[Press Conference: "Conflict of Interest Allegations at City Hall"]
[00:00:19]
ABOUT TWO WEEKS AGO, I STARTED GETTING CALLS FROM INSTITUTIONS THAT RECEIVED THIS.
IT HADN'T BEEN ON THE CITY WEBSITE UNTIL VERY RECENTLY, BUT, UH, UNDERWRITERS, BOND UNDERWRITERS WERE CONTACTING MY OFFICE ABOUT, THEY WERE ALARMED.
SOME WERE ALREADY DOING BUSINESS WITH THE CITY.
SOME WERE HOPING TO DO BUSINESS WITH THE CITY, BUT THEY SAID IT WAS THE APPEARANCE OF PAY TO PLAY, AND THEY WERE SEEKING ADVICE.
UH, QUITE FRANKLY, I RAN ON TRANSPARENCY AND ENDING CONFLICTS OF INTEREST.
SO I WAS ALARMED AND, UH, REALLY, QUITE FRANKLY, UH, WAS DISAPPOINTED THAT I WOULD HAVE TO DEAL WITH THIS.
I'D MUCH RATHER BE IN MY OFFICE WORKING ON PUBLIC SAFETY OR INFRASTRUCTURE, BUT I JUST ASK YOU TO LOOK AT IT YOURSELF.
IT RE, IT REALLY DOESN'T NEED MUCH EXPLANATION OTHER THAN IT NEEDS TO STOP.
UM, I CAN'T BELIEVE SOMEONE IN THE CONTROLLER'S OFFICE DIDN'T SAY NO.
UH, OTHER CONTROLLERS HAVE HAD CONFERENCES.
CHRIS BROWN WOULD HAVE ONE ZERO SPONSORSHIP.
OTHER CONTROLLERS, ZERO SPONSORSHIPS.
SO IN THIS SHORT PERIOD OF TIME, WE'RE WITNESSING A CITY CONFERENCE, WHICH I WAS ASKED TO WELCOME EVERYONE TOO.
I THOUGHT THAT WOULD BE APPROPRIATE.
UM, SO WE'VE GONE FROM ZERO SPONSORSHIPS TO A HUNDRED THOUSAND DOLLARS SPONSORSHIP IF YOU WANT TO HAVE PRIVATE TIME AND A DINNER WITH A CONTROLLER AS WE TALK, I UNDERSTAND IT'S BEING ALTERED.
UH, I'D LIKE TO THINK I DON'T HAVE A LEAK IN MY OFFICE.
I'D LIKE TO THINK SOMEONE FINALLY IS USING GOOD JUDGMENT AND KNOWS THAT THIS IS NOTHING BUT THE APPEARANCE OF PAY TO PLAY IN HOUSTON, TEXAS, DONE WITH CITY RESOURCES, CITY EMPLOYEES, AND IT'S DAMAGED.
HOUSTON, UH, MR. HOLLANDS, THE CONTROLLER, IS A PART OF THE SELECTION TEAM THAT CHOOSES THE UNDERWRITERS.
THERE'S A FINANCE GROUP MADE UP, A LEGAL, THE FINANCIAL DIRECTOR, THE CONTROLLER, AND THEY RATE THE PEOPLE THAT WOULD LIKE TO DO BUSINESS WITH THE CITY OF HOUSTON BOND UNDERWRITERS.
AND WE WOULD LIKE EVERYONE TO KNOW THAT EVERYONE IS WELCOME IF YOU'RE AN EXISTING UNDERWRITER, IF YOU'RE A LARGE ONE, SUCH AS GOLDMAN SACHS HAVE LOTS OF RESOURCES, OR YOU'RE A STARTUP UNDERWRITER, PERHAPS A MINORITY FIRM THAT DOES NOT HAVE THE RESOURCES.
IF YOU HAVE A HUNDRED THOUSAND, YOU CAN GO TO DINNER WITH THE CONTROLLER OR ARE, THERE'S DIFFERENT LEVELS.
