Texas Railroad Commissioners’ Close Ties to Oil and Gas Industries That They Oversee Raise Questions about Ethical StandardsPress Release

New series of reports shows need for ethical reforms and greater oversight of the state’s oil and gas regulatory agency

 LAREDO, TEXAS — Weak ethics rules and lackluster oversight by the Railroad Commission of Texas raises questions about the independence of the three elected members of the commission, according to a report from Texans for Public Justice and Commission Shift. After massive electricity blackouts took Texans’ lives and livelihoods, the Railroad Commission — which is the state’s oil and gas agency — joins the list of state agencies facing calls for reform.

The first in a series of reports called Captive Agency focuses on personal financial statements submitted by Railroad Commission Chair Christi Craddick, demonstrating her close ties to the oil and gas industry she oversees. Comparing the statements, required by the Texas Ethics Commission, to the Railroad Commission docket, the report finds several instances where Commissioner Craddick did not recuse herself from decisions impacting companies in which she had financial interests. Forthcoming reports examining personal financial statements submitted by Commissioners Wayne Christian and Jim Wright will show that these issues are structural, not personal, and that the agency’s  conflicts policies need to be  strengthened.

“We can all agree that agency leadership should not be so closely tied to the oil and gas industry it oversees,” said Virginia Palacios, executive director of Commission Shift and co-author of the report. “It’s time for lawmakers to reform conflict of interest policies at the Railroad Commission.”

Key Findings from the First Captive Agency report:

• Commissioners own stakes in oil and gas entities that do business with the agency. 
• The Railroad Commission rules about when commissioners need to recuse themselves from items on the docket are weak and unclear.
• The three railroad commissioners overseeing the state’s oil and gas industry are elected in expensive, statewide campaigns that are overwhelmingly funded by the oil and gas companies that they regulate.
• Commissioners are allowed to take campaign contributions throughout their six-year terms, except during a six-month period surrounding the regular legislative session that occur every two years.

“This report examines several commission decisions that posed potential conflicts with a commissioner’s personal investments,” said Andrew Wheat of Texans for Public Justice, co-author of the report. “In each case, the agency’s ethics and recusal policies proved to be so lax or vague as to be virtually meaningless.” 

Key Policy Recommendations from Commission Shift:

• Demonstrate no financial interest: Before serving, commissioners should be required to divest from the industries they regulate, as in Oklahoma.
• Limit campaign contributions: Railroad Commission candidate fundraising should be limited to the 18-month period preceding that election, with limits of $5,000 per election cycle , just like statewide judicial races. 
• Improve financial disclosure: Texas should dramatically increase the maximum values reported in personal financial disclosures, which currently max out at just “$44,630 or more.” 
• Strengthen and clarify recusal standards: Commissioners should recuse themselves from cases involving companies with which they have personal equity, income, business or if the company donated more than $1,000 to their campaign in the last election cycle.
• Use a neutral forum for contested cases: Move to independent hearings through the State Office of Administrative Hearings instead of in-house administrative law judges.
• Reduce bias in legislative accountability: Lawmakers who are family members of railroad commissioners or executive directors should be required to recuse themselves from decisions involving the agency and should not be allowed to sit on committees that oversee the agency.

Look for additional reports in the Captive Agency series in the coming weeks. Visit the Commission Shift website, and follow us on Instagram, Twitter, Facebook and LinkedIn.

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Commission Shift is a Texas-based nonprofit building public support to hold the Railroad Commission of Texas accountable to its mission in a shifting energy landscape. We educate and organize a wide array of Texans to build support for changes at the Railroad Commission that improve the agency’s function, transparency, and accountability to the many people and places impacted by the oil and gas industry.

Texans for Public Justice is an Austin-based non-profit organized in 1997 to take on political corruption and corporate abuses in Texas. Through research and public advocacy, TPJ participates in  debates on political reform, consumer protection, civil justice and corporate accountability.