ETHICS COMPLAINTS FILED: PERRY FAILED TO DISCLOSE $202,400 DEBT ON COLLEGE STATION HOUSE IN 2007, 2008, 2009
July 6th, 2010

Perry Also Failed to Report Rental Income from House He Claimed as Residential Homestead While Living in Rental Mansion

Last Friday, Texas Democratic Party Executive Director Ruben Hernandez filed two complaints with the Texas Ethics Commission (TEC) regarding Rick Perry’s failure to properly report required information on his personal financial statements in 2007, 2008, and 2009. Perry failed to report the identity of the person who had an interest and to whom he paid notes on a house he bought in College Station, Texas in April, 2007. Perry also failed to report rental income on the house on his 2007 and 2008 PFS.

“For three years, the Governor failed to report over $200,000 in debt he owed on a house in College Station, as well as over $11,000 in rental income he received from the property,” Hernandez explained, noting that Perry’s reporting failure involved the same house he tried to claim as his residential homestead on January 1, 2008, while he was living in a taxpayer funded rental mansion west of Austin before the Governor’s Mansion caught fire, according to Associated Press reports from August 12 and 13, 2009. The Texas Constitution requires the Governor to live in Austin.

“While Rick Perry was living in a taxpayer-funded rental mansion, he got caught with his hand in the cookie jar when he claimed a residential homestead exemption on a College Station house where he never lived,” Hernandez said, “and for three years, the Governor didn’t report his debt on that same house, as required by law.”

Hernandez noted that just a few weeks ago, a non partisan organization, Texans for Public Justice, filed a TEC complaint because the Governor failed to itemize expenditures related to his rental mansion. He also observed that Perry surely understood the debt reporting requirement, because Perry has reported similar debts during his twenty five year political career, including a car loan on a Mercedes Benz.

“Apparently Rick Perry has a problem following ethics laws when it come to housing, and it makes you wonder what he’s trying to hide,” Hernandez concluded.

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Brief description of complaint attached. View complain at txdemocrats.org

Summary of TEC Complaints

1. Complaint: Perry Failed to Disclose $202,400 in Debt on Personal Financial Statements in 2007, 2008, 2009

Rick Perry violated Texas Government Code, Sec. 572.022(c)(2) because he failed to disclose the identity of a person who retained an interest in real property that he owned and he also violated Sec. 572.022(b)(5) because he failed to identify a person to whom notes were due in his Personal Financial Statements for 2007, 2008 and 2009.

  • According to the records of the Brazos Co. Appraisal District, on April 11, 2007, Perry bought a house at 1016 Leopard St. in College Station.
  • According to the Brazos Co. Abstract Company, the property was subject to a deed of trust executed in favor of PrimeLending, a PlainsCapital Company, dated April 11, 2007, securing a note for $179,900 and a subordinate deed of trust executed in favor of the same lender, dated on the same date, securing a note for $22,500 until February 9, 2010.
  • According to copies of tax returns, Perry claimed a deduction from his federal income taxes based on the interest he paid on the mortgage for this house.
  • Although Perry disclosed his ownership of the house on his Personal Financial Statements in 2007, 2008 and 2009, he did not disclose the associated debt or the identity of the lender who retained an interest in the property via deeds of trust during each of those years.

Texas Government Code Sec. 573.022(c)(2) requires the disclosure of PrimeLending -PlainsCapital as “persons retaining an interest in the property.” Perry also should have disclosed the notes pursuant to Sec. 572.022(b)(5), which requires the “identification of each guarantor of a loan and identification of each person or financial institution to whom a personal note or notes or lease agreement for a total financial liability in excess of $1,000 at any time during the year, and the category of the amount of the liability”

2. Complaint: Rick Perry violated Texas Government Code Sec, 572.022(b)(4) because he failed to disclose rental income of his Personal Financial Statements in 2007 and 2008.

  • According to Pick Perry’s 2007 and 2008 tax returns, he received rental income of $5,200 and $6,240, respectively for a house at 1016 Leopard St. in College Station. Perry did not disclose this rental income on his Personal Financial Statements for 2007 and 2008.

Texas Government Code Sec. 572.022(b)(4) requires the disclosure “of each source and the category of the amount of income in excess of $500 derived from each source from interest, dividends, royalties and rent of this rental income.”