LOIS, I BELIEVE I SAW WAS 10,000, WHICH YOU GET YOUR NAME AND LOGO ON THE WEBSITE.
I'LL SAY AGAIN, I'M, I'M DISAPPOINTED THIS WAS BROUGHT TO ME.
I AM ASKING CITY EMPLOYEES NOT TO GO TILL TUESDAY.
IF IT ACTUALLY GOES FORWARD, WHICH I WOULD ADVISE THE CONTROLLER TO CANCEL IT, I WON'T BE THERE.
CITY EMPLOYEES SHOULDN'T BE THERE.
IT'S UNACCEPTABLE TO HAVE SPONSORS AT ANY LEVEL.
AND THEN THE MONEY IS FORWARDED TO A NONPROFIT THAT THE CONTROLLER CONTROLS.
AND IT MAY BE A VERY WORTHWHILE, I'M CERTAIN HOUSTON FORWARD FUND DOES
[00:05:01]
GOOD CHARITABLE WORK, BUT THE DIRECT CONTROLLER DOES HAVE THE INFLUENCE OF WHERE THOSE FUNDS ARE SPENT.SO OBVIOUSLY, UH, I'M ALARMED, I'M CONCERNED WHAT IT DOES TO OUR CREDIT RATING.
UH, ONE OF THE ISSUES THAT THE RATING INSTITUTIONS USE IS MANAGEMENT OF CITY FINANCES.
AND I DON'T BELIEVE THIS WOULD PASS ANYONE'S TEST.
SO WE WILL CONTINUE IN MY ADMINISTRATION TO ASSURE TRANSPARENCY.
I'VE SAID REPEATEDLY, EVEN LAST WEEK WHEN WE WERE LOOKING AT PROPOSAL TO RAISE TAXES THAT WE'RE GOING, WE'RE NOT GONNA RAISE TAXES UNTIL WE ELIMINATE WASTE DUPLICATION, CONFLICTS OF INTEREST, AND EVEN CORRUPTION.
EVERY TIME I THINK I'VE SEEN EVERYTHING SINCE I WAS SWORN INTO JANUARY, THEN I RUN ACROSS SOMETHING LIKE THIS.
AND THE ONLY THING I WOULD ASK OF YOU IS TO REVIEW IT.
YOU REACH YOUR OWN CONCLUSIONS.
I WILL SAY AFTER SPENDING 50 YEARS IN GOVERNMENT, THE DIFFERENCE WOULD BE IN AUSTIN, WE DON'T VOTE ON VENDORS, WE VOTE ON POLICY.
SO THIS IS KIND OF A NEW EXPERIENCE FOR ME TO SEE.
AND IT'S SHOCKING THAT CITY OFFICIALS REACH OUT TO VENDORS AND SET GOALS FOR WHAT THEY NEED TO MEET AS A SPONSOR FOR A CITY SPONSORED HELD EVENT, WHICH IS SUPPOSED TO BE INFORMATIVE AND INVITING FOR CITY BUSINESS.
IF YOU WANT TO DO BUSINESS WITH THE CITY OF HOUSTON, THIS WAS SENT OUT.
AND LIKE I SAID, I HADN'T PAID A LOT OF ATTENTION TO IT, NOT MY DEPARTMENT, BUT OUR PHONE STARTED RINGING.
IF WE DON'T CONTRIBUTE AT THE LEVEL OF OUR COMPETITOR, CAN WE STILL GET CITY BUSINESS CAN? IF WE DON'T, WHAT ARE THE REPERCUSSIONS FOR KEEPING THE CITY BUSINESS FOLKS? I'M DISAPPOINTED, BUT I'M DOING MY JOB.
WE'VE WRITTEN A LETTER TO ALL THE CURRENT INSTITUTIONS AND POTENTIAL OF ASSURING THEM THAT THERE'S AN OPEN DOOR POLICY HERE.
