Agency has many ties to builders

Consumer groups see the Texas Residential Construction Commission as a puppet of the Texas Association of Builders. The TAB says its interest is simply participation in government, taking advantage of opportunities available to any citizen. But thousands of pages of documents released over the past several months show the keen interest of builders' groups in the agency's workings. Most of the documents came from the state comptroller's office, which conducted an inquiry into the TRCC at the request of state Rep. Todd Smith, R-Euless.... Rep. Jessica Farrar, D-Houston, introduced a bill last year that would have made the TRCC free to homeowners, required continuing education for builders and allowed the commission to take action against builders who abandoned jobs... "It's the fox guarding the henhouse," Farrar said... See related Reports: Texas Comptroller Condemns TRCC Builder Protection Agency &  WFAA News 8 Report - $1,000 Lunch Scandal

Star-Telegram
Agency has many ties to builders
By ANDREA JARES
STAR-TELEGRAM STAFF WRITER

Consumer groups see the Texas Residential Construction Commission as a puppet of the Texas Association of Builders. The TAB says its interest is simply participation in government, taking advantage of opportunities available to any citizen.

But thousands of pages of documents released over the past several months show the keen interest of builders' groups in the agency's workings. Most of the documents came from the state comptroller's office, which conducted an inquiry into the TRCC at the request of state Rep. Todd Smith, R-Euless.

Six of the commission's nine members are members of builders' associations, and the agency has in some instances adopted the precise wording of rules suggested by the TAB. E-mails also show regular chatter between the staffs of the agency and the builders' group on subjects large and small -- how to make sure association members register with the agency, how to schedule hotel accommodations and who will pick up whom at the airport.

The association played a key role in writing the 2003 bill that created the agency. The Web site for Bush & Motes, an Arlington law firm with many home-builder clients, touts the firm's involvement in "drafting and passing" the law that created the TRCC.

State Rep. Allan Ritter, D-Nederland, said builders were involved in the legislation. Scott Norman, the TAB's general counsel, said builders were participating in government just as anyone else is eligible to.

"'Came up with the wording' I think would be an overstatement," Norman said. "We were very involved in participating in the legislative process just like any other advocacy group, consumer group or business association. The bill ended up with something for everybody to like and something for everybody not to like."

Plenty of connections

But there is a web of connections between the construction industry and the key players in the bill's passage. Ritter, whose family owns a lumber company, is director of the Texas Construction Industry Council. He has received thousands of dollars in political donations from the TAB, as well as a lobbyist who represents Texas United Independent Developers LLC.

Sen. Troy Fraser, R-Horseshoe Bay, is an