KPRC Obtains Emails Connecting Lead Sponsor to Hollins’ Office

Hollins’ Call for Investigation of the State of the City Event Falls Flat

Last night Mario Diaz, an investigative reporter for KPRC, broke a story that the station had obtained emails Loop Capital, the lone $50,000 sponsor for Hollins’ conference, receiving a large contract around the time it committed to the sponsorship.

The contract in question was to manage the placement of financing for improvements at IAH. The improvements will ultimately be paid for by United Airlines but the is using bonds to finance them.  An August 1 email showed that United was pressing for Bank of America to lead the placement of the bonds. However, on August 16, Vernon Lewis, Hollins’ representative on the Finance Working Group, sent an email to “Ray and the Loop Capital team” to inform them the firm had been selected to “co-lead” the financing.

So, sometime between August 1 and August 16, Loop Capital was added as the co-leader of the placement. We do not know exactly when Loop Capital committed to be the “Platinum” sponsor for Hollins' event, but it must have been either shortly before or after its appointment to this lucrative contract.

Meanwhile, to divert attention away from the growing controversy involving his solicitation of six-figure sponsorships for his office’s investor conference, Hollins has called for an OIG investigation of the recent State of the City (SOTC) event co-sponsored by Houston First¹ and the Greater Houston Partnership².  

So, in fairness, I thought I should look at the SOTC event to see if it was comparable to Hollins’ event. It is not. Here is what I found.

Let’s begin with transparency. When I contacted the City about the SOTC, I was immediately sent an accounting of the event and a list of sponsors.  In contrast, we still do not have an accounting of Hollins’ event and still do not know where the sponsorship money is going other than a donor-advised fund at the Great Houston Community Foundation. We have no information on who will actually control the disbursement of the funds or whether any money has already been disbursed.

The SOTC lunch was sponsored by the Greater Houston Partnership (GHP) for decades until a kerfuffle between Mayor Turner and the GHP over its refusal to oppose the State’s new voting restrictions. Turner pulled the event in retaliation and Houston First became the new sponsor. This year, the event was co-sponsored by Houston First and the GHP.

The event took in about $582,000 and had expenses of $472,000, leaving about $110,000 in excess proceeds. Those were split with roughly two-thirds going to GHP and one-third to Houston First.

The largest sponsors of the event paid $25,000. They were the Kinder Foundation and Chevron. There was one $15,000 sponsor, Enchanted Rock Energy. None of the three are City Vendors.

There were another 105 sponsors that donated between $1,500 and $10,00. The average was about $4,700. In return, the sponsors received certain special privileges, including a VIP reception to which Hollins referred. However, rather than being a private dinner, several hundred tickets were made available to the sponsors for their employees and guests to attend the reception which was held just before the lunch.

The overwhelming majority of the sponsors are GHP members. Looking down through the guest list, I would break them down into three groups. Certainly, there were City vendors among the group. There were also sponsors which have regulatory matters before the City. The final group appeared to be long-time GHP supporters with no direct interest in the City. The GHP and Houston First both told me that Whitmire played no role in soliciting sponsorships. I can tell you from attending this event many times over the years, that almost all of the sponsors have been sponsors of this event for many years.

I personally have never liked that the Mayor’s State of the City address was sponsored by an outside entity, that citizens had to pay hefty ticket prices to attend, or that it was held on a weekday at lunch when most Houstonians are working. When I was running for mayor, one of my campaign promises was that the State of the City would be held on a Saturday and would be open to the public, free of charge. I understand that Whitmire may consider changes in that direction for future State of the City addresses.

But regardless, the character of the two events could not be more different. For State of the City luncheon, we know exactly who contributed and where the money went. For Hollins’ event, we are still in the dark on both accounts.

As far as I am aware, an elected official has never used a City sponsored event to benefit a charity where that official chose the charity. I think allowing one elected official to make such unilateral decisions about such events, especially when substantial sponsors are involved is a very bad ide - whether it is the mayor, controller, or anyone else,

Hopefully, the Whitmire administration and Council will use this controversy as an opportunity to codify exactly how such events will be conducted in the future. The rules should include conflict-of-interest provisions, procedures for the solicitation of sponsorships, and, especially, how any excess proceeds are to be distributed.

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Note 1- Houston First is a governmental corporation wholly owned by the City of Houston, that operates the George R. Brown Convention Center and some other related facilities and is responsible for marketing the City as a convention destination.

Note 2- The Greater Houston Partnership is a non-profit organization and is the function equivalent of a chamber of commerce for the Houston region.