IT'S NOT BASED ON YOUR ABILITY TO PAY TO DO CITY BUSINESS.
WITH THAT, THERE'S NOT MUCH MORE I HAVE TO OFFER THAN I'D RATHER BE WORKING ON PUBLIC SAFETY INFRASTRUCTURE AND CONTINUING MAKING THIS A GREAT CITY.
WE HAVE GREAT PEOPLE, GREAT CITY, BUT WE HAVE SOME REAL CHALLENGES.
AND I'M SORRY I HAVE TO DEAL WITH THIS THIS MORNING, BUT IT OUGHT TO NOT GO FORWARD.
I'M ENCOURAGING YOU NOT TO GO UNLESS HIT THE RESET BUTTON AND DO THIS PROPERLY.
INVITE EVERYONE TO COME TO A TRUE FINANCIAL CONFERENCE WHERE THEY'LL LEARN ABOUT THEIR OPPORTUNITIES IN THIS GREAT CITY, SOON TO BE THE THIRD LARGEST CITY IN THE NATION.
I'LL OPEN UP TO ANY QUESTIONS SINCE YOU STARTED GETTING CALLS TWO WEEKS AGO NOW, SIR, SINCE YOU STARTED GETTING CALLS TWO WEEKS AGO, HAVE YOU REACHED OUT TO YOUR CONTROLLING HIMSELF? NO, I HAVE NOT.
OR IS THIS THE FIRST TIME HE'S LIKELY THIS IS, THIS IS, THIS IS MY DECISION TO MAKE IT A TRANSPARENT ISSUE AND ASSURE THE PUBLIC, UH, YOU KNOW, THE INSTITUTIONS, THE BOND COUNCIL IS A PRETTY CLOSE KNIT GROUP OF PEOPLE.
I UNDERSTAND THEY'RE DISCUSSING IT.
WHAT DO WE DO? WHAT DOES THIS MEAN? SO, NO, I'VE, UH, BEEN RUNNING MY OFFICE LOOKING OUT FOR THE CITY, AND THIS IS SOMETHING THIS MESS WAS BROUGHT TO ME, UM, BY INSTITUTIONS.
AND THEY ALSO ARE VERY, VERY CONCERNED THAT IT VIOLATES SEC RULES, WHICH IS UNDER REVIEW.
MAYOR, WHAT WOULD YOU LIKE TO SEE HAPPEN TO THE CONTROLLER HERE? ARE YOU CALLING FOR ANY SORT OF LIKE DISCIPLINE? NO, NO.
I'M, I'M ASKING THE, THE CITY OIG OFFICE TO SEE IF IT'S IN CONFLICT.
UH, WITH OUR CITY ETHICS, IT MAY BE A REAL ALARM THAT MAYBE WE NEED TO REVIEW THE CITY ETHICS POLICIES.
UH, THIS WAS DONE LARGELY IN PRIVATE.
[00:10:01]
IT WAS, UH, USING CITY EMPLOYEES, CITY RESOURCES.SO WHEN I HEARD OF IT, SURE, CITY OF HOUSTON INVESTOR CONFERENCE SPONSORED BY THE CITY OF HOUSTON.
DO I WANNA WELCOME PEOPLE TO OUR GREAT CITY, ASSURE THEM THAT EVERYONE'S GONNA HAVE A LEVEL PLAYING FIELD AND BE VERY TRANSPARENT.
UH, THAT'S THE WAY I RUN MY SHOP.
THAT'S MY COMMITMENT TO THE CITY OF HOUSTON.
UH, THE CONTROLLER ACTUALLY INVITED, IF YOU'LL LOOK LAST WEEK, FOR FOLKS TO COUNSEL AND OTHERS TO PARTICIPATE.
AND HE'S REFERENCED THAT I WOULD GIVE THE, THE, UH, OPENING WELCOMING REMARKS, WHICH I DO PRETTY ROUTINELY.
