For Van de Putte, Questions About Private Work, Public Role

As a practicing pharmacist and former board director of the Texas Pharmacy Association, state Sen. Leticia Van de Putte, the Democratic candidate for lieutenant governor, has raised some eyebrows over the years by sponsoring dozens of bills that affect her profession.

Her explanation is not unusual in the Texas Capitol: Who better than a pharmacist to write legislation concerning pharmacists?

Her campaign is using similar logic to explain another dual role: Van de Putte’s advocacy for minority-owned investment banking firms in the Legislature while serving on the advisory board of one of the companies, which later paid her $2,000 a month to consult for it.

There is no evidence that Van de Putte broke any rules, and her campaign says her dealings never posed a conflict of interest. If elected lieutenant governor — where she would continue to make a $7,200 annual legislative salary — she has said she will give up outside employment.

But as she reaches for one of the most powerful jobs in Texas, the blurred lines between her private work and public role are giving rise to familiar questions in a part-time Legislature, where low pay and lax disclosure laws have fostered the perception of conflicts of interest.

“This is a conflict of interest problem, clearly,” said Craig Holman, a government ethics expert at the liberal watchdog group Public Citizen, based in Washington. “But the structure of state government in Texas nurtures it.”

Van de Putte declined to be interviewed for this article, but in a written statement vowed to run “an open and transparent campaign, just as I have led as senator and will lead as lieutenant governor.”

Her campaign manager, Scott Remley, noted that Van de Putte has released her full tax returns, while her Republican opponent, state Sen. Dan Patrick, has not.

Van de Putte has said over the years that she assiduously avoids mixing private and state business. The state forced her to sell her pharmacy in the 1990s because its contract with the joint state-federal Medicaid program was found to violate a constitutional conflict of interest provision.

The ruling was later overturned, which allowed other health care professionals to serve in state government while keeping their jobs. But it came too late for Van de Putte, who says she lost $100,000 on the sale.

Over two decades in public office, she has sponsored more than 60 bills affecting pharmacists. The Texas Pharmacy Association recently applauded her pro-pharmacy legacy, while its political wing endorsed her and gave her a $10,000 contribution.

“We are very fortunate to have one of our own in the Texas Senate,” the group said in its 2013 annual report. “She has been a driving force for the profession and carried a number of the bills which will benefit all of us.”

Remley called Van de Putte’s ability to draw on her professional experience when she files pharmacy bills “how Texas’ Legislature is supposed to work — with legislators using their real-world experience to help put Texas first.”

Van de Putte’s ties to the investment banking business have been less visible than the pharmacy work. Her association with Southwestern Capital Markets stretches back to at least 1992, when Robert G. Rodriguez, a distant cousin of hers and founder of the company, put her on an unpaid advisory board.

The goal, Rodriguez said, was to bring together people with a “background in the public financing, or tax dollars involved in financing.” The senator’s campaign said she advised the company about health care finance issues.

Several months after being named to the board, Van de Putte, then a House member, filed a bill aimed at getting more business for firms like Southwestern.

The bill would have required state agencies to make a good-faith effort to give 20 percent of their bond contracting business to women- and minority-owned companies based in Texas.

When she explained her bill before a House committee, she told legislators they would get firsthand testimony from “some folks who will let you know what’s happening in the investment banking business.”

One of them was Bexar County Commissioner Paul Elizondo, a longtime friend and mentor, who supported giving more business to such firms. The other was Rodriguez, head of the only company that sent representatives to testify in support of the bill.

Van de Putte did not mention that she served on the advisory board but said her bill would be “a real helping hand to those Texas folks who are doing business in this area.”

Remley said disclosing an unpaid role with Southwestern was unnecessary because it was “not a board in the traditional sense” and did not make decisions. Van de Putte, he said, as a member of the Mexican American Legislative Caucus and the committee that hears such bills, was the bill’s natural author.

The bill did not become law, but initiatives aimed at giving more work to women- and minority-owned firms were adopted, and Southwestern had some success breaking into state bond deals, Rodriguez said.

A few years later, at a time when his company was doing state bond work, he hired Van de Putte as a consultant for $2,000 a month, a role she performed from 2000 to 2002. In 2001, she wrote another bill to give preference to state contractors with headquarters in Texas, but it did not single out companies doing bond business like the 1993 bill did. It did not pass, either.

Remley said her support for local firms stemmed not from a desire to help Southwestern but from her belief that state tax dollars should be spent in Texas.

As for what she did at Southwestern, Rodriguez recalled paying the senator to develop contacts and foster “good will” at local government entities where his company sold its services.

“She could not, quote, do anything for us, relative to the state where she is a legislator, but you have examples today of state reps that are employed by investment banks,” he said. “They can go to look and secure finances with school districts and cities and counties.”

Remley gave a different description of Van de Putte’s work for the firm. He said she was paid to give Southwestern advice on a possible expansion into debt financing in the health care field. In 2007, when she was planning to go to work for the investment banking firm again, she told The San Antonio Express-News that she would “never get involved with city, county or school district bonds,” calling that “way too close to the ethical line.”

She chose not to go back to work for Southwestern, her campaign said.

Rodriguez said his rather dismal performance in state agency bond deals shows that there was no ethical conflict involving the senator. “She was out there helping us, but neither she, nor I, nor us, obviously, got any benefit,” he said. “There’s nothing here to show we got any benefit out of it.”

Disclosure: The Texas Pharmacy Association was a corporate sponsor of The Texas Tribune in 2012. A complete list of Texas Tribune donors and sponsors can be viewed here.