Wendy Davis fined for ethics violation Former state Sen. Wendy Davis paid $5,000 to settle a nearly three-year old ethics dispute

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AUSTIN — Former state Sen. Wendy Davis has been fined by a state regulator for failing to properly disclose her business relationships with two lobbyists, capping a years-long ethics inquiry that erupted into a flashpoint during her 2012 re-election campaign.

The Texas Ethics Commission, in an order released this week, ruled on a complaint lodged nearly three years ago by Davis's Republican opponent, Mark Shelton, toward the end of a rancorous multi-million dollar state Senate campaign that Davis narrowly won.

The commission found "credible evidence" that Davis, an attorney, ran afoul of state law by failing to report on personal financial disclosure forms her connection to lobbyists registered on behalf of two law firms she did work for. The commission also ruled that Davis did not disclose the two law firms as entities that employed lobbyists and also compensated her.

The violations occurred on reports detailing Davis's financial activity for calendar years 2010 and 2011.

As part of an agreement, Davis has paid a $5,000 fine, the largest levied by the commission in nearly a year, but said she fully disclosed everything required under state law when filling out her financial statements.

"While I disagree with the TEC's decision and believe I acted with full transparency, I respect the ruling and consider the matter closed," Davis said in a statement.

Davis, a Fort Worth Democrat best know for her 2013 marathon filibuster of a bill to impose stringent abortion requirements, won a seat in the state senate in 2008. She ran as the Democratic nominee for governor against Republican Greg Abbott in 2014, losing by double digits.

On the campaign trail, Abbott repeatedly hounded her on ethics issues involving voting on bills affecting clients of her law firm, most notably legislation governing a toll-road project for which the North Texas Tollway Authority hired Davis's law firm.

The commission publicly released its ruling against Davis this week, but voted behind closed doors to issue a fine on Feb. 12.

Davis signed the commission's order in late April, following up with a strongly-worded letter last week to the TEC in which she said regulators got it wrong but that she is opting "to put this matter behind me as promptly and economically as reasonably possible." Agreeing to comply with a commission is not an admission of guilt.

Davis's lawyer, Renea Hicks, also fired off a letter to the commission, saying the state regulator was misapplying disclosure laws to punish Davis.

Shelton's ethics complaint focused on the Newby Davis law firm, which Davis formed in March of 2010 with Brian Newby, who once served as former Gov. Rick Perry's chief of staff, and another law firm called Cantey Hanger. Davis was an attorney "of counsel" with Cantey Hanger until last year.

Newby Davis and Cantey Hanger were disclosed on the personal financial disclosure statements as sources of occupational income, but the commission says Davis did not fill out a section of the form detailing she and a registered lobbyist had a common "interest" in a business.

Newby registered as a lobbyist for both law firms in 2010 and 2011. Another attorney, Marcy Weldin Foster, registered as a lobbyist for both firms in 2011.

Davis has said she was unaware that Newby had ever registered and corrected her filing for 2010 after finding out, but maintained that Newby never actually lobbied and was not compensated for lobbying. She also argued that her "of counsel" status with Cantey Hanger did not constitute a "substantial interest" with the firm that would require the type of disclosure sought in the complaint.

But the commission rejected her arguments.

Davis "had ready access to both Mr. Newby, as her business partner, and Ms. Foster, as an employee of her firm, and could have asked them whether they were lobbyists," the commission wrote in its ruling.

Davis's law firm employment and connection to lobbyists became a hot topic during her race with Shelton, who called for a criminal probe into the NTTA issue (the Public Integrity Unit closed its investigation of Davis and the NTTA last year without finding any issues worth pursuing).

Shelton also launched TV ads accusing Davis of "hiding her lobbyist business partner "on state filings and that her own law firm lobbied the same legislature in which she casts votes. Davis responded with ads of her own accusing Shelton of deceiving voters.

Shelton said he felt vindicated by the commission's ruling.

"All this time later," Shelton said in an interview, "the ethics commission has shown we were right about all of this."