BUT, UH, WHEN THIS WAS BROUGHT TO ME, I'M GONNA BE HONEST WITH YOU, I WAS SHOCKED THAT SOMEONE WOULD PUT IN WRITING THE BENEFITS TO A FUND THAT HE CONTROLS UP A HUNDRED THOUSAND DOLLARS.
HOW WOULD YOU LIKE, PUT YOURSELF IN THE SHOES OF A STARTUP INSTITUTION OR, OR A COMPETITOR.
IT'S A VERY COMPETITIVE BUSINESS TO BE CHOSEN AS, UH, UNDERWRITERS.
WHAT IF THROUGH THE INDUSTRIES YOU HEAR THAT THIS LARGE CONCERN IS DOING IT? SHOULD YOU DO IT OR NOT DO IT? AND THEN THEY RAISE THE ISSUE OF THE SEC RULES.
THEY DON'T WANT TO VIOLATE STANDARDS OR RULES, BUT THEY'VE NEVER EXPERIENCED IT IN HOUSTON.
I I CHECKED WITH OTHER CONTROLLERS, IT'S JUST UNIMAGINABLE THAT A CITY ELECTED OFFICIAL DOING CITY BUSINESS WOULD LOOK FOR SPONSORS FOR ANY REASON.
AND THEN YOU GET UP TO A HUNDRED THOUSAND DOLLARS THAT SEPARATES THE BIG BOYS FROM THE LITTLE ONES REAL QUICK.
SO IF YOU'RE A STARTUP HOUSTON FIRM AND YOU'RE COMPETING WITH A MAJOR NEW YORK INSTITUTION, I WOULD THINK YOU HAVE REASON TO BE CONCERNED.
SO TRANSPARENCY IS WHAT I'M CALLING FOR ACCOUNTABILITY AND ASKING PEOPLE, IT OUGHT TO STOP TO BE CLEAR.
DO YOU THINK THAT THESE COMPANIES WERE GIVEN SPECIAL PREFERENCE OR IS IT, I I DON'T KNOW.
I JUST KNOW IT'S WRONG AND VIOLATES EVERYTHING I STAND FOR.
SINCE I WAS SWORN IN OF TRANSPARENCY AND, AND I TALKED ABOUT CONFLICTS OF INTEREST LAST WEEK, WHEN PEOPLE DON'T RAISE TAXES, THERE ARE CONFLICTS OF INTEREST STILL BEING PRACTICED.
AND THIS IS AS GLARING AS ANYTHING I'VE SEEN.
MAYOR, DO YOU KNOW IF ANY MONEY HAS CHANGED HANDS? NO.
HAS THERE BEEN A REFERRAL TO ANY LAW ENFORCEMENT AGENCY FOR REVIEW? NO.
I'M NOT GONNA COMMENT ON THAT.
I KNOW, LIKE WHEN YOU'RE LOOKING AT OTHER CITY EVENTS, IT'S NOT NECESSARILY UNCOMMON FOR THEM TO HAVE SPONSORS, FOR EXAMPLE, THE 4TH OF JULY EVENT.
BUT WE HAVE EVERY SUMMER SPONSORED BY SHELL.
BUT I'M KIND OF CURIOUS WHEN YOU'RE LOOKING AT THAT SORT OF EVENT SPONSORED BY SHELL VERSUS
AND I WAS CURIOUS TOO, YOU WRITE IN THIS LETTER THAT YOU NEED TO SEE THIS ADDRESSED BEFORE ANY OF YOUR STAFFERS ATTEND THIS.
HOW TO WHAT LEVEL WOULD IT NEED TO BE ADDRESSED IN ORDER FOR YOU TO ATTEND AND LET YOUR STAFF ATTEND? SAY WHAT? YOU SAID THAT YOU WOULD NOT LET YOUR STAFF.
I'M NOT GONNA GO WHERE IT, THERE IS THE APPEARANCE OF PAY TO PLAY.
THAT'S WHAT WE'RE TRYING TO END.
