enforce them through a contempt action in a
district court. We are not allowed to then --
THE COURT: It would be in a contempt action, I
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suspect.
MR. NIXON: We aren't allowed to bring any affirmative
relief in the state district court from the subpoenas. That's
why we're here. Because once we produce the information -- and
that's -- you've identified the problem. The subpoenas were so
overbroad, that the overbreadth of the subpoenas itself is itself
a constitutional violation.
THE COURT: Well, you're not getting any help from your
clients as to be able to limit it, either, because you don't want
to give them anything.
MR. NIXON: No. That's -- Judge, that's -- I would
disagree. We would give them responsive -- and I did try.
THE COURT: It's America. You have the right to
disagree.
MR. NIXON: I had two conversations with the lawyer.
One was an e-mail late last night and one on Monday, saying, can
we please look at these? Is there something that we can agree
on? Because, quite frankly, we're -- we don't have a problem,
not ever and not today, and we'd do it right now of producing the
e-mails that they are seeking that went to legislators. We don't
think there's a violation of a statute. And if they want to find
us guilty of violating the lobby statute on that information --
and they already have -- we don't have a problem with that
because, then, we can appeal that in the normal course.
What we have a problem with is disgorging all --
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THE COURT: When you say they already have, you mean
you believe that --
MR. NIXON: There's been a preliminary determination,
as a result of the preliminary information, that Mr. Sullivan
should register as a lobby. Now, they offered us an opportunity
to agree with them, and we declined and said we'd like to proceed
to a formal hearing.
At the formal hearing is when they have issued these
subpoenas that we can't seem to get them to narrow the scope
down. We're happy to produce whatever information that we sent
to members of the legislature that have -- that refer to
legislation, they refer to measures, they refer to anything. We
do not think that those qualify as lobbyists. We think we also
fall within the media exception. We're happy to have those
issues fully litigated in the formal hearing process and then, if
necessary, on appeal a de novo.
Where we are stuck is the fact that I can't get them to
budge off of the overbreadth of these subpoenas. That the
overbreadth is a constitutional violation, not the prosecution
itself. We can deal with that. Those are -- we could deal with
that in state court. But once we produce this information and it
becomes public record that anybody can access, then our 100,000
subscribers, our donors, and our sources are then subject
harassment to use by other people, to -- and, you know, this is a
new media environment where Mr. Sullivan is pushing information
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to voters, and he has -- I mean, he's as large as the Austin
American-Statesman and doing it in a different modality.
THE COURT: Frankly, I find the Statesman a very thin
paper.
MR. NIXON: I use them because they're about the same
size in terms of subscribers, but it's no different than the
protection that the Statesman would be arguing for in this court
if they had been -- received such a subpoena. And they wanted to
say, you know what, when you endorse people and put it on your
editorial page and then, you write letters on your editorial
page -- look, I used to be member of the legislature. I would
get routinely the Dallas Morning News, the Houston Chronicle, the
Fort Worth paper, everybody in my office. Arguably, it's the
same kind of information. They were providing me information.
They were providing me their editorial pages. No difference
here. There's no difference.
Many of the members of the legislature are actually
subscribers to Empower Texans. They sign up themselves.
THE COURT: No. We're in the next county from where we
stand in that.
Let me hear from the state with regard to that.
MR. SEAQUIST: Judge, my understanding has been, all
along, that the objections to these subpoenas has never been
overbreadth. It has always been a First Amendment objection.
The problem is the plaintiffs have --
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THE COURT: Wait a minute. You've heard counsel just
now. So why don't you respond to what he tells me?
MR. SEAQUIST: Well, Judge, he says that he's happy to
produce all of these communications. They've produced not a
single one. This is not a situation where counsel said, here's
what we'll give you. I mean, if overbreadth is the issue, what
they should have done is produced what they thought that was
within the subpoena, and then, if the Commission felt like more
was necessary, that could have been handled. They have not
produced a single page.
THE COURT: Well, has the Commission tentatively
already said they lose?
MR. SEAQUIST: In terms of the lobbying sworn complaint
only. There was a finding because there are some communications,
Judge, in the record between Mr. Sullivan and legislators
directly advocating for particular pieces of legislation. Fits
right into the statutory definition of lobbying activities.
THE COURT: That really doesn't surprise me. I had to
have school officials register as a lobbyist. I had to have
people in business as registered lobbyists mainly because they
just went and talked to a legislator. So I'm kind of familiar
with how easy it is to become a lobbyist. It's interesting that
the lobbyist association and the other intervenor want Mr.
Sullivan to join. I'm being a little obtuse.
What is the position of public record? Everything that
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goes to the Ethics Commission public record? Or does the Ethics
Commission have the right to engage in a confidentiality order
that has to be either by consent disclosed or by a judge
disclosed?
MR. SEAQUIST: Well, unfortunately, Judge, the
preliminary hearing is entirely confidential by law. However,
the plaintiffs didn't produce -- and the subpoenas were issued in
advance of that proceedings, too. And so, if they had been
produced at that time, everything would have been --
THE COURT: Let's forget what's happened right now.
Right now, you're in the United States District Court with
nothing. They haven't done anything. They say they tried to be
reasonable and they didn't get anywhere because you've already
made up your mind, which may or may not be true. I do not know.
My job is to, you know, to preside over a war. It's
going to cost people of Texas a lot of money. Or the impossible:
To get the Ethics Committee and Mr. Sullivan through competent
lawyers, get the information that's necessary without a war.
MR. SEAQUIST: Unfortunately, Judge, I think the formal
hearing proceedings before the Ethics Commission is subject to
the Open Records and the Open Meetings Act. So I don't believe
that there is a procedure, and I could be corrected on that.
THE COURT: Well, I suspect that's true. I'm talking
about evidentiary materials.
MR. SEAQUIST: What I'd like to do --
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THE COURT: When you come into the courtroom and you
have evidence, exhibits, contracts, whatever, subject to a
confidentiality order, the trial was in the public courtroom,
everything is public, but the Judge has to make that
determination if it's going to be open or not, after the trial is
over. The jury may get it, but the jury gets instructions that
it's confidential at this time. That's not any big deal. That
goes on all the time.
MR. SEAQUIST: I think, Judge, I think the ability --
well, two things, Judge. What I'm told is that if it's not
entered into the record, then it's not public. It doesn't have
to be a public record. So the Committee could review it without
it being a public record. If it is to be entered into the public
record, I think that it would have to be a public record. I
think that the ability to seal that proceeding is a benefit that
the federal court has that it's not clear that the Ethics
Commission does.
THE COURT: Now, Mr. Seaquist, is the state telling me
that their legal people, you and the people sitting here, can't
sit down and go over those interrogatories and get them in more
narrow frame with description? They'd have to answer them under
oath, don't they?
MR. SEAQUIST: No. They're subpoenas for documents,
Judge.
THE COURT: Well, then, I can easily require that they
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answer them under oath. But I'd like for y'all to try, first, to
see if reason can prevail. I'm a big believer in reason prevail.
I'm a little too busy to redraw myself. I don't really know what
you want. You want everything because you've asked for
everything. They want to give you nothing, no matter what
counsel says, and we're at an impasse. And we're either going to
have to get the impasse through reason, if possible, or through
the courts, which is going to take a long time and be very
expensive. That's the option both of you have. Okay.
MR. BARNSTONE: Your Honor, I'd like to make a quick
comment, if that's permissible.
THE COURT: Well, I would, too. I get to go first.
Write down this: Geier, G-E-I-E-R, versus the Missouri
Ethics Commission, 715 F. 3d 674. It's an Eighth Circuit case.
It's a thing I don't have jurisdiction under. It's a state
matter and it's a quasi-judicial proceedings.
MR. SEAQUIST: Judge.
THE COURT: Now -- no, no, no. We all have turns.
He's next. He came up here twice.
MR. SEAQUIST: Sorry.
MR. BARNSTONE: I agree with that, your Honor. I also
think that as far as these subpoenas go, this is really an
Article III issue. This issue is not ripe for this court.
THE COURT: Well, I don't disagree with that at all.
But if I can be a catalyst in getting you the information and
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stopping all of his 100,000 people having to pay for all of this
and the taxpayers pay, ultimately, it's going to get decided.
And right now, things are going to get hotter.
MR. BARNSTONE: And I'm fairly certain that the parties
are going to take seriously the Court's guidance as far as the
overbreadth of the requests, the subpoenas that were served by
the Commission.
THE COURT: I would hate to have to defend those.
MR. BARNSTONE: And I agree with that. But the first
step in that process -- and Mr. Nixon's not correct on that. The
first step in that process is go to the state district court and
argue that in front of the state district court. Either side,
either the Ethics Commission or the respondent, has the right to
go to state district court and that's in 571.137.
THE COURT: It will -- I'm not going to grant any
injunction, but let's put it this way. I want a report in 15
days whether or not y'all have gotten an agreement with regard to
the documents. I'm not going to dismiss this case either. As
long as I've got it, I've got it. And I want y'all to make an
effort to see if you can grow up, specify exactly what you need,
and see if they will grant it or if they want a constitutional
issue.
MR. BARNSTONE: Will the parties have the ability, in
the meantime, to -- if they deem it necessary to go to the state
district court and file the appropriate paperwork there?
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THE COURT: It's America. You can go to any court you
want. And I'm sure those Travis County judges would just love to
have that case. If you can find one.
MR. BARNSTONE: Thank you, your Honor.
THE COURT: All right. Anything else today, sir?
MR. NIXON: Yes. Just by way of quick comment.
We do not believe that the Government Code 571 nor the
Administrative Procedures Act allow for interlocutory appeal or
mandamus of the Ethics Commission or a ruling from the Ethics
Commission. So we -- any kind of effort to go back to the Ethics
Commission is a futile act. Once the information's out, that's
the harm, that's the First Amendment violation.
So we don't have --
THE COURT: So you don't want to go back and reason?
MR. NIXON: I don't want to have to go back and reargue
to them. I'm happy to go back and sit down with them. And I've
always been happy to sit down with them and redraft the subpoenas
in a way that are protective of my client's constitutional
rights, which is what I said at the original --
THE COURT: Well, that's what I thought.
MR. NIXON: At the original hearing. So we're
prepared --
THE COURT: Just forget what I've said. I can see that
the plaintiff has no intent to --
MR. NIXON: No. We're happy to --
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THE COURT: No, sir. You just answered it. If you
want a constitutional issue, you file within seven days your
response with regard to the Eighth Circuit, and then, I'll decide
whether to simply dismiss the lawsuit or continue it. I'm in
recess until 11:00.
(End of proceedings.)
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* * * * * *
UNITED STATES DISTRICT COURT)
WESTERN DISTRICT OF TEXAS )
I, LILY I. REZNIK, Official Court Reporter, United States
District Court, Western District of Texas, do certify that the
foregoing is a correct transcript from the record of proceedings
in the above-entitled matter.
I certify that the transcript fees and format comply with
those prescribed by the Court and Judicial Conference of the
United States.
WITNESS MY OFFICIAL HAND this the 21st day of March, 2014.
/s/Lily I. Reznik
LILY I. REZNIK, CRR, RMR
Official Court Reporter
United States District Court
Austin Division
501 W. 5th Street, Suite 4153
Austin, Texas 78701
(512)391-8792
Certification No. 4481
Expires: 12-31-14
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561-835-0220
WWW.USLEGALSUPPORT.COM
1 (Pages 1 to 4)
1
IN RE: )
EMPOWER TEXANS, INC. )
EXCERPT TRANSCRIPTION OF AUDIO AND VIDEO RECORDING
TEXAS ETHICS COMMISSION
APRIL 3, 2014
2
1 CHAIRMAN JIMCLANCY: All right. We are here
2 to proceed on the contested case proceedings in
3 sworn complaint SC-3120485 and 3120486, in the
4 matter of Empower Texans, d/b/a Texans For Fiscal
5 Responsibility, as well as sworn complaint number
6 SC-3120487 and sworn complaint SC-3120488, in the
7 matter of Michael Q. Sullivan, Respondent.
8 Counsel, if you would both approach the
9 counsel table.
10 The Commission understands that there
11 has been some dispute regarding subpoenas issued by
12 the Commission, and counsel have some additional
13 matters that they would like to take up with the
14 Commission.
15 So counsel for the Commission.
16 MR. JOHN MOORE: Yes, sir. John Moore for the
17 Texas Ethics Commission.
18 We have for you this morning a new
19 request for subpoenas that comes out of the
20 litigation, of which the agency is currently
21 involved, and we would like to present that to you
22 this morning for your consideration.
23 CHAIRMAN JIMCLANCY: Thank you.
24 (Documents tendered to panel).
25 CHAIRMAN JIMCLANCY: So counsel, these are
3
1 two separate subpoenas; one to Empower Texans, one
2 to Michael Q. Sullivan?
3 MR. JOHN MOORE: That's correct, although they
4 are the same in terms of language.
5 I don't know if the Commission would
6 like to have some time to read these over before
7 they consider it.
8 CHAIRMAN JIMCLANCY: Has Counsel for the
9 respondent received copies of these?
10 MR. JOHN MOORE: They received themyesterday.
11 The same thing was forwarded to themyesterday by
12 the attorney general's office.
13 CHAIRMAN JIMCLANCY: Okay. And what is it
14 specifically that you are asking the commission to
15 do here?
16 MR. JOHN MOORE: What these -- excuse me for a
17 moment while I get my glasses.
18 What these subpoenas do, basically, is
19 ask for specific information. As you are aware,
20 the judge in the hearing said that he thought they
21 might deal with fraud. We have asked for specific
22 information within a specific time period with
23 specific definitions of what we are looking for.
24 We have a list of 19 different items or
25 19 different areas that we would like the
4
1 production of documents in pursuant to the board
2 rules and the APA. So we think the request is
3 reasonable. We have already shown good cause.
4 This is actually a much narrower request for
5 information than was previously asked for.
6 CHAIRMAN JIMCLANCY: What are you asking the
7 commission to do with the ones that are currently
8 outstanding?
9 MR. JOHN MOORE: Probably to go ahead and
10 withdrawthem.
11 CHAIRMAN JIMCLANCY: Are you asking the
12 commission to issue these two subpoenas?
13 MR. JOHN MOORE: Yes, sir, we are, but giving
14 the other side a reasonable time in which to
15 respond. We have not put a date certain in the
16 subpoena.
17 CHAIRMAN JIMCLANCY: Are we correct that the
18 respondent has agreed to the language of the new
19 subpoenas?
20 MR. JOHN MOORE: No, they have not.
21 CHAIRMAN JIMCLANCY: Is there any portion of
22 it that is -- is there any portion of this subpoena
23 that has been agreed to by respondent?
24 MR. JOHN MOORE: Not that I knowof, no, sir.
25 CHAIRMAN JIMCLANCY: Is there anything
EXHIBIT 22
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2 (Pages 5 to 8)
5
1 additional to add, counsel, for your portion of the
2 case?
3 MR. IAN STEUSLOFF: What I would add is that,
4 I believe, according to the transcript of the March
5 20 hearing in federal district court, Mr. Nixon did
6 make representations that he would be happy to
7 provide copies of communications that were sent to
8 legislators that relate to the lobby cases. But,
9 you know, we have not seen any documents at this
10 time and we are not aware that there has been any
11 written agreement fromMr. Nixon that he would be
12 able to -- that his clients would be able to
13 produce the information that we are requesting in
14 the subpoenas related to the lobby cases.
15 CHAIRMAN JIMCLANCY: Are any of these 19
16 items that you are requesting in the lobby case
17 agreed to by the respondents?
18 MR. IAN STEUSLOFF: Not in writing. I mean,
19 there were just some statements made in court that
20 he would be happy to produce those documents, but
21 we haven't seen anything further, and I haven't
22 been informed that there has been any actual
23 agreement.
24 CHAIRMAN JIMCLANCY: And, Mr. Moore, with
25 regard to the 19 items in the PAC case, are there
6
1 any items that are agreed to by respondents?
2 MR. JOHN MOORE: No, sir.
3 CHAIRMAN JIMCLANCY: Just so the commission
4 understands what you are asking at this formal
5 hearing, what is the status of the documents that
6 have been produced thus far by the respondents?
7 MR. JOHN MOORE: We have seen no documents.
8 CHAIRMAN JIMCLANCY: None at all?
9 MR. JOHN MOORE: Well, I think in the
10 preliminary reviewthere was some tax information
11 that was produced.
12 MR. IAN STEUSLOFF: There were some Form990s
13 that were requested by commission staff and Empower
14 Texans did produce copies of those Form990s, as
15 required under federal law.
16 CHAIRMAN JIMCLANCY: And howmany e-mails
17 have been produced by the respondent thus far?
18 MR. IAN STEUSLOFF: None.
19 CHAIRMAN JIMCLANCY: None at all?
20 MR. IAN STEUSLOFF: No documents in response
21 to our written questions or subpoenas.
22 CHAIRMAN JIMCLANCY: Howabout the political
23 advertising, have any of those been produced?
24 MR. IAN STEUSLOFF: I don't believe so.
25 MR. JOHN MOORE: Not fromthe respondent. We
7
1 have seen it as attached to the complaint, but not
2 fromthe respondent.
3 CHAIRMAN JIMCLANCY: All right. Any
4 questions by the commissioners of counsel for the
5 commission? Commissioner Hobby.
6 COMMISSIONER PAUL HOBBY: This is the first
7 time I have seen this document and so I amjust
8 working through it. The definitions and
9 instructions that precede the subpoena request
10 themselves, at the end they have a statement of
11 exclusion, they have four categories that strike me
12 as important to the conversation we're about to
13 have in just a minute and in terms of narrowing the
14 scope of the existing subpoena in response to input
15 fromJudge Sparks.
16 So could you talk through, the first one
17 sounds a little (inaudible) to me, Mr. Moore. This
18 subpoena does not seek the production of any
19 information that identifies any contributor or
20 subscriber to Empower Texans who is not also
21 Empower Texans. Can you go through those four
22 categories and explain those, please.
23 MR. JOHN MOORE: Well, actually, the way this
24 works is what we are looking for are the documents
25 fromthese four entities and not fromcontributors
8
1 or subscribers who are not also within these four
2 categories. That's what that limitation is. So we
3 are not seeking, outside these four categories,
4 contributor or individual information, based from
5 contributors and subscribers to Empower Texans.
6 COMMISSIONER PAUL HOBBY: So the implication
7 there is that Empower Texans is also a contributor
8 and a subscriber to Empower Texans --
9 MR. JOHN MOORE: Well, at least they are a
10 contributor, as far as we know.
11 COMMISSIONER PAUL HOBBY: They contribute to
12 themselves? You're talking about the title?
13 MR. JOHN MOORE: Actually we are talking about
14 the entity. It's a 501(c)(4).
15 COMMISSIONER PAUL HOBBY: It contributes to
16 itself --
17 MR. JOHN MOORE: Yes.
18 COMMISSIONER PAUL HOBBY: -- or it's a member
19 of itself?
20 MR. JOHN MOORE: Yes.
21 COMMISSIONER PAUL HOBBY: Okay. And so are
22 these statements in -- are they taken together or
23 are they exclusions? Are they "or" or are they
24 "and" statements.
25 MR. JOHN MOORE: Excuse me?
EXHIBIT 22
561-835-0220
3 (Pages 9 to 12)
9
1 COMMISSIONER PAUL HOBBY: Are they "or" or are
2 they "and" statements? Must the communication fit
3 into all four categories before it's excluded or
4 just one?
5 MR. JOHN MOORE: Any one of these categories.
6 Not all four.
7 COMMISSIONER PAUL HOBBY: Why is number 4 not
8 the ultimate issue? Number 4, for those of us who
9 don't have the document is: Who is not also a
10 political contributor whose contributions are
11 subject to the reporting requirements of Title 15
12 of the Texas Ethics Committee.
13 MR. JOHN MOORE: It's -- anybody that can be
14 identified as a political contributor, that would
15 be the ultimate. You are talking about the
16 ultimate issue as to whether it's a PAC or not. It
17 does relate to that issue. Because if you are a
18 political contributor and they are soliciting
19 contributions, accepting them, and making
20 expenditures, then you have a PAC. So that does go
21 to the ultimate issue.
22 COMMISSIONER PAUL HOBBY: Thank you.
23 CHAIRMAN JIMCLANCY: Commissioner Untermeyer.
24 COMMISSIONER CHASE UNTERMEYER: Mr. Moore, I
25 also have a question with regard to the list of 19
10
1 categories here. The very first one says: A copy
2 of each nonidentical communication sent by or on
3 behalf of Empower Texans and/or Michael Quinn
4 Sullivan that is directed to open quotes, honorable
5 members of the Texas House, closed quote, or that
6 contains in the text of the communication the
7 words, open quotes, Honorable Members of the Texas
8 House, et cetera.
9 Later, and I amlooking at number 9 or
10 10, you speak much more broadly here: A member of
11 the legislative branch. And I just wonder why this
12 number 1, it is so specifically that you can only
13 go after documents that have the words Honorable
14 Members of the Texas House. Not the Senate, not
15 just members.
16 MR. IAN STEUSLOFF: Well, and necessary and
17 with respect to the lobby case, there are a number
18 of documents that were included with the original
19 complaints that purport to be communications from
20 Mr. Sullivan to members of the house. And many of
21 those documents are -- you know, they include at
22 the very top "Honorable Members of the Texas
23 House."
24 And the issue is whether those documents
25 were in fact communications subject to the lobby
11
1 law, whether they were made with the intent to
2 influence legislation.
3 So we don't know if there are additional
4 documents, additional e-mails that were sent in the
5 same manner, and so that first question or that
6 first itemis intended to obtain all of those
7 communications that were just sent as a matter of
8 course to all members of the legislature,
9 specifically directing themto vote in a particular
10 way. So that's why we are seeking communications
11 that were specifically addressed to those
12 individuals or have that in the text of the message
13 itself.
14 COMMISSIONER CHASE UNTERMEYER: Okay. But it
15 does seemthat, and maybe this is your intent, to
16 restrict the application of number 1, just to any
17 communication that has those words in quotation
18 marks.
19 MR. IAN STEUSLOFF: Well, as to number 1,
20 that's correct. It would be restricted to those
21 recipients or restricted to those communications
22 that include that text. And we believe that those
23 sorts of communications are likely subject to the
24 lobby law because they would be communications
25 specifically sent to a group of legislators, which
12
1 it appears that they do as a matter of course.
2 COMMISSIONER CHASE UNTERMEYER: Thank you.
3 CHAIRMAN JIMCLANCY: All right. Counsel,
4 will it be Mr. Trainor or Mr. Nixon?
5 MR. JOSEPH NIXON: It will be me. Thank you
6 very much.
7 CHAIRMAN JIMCLANCY: Start with things you
8 agree with or things you disagree with.
9 MR. JOSEPH NIXON: I love it.
10 Let's start giving you a couple answers
11 to your questions that you asked counsel.
12 One of the first things you asked himis
13 have we produced anything. You know, we are not
14 required to produce something unless it's subject
15 to a valid subpoena.
16 Your counsel in the federal court case
17 submitted a statement on Friday to the judge saying
18 that it is the commission's intent not to enforce
19 the original subpoena that was issued. And of
20 course I amcertain that you have been advised as
21 to the description that the federal judge gave
22 those original subpoenas. Overbroad was one of
23 them, which was a termI used in asking you not to
24 issue themto begin with.
25 So we have sat down at two separate
EXHIBIT 22
561-835-0220
4 (Pages 13 to 16)
13
1 meetings, both more than two hours each, to sit
2 down with your counsel, both Mr. Nichols, in
3 whatever role he plays for the commission, and
4 those with the attorney general's office, to go
5 over here is what we have that I think that you
6 might want to ask for, and let me tell you what we
7 don't have.
8 CHAIRMAN JIMCLANCY: Just to clarify,
9 Mr. Nichols is counsel for the commission in the
10 state district court proceeding.
11 MR. JOSEPH NIXON: Okay. Well, Mr. Nichols is
12 a lawyer who sent me at 3:45 the copies of the
13 subpoenas that you have been provided with today,
14 and I have had no opportunity to visit with these
15 gentlemen about those. In fact, these gentlemen
16 didn't attend any of the meetings. The only people
17 who attended the meetings were Mr. Nichols and
18 counsel fromthe attorney general's office. So to
19 the extent that if you want these gentlemen to
20 participate, I would suggest that they come to the
21 meetings where we were trying to work these out.
22 The first time we had a meeting, they
23 sent us drafts of subpoenas. They brought with
24 themdrafts of subpoenas that the request number 1
25 was identical to the one -- request number 1 that
14
1 the judge found to be overbroad. I think he might
2 have even used even stronger terms.
3 But my point is, is that they went even
4 further broad in both these subpoenas and the ones
5 they sent us before where we said, look, guys, we
6 can't work with those, you are going to have to be
7 reasonable.
8 If I could, if everybody has a copy,
9 let's turn to page 3, paragraph 14, and read the
10 definition of document.
11 CHAIRMAN JIMCLANCY: Is this on the lobby
12 subpoena or the PAC subpoena?
13 MR. JOSEPH NIXON: I think they are the same.
14 I think they just told you both subpoenas are
15 identically worded. Let me make sure that is the
16 case. They are the same. Paragraph Number 14
17 under definitions and instructions, either one.
18 "Document means every writing or record of
19 whatever type and description in the possession,
20 custody or control of Michael Quinn Sullivan,
21 including all writings and records that have been
22 transferred fromMichael Quinn Sullivan to his
23 accountants, attorneys, or consultant, however
24 made, and included all handwriting, typed, printed,
25 recorded, transcribed, taped, filmed, graphic or
15
1 sound reproduction materials, magnetic cards or
2 cartridges, optical storage devices and computer
3 records, printout runs, cards, tapes or discs,
4 together with all programming instructions and
5 material necessary for their use.
6 Document includes every copy of every
7 document where such copy is not identical to the
8 original because of any addition, deletion,
9 alteration or notation. Document specifically
10 includes but is not limited to statements of charge
11 of organizations, telephone and personnel
12 directories, press releases, web page contents and
13 postings, announcements, notices, statements of
14 procedure and policy, biographies and personnel
15 files, individual appointment calendars and
16 schedules, card files, diaries, records of e-mails,
17 telephone logs, routing slips, records of evidence
18 of incoming and outgoing telephone calls,
19 itineraries, activity reports, travel vouchers and
20 accounting, bank records, accounting and
21 bookkeeping records and materials, financial
22 records and statements, external or internal
23 correspondents, cables, telexes, teletypes,
24 telegrams, telecopies, verbal or written
25 communication, memorandums, letters, messages,
16
1 reports."
2 Next page, "Plans forecasts summaries,
3 briefing materials, studies, notes, working papers,
4 graphs, maps, charts, diagrams, agendas, minutes,
5 transcripts, records or summaries of any meeting,
6 conversation, conference or document or
7 communication and all attachments to any of the
8 items set forth in this paragraph. Documents
9 include but are not limited to electronic
10 communications sent to or fromthe following e-mail
11 addresses: MSullivan, MQSullivan, info, letters,
12 Akerr, all at EmpowerTexans.com."
13 Okay. Now, if you thought that the
14 first request was overbroad, and some might say
15 absurd, then what I just read to you is
16 irresponsible. I can't work with that. That's
17 just a definition of a document.
18 Here is what else they would have us do.
19 They have a definition of relates to. They also
20 have a definition of Empower Texans, means Empower
21 Texans, Inc, including but not limited to Empower
22 Texans doing business as Texans for Fiscal
23 Responsibility or any other affiliated
24 subsidiary -- or subsidiary entities and any and
25 all officers, directors, employees, attorneys,
EXHIBIT 22
561-835-0220
5 (Pages 17 to 20)
17
1 representatives, agents or other persons acting on
2 behalf.
3 So I would have to give up my
4 communications to my client to respond to this.
5 CHAIRMAN JIMCLANCY: Couldn't you object to
6 privilege?
7 MR. JOSEPH NIXON: Why are you sending me
8 something that is clearly objectionable to begin
9 with?
10 I could object to privilege and you know
11 what? The last time I objected in front of this
12 commission I was ignored.
13 MR. JOHN MOORE: May I respond?
14 MR. JOSEPH NIXON: Not at this time.
15 CHAIRMAN JIMCLANCY: Sir, give me just one
16 second.
17 Counsel, no, we are going to let
18 Mr. Nixon finish his opening and we will find out
19 what portions of this subpoena, if any, he can
20 agree to.
21 MR. JOSEPH NIXON: So the issue is, you know,
22 I have sat down I guess with counsel in the state
23 court action that doesn't have anything to do with
24 the subpoenas and tried to work through in a very
25 professional manner what the commission might want
18
1 to look at.
2 One of the first things you have in this
3 problemis a process. Of course, the lack of rules
4 is a fundamental problem. But more importantly,
5 you have sent Mr. Sullivan, individually, who of
6 course -- Mr. Sullivan is accused of what?
7 Lobbying without registering in a specific way, in
8 a specific time frame. So you have sent hima
9 request that he produce Empower Texans documents in
10 the Empower Texans case. Well, Mr. Sullivan is not
11 a party to the Empower Texans case.
12 Similarly, you have sent Empower Texans
13 document requests with regard to Mr. Sullivan.
14 These are identical, in the Mr. Sullivan case where
15 Empower Texans is not a party to Mr. Sullivan's
16 case.
17 One of the things that these don't
18 address is the cost to either one, Mr. Sullivan or
19 Empower Texans, for responding as nonparty
20 witnesses. You have got to pay their cost of
21 production.
22 And one of the things I made clear, and
23 Mr. Sullivan testified, is that some of these
24 things he may have and some of these things may be
25 on computer where he's got to go, look, we just
19
1 went through this exercise in another case and to
2 search the computer, go back and do that kind of
3 work, tens of thousands of dollars. But these
4 things -- what these basically do is request -- it
5 might be the intent of the commission, but the
6 request is to Empower Texans to shut down and do
7 nothing other than to go look for stuff.
8 This is a doubling down of the first
9 subpoena. What you have been given today, we are
10 going to make it worse, we're going to make it even
11 more expansive.
12 Let's talk about the commission's role
13 here. You were given complaints with documents
14 that were hearsay. Instead of doing the work that
15 a lawyer would do to prove up documents and move
16 around any hearsay objection, they keep making the
17 same mistake. It's really not incumbent upon me to
18 diagramor to explain to the commission howto do
19 its work. But the reality is that the commission
20 has two complaints. The commission has not voted
21 to expand the investigation. The commission waited
22 20 months before it had its preliminary hearing,
23 despite our request that it move quickly. It
24 didn't do its homework in even proving up the
25 documents that were attached to the complaint, and
20
1 then wants us to do all of its work for it.
2 Well, the lawin the state is very clear
3 that the complainant -- I mean that the respondent
4 in a case like this doesn't have to cooperate with
5 the commission.
6 And so to the first question you asked,
7 have they produced any documents, we did produce
8 documents that were validly obtainable and
9 responsive to document requests during the
10 preliminary process, and since then we have not
11 received a single reasonable request. We don't
12 have to make your case for you. The commission has
13 to do its own case.
14 We are entitled to First and Fourteenth
15 Amendment protection and we are going to insist on
16 it. We are never going to budge fromthat.
17 So what the commission may want to
18 consider is looking at what it has attached to the
19 complaints and asking the simple question, are
20 these true and correct copies of documents you
21 produced, to move around your hearsay objection,
22 and then make its decision based upon what's
23 attached to the complaint. Because the one thing
24 the commission has not done is vote to expand this
25 into a general investigation, which these subpoenas
EXHIBIT 22
561-835-0220
6 (Pages 21 to 24)
21
1 are.
2 And the lawof the state is very clear
3 as it relates to agency investigations. You are
4 not allowed to do fishing expeditions. You are not
5 allowed to do global searches. You are not allowed
6 to do general investigations.
7 Your investigation is limited
8 specifically to that authority you have under the
9 statute, and in this case, you know, to the
10 complaint because you have not voted in a timely
11 fashion. And, by the way, the statute of
12 limitations long passed with regard to any of
13 other -- this activity.
14 So it's time to be reasonable and take a
15 hard look at where we are. The lack of rules has
16 created a problemfor us, and I would ask the
17 chairman a simple question. If the commission
18 chose to issue subpoenas today, these or any
19 others, would the respondent have a right to quash?
20 CHAIRMAN JIMCLANCY: The subpoenas that we
21 intend -- or have the authority to issue?
22 MR. JOSEPH NIXON: If you chose to issue these
23 subpoenas or others would we have a right to file a
24 motion to quash?
25 CHAIRMAN JIMCLANCY: You would have a right
22
1 to file a motion. And, in fact, last time we set
2 themfor hearing on the 17th.
3 MR. JOSEPH NIXON: Where would I file -- where
4 would the respondent in this case file a motion to
5 quash?
6 CHAIRMAN JIMCLANCY: Well, are you referring
7 to the motions you would file in this proceeding,
8 in this formal hearing proceeding or a motion that
9 you would file in the state district court outside
10 of our jurisdiction?
11 MR. JOSEPH NIXON: That's the point. The
12 statute says the respondent has -- the recipient of
13 a subpoena has the right to file a motion to quash.
14 It doesn't say where. This commission has no rules
15 as to where. So I amasking you formally,
16 officially --
17 CHAIRMAN JIMCLANCY: The statute says you
18 have a right to file a motion to quash?
19 MR. JOSEPH NIXON: That's right. Under the
20 Administrative Procedures Act.
21 CHAIRMAN JIMCLANCY: Does the Administrative
22 Procedures Act also say that the commission has the
23 right to seek enforcement?
24 MR. JOSEPH NIXON: The commission does have
25 the right and it's very specific, it's very
23
1 specific as to where. I think it's -- is it 151 --
2 571.137(c) gives the commission the right to seek
3 enforcement in a state district court. "D" simply
4 says the respondent has a right to file a motion to
5 quash. Period. It doesn't say where.
6 So I amasking you, where would the
7 respondent file a motion to quash?
8 CHAIRMAN JIMCLANCY: Well, as it's a statute,
9 and as a former member of the legislature, what
10 would you say the legislature intended for that
11 motion to quash to be filed?
12 MR. JOSEPH NIXON: Are you now seeking my
13 counsel? And are you going to follow my counsel?
14 CHAIRMAN JIMCLANCY: Well, what I amreally
15 seeking is if you say in paragraph C it says that
16 we are supposed to file our motions to enforce our
17 subpoenas in district court, we are giving you the
18 opportunity to object and file motions in this
19 proceeding. I would imagine that you would also
20 have a (inaudible) to contest the decisions of this
21 body in the Travis County District Court, just like
22 we do.
23 MR. JOSEPH NIXON: Well, that's what's
24 interesting. That's something you would imagine,
25 but I want you to know the attorney general on your
24
1 behalf has represented to the Court, on page 34,
2 lines 1 and 2, that our motion to quash resides
3 only and uniquely before this body. We do not have
4 the opportunity to go to a district court, so says
5 your counsel to a federal judge. And that's where
6 the problemexists --
7 CHAIRMAN JIMCLANCY: Would you mind if I let
8 my counsel respond to that one and see what they
9 would say to that question?
10 MR. JOSEPH NIXON: I have a copy of the
11 transcript and I amprepared to read it to the
12 commission if you would like it to be read to you.
13 CHAIRMAN JIMCLANCY: Counsel, howwould you
14 respond on the motion to quash? I want to address
15 that first.
16 MR. JOHN MOORE: Thank you. Under the APA,
17 the Rules of Evidence and the Rules of Texas
18 Procedure as to discovery apply. Therefore, a
19 motion to quash would be filed in front of the fact
20 finder, in this case, the commission sitting as the
21 fact finder in this proceeding. He would file the
22 motion with the commission to quash. That's howit
23 would start.
24 CHAIRMAN JIMCLANCY: And what if he didn't
25 like the ruling of the commission?
EXHIBIT 22
561-835-0220
7 (Pages 25 to 28)
25
1 MR. JOHN MOORE: Well, he has the opportunity
2 of course to appeal that once the commission makes
3 a decision. If he refuses to comply with subpoena
4 and the commission decides to enforce its subpoena,
5 then he has the ability to bring that in district
6 court.
7 CHAIRMAN JIMCLANCY: Did you have something
8 else to add?
9 MR. JOHN MOORE: Not at this time. I will
10 save it.
11 MR. JOSEPH NIXON: You know, the great thing
12 about arguing or talking about the law, you can
13 always take a look at it, and I would ask the
14 commission to take a look at it because what you
15 were just informed is absolutely incorrect. We
16 don't have an appellate process or an intermediary
17 right of appeal froma motion to quash brought
18 before you. So here is what our situation is. You
19 issue a subpoena, we come right back to you and
20 file a motion to quash, and then that's it. We
21 have no place else to go.
22 We do not have -- because the standard
23 on -- we cannot be the appellant, we cannot be the
24 aggressor or the proponent in any kind of appellate
25 reviewof your decision to not quash your own
26
1 subpoena.
2 CHAIRMAN JIMCLANCY: Do you agree that the
3 commission does not have the power of contempt over
4 your client?
5 MR. JOSEPH NIXON: I do.
6 CHAIRMAN JIMCLANCY: Do you agree that in
7 order to enforce its subpoena the commission must
8 go to the district court to seek enforcement?
9 MR. JOSEPH NIXON: I do.
10 CHAIRMAN JIMCLANCY: Do you agree that in the
11 district court your client would have all of its
12 due process rights to resist that motion?
13 MR. JOSEPH NIXON: No.
14 CHAIRMAN JIMCLANCY: Why?
15 MR. JOSEPH NIXON: Because a motion for
16 contempt is limited to the issue of did you comply
17 with the subpoena. So that is the only issue
18 before the Court. The Court may not consider and
19 is not allowed to consider any other reasons why
20 you did not comply with the subpoena. The standard
21 of proof is not the same as if it would be had I
22 had an opportunity to appeal your decision to not
23 quash your own subpoena.
24 CHAIRMAN JIMCLANCY: So your position is that
25 if we deny a motion (inaudible) to quash, there is
27
1 no review of that decision?
2 MR. JOSEPH NIXON: That's correct, there is no
3 review of that decision. And that is what the
4 issue was before Judge Sparks, and it's because we
5 had no other opportunity to have a review of our --
6 and protection of our constitutional rights because
7 the process does not give us an intermediate right
8 of appeal, the production -- we are faced with a
9 singular dilemma: Comply with the subpoena and
10 lose our constitutional rights or be held in
11 contempt. That's it.
12 CHAIRMAN JIMCLANCY: But isn't that why you
13 sought injunctive relief in the federal court?
14 MR. JOSEPH NIXON: Thank you very much for
15 agreeing that the Court has jurisdiction. You just
16 made my point.
17 CHAIRMAN JIMCLANCY: I don't understand.
18 MR. JOSEPH NIXON: Okay. That's why we sought
19 injunction in federal court, because we were able
20 to say, judge, we have no place else to go. So now
21 you say, yeah, you are right, don't you have a
22 right to go to a federal judge? Absolutely we do.
23 And as I understand your question, you have just
24 confirmed that what we did was appropriate because
25 we had no other choice but to either lose our
28
1 constitutional rights and produce documents that
2 are violative of our rights or be held in contempt.
3 CHAIRMAN JIMCLANCY: Counsel, I think what I
4 did was I stated why you filed your petition and
5 the basis for your seeking injunctive relief.
6 MR. JOSEPH NIXON: Well, the record will
7 reflect what it does.
8 So that's -- and look, the commission is
9 really -- you don't need any information fromus to
10 do what I think the commission is predisposed to
11 doing and in one case already has done. If you
12 want to determine that e-mail blast to legislators
13 as part of a reporting process called score
14 carding, in which voters are informed as to how
15 their state reps vote, if you want to find that to
16 be lobbying, then do it.
17 If you want to find that a 501(c)(4)
18 automatically becomes a political action committee
19 because it spends some funds as independent
20 campaign expenditures, then do it. Those issues
21 aren't in dispute.
22 But what you are not allowed to do is
23 what the subpoenas are trying to do: Intimidate,
24 harass, cajole, and violate constitutional rights
25 of my client to speak publicly on issues it chooses
EXHIBIT 22
561-835-0220
8 (Pages 29 to 32)
29
1 to speak publicly.
2 CHAIRMAN JIMCLANCY: Can I ask a fewspecific
3 questions of you?
4 MR. JOSEPH NIXON: Sure.
5 CHAIRMAN JIMCLANCY: Is it correct that your
6 client objects to producing e-mails fromMichael
7 Quinn Sullivan to a member of the legislature
8 urging both for or against a piece of legislation?
9 MR. JOSEPH NIXON: Are you asking only for
10 that?
11 CHAIRMAN JIMCLANCY: Yes, sir.
12 MR. JOSEPH NIXON: And you are not using any
13 of the definitions?
14 CHAIRMAN JIMCLANCY: I just said what I was
15 asking.
16 MR. JOSEPH NIXON: Fromhimpersonally?
17 CHAIRMAN JIMCLANCY: FromMichael Quinn
18 Sullivan.
19 MR. JOSEPH NIXON: Well, have you -- I would,
20 and for this reason only: You have not -- you
21 don't have a complaint in front of you that gives
22 you that authority to ask that question.
23 CHAIRMAN JIMCLANCY: So --
24 MR. JOSEPH NIXON: Now, I will tell you,
25 Mr. Sullivan -- to our understanding, there aren't
30
1 going to be any e-mails where he e-mails,
2 Representative Ramsey, will you please vote no on
3 this, because he doesn't do that. There aren't
4 going to be any. That's not how he involves
5 himself in the process. That's not how he serves
6 as a journalist. That's not how he reports. So
7 you are not going to see a specific e-mail to a
8 specific legislator.
9 Mr. Sullivan doesn't walk the halls, he
10 doesn't knock on doors, he doesn't ask people, he
11 doesn't work legislation, he doesn't count noses,
12 who is on board, who is not on board. That's not
13 what he does.
14 He communicates with voters through
15 his -- through the Empower Texans web page, through
16 e-mails to voters, through outreach to voters, he
17 communicates with voters and he tells voters what's
18 going on at the Capitol, in his opinion.
19 CHAIRMAN JIMCLANCY: So the e-mails that we
20 reviewed previously fromMr. Sullivan and Empower
21 Texans urging vote for or against this amendment or
22 that amendment, how does that not fall within what
23 you are discussing?
24 MR. JOSEPH NIXON: Those are e-mails blasts
25 that went to a large group of people.
31
1 CHAIRMAN JIMCLANCY: Of legislators.
2 MR. JOSEPH NIXON: Of more than legislators.
3 It went to his subscribers, to his donors, to a
4 large group of people. They are just part of an
5 e-mail blast. We told your counsel all of this.
6 CHAIRMAN JIMCLANCY: Let me ask you just one
7 other question --
8 MR. JOSEPH NIXON: Let me just say, this is
9 why, if you look at the subpoenas, document
10 requested, number 1, there is a description.
11 Number 2, the odd numbered requests are description
12 of what kind of documents they want. The even
13 numbered requests are identical. A copy of any
14 e-mail list to which nonidentical communication
15 described in request number 1 was sent, which may
16 be redacted as necessary in a manner consistent
17 with the instruction of law.
18 So basically we said, look, you are not
19 going to find any of those e-mails because he
20 doesn't do that. You know, I knowyou want to
21 presuppose that he is a lobbyist and does lobby
22 stuff. That's not what he does. He is a
23 journalist that does journalist stuff and forces
24 his issues out in his own way. It's called new
25 media.
32
1 What you are wanting to do is stop his
2 ability to communicate, but you have asked for --
3 you have asked for it because we said you are not
4 going to find anything because there aren't any.
5 So what you are asking for are copies of e-mail
6 blasts, which are going to be very expensive and
7 hard to reproduce, to go back and find themall, to
8 the extent that we can.
9 CHAIRMAN JIMCLANCY: Let me ask you about the
10 PAC case. Does your client object to producing
11 evidence of political expenditures during the
12 specific period at issue in this case?
13 MR. JOSEPH NIXON: I think my client has
14 already produced themand filed themof record as
15 required by the Texas Ethics Commission on the
16 forms required by the Texas Ethics Commission.
17 CHAIRMAN JIMCLANCY: Does your client object
18 to producing evidence of political contributions
19 with the identity of the contributor kept
20 confidential?
21 MR. JOSEPH NIXON: Yes, because we are not
22 required to produce political contributions froma
23 501(c)(4).
24 CHAIRMAN JIMCLANCY: Isn't that the ultimate
25 question?
EXHIBIT 22
561-835-0220
9 (Pages 33 to 36)
33
1 MR. JOSEPH NIXON: And let me just say this.
2 To the extent that any campaign contribution wasn't
3 specifically solicited for a specific purpose, to
4 make an independent campaign expenditure, we would
5 object. But if we asked anybody for a specific
6 purpose, for a specific campaign contribution for a
7 purpose, then we have no problemproducing that.
8 CHAIRMAN JIMCLANCY: So you mean if you ask
9 someone, send me a contribution so I can buy this
10 d/b/a?
11 MR. JOSEPH NIXON: Right.
12 CHAIRMAN JIMCLANCY: But if you said send me
13 a contribution because I want to elect leaders who
14 think like we do, that would not be included?
15 MR. JOSEPH NIXON: That would not be included,
16 or send me a contribution so we can continue our
17 good work.
18 Okay. So like attached to the complaint
19 of Empower Texans is a copy of a web page. It's
20 either a web page or e-mail that went out. And it
21 had a box. Let me see if I can find it for you.
22 There was -- on an e-mail, there was a
23 box that said -- there was a box that appeared
24 on -- in either an e-mail or on our web page five
25 times that said, please donate 5, 10, $25. And we
34
1 have looked. During that time period that the box
2 appeared, that we cannot trace any of the
3 combinations -- any of the contributions to anybody
4 present on that box. But if we assume all the
5 contributions that came in during that time period
6 were contributions frompeople who pressed on the
7 box, the contributions total $375, which is below
8 the reporting threshold, and they are all -- with
9 one exception, they are all $10, $5, $20
10 contributions.
11 We have no problem-- and there are like
12 eight of themor something. So we have no problem
13 producing those six or seven or eight with the
14 names redacted, as relates to that. But understand
15 that since it didn't get to the $500 threshold,
16 that we didn't need to report those. But that's
17 it.
18 And we have explained to your -- we have
19 explained to Mr. Nichols and to the attorney
20 general's office that, and say ask us for that, we
21 will give you that happily.
22 CHAIRMAN JIMCLANCY: All right. And just so
23 I understand where we are sort of procedurally, if
24 the commission were to withdrawits prior subpoena
25 and issue a newsubpoena of some kind today, is
35
1 there any formof a newsubpoena that you can agree
2 to or does the procedural problems prevent you from
3 doing so?
4 MR. JOSEPH NIXON: No. I think we -- look,
5 the devil is always in the details. We have gotten
6 two proposed drafts of subpoenas, each worse than
7 your original subpoena. I don't understand the
8 basis for wanting to continue to double down each
9 time.
10 I mean, if you issued a subpoena that
11 addressed the issues in the complaints, it would be
12 hard to find an objection to issues -- to those
13 subpoenas that ask for stuff in our complaints, but
14 that were like, do you agree that these are true
15 and correct copies so we can say yes, we do, or no,
16 we don't.
17 Many of the copies that you have
18 attached to the complaint are not complete. We
19 have gone over that before. They stop in the
20 middle of sentences, they stop in the middle of
21 paragraphs, they are just one page. What is that?
22 You know, one of the things, you know,
23 we have asked for and not yet received a copy of
24 the commission's file, which we are entitled to
25 receive. I don't understand that. We have asked
36
1 for and have not yet received the documents,
2 apparently, the agent of Mr. Keffer (phonetic),
3 turned over to the commission, in the
4 communications between the commission and that
5 agent.
6 I mean, I don't understand why the
7 commission has chosen not to cooperate and provide
8 us information. We were initially promised and we
9 are clearly entitled to receive witness statements,
10 which would mean that we would be entitled to the
11 preliminary hearing tapes. That's clearly in the
12 statute. It's in the administrative code. I don't
13 knowwhy. We have asked for those. We were
14 specifically told you can't get them, we are not
15 going to turn themover. Those are witness
16 statements and I don't care howyou got them, they
17 are statements of a witness made under oath and we
18 are entitled to have them.
19 CHAIRMAN JIMCLANCY: We will hear from
20 Mr. Moore in just a second.
21 Do any of the commissioners have any
22 further questions for Mr. Nixon? All right.
23 Mr. Moore? Response?
24 MR. JOHN MOORE: Let me start with the last
25 issue first. At the pre-hearing conference back in
EXHIBIT 22
561-835-0220
10 (Pages 37 to 40)
37
1 February, the commission directed Mr. Nixon to file
2 a subpoena. We agreed that we would comply with
3 subpoena. Mr. Nixon has not filed anything in the
4 case except for his one motion to produce a
5 confidential record fromthe preliminary hearing
6 conference, so I think you start on about page 80
7 of the transcript, you will see that the chair
8 clearly directed Mr. Nixon to file a subpoena.
9 Never seen it.
10 I would be happy to comply with a
11 subpoena when we get it and if anything is
12 privileged and confidential, we will of course file
13 an objection to that. But if he will do what you
14 directed to do at that hearing, we would be happy
15 to comply with it.
16 Starting with the rest that Mr. Nixon
17 talks about. I will stipulate that they are a
18 501(c)(4). That doesn't matter in this case before
19 you. The constitutional arguments Mr. Nixon is
20 making do not matter in this case before you. This
21 is an administrative proceeding under the election
22 code, under the government code, under the APA,
23 under the Texas Rules of Evidence, and the Texas
24 Rules of Civil Procedure as they apply.
25 You are determining in this hearing
38
1 whether Mr. Nixon's clients violated those
2 statutes, the election code, the lobby code, the
3 lobby act, or not. That's what you are here to
4 determine. That's what the case is here for. It's
5 not to determine whether something is
6 constitutional or not. Mr. Nixon has other
7 remedies for that if he wants to do those.
8 The case before you is based on the
9 evidence. Is there a violation of the acts?
10 That's all you have to determine. Our subpoenas --
11 I understand Judge Sparks' complaint was, it says
12 any and all. That's too broad for me. For some
13 judges it is, for some judges it isn't.
14 We made the effort through our
15 attorneys, through the attorney general's office in
16 the litigation to make the subpoenas more specific,
17 and they are more specific. They give Mr. Nixon
18 definitions. We are not asking for himto produce
19 the definitions. We are asking for himto produce
20 the documents that are listed. We are not
21 asking -- if he has privileged information he wants
22 to object to the production of, he has the ability
23 to do that. Instead, he hides behind it's not
24 constitutional. Well, again, he has another forum
25 to hear that in.
39
1 Here we are going to decide whether the
2 acts that this commission has authority over are
3 violated or not. That's what we are here for.
4 The procedures are set out. The APA
5 sets out the procedures. He talks about no
6 procedures. The APA is the constitutionally
7 standard for proceedings. It's the statutory
8 embodiment of the constitutional protections of
9 Mr. Nixon's client. It would be good if he would
10 read the statute.
11 The statute does not have the ability
12 for anybody to have an interlocutory appeal under
13 the APA. Those issues will be taken up later if
14 the case is appealed to court.
15 The agency has the authority to make its
16 determinations based upon its own statutes upon the
17 APA Rules of Civil Procedure, and the Rules of
18 Evidence. And that's what we are here on.
19 We think the subpoenas are as narrowas
20 we can make them. If we go any further in
21 narrowing this, we may miss information we think is
22 necessary to prove our case in the time periods we
23 are asking for. We are not asking for everything
24 that Mr. Nixon and his clients have. We are asking
25 for specific information during a specific time
40
1 period. That's all we are requesting for in this
2 case.
3 We think they are reasonable, that there
4 is no basis on which to quash anything. If there
5 is privileged information that can be protected
6 with a protective order, and that information will
7 not be released. We are not asking for information
8 that they are not required to produce.
9 Now, as to the 501(c)(4), a 501(c)(4)
10 entity acting as a PAC does not receive the
11 protections of a 501(c)(4) in not disclosing its
12 contributors. Case after case after case, after
13 Citizens United, it's been decided in federal
14 courts that if you are going to act as a PAC, if
15 you are a 501(c)(4) and you are going to act as a
16 PAC, then you have comply with those state laws and
17 you are going to have to produce that information,
18 whether it's the national organization of marriage
19 versus McKee case out of Maine, whether it's the
20 Vermont Right to Life case, whether it's the cases
21 out of Montana. Those cases have held that if you
22 are going to act like a PAC, you are going to have
23 to comply with the laws that apply to that.
24 Just because you are a 501(c)(4) does
25 not make you a -- create a magic bullet that means
EXHIBIT 22
561-835-0220
11 (Pages 41 to 44)
41
1 you don't have to comply with any other law.
2 What we are asking here and what we are
3 seeking here and what we have seen so far with what
4 little evidence we have been able to accumulate
5 because the other side will not be cooperative in
6 this matter, is we see that they are acting in a
7 way that is contrary to our state lawand that's
8 what we are seeking to enforce here.
9 It's interesting, Mr. Nixon was just
10 involved in litigation in San Antonio where his
11 clients, Empower Texans, were the plaintiffs. I
12 wonder if he would have been upset if the other
13 side would have taken the position that he is
14 taking here and saying we don't have to produce
15 anything because it's unconstitutional. I amsure
16 he would not be -- he would not take that argument
17 as being very serious.
18 If Mr. Nixon would read the law, read
19 the statutes, read howthey work together, he would
20 understand that his client needs to comply with a
21 subpoena and that if he has any concerns with the
22 subpoenas, he can bring those up with the
23 commission and the commission can address those.
24 Thank you.
25 CHAIRMAN JIMCLANCY: Do you have anything to
42
1 add to that? There is a great concern regarding
2 identity of the contributors. Howis it that this
3 subpoena will address that issue?
4 MR. IAN STEUSLOFF: Well, and I believe
5 Mr. Moore can add more, but the subpoenas
6 specifically state that they do not seek the
7 production of information that identifies
8 contributors to Empower Texans who are not also
9 political contributors, members of the legislative
10 branch, executive branch or Empower Texans. So the
11 objections that Mr. Nixon had been raising
12 regarding the disclosure of -- you know, of donors,
13 is being addressed in the subpoenas, and the
14 commission is charged with the task of enforcing
15 the laws that are under its jurisdiction, and we
16 are not -- the commission is not confined just to
17 the documents that are filed with a complaint.
18 Otherwise the legislature would not have
19 given the commission staff the authority to propose
20 written questions to respondents, to contact
21 witnesses to obtain information, or given the
22 authority to the commission to issue subpoenas for
23 information.
24 We don't have to look just at the
25 documents that are filed with the complaints. And
43
1 so these subpoenas are -- if the commission issues
2 them, they would be issued under their statutory
3 authority requesting information that is relevant
4 to the complaint's allegations.
5 If Mr. Nixon or Mr. Sullivan or somebody
6 with Empower Texans, with actual knowledge of the
7 facts related to the case would like to, you know,
8 stipulate that the documents that are at issue in
9 the complaints are actually fromMr. Sullivan to
10 legislators, you know, we are happy to discuss that
11 with them, or if they want to provide actual
12 testimony about these blast e-mails and try to deny
13 that the communications were actually sent to
14 legislators, you know, we are happy to also ask
15 questions to obtain that and other testimony.
16 But there hasn't been any indication so
17 far that they are willing to stipulate to anything
18 and, you know, we feel it's necessary that these
19 subpoenas have to be as broad as they are and
20 include such definitions as "document" that's
21 included because it already appears that they are
22 playing games and dancing around the idea that, you
23 know, Sullivan did not send any e-mails to
24 legislators because these were blast e-mails, they
25 went out to an unspecified group of people.
44
1 Well, the documents that were included
2 with the complaints clearly specified that they
3 were sent to the offices of legislators and that's
4 what the subpoenas are intended to obtain is those
5 actual documents and additional documents.
6 But you know, I don't knowthe extent to
7 which they would respond or object, but I think we
8 already have some indication that -- you know, that
9 these subpoenas need to be as detailed as they are
10 to ensure that they can't -- you know, that they
11 can't just play word games and escape the
12 subpoenas.
13 CHAIRMAN JIMCLANCY: Before you step down, I
14 want to make --
15 MR. JOHN MOORE: Mr. Chairman, can I add one
16 thing to your question about the disclosure of the
17 contributors? I will point out that if you go to
18 the Empower Texans website and their contribution
19 pages, that they disclose some of their
20 contributors on their website. They have pictures
21 of them, they have their names. So on one hand
22 they are hiding behind the 501(c)(4), we don't have
23 to disclose our contributors. On the other hand
24 they disclose their contributors.
25 CHAIRMAN JIMCLANCY: Well, some of them, not
EXHIBIT 22
561-835-0220
12 (Pages 45 to 48)
45
1 all of them.
2 MR. JOHN MOORE: Well, not all of them, but we
3 don't knowif that makes all of them. That's the
4 other thing. We don't have that information. Our
5 indication is that there are not that many
6 contributors fromwhat we have been able to
7 determine fromlooking at other sources.
8 CHAIRMAN JIMCLANCY: Counsel, let me make
9 something very clear about what we are trying to
10 accomplish here. We realize that the respondent
11 has raised some constitutional questions about the
12 whole nature of the inquiry. Okay? What we do not
13 want to do is we do not want a breadth question,
14 whether or not a subpoena is overbroad to be some
15 sort of federal question. And so what we are
16 seeking is some sort of orderly process for them.
17 Counsel, you provided us another
18 subpoena. It still appears to be comprehensive. I
19 suspect the respondents will have more objections
20 to it, but we want to have an orderly way for
21 processing through them.
22 And so what we are looking at in terms
23 of a schedule is if there were to be any subpoenas
24 voted on by the commission, and I want to just
25 address this so that we can finally finish up, that
46
1 no response to such subpoenas would be due until
2 May 5th. That both sides -- and I presume,
3 Mr. Nixon, if you are going to reorder your
4 subpoena for the nonprivileged portions of the
5 commission's file, that that would be issued as
6 well. That the parties would file motions for
7 protection or motions to quash by April 21st. That
8 those responses would be due by April 28th. And
9 that replies would be due by May 1st, and that all
10 nonobjectionable documents would be produced on a
11 subpoena deadline of May 5th. Okay? That is what
12 we are looking at in terms of a schedule for making
13 sure that each party has the opportunity to make
14 their objections and have themheard at the
15 appropriate time.
16 Depending on the motions that are filed,
17 we can schedule the commission meetings to take
18 those up. But I will tell you that we are not
19 prepared today to deal with whether or not included
20 but not limited to language in the word documents
21 is going to be something that we are ready to rule
22 on at the moment. And therefore, we also like
23 counsel for the commission and counsel for the
24 respondent to, you know, after they have gone
25 through this and filed their motions, to also
47
1 attempt to confer to see if there is any area of
2 agreement that we can agree to with regard to a
3 subpoena.
4 MR. JOSEPH NIXON: Mr. Chairman, briefly, so
5 as I understand the process.
6 CHAIRMAN JIMCLANCY: Sure.
7 MR. JOSEPH NIXON: They can issue whatever
8 kind of subpoenas they want?
9 CHAIRMAN JIMCLANCY: Not true.
10 MR. JOSEPH NIXON: And then you have given us
11 a time schedule which we have to like issue
12 objections and then work it out, and then attempt
13 to work it out, and then come to you and report how
14 we will work it out and maybe with a motion to
15 quash and ultimate ruling by you. But that still
16 puts us in a spot where if that process occurs and
17 we have issues, then we still don't have a right of
18 appeal because we have exhausted our appeal to you.
19 That puts us in a spot where our only recourse is
20 to -- if there is a federal question, then to
21 assert it in another jurisdiction.
22 I would urge the commission, rather than
23 adopt that process, is to digest the information
24 that I have talked about with you today and maybe
25 for the chairman to take a pen in hand and write
48
1 his own subpoena, because what you have heard from
2 your lawyers are three very important things.
3 First is, they have already made a
4 decision: Mr. Sullivan is violating the lobby
5 statute and Empower Texans is a PAC. There is no
6 disputing that that is their position.
7 They have also told you that it is not
8 possible for themto prosecute their case without
9 subpoenas, which you have called perhaps detailed.
10 I forget the word you used.
11 CHAIRMAN JIMCLANCY: Comprehensive.
12 MR. JOSEPH NIXON: Comprehensive.
13 And the third thing, and most shocking
14 is that Mr. Moore said the constitution does not
15 matter because this is an administrative hearing.
16 That -- I amamazed that a member of the bar of the
17 State of Texas, employed by the State of Texas,
18 where my tax dollars are going to help pay his
19 salary, would make such a statement.
20 MR. JOHN MOORE: Mr. Chairman.
21 MR. JOSEPH NIXON: That is --
22 MR. JOHN MOORE: Mr. Chairman, may I speak to
23 that personal attack?
24 MR. JOSEPH NIXON: I don't want to be
25 interrupted again. I did not interrupt anybody
EXHIBIT 22
561-835-0220
13 (Pages 49 to 52)
49
1 else. But, I mean, that the record reflects.
2 Now, in relation to the subpoenas --
3 CHAIRMAN JIMCLANCY: Just so you understand,
4 Mr. Moore, you will have an opportunity to respond.
5 MR. JOHN MOORE: Thank you.
6 MR. JOSEPH NIXON: In relation to the
7 subpoenas, it's Section 571.137 of the government
8 code, which is your code. It says A: In
9 connection with a formal hearing, the commission as
10 authorized by this chapter may subpoena and examine
11 witnesses and documents that directly relate to a
12 sworn complaint.
13 It doesn't give anybody broad,
14 expansive, I need to be sure and ask for
15 everything.
16 You can direct -- it has to be directly
17 related to the sworn complaint. That's it.
18 Nothing else. So -- and so that we are finally --
19 so that there is no confusion about what the Court
20 said, let me read to you the Court's words, for
21 those of you who have not heard them.
22 The Court: So -- to Mr. Seaquist, in
23 the attorney general's office.
24 MR. JOHN MOORE: Do you have a page and line?
25 MR. JOSEPH NIXON: Yes, page 30, beginning
50
1 line 11: So I was wondering if either side was
2 intellectually honest and fair enough to sit down
3 and get the subpoena request reasonable. These are
4 not.
5 Mr. Seaquist: Judge --
6 The Court, Line 15: Now, whether they
7 are unconstitutional is another thing. But these
8 are absurd. You are asking for the cattle in the
9 pen by asking everything in the pen: The dirt, the
10 mosquitoes, the tics. The subpoenas are overbroad.
11 Now, whether or not that's constitutional or not,
12 it seems to me that intelligent people can sit down
13 and get the information with reasonable, you know,
14 the word all in every one of these. One of themis
15 a two-year period. Some of these are one-year
16 periods. All -- I can't even imagine if someone
17 gave me that subpoena of all the orders I write in
18 the last year to prove that I was a federal judge
19 or a bad one, one of the two, there is not much
20 reasonableness.
21 Now, what is the position of the ethics
22 commission, your client, as to why they would not
23 sit down and try to work with the lawyer to get the
24 appropriate information? Because he is a smart
25 guy. He knows ultimately he is going to be back in
51
1 state court or the federal court and he wants to
2 have a reasonable position. The ethics committee
3 on the other hand ought to think about the same
4 thing. They are not the final word. They have an
5 appeal to state court. Ending line 9, page 31.
6 Now, he went on for a little bit longer
7 and he had another opportunity to describe the
8 subpoenas, but I think that gets the gist. And I
9 want the commission to know, after I made my
10 objections, after you had your informal hearing and
11 then the AG came over and you went back into
12 executive session, I waited for and met with the
13 lawyers for the attorney general's office who were
14 representing the commission who said can we please
15 work this out, is there something we can do? And
16 was told, we are just going to proceed on what we
17 got. I was told no. And they admitted to that to
18 the federal court.
19 I amasking you to followthe law. The
20 lawsays it's got to be related to the complaint.
21 The complaint is all you have before it. Ask us
22 about the documents attached to the complaint.
23 Citizens United doesn't say that everybody, every
24 corporate entity that spends independent campaign
25 expenditures has automatically turned themselves
52
1 into a PAC. It's very limited. It says, if you
2 ask for money, let's talk about Citizens United,
3 the Hillary movie --
4 CHAIRMANJIMCLANCY: I think we are going
5 afield. Can we wrap this up?
6 MR. JOSEPHNIXON: All right. Yes. If we ask
7 for money for a specific purpose, we would have to
8 disclose that money for the purpose that we asked
9 for. But we do not have to disclose our donors
10 because of independent political expenditures.
11 That is the law.
12 Mr. Chairman, members, I would love to
13 help you. I cannot be both your prosecutor and the
14 defense counsel. It is not incumbent upon me to
15 cooperate in the same way that you would expect --
16 you know, I amdefending my client. It is not my
17 prerogative. It is not my responsibility to either
18 this commission or to the client to do the
19 commission's work for it, to describe in detail
20 what you ought to ask for and -- but I amtrying to
21 be reasonable. But I have told you, if you are
22 going to find Michael Sullivan to be a lobbyist, do
23 it. If you are going to call us a PAC, do it.
24 Give us a right of appeal. We will take it if we
25 have to, if we choose to. But you are not allowed
EXHIBIT 22
561-835-0220
14 (Pages 53 to 56)
53
1 to use the complaint process to otherwise violate
2 our constitutional rights. Thank you.
3 CHAIRMAN JIMCLANCY: Mr. Moore.
4 MR. JOHN MOORE: I think we are done with the
5 hearing. I think Mr. Nixon just stipulated to the
6 fact that his clients violated the law, so I think
7 we can just issue an order to that effect and he
8 can have his appeals rights.
9 CHAIRMAN JIMCLANCY: The hearing hasn't even
10 started yet. Let's wait until we get to it.
11 MR. JOHN MOORE: What's very interesting is
12 Mr. Nixon always picks out what he thinks supports
13 himself. For anybody that has read the transcript
14 or for anybody that was at the Court hearing, it's
15 quite apparent that Judge Sparks threwhis hands up
16 at the end of the hearing because he realized that
17 Mr. Nixon wasn't going to cooperate no matter how
18 reasonable the attorney general was going to be in
19 the case and he walked out. So that's where
20 Mr. Nixon is coming fromhere.
21 Followthe law. Mr. Nixon does not want
22 to followthe law. Mr. Nixon's client does not
23 want to followthe law. That's why we are here.
24 If they followed the lawwe wouldn't be here. I
25 mean, that's where we are at on this. We ask the
54
1 subpoenas be issued, that we go through the
2 schedule you set out. We will be happy to comply
3 with any subpoenas that are submitted to us minus
4 any confidential privileged information. I think
5 we proceed with the case.
6 I do resent the fact Mr. Nixon
7 mischaracterized what I said. This administrative
8 proceeding is for purposes of enforcing the
9 statutes that we have authority over. We don't --
10 this commission does not have the authority to make
11 constitutional determinations under the law. It
12 can only make those determinations that are laid
13 out under the statutes that it has jurisdiction on.
14 Thank you.
15 CHAIRMAN JIMCLANCY: All right.
16 Commissioners, we have a procedural schedule in
17 mind. The first thing we have to deal with is the
18 currently pending subpoenas of Michael Quinn
19 Sullivan and Empower Texans. Given the confusion
20 over those, the chair will entertain a motion to
21 withdrawthose subpoenas, both the ones to Empower
22 Texans and the ones to Michael Sullivan.
23 COMMISSIONER PAUL HOBBY: I so move.
24 CHAIRMAN JIMCLANCY: Motion by Commissioner
25 Hobby.
55
1 COMMISSIONER HUGH AKIN: Second.
2 CHAIRMAN JIMCLANCY: Second by Commissioner
3 Akin.
4 All in favor say aye.
5 (Chorus of ayes)
6 CHAIRMAN JIMCLANCY: Now, we have another set
7 of proposed subpoenas. Mr. Nixon, is it correct
8 that you are also seeking production of the
9 commission's file, the nondisclosed (inaudible)
10 portions of it?
11 MR. JOSEPH NIXON: Thank you, Mr. Chairman. I
12 want to note to the commission a statement issued
13 on March 17th in which the commission said that
14 should the federal court deemit proper to exercise
15 jurisdiction in the federal lawsuit, the commission
16 will stay formal hearing process including pending
17 response deadlines.
18 I mean, if the commission is going to
19 restrain fromimposing deadlines on us, I think
20 it's appropriate that we restrain and similarly not
21 ask the commission to produce its file until we
22 knowin what manner we are going forward. I don't
23 knowin relation to howthe -- if the commission
24 chooses to issue newsubpoenas, howthat would
25 comport with its earlier statement of March 17th,
56
1 which is what I determined to be basically a stay.
2 I would urge the commission to reflect
3 on those words and perhaps followwhat it thought
4 was good policy on March 17th, and that is, you
5 know, why would you want to issue newsubpoenas at
6 this point.
7 You have heard counsel. They think we
8 are guilty of a violation. You can -- if you
9 choose to act, then it's up to you. There may not
10 necessarily be a federal question involved and you
11 are going forward on what's currently in your file,
12 and you certainly have the authority to do that.
13 But if you continue -- if you issue a
14 newset of subpoenas, you are going to give us,
15 perhaps, depending on what they say, a newset of
16 issues, and I don't knowwhy you would want to do
17 that, particularly in light of the fact you said
18 you are going to stand still anyway.
19 CHAIRMAN JIMCLANCY: Commission staff, can we
20 still seek these subpoenas to be issued?
21 MR. JOHN MOORE: Yes, sir.
22 CHAIRMAN JIMCLANCY: All right.
23 Commissioners, we spoke for a bit in executive
24 session about the status of the pending litigation,
25 the problems with the currently existing subpoenas
EXHIBIT 22
561-835-0220
15 (Pages 57 to 60)
57
1 and the necessity for a procedure to resolve any
2 breadth objections and other type of question
3 objections.
4 With regard to any future subpoenas,
5 motions to be filed regarding those will be filed
6 by April 21st, responses by April 28th, replies by
7 May 1st, and then responses of nonobjectionable
8 documents would be responded to by May 5th.
9 We have in front of us two subpoenas,
10 one against Empower Texans and one against Michael
11 Quinn Sullivan. And the chair will entertain a
12 motion as to whether or not the commission finds
13 good cause to issue the subpoenas to Empower
14 Texans, Inc. and Michael Quinn Sullivan.
15 COMMISSIONER PAUL HOBBY: I'd like a
16 discussion before the motion.
17 CHAIRMAN JIMCLANCY: Sure. Commissioner
18 Hobby.
19 COMMISSIONER PAUL HOBBY: Mr. Chairman, I find
20 it would be helpful here to move this along, the
21 reissuance of a narrow set of subpoena as I
22 understand it is responsive to the federal court's
23 order (inaudible). An allegation has been made
24 that representatives of the attorney general's
25 office refused to meet and confer with respect to
58
1 narrowing the scope of the existing subpoenas that
2 were just withdrawn. I would like to ask Ms. Penn
3 to step to the mic and either agree or disagree
4 with that representation.
5 MS. AMY PENN: Thank you, Chairman,
6 Commissioner Hobby. To first address the --
7 CHAIRMAN JIMCLANCY: Would you identify
8 yourself first so that everyone knows who is
9 talking.
10 MS. AMY PENN: I apologize. Thank you, Chair.
11 My name is Amy Penn. I'man assistant attorney
12 general at the attorney general's office. I have
13 been, in cooperation with another assistant
14 attorney general, Gunnar Seaquist, representing the
15 commission in the current action in federal court.
16 Gunnar Seaquist has taken the lead on this case up
17 until now. We are nowtransitioning into I am
18 taking over.
19 I was present for the conversation I
20 believe you are referring to with Mr. Nixon that
21 was before the previous executive session.
22 Mr. Nixon discussed with us whether or not we would
23 sit down and discuss the scope of the subpoenas.
24 At that time that was on the eve of our hearing in
25 front of the federal court. We had already briefed
59
1 the issues and were prepared to discuss it with the
2 Court.
3 At that time we did discuss it with
4 Mr. Nixon briefly. He told us he believed that the
5 subpoenas were overbroad because they asked for
6 information that was protected by the First
7 Amendment. At that time our understanding was that
8 Mr. Nixon's objection was to the subpoenas
9 requesting information that he believed was
10 protected by the First Amendment.
11 Understanding that to be the issue that
12 was before the Court and that was Mr. Nixon's
13 objection, Mr. Seaquist actually represented to
14 Mr. Nixon that the commission and the attorney
15 general's office was confident that there was no
16 first amendment concern and that we wanted to bring
17 that issue in front of the Court. It was not until
18 we got to the Court that we opened up the
19 discussion about the breadth of the subpoenas and
20 that they were, as Mr. Nixon classified them,
21 overbroad and asked for too many documents.
22 It was in response to that concern and
23 the concern raised by Judge Sparks at that hearing
24 that the commission and Mr. Seaquist and myself and
25 Mr. Nichols, outside counsel, have met with
60
1 Mr. Nixon and his other cocounsel to discuss the
2 breadth of the subpoenas and address the specific
3 issues that were raised by Judge Sparks.
4 COMMISSIONER PAUL HOBBY: How many times have
5 you met with him?
6 MS. AMY PENN: Outside of the brief meeting we
7 had with him, which I wouldn't classify a formal
8 meeting, it was only a few minutes. We have met
9 with himtwice and as he represented each of those
10 meetings was over two hours long.
11 COMMISSIONER PAUL HOBBY: So in the four
12 hours, have they agreed to anything with respect to
13 the (inaudible) subpoena.
14 MS. AMY PENN: They have agreed to the extent
15 there was or are any communications that were
16 nonunique, that I believe, and I believe that they
17 appreciated our offer to tell themthat we were not
18 seeking unique -- multiple versions of unique --
19 nonunique documents. Excuse me. Let me rephrase
20 that. I believe that they have agreed with us in
21 that insofar as we have asked for documents that
22 were -- there are multiple versions of the same
23 documents sent to a number of recipients. We have
24 only asked for one copy of that communication. I
25 believe that addresses their concerns and I believe
EXHIBIT 22
561-835-0220
16 (Pages 61 to 64)
61
1 they were satisfied with that.
2 In addition, as you have heard
3 discussion here, we have clarified to themthat we
4 are not seeking the names of individuals who are
5 not making political contributions, and I believe
6 that that addresses their concerns.
7 We have not received explicit agreement
8 fromthemin writing that I amaware of that they
9 have agreed to produce any particular documents
10 beyond what they have already produced.
11 COMMISSIONER PAUL HOBBY: So with respect to
12 the federal court's instructions we have a choice
13 today, and that is to wait for Mr. Nixon to agree
14 with the comprehensive narrowset of subpoenas or
15 reissue a comprehensive narrowset of subpoenas
16 based on input fromhimand Judge Sparks.
17 MS. AMY PENN: Yes, sir.
18 COMMISSIONER PAUL HOBBY: Thank you.
19 MS. AMY PENN: Thank you.
20 COMMISSIONER PAUL HOBBY: The one question I
21 have for our counsel is, as I said before, the
22 qualifier at the end of the definitions and
23 instructions, is the (inaudible). The instructions
24 and definitions are boilerplate, they seem
25 overbroad because that is the definition of
62
1 boilerplate. I would put that at the top in bold,
2 put it at the top of the instructions the
3 definitions, and I would make clear
4 that number 4 only relates to the PAC cases. Put
5 it at the top because you read the definitions of
6 instructions and you pick up speed and get the
7 overbroad feeling, but if you have the qualifier at
8 the top that says this is not what we are talking
9 about, this qualifies everything beyond, I think
10 that (inaudible). That would be my suggestion for
11 4.
12 MR. JOSEPH NIXON: Mr. Hobby, so that we are
13 clear, you know, I, on both occasions, asked for
14 people of authority to come to those meetings.
15 Neither gentleman to my left came. No one fromthe
16 ethics commission came. Mr. Nichols was there and
17 took comprehensive notes. Ms. Penn was there for
18 part of them. Mr. Seaquist was there for all of
19 them. We went through an extensive list of things
20 that clearly are related, directly related to the
21 complaint.
22 Now, don't for one second think that I
23 haven't bent over backwards, both with the AG's
24 office, when you hired themto represent you,
25 before the hearing. There was also an e-mail
63
1 exchange with Mr. Seaquist.
2 But howin the world amI supposed to
3 sit down and negotiate a document subpoena when I
4 get it at a quarter to 4 the night before. And
5 quite frankly, because of the lawsuit, I amnot
6 certain whether or not I amallowed to talk to
7 these gentlemen. I don't knowif I have to talk to
8 themthrough their lawyers. But if they don't come
9 to the meetings and talk to say, okay, this is what
10 we will agree to, this is what we will do, if they
11 can't come and if they don't commit to themselves,
12 please, do not misunderstand that I amgoing to
13 object and point that out every single time.
14 I amnot going to allowmy clients under
15 any shape, way or form, to look as if they are not
16 trying to be reasonable.
17 We haven't issued subpoenas to the
18 commission. We asked for one deposition, and the
19 commission determined that I had to have a good
20 cause standard, which is not in the statute, and
21 denied it. That's all the discovery I have asked
22 for outside of the commission's file.
23 Mr. Chairman, you ordered your staff to
24 provide me their file. I don't need a subpoena for
25 that and do not contend nowthat I need a subpoena
64
1 for that. Just tell them, produce your file, as
2 you did before.
3 But I amhappy to sit here and go into
4 another roomwith these gentlemen and try to figure
5 out what it is that we can agree to. And maybe
6 they ought to -- the first fundamental thing that
7 the commission has not dealt with is the fact that
8 you are asking nonparties to produce extensive
9 documents to the other entity's complaint. There
10 is a cost associated with that, and the statute
11 requires the commission put up a bond.
12 COMMISSIONER PAUL HOBBY: Right. All these
13 objections have been made before. If I understand
14 where the chairman is going, you are going to get
15 the opportunity to agree in the next couple hours,
16 but the judge told principals to meet, told clients
17 to meet, told counsel to meet. My understanding
18 with the court proceeding is the judge told lawyers
19 to meet (inaudible).
20 MR. JOSEPH NIXON: It doesn't matter who meets
21 if one side doesn't have any authority. I came
22 with authority. If the other side shows up and
23 they don't have any authority, it doesn't matter.
24 It means that you weren't there. It means the
25 commission wasn't there. Maybe they had lawyers
EXHIBIT 22
561-835-0220
17 (Pages 65 to 68)
65
1 there, but they weren't there, without authority to
2 make decisions.
3 And what I get are subpoenas late at
4 night. And I'msupposed to like suddenly be the
5 bad guy because we didn't agree to them? That's
6 not reasonable. I hadn't even seen thembefore.
7 We sat down and made a list of things that you
8 ought to ask for. Those are not there.
9 CHAIRMAN JIMCLANCY: Thank you, Mr. Nixon.
10 Is there any further discussion by commissioners?
11 All right. Before us right now is the revised
12 subpoenas (inaudible) and Michael Quinn Sullivan.
13 Is there a motion to issue these two subpoenas?
14 COMMISSIONER TOMHARRISON: So moved.
15 COMMISSIONER PAUL HOBBY: Not without removing
16 the qualifiers (inaudible).
17 CHAIRMAN JIMCLANCY: Do you have an amendment
18 to this?
19 COMMISSIONER PAUL HOBBY: (The following
20 statement contains many inaudible areas)
21 I do offer an amendment. The amendment
22 is to the last paragraph, occurred without numbers,
23 should be moved to the front of it, under the
24 title, the statement of exclusion, all of the
25 following without limitation shall be subject to
66
1 the following restrictions: Empower Texans as
2 defined herein or to this chapter, number 2, a
3 member of the legislative branch or this, a member
4 of the executive branch. Or in the case of SC,
5 filling the number to the PAC cases (inaudible)
6 subject to reporting (inaudible). That is my
7 amendment.
8 CHAIRMAN JIMCLANCY: And that is the
9 amendment to the subpoena to Empower Texans. So
10 let's take themseparately. Do you have an
11 amendment to the subpoena to Empower Texans
12 (inaudible)?
13 COMMISSIONER PAUL HOBBY: I have made a motion
14 to amend the subpoenas and submitted it to my staff
15 (inaudible).
16 MR. JOHN MOORE: I have one other point on
17 this. These drafts that you have are witness and
18 subpoena duces tecum. We have not set a date for
19 the formal hearing so we would ask that the first
20 paragraph that refers to appearing for the formal
21 hearing be removed also fromthe subpoena.
22 CHAIRMAN JIMCLANCY: I will have Commissioner
23 Hobby address that part too.
24 COMMISSIONER PAUL HOBBY: I will amend my
25 original motion to delete the reference to the
67
1 (inaudible).
2 CHAIRMAN JIMCLANCY: Is there a second?
3 COMMISSIONER TOMHARRISON: Second.
4 CHAIRMAN JIMCLANCY: All in favor of issuing
5 these subpoenas as amended say aye.
6 (Chorus of ayes).
7 CHAIRMAN JIMCLANCY: All opposed?
8 The motion passes. All right.
9 Gentlemen, please try to figure things out. If
10 not, we will accept your written submissions on
11 April 21st.
12 (Transcript excerpt concluded)
13
14
15
16
17
18
19
20
21
22
23
24
25
68
1 C E R T I F I C A T E
2
3
4 THE STATE OF TEXAS )
5 COUNTY OF TRAVIS )
6
7
8
9 I, Katrina Faith Wright, do hereby certify
10 that I was authorized to and did listen to and
11 transcribe the foregoing recorded proceedings and
12 that the transcript is a true record to the best of
13 my ability.
14
15 Dated this 7th day of April, 2014.
16
17
18
19
20 _________________________________
21 Katrina Faith Wright
22
23
24
25
EXHIBIT 22
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Page 1
A
ability 25:5 32:2
38:22 39:11
68:13
able 5:12,12 27:19
41:4 45:6
absolutely 25:15
27:22
absurd 16:15 50:8
accept 67:10
accepting 9:19
accomplish 45:10
accountants 14:23
accounting 15:20
15:20
accumulate 41:4
accused 18:6
act 22:20,22 38:3
40:14,15,22 56:9
acting 17:1 40:10
41:6
action 17:23 28:18
58:15
activity 15:19
21:13
acts 38:9 39:2
actual 5:22 43:6
43:11 44:5
add 5:1,3 25:8
42:1,5 44:15
addition 15:8 61:2
additional 2:12
5:1 11:3,4 44:5
address 18:18
24:14 41:23 42:3
45:25 58:6 60:2
66:23
addressed 11:11
35:11 42:13
addresses 16:11
60:25 61:6
administrative
22:20,21 36:12
37:21 48:15 54:7
admitted 51:17
adopt 47:23
advertising 6:23
advised 12:20
affiliated 16:23
afield 52:5
ag 51:11
agency 2:20 21:3
39:15
agendas 16:4
agent 36:2,5
agents 17:1
aggressor 25:24
agree 12:8 17:20
26:2,6,10 35:1
35:14 47:2 58:3
61:13 63:10 64:5
64:15 65:5
agreed 4:18,23
5:17 6:1 37:2
60:12,14,20 61:9
agreeing 27:15
agreement 5:11,23
47:2 61:7
ags 62:23
ahead 4:9
akerr 16:12
akin 55:1,3
allegation 57:23
allegations 43:4
allow 63:14
allowed 21:4,5,5
26:19 28:22
52:25 63:6
alteration 15:9
amazed 48:16
amend 66:14,24
amended 67:5
amendment 20:15
30:21,22 59:7,10
59:16 65:17,21
65:21 66:7,9,11
amy 58:5,10,11
60:6,14 61:17,19
announcements
15:13
answers 12:10
antonio 41:10
anybody 9:13 33:5
34:3 39:12 48:25
49:13 53:13,14
anyway 56:18
apa 4:2 24:16
37:22 39:4,6,13
39:17
apologize 58:10
apparent 53:15
apparently 36:2
appeal 25:2,17
26:22 27:8 39:12
47:18,18 51:5
52:24
appealed 39:14
appeals 53:8
appeared 33:23
34:2
appearing 66:20
appears 12:1 43:21
45:18
appellant 25:23
appellate 25:16,24
application 11:16
apply 24:18 37:24
40:23
appointment 15:15
appreciated 60:17
approach 2:8
appropriate 27:24
46:15 50:24
55:20
april 1:13 46:7,8
57:6,6 67:11
68:15
area 47:1
areas 3:25 65:20
arent 28:21 29:25
30:3 32:4
arguing 25:12
argument 41:16
arguments 37:19
asked 3:21 4:5
12:11,12 20:6
32:2,3 33:5
35:23,25 36:13
52:8 59:5,21
60:21,24 62:13
63:18,21
asking 3:14 4:6,11
6:4 12:23 20:19
22:15 23:6 29:9
29:15 32:5 38:18
38:19,21 39:23
39:23,24 40:7
41:2 50:8,9
51:19 64:8
assert 47:21
assistant 58:11,13
associated 64:10
assume 34:4
attached 7:1 19:25
20:18,23 33:18
35:18 51:22
attachments 16:7
attack 48:23
attempt 47:1,12
attend 13:16
attended 13:17
attorney 3:12 13:4
13:18 23:25
34:19 38:15
49:23 51:13
53:18 57:24
58:11,12,14
59:14
attorneys 14:23
16:25 38:15
audio 1:11
authority 21:8,21
29:22 39:2,15
42:19,22 43:3
54:9,10 56:12
62:14 64:21,22
64:23 65:1
authorized 49:10
68:10
automatically
28:18 51:25
aware 3:19 5:10
61:8
aye 55:4 67:5
ayes 55:5 67:6
B
b 2:4 33:10
back 19:2 25:19
32:7 36:25 50:25
51:11
backwards 62:23
bad 50:19 65:5
bank 15:20
bar 48:16
based 8:4 20:22
38:8 39:16 61:16
basically 3:18
19:4 31:18 56:1
basis 28:5 35:8
40:4
beginning 49:25
behalf 10:3 17:2
24:1
believe 5:4 6:24
11:22 42:4 58:20
60:16,16,20,25
60:25 61:5
believed 59:4,9
bent 62:23
best 68:12
beyond 61:10 62:9
biographies 15:14
bit 51:6 56:23
blast 28:12 31:5
43:12,24
blasts 30:24 32:6
board 4:1 30:12,12
body 23:21 24:3
boilerplate 61:24
62:1
bold 62:1
bond 64:11
bookkeeping 15:21
box 33:21,23,23
34:1,4,7
branch 10:11 42:10
42:10 66:3,4
EXHIBIT 22
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Page 2
breadth 45:13 57:2
59:19 60:2
brief 60:6
briefed 58:25
briefing 16:3
briefly 47:4 59:4
bring 25:5 41:22
59:16
broad 14:4 38:12
43:19 49:13
broadly 10:10
brought 13:23
25:17
budge 20:16
bullet 40:25
business 16:22
buy 33:9
C
c 8:14 23:2,15
28:17 32:23
37:18 40:9,9,11
40:15,24 44:22
68:1,1
cables 15:23
cajole 28:24
calendars 15:15
call 52:23
called 28:13 31:24
48:9
calls 15:18
campaign 28:20
33:2,4,6 51:24
cant 14:6 16:16
36:14 44:10,11
50:16 63:11
capitol 30:18
card 15:16
carding 28:14
cards 15:1,3
care 36:16
cartridges 15:2
case 2:2 5:2,16,25
10:17 12:16
14:16 18:10,11
18:14,16 19:1
20:4,12,13 21:9
22:4 24:20 28:11
32:10,12 37:4,18
37:20 38:4,8
39:14,22 40:2,12
40:12,12,19,20
43:7 48:8 53:19
54:5 58:16 66:4
cases 5:8,14 40:20
40:21 62:4 66:5
categories 7:11,22
8:2,3 9:3,5 10:1
cattle 50:8
cause 4:3 57:13
63:20
certain 4:15 12:20
63:6
certainly 56:12
certify 68:9
cetera 10:8
chair 37:7 54:20
57:11 58:10
chairman 2:1,23,25
3:8,13 4:6,11,17
4:21,25 5:15,24
6:3,8,16,19,22
7:3 9:23 12:3,7
13:8 14:11 17:5
17:15 21:17,20
21:25 22:6,17,21
23:8,14 24:7,13
24:24 25:7 26:2
26:6,10,14,24
27:12,17 28:3
29:2,5,11,14,17
29:23 30:19 31:1
31:6 32:9,17,24
33:8,12 34:22
36:19 41:25
44:13,15,25 45:8
47:4,6,9,25
48:11,20,22 49:3
52:4,12 53:3,9
54:15,24 55:2,6
55:11 56:19,22
57:17,19 58:5,7
63:23 64:14 65:9
65:17 66:8,22
67:2,4,7
chapter 49:10 66:2
charge 15:10
charged 42:14
charts 16:4
chase 9:24 11:14
12:2
choice 27:25 61:12
choose 52:25 56:9
chooses 28:25
55:24
chorus 55:5 67:6
chose 21:18,22
chosen 36:7
citizens 40:13
51:23 52:2
civil 37:24 39:17
clancy 2:1,23,25
3:8,13 4:6,11,17
4:21,25 5:15,24
6:3,8,16,19,22
7:3 9:23 12:3,7
13:8 14:11 17:5
17:15 21:20,25
22:6,17,21 23:8
23:14 24:7,13,24
25:7 26:2,6,10
26:14,24 27:12
27:17 28:3 29:2
29:5,11,14,17,23
30:19 31:1,6
32:9,17,24 33:8
33:12 34:22
36:19 41:25
44:13,25 45:8
47:6,9 48:11
49:3 52:4 53:3,9
54:15,24 55:2,6
56:19,22 57:17
58:7 65:9,17
66:8,22 67:2,4,7
clarified 61:3
clarify 13:8
classified 59:20
classify 60:7
clear 18:22 20:2
21:2 45:9 62:3
62:13
clearly 17:8 36:9
36:11 37:8 44:2
62:20
client 17:4 26:4
26:11 28:25 29:6
32:10,13,17 39:9
41:20 50:22
52:16,18 53:22
clients 5:12 38:1
39:24 41:11 53:6
63:14 64:16
closed 10:5
cocounsel 60:1
code 36:12 37:22
37:22 38:2,2
49:8,8
com 16:12
combinations 34:3
come 13:20 25:19
47:13 62:14 63:8
63:11
comes 2:19
coming 53:20
commission 1:12
2:10,12,14,15,17
3:5,14 4:7,12
6:3,13 7:5 13:3
13:9 17:12,25
19:5,18,19,20,21
20:5,12,17,24
21:17 22:14,22
22:24 23:2 24:12
24:20,22,25 25:2
25:4,14 26:3,7
28:8,10 32:15,16
34:24 36:3,4,7
37:1 39:2 41:23
41:23 42:14,16
42:19,22 43:1
45:24 46:17,23
47:22 49:9 50:22
51:9,14 52:18
54:10 55:12,13
55:15,18,21,23
56:2,19 57:12
58:15 59:14,24
62:16 63:18,19
64:7,11,25
commissioner 7:5,6
8:6,11,15,18,21
9:1,7,22,23,24
11:14 12:2 54:23
54:24 55:1,2
57:15,17,19 58:6
60:4,11 61:11,18
61:20 64:12
65:14,15,19
66:13,22,24 67:3
commissioners 7:4
36:21 54:16
56:23 65:10
commissions 12:18
19:12 35:24 46:5
52:19 55:9 63:22
commit 63:11
committee 9:12
28:18 51:2
communicate 32:2
communicates 30:14
30:17
communication 9:2
10:2,6 11:17
15:25 16:7 31:14
60:24
communications 5:7
10:19,25 11:7,10
11:21,23,24
16:10 17:4 36:4
43:13 60:15
complainant 20:3
complaint 2:3,5,6
7:1 19:25 20:23
21:10 29:21
33:18 35:18
38:11 42:17
49:12,17 51:20
EXHIBIT 22
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Page 3
51:21,22 53:1
62:21 64:9
complaints 10:19
19:13,20 20:19
35:11,13 42:25
43:4,9 44:2
complete 35:18
comply 25:3 26:16
26:20 27:9 37:2
37:10,15 40:16
40:23 41:1,20
54:2
comport 55:25
comprehensive
45:18 48:11,12
61:14,15 62:17
computer 15:2
18:25 19:2
concern 42:1 59:16
59:22,23
concerns 41:21
60:25 61:6
concluded 67:12
confer 47:1 57:25
conference 16:6
36:25 37:6
confident 59:15
confidential 32:20
37:5,12 54:4
confined 42:16
confirmed 27:24
confusion 49:19
54:19
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understand 27:17
27:23 34:14,23
35:7,25 36:6
38:11 41:20 47:5
49:3 57:22 64:13
understanding
29:25 59:7,11
64:17
understands 2:10
6:4
unique 60:18,18
uniquely 24:3
united 40:13 51:23
52:2
unspecified 43:25
untermeyer 9:23,24
11:14 12:2
upset 41:12
urge 47:22 56:2
urging 29:8 30:21
use 15:5 53:1
V
valid 12:15
validly 20:8
verbal 15:24
vermont 40:20
versions 60:18,22
versus 40:19
video 1:11
violate 28:24 53:1
violated 38:1 39:3
53:6
violating 48:4
violation 38:9
56:8
violative 28:2
visit 13:14
vote 11:9 20:24
28:15 30:2,21
voted 19:20 21:10
45:24
voters 28:14 30:14
30:16,16,17,17
vouchers 15:19
W
wait 53:10 61:13
waited 19:21 51:12
walk 30:9
walked 53:19
want 13:6,19 17:25
20:17 23:25
24:14 28:12,15
28:17 31:12,20
33:13 43:11
44:14 45:13,13
45:20,24 47:8
48:24 51:9 53:21
53:23 55:12 56:5
56:16
wanted 59:16
wanting 32:1 35:8
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561-835-0220
Page 12
wants 20:1 38:7,21
51:1
wasnt 33:2 53:17
64:25
way 7:23 11:10
18:7 21:11 31:24
41:7 45:20 52:15
63:15
web 15:12 30:15
33:19,20,24
website 44:18,20
went 14:3 19:1
30:25 31:3 33:20
43:25 51:6,11
62:19
whats 20:22 23:23
30:17 53:11
56:11
willing 43:17
withdraw 4:10
34:24 54:21
withdrawn 58:2
witness 36:9,15,17
66:17
witnesses 18:20
42:21 49:11
wonder 10:11 41:12
wondering 50:1
word 44:11 46:20
48:10 50:14 51:4
worded 14:15
words 10:7,13
11:17 49:20 56:3
work 13:21 14:6
16:16 17:24 19:3
19:14,19 20:1
30:11 33:17
41:19 47:12,13
47:14 50:23
51:15 52:19
working 7:8 16:3
works 7:24
world 63:2
worse 19:10 35:6
wouldnt 53:24 60:7
wrap 52:5
wright 68:9,21
write 47:25 50:17
writing 5:18 14:18
61:8
writings 14:21
written 5:11 6:21
15:24 42:20
67:10
X
Y
yeah 27:21
year 50:18
yesterday 3:10,11
youre 8:12
Z
0
1
1 10:12 11:16,19
13:24,25 24:2
31:10,15
10 10:10 33:25
34:9
11 50:1
137 23:2 49:7
14 14:9,16
15 9:11 50:6
151 23:1
17th 22:2 55:13,25
56:4
19 3:24,25 5:15,25
9:25
1st 46:9 57:7
2
2 24:2 31:11 66:2
20 5:5 19:22 34:9
2014 1:13 68:15
21st 46:7 57:6
67:11
25 33:25
28th 46:8 57:6
3
3 1:13 13:12 14:9
30 49:25
31 51:5
3120486 2:3
34 24:1
375 34:7
4
4 8:14 9:7,8 28:17
32:23 37:18 40:9
40:9,11,15,24
44:22 62:4,11
63:4
45 13:12
5
5 33:25 34:9
500 34:15
501 8:14 28:17
32:23 37:18 40:9
40:9,11,15,24
44:22
571 23:2 49:7
5th 46:2,11 57:8
6
7
7th 68:15
8
80 37:6
9
9 10:9 51:5
990s 6:12,14
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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
EMPOWER TEXANS, INC.; and MICHAEL
QUINN SULLIVAN,
Plaintiffs,
-vs-
COMMISSION; and NATALIA LUNA ASHLEY,
in her capacity as Interim Executive Director of
the Texas Ethics Commission,
Defendants.
ORDER
FILED
2114APR25
PH:I8
CLr U
TEU TEXAS
Case No. A-14-CA-172-SS
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and
specifically Plaintiffs Empower Texans, Inc. and Michael Quinn Sullivan's Motion for Temporary
Restraining Order [ # 7] , and Defendants The State of Texas Ethics Commission and Natalia Luna
Ashley's Response [ # 17] ; Movant Steve Bresnen's Motion to Intervene [ # 11] , Plaintiffs' Response
[ # 12] , and Bresnen's Reply [ # 14] ; Movant Professional Advocacy Association of Texas's Motion
for Leave to File Amicus Brief [ # 15] ; the Texas Ethics Commission's Motion to Dismiss [ # 23] , and
Plaintiffs' Response [ # 29] ; Movants Texas Right to Life Committee, Inc. and Texas Home School
Coalition Association, Inc.'s Motion to Intervene [ # 25] ; and Plaintiffs' Motion for Leave to File
Reply [ # 3 4] . Having reviewed the documents, the governing law, and the file as a whole, the Court
now enters the following opinion and orders.
I
EXHIBIT 24
Background
Empower Texans, Inc. is a non-profit, tax-exempt "social welfare" organization. See
I.R.C.

501 (c)(4)(A). Empower represents its purpose is to inform voters about its preferred policy
solutions, endorse political candidates, and "grade" legislators by evaluating their votes and placing
them on a "Fiscal Responsibility Index" scorecard. Michael Quinn Sullivan is Empower's President
and the founder of a separate Empower Texans Political Action Committee.
In April 2012, two Texas state representatives filed complaints against Empower and
Sullivan with the Texas Ethics Commission (TEC). Those complaints alleged Empower had failed
to properly report its political expenditures and comply with Texas state laws governing political
action committees. The complainants also alleged Sullivan had failed to register as a lobbyist. In
connection with its investigation of those complaints, the TEC issued subpoenas to both Empower
and Sullivan. Plaintiffs responded by filing this lawsuit under

1983, alleging the TEC subpoenas
violate Plaintiffs' First Amendment rights. Plaintiffs also challenge Texas's lobbying laws, which
exempt seven classes of persons from registering as lobbyists, as unconstitutional under the
Fourteenth Amendment's Equal Protection Clause. Plaintiffs also contend they are being selectively
prosecuted and denied due process.
Plaintiffs filed a Motion for Temporary Restraining order seeking only to enjoin the TEC
from enforcing its subpoenas. The Court held a hearing on the motion on March 20, 2014. At the
hearing, the Court instructed Plaintiffs to file a pleading regarding abstention under Younger v.
Harris, 401 U.S. 37(1971). Plaintiffs have since filed their responsive pleading, the TEC has moved
to dismiss, and various non-parties have moved to intervene.
-2-
EXHIBIT 24
Analysis
Because the TEC's motion to dismiss challenges this Court's jurisdiction, the Court
addresses that motion first. The Court then turns to the abstention issue, and concludes abstention
is appropriate in this case.
I. Motion to Dismiss
Federal district courts are courts of limited jurisdiction, and may only exercise such
jurisdiction as is expressly conferred by the Constitution and federal statute. Kokkonen v. Guardian
Life Ins. Co. ofAm., 511 U.S. 375, 377 (1994). Federal Rule of Civil Procedure 12(b)(l) allows a
party to assert a lack of subject matter jurisdiction as a defense to suit. The burden of establishing
subject matterjurisdiction by a preponderance of the evidence rests with the party seeking to invoke
it. New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 327 (5th Cir. 2008).
In evaluating a challenge to subject matter jurisdiction, the Court is free to weigh the
evidence and resolve factual disputes so that it may be satisfied jurisdiction is proper. See Montez
v. Dep't of Navy, 392 F.3d 147, 149 (5th Cir. 2004). In conducting its inquiry the Court may
consider: (1) the complaint alone; (2) the complaint supplemented by undisputed facts; or (3) the
complaint supplemented by undisputed facts plus the Court's resolution of disputed facts. Id. The
Court must take the allegations in the complaint as true and draw all inferences in the plaintiff's
favor. Saraw P 'ship v. United States, 67 F.3d 567, 569 (5th Cir. 1995); Garcia v. United States, 776
F.2d 116, 117 (5th Cir. 1985). Dismissal is warranted if the plaintiff's allegations, together with any
undisputed facts, do not establish the Court has subject matter jurisdiction. See Saraw, 67 F.3d at
569; Hobbs v. Hawkins, 968 F.2d 471, 475 (5th Cir. 1992).
-3-
EXHIBIT 24
The TEC moves to dismiss all claims against it on Eleventh Amendment immunity grounds.
In general, the Eleventh Amendment bars suits against "the State or one of its agencies or
departments," absent consent, waiver, or abrogation. Pennhurst State Sch. & Hosp. v. H alderman,
465 U.S. 89, 100 (1984); see also Willy. Mich. Dep't of State Police, 491 U.S. 58,66(1989). The
TEC contends it is immune from suit under

1983, and this case should proceed only against
Ashley, named in her official capacity. See Exparte Young, 209 U.S. 123, 155-56 (1908) (Eleventh
Amendment does not bar suits against state officials named in their official capacity seeking
prospective injunctive relief). This is true, the TEC says, because it says so. Offering only a single,
general citation to Chapter 571 of the Texas Government Code, the TEC asserts it is a "state agency"
entitled to the protections of the Eleventh Amendment.
While not discounting the possibility the TEC may be entitled to Eleventh Amendment
immunity, the Court declines to simply take the TEC's word for it. When faced with a purported
state defendant, the Fifth Circuit has instructed courts to look to a list of six factors in determining
"whether an entity is an arm of the state." Delahoussaye v. City of New Iberia, 937 F.2d 144, 147
(5th Cir. 1991); see also Laje v. R. E. Thomason Gen. Hosp., 665 F.2d 724, 727 (5th Cir. 1982) ("A
federal court must examine the particular entity in question and its powers and characteristics as
created by state law to determine whether the suit is in reality a suit against the state itself"). The
TEC analyzes none of these factors, offering the Court no basisother than the TEC's own
representationfor deciding whether the TEC is properly considered a state agency, or an arm of
the state, or something else. The Court therefore declines to dismiss the TEC on the basis of
Eleventh Amendment immunity at this time.
El
EXHIBIT 24
The Court's conclusion is bolstered by the TEC's prior conduct before this Court. In 2012,
the TEC and its then-Executive Director were sued in this Court under

1983 for violating the First
Amendment rights of another political organization. See Texans for Free Enter. v. Tex. Ethics
Comm 'n, No. 1 :12-cv-845-LY (W.D. Tex. filed Sept. 12, 2012). Proceeding before Judge Yeakel,
the TEC moved to dismiss on Eleventh Amendment grounds. In fact, the TEC's pending motion is
an almost verbatim copy of its 2012 motion, right down to the reference to the filing date. See Mot.
Dism. [ # 23] , at 2 ("It is unfortunate that in October of 2012 a state agency defendant still needs to
raise an issue that has been a matter of well settled law for decades."). Judge Yeakel dismissed the
motion after granting a preliminary injunction against the TEC and its director. On appeal, the TEC
did not raise an immunity defense, and the Fifth Circuit affirmed the preliminary injunction. Texans
for Free Enter. v. Tex. Ethics Comm 'n, 732 F.3d 535 (5th Cir. 2013). The TEC subsequently agreed
to the entry of a permanent injunction and final judgment against both the TEC and its director.
Texans for Free Enter., No. 1:12-CV-845-LY (W.D. Tex. Dec. 20, 2013). The TEC's conduct
therefore suggests it is at least unsure whether it is an arm of the state immune from suit, and a
conclusory sentence to the contrary is insufficient to persuade the Court it lacks jurisdiction.
II. Younger Abstention
As the Fifth Circuit has recognized, "[ i] n Younger, the Supreme Court instructed federal
courts that the principles of equity, comity, and federalism in certain circumstances counsel
abstention in deference to ongoing state proceedings." Wightman v. Tex. Supreme Court, 84 F.3d
188, 189 (5th Cir. 1996) (internal quotation marks omitted). Abstention is proper under Younger
when three criteria are met: "(1) the dispute should involve an 'ongoing state judicial proceeding;'
(2) the state must have an important interest in regulating the subject matter of the claim; and (3)
-5-
EXHIBIT 24
there should be an 'adequate opportunity in the state proceedings to raise constitutional challenges."
Id. (quoting Middlesex Cnly. Ethics Comm. v. Garden State Bar Ass 'n, 457 U.S. 423, 432 (1982)).
Although Younger itself dealt with an ongoing state criminal proceeding, its reach has been
expanded to civil proceedings and state administrative proceedings. Ohio Civil Rights Comm 'n v.
Dayton Christian Schs., Inc., 477 U.s. 619, 626-27 (1986). The question before the Court is whether
this case is one in which the Court should abstain in deference to the ongoing proceedings before the
TEC. The Court holds it is.
As an initial matter, the Court notes Plaintiffs concede the first two requirements for
abstention under Younger are met in this case. See Pl.'s Brief [ # 26] , at 5 ("To be clear, the first two
(2) elements of the Younger doctrine test have likely been met."). There is undeniably an ongoing
state administrative proceeding pending before the TEC, and the TEC' s interest in enforcing Texas's
election laws is important. Plaintiffs only challenge the existence of the third element, and raise the
possibility they may also meet an exception to the abstention doctrine even if all three elements are
met.
The third element of the Younger abstention doctrine asks whether Plaintiffs had, or will
have, "an opportunity to present their federal claims in the state proceedings." Juidice v. Vail, 430
U.S. 327, 337 (1977). Plaintiffs' "failure to avail themselves of such opportunities does not mean
that the state procedures were inadequate." Id. In this case, there are (or were) adequate opportunities
for Plaintiffs to present their constitutional claims. A formal hearing before the TEC is subject to the
procedural protections of the Texas Administrative Procedure Act. TEx. Gov'T CODE

57 1.139(c);
see also id.

2001.051 .202. Plaintiffs may appeal any adverse final decision rendered by the TEC,
EXHIBIT 24
and receive a trial de novo in which their constitutional challenges may be litigated. See
id. 2001.171.173
With respect to the subpoenas in particular, Plaintiffs could have also moved for a protective
order (i.e., moved to quash) in the district court. Id.

571.137(d) ("A respondent has the right to
quash a subpoena as provided bylaw." ).1 Additionally, all parties concede the TEC's subpoenas are
not self-executing. If Plaintiffs refuse to comply with the TEC' s subpoenas, as they have consistently
done so far,2 the TEC must present the subpoena to the state district court for enforcement.
Id.

571.137(c) ("If a person to whom a subpoena is directed. . . refuses to produce books, records,
or other documents. . . the commission shall report that fact to a district court in Travis County. The
district court shall enforce the subpoena by attachment proceedings for contempt in the same manner
as the court enforces a subpoena issued by the court."). If the TEC seeks enforcement of the
subpoenas through the state courts, Plaintiffs will again have opportunities to raise their defenses to
the production of the requested documents, whether constitutional or otherwise. If the trial court
enforces the subpoena, that decision is also appealable, and the appellate court may consider
constitutional and other challenges to the production of the documents. E.g., Sinclair v. Says. & Loan
Comm ' r of Tex., 696 S.W.2d 142, 144 (Tex. App.Dallas 1985, writ ref'd n.r.e.) (reviewing various
constitutional and non-constitutional challenges to subpoena). Plaintiffs may also have a mandamus
Counsel for Plaintiffs and the TEC represented before this Court the TEC itself rules on motions to quash,
rather than a district court. Texas law, however, incorporates "limitations of the kind provided for discovery under the
Texas Rules of Civil Procedure" into the discovery process in contested cases. TEx. Gov' T CODE

2001.091(a). The
Texas Rules of Civil Procedure provide a mechanism for moving for a protective order in district court. TEX. R. Civ. P.
176.6(e). Plaintiffs do not contend they moved for a protective order in the state district court in this case.
2
Before this Court, Plaintiffs' counsel represented he and his clients were "happy to produce" certain
documents, but as of the hearing Plaintiffs had not produced anything in response to the subpoenas. Hrg. Tr. [ # 32] , at
40.
-7-
EXHIBIT 24
remedy available. See Pelt v. State Bd. of Ins., 802 S.W.2d 822, 829 (Tex. App.Austin 1990, no
writ) ("If the trial court improperly overrules a motion to quash that it was required to sustain, or
otherwise directs production ofundiscoverable information, mandamus will issue to correct the error
and set aside the order.").
Plaintiffs seem particularly disturbed by the thought they might face legal consequences for
failing to comply with a subpoena. Setting aside the fact that Plaintiffs could have moved to quash
the subpoena rather than file a federal lawsuit, Plaintiffs' argument is irrelevant. Nothing in Younger
and its progeny requires Plaintiffs to be immunized from the consequences of their actions while
pursuing their legal arguments. True enough, noncompliance with a subpoena may spur a contempt
action; noncompliance in the contempt action may lead to the issuance of a fine. But those steps are
not taken while Plaintiffs are absent. To the contrary, Plaintiffs can and should be present in the state
courts showing cause why they are not complying with the subpoenas and litigating their defenses.
The Supreme Court recognized these principles in Juidice, where the Court held Younger abstention
was appropriate even though the party resisting the subpoena was held in contempt, fined, and jailed
for his noncompliance. 430 U.S. at 329-3 0. The Court noted abstention is particularly appropriate
where a state court contempt process is implicated, because federal court intervention "is an offense
to the State's interest" equivalent to intervention in state criminal proceedings. Id. at 336 (internal
quotation marks omitted); see also Id. (recognizing "interference with the contempt process not only
unduly interferes with the legitimate activities of the State, but also can readily be interpreted as
reflecting negatively upon the state courts' ability to enforce constitutional principles" (internal
quotation marks, alterations, and citations omitted)).
EXHIBIT 24
This Court and others have abstained in similar circumstances in the past. For example, this
Court previously abstained under Younger when an advocacy focused non-profit sought an
injunction prohibiting the enforcement of three grand jury subpoenas targeted at the group's political
activities. Tex. Ass'n of Bus. v. Earle, 388 F.3d 515, 5 16-17 (5th Cir. 2004). The Fifth Circuit
affirmed, finding each prong of the Younger analysis satisfied. Id. at 519-21. With respect to the
third element in particular, the court noted the plaintiff could have moved to quash the subpoena,
sought mandamus relief thereafter, or litigated its First Amendment defense "at any criminal trial
arising from the grand jury investigation." Id. at 521. The Fifth Circuit's opinion thus confirms the
relevant question under the third element is whether the plaintiff will be able to present its
constitutional defenses at some point, not whether the plaintiff will have an opportunity to do so
without exposing itself to negative consequences should it lose.
A recent decision from the Eighth Circuit, while not binding, is also on point. See Geier v.
Miss. Ethics Comm'n, 715 F.3d 674 (8th Cir. 2013). In Geier, the Missouri Ethics Commission
initiated an enforcement action against a political action committee and its founder, Geier. Id. at 676.
Geier responded by filing suit in federal court, seeking an injunction on First Amendment grounds.
Id. The district court sua sponte abstained on Younger grounds, and the Eighth Circuit affirmed on
appeal. Id. at 680. As in this case, Geier conceded the existence of an ongoing state proceeding in
which the state had an important interest. Id. at 678. The court rejected Geier's contention he did not
have an adequate opportunity to raise his constitutional claims in the state court, finding Missouri's
process for judicial review of final administrative decisions adequate. Id. at 679. As Geier reflects,
even if the Plaintiffs here could only seek relief by means of an appeal after losing at the TEC, that
avenue alone would be sufficient to protect their rights.
I,'
EXHIBIT 24
Finally, Plaintiffs contend they fall within one of Younger's "narrowly delimited exceptions."
Earle, 388 F.3d at 519. "Specifically, courts may disregard the Younger doctrine when: (1) the state
court proceeding was brought in bad faith or with the purpose of harassing the federal plaintiff, (2)
the state statute is flagrantly and patently violative of express constitutional prohibitions in every
clause, sentence, and paragraph, and in whatever manner and against whomever an effort might be
made to apply it, or (3) application of the doctrine was waived." Id. (internal quotation marks
omitted). Plaintiffs contend this is a case of bad faith prosecution, and further argue the production
of their donor lists will result in irreparable injury justifying federal intervention.
Plaintiffs' arguments are wholly unpersuasive. The TEC is conducting an investigation on
sworn complaints filed against Plaintiffs by state representatives. This is precisely the mission of the
TEC. See TEX. Gov'T CODE

571.121(a) ("The commission may. . . hold hearings.. . on a sworn
complaint, and render decisions on complaints . .
. .").
Plaintiffs' complaint that the TEC has
"already found them guilty" is both hyperbolic and reflective of the TEC's express compliance with
the statutes governing its operation. Specifically, the TEC is authorized to conduct formal hearings
both when it determines a complaint presents credible evidence of violations of laws within its
jurisdiction, and when it does not. See id.

571.126. Because Texas law allows the TEC to conduct
a formal hearing even when it "determines that there is insufficient credible evidence for the
commission to determine that a violation. . . has occurred," the TEC's decision to move forward
with formal hearings against both Empower and Sullivan does not evidence bad faith.
Id.

571.126(d). Plaintiffs have absolutely no evidence of bad faith or any nefarious motive by the
TEC or anyone else.
-10-
EXHIBIT 24
The Court also rejects Plaintiffs' suggestion Texas Governor Rick Perry's decision to veto
a bill calling for the disclosure of

501(c)(4) contributor lists in 2013 shows Plaintiffs will suffer
irreparable harm. As an initial matter, Plaintffs are not required to produce the lists. They are free
to withhold the documents, as they have done for months, and litigate their claims. Additionally, the
TEC has represented to this Court its subpoenas "do not now, nor have they ever, sought blanket
donor or subscriber lists." Def's Advisory
[ # 281,
at 2. The TEC has also "proposed subpoenas that
expressly allow for the Plaintiffs to redact the names and other identifying information of
subscribers, donors, and contributors so that information is not disclosed." Id. Plaintiffs have not
shown they will be irreparably injured if their federal lawsuit is not allowed to proceed.
Because the requirements of the Younger abstention doctrine are satisfied, the Court declines
to exercise jurisdiction over this case and abstains in deference to the ongoing proceedings before
the Texas Ethics Commission.
Conclusion
Accordingly,
IT IS ORDERED that the Defendant Texas Ethics Commission's Motion to Dismiss
[ # 23] is DENIED;
IT IS FURTHER ORDERED that Plaintiffs Empower Texans, Inc. and Michael
Quinn Sullivan's Motion for Leave to File Reply [ # 34] is GRANTED;
IT IS FURTHER ORDERED that all claims brought by Plaintiffs Empower Texans,
Inc. and Michael Quinn Sullivan in the above-styled cause are DISMISSED WITHOUT
PREJUDICE pursuant to Younger v. Harris, 401 U.S. 37 (1971);
-11-
EXHIBIT 24
IT IS FINALLY ORDERED that all other pending motions are DISMISSED AS
MOOT.
SIGNED this the c25lay of April 2014.
UNITED STATES DI&rthCT JUDGE
172 mot dism ord k k t.frrn
12
EXHIBIT 24
EXHIBIT 25
EXHIBIT 25

Original Petition Request For Declatory Judgment and Request For Equitable Relief

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___________________________________

Plaintiffs Original Petition

v. OF TRAVIS COUNTY, TEXAS

THE STATE OF TEXAS ETHICS

v. OF TRAVIS COUNTY, TEXAS

THE STATE OF TEXAS ETHICS

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