AND THE, UH, FACT THAT IT'S THE APPEARANCE, IT'S BEING, UH, PREPARED.
ALL THIS, EVERYTHING THAT'S INVOLVED IN IT WAS DONE WITH CITY RESOURCES.
AND THEN HOW MUCH, I MEAN, WHERE'S THE TRANSPARENCY OF, DO YOU HAVE ANY IDEA WHO'S ALREADY CONTRIBUTED OR IS A SPONSOR? NO, IT'S NOT.
THEN YOU REFER THAT MONEY TO A NONPROFIT THAT YOU CONTROL, MAY DO GREAT WORK AT THE NONPROFIT, BUT I'M ASSUMING IF YOU SEND THEM SIGNIFICANT AMOUNT OF MONEY, THEY'LL LOOK TO HIM FOR ADVICE AND COUNSEL, HOW YOU'D LIKE TO SPEND IT.
IT'S THE ONLY WAY I CAN DESCRIBE IT.
MAYOR, HOW MUCH MONEY IS ON THE TABLE HERE IN TERMS OF THE BOOK OF BUSINESS THAT THESE FINANCIAL INSTITUTIONS ARE COMPETING FOR? ARE WE TALKING ABOUT WE RUN A $7 BILLION BUSINESS AND, UH, WE SELL BONDS, WE INVEST, WE HAVE BANK ACCOUNTS, WE HAVE PEOPLE THAT HELP US MANAGE OUR FINANCES.
[00:15:01]
AND THERE AGAIN, GREG, IT'S DONE COMPETITIVELY AND THERE IS A FINANCE WORKING GROUP AND THE CONTROLLER HAS VERY CLEAR STANDING IN THAT GROUP ALONG WITH LEGAL, THE FINANCE, SOME OUTSIDE COUNSEL, BUT FROM THE, THE BEGINNING OF THE APPEARANCE OF PAY TO PLAY THAT WENT OUT TO THE INDUSTRY, UH, I, I WAS BROUGHT THIS NOT BY THE CONTROLLER'S OFFICE, BUT BY AN INSTITUTION SEEKING ADVICE.DO WE OR DON'T WE? WE'RE DOING CURRENT BUSINESS WITH YOU AND WE DON'T WANNA BE LEFT OUT.
WHAT DO YOU THINK MAYOR? AND QUITE FRANKLY, I SAW IT AND COULD NOT BELIEVE THAT SOMEONE IN THE CONTROLLER'S OFFICE DIDN'T SAY, NO, CAN'T DO IT.
YOU NEED PEOPLE AROUND YOU THAT KEEP YOU, YOU.
IF SOMEBODY, I DON'T EVEN KNOW WHO CAME UP WITH THE IDEA, OBVIOUSLY THE BUCK STOPS WITH THE ELECTED OFFICIAL, BUT, UH, I DON'T KNOW OF ANYONE THAT COULD LOOK AT THIS AND THINK IT'S PROPER AND IT'S BEING ALTERED, PROBABLY SPECULATING BROUGHT ON BY THE PRESSURE.
MAYBE THE INDUSTRY IS ACTUALLY SAYING WE'RE NOT GONNA SHOW UP IF THAT'S THE CONDITIONS.
BUT YOU KNOW, LIKE I SAID, I'M, I'VE TOLD YOU EVERYTHING I KNOW.
I'VE TOLD YOU THE ACTION I'M TAKING, I'M SOUNDING AN ALARM.
IF YOU GO FORWARD, I WON'T BE DOING A WELCOMING ADDRESS.
AND I WOULD ENCOURAGE CITY EMPLOYEES AND OTHERS TO STAY AWAY.
CONCEIVABLY, IT COULD BE A, A, A RESTART BUTTON AT SOME POINT AND DO IT RIGHT, SHOULDN'T BE ABOUT SPONSORSHIPS OR RAISING MONEY EVEN FOR A WORTHWHILE COST.
SO WITH THAT SAID, I APPRECIATE Y'ALL BEING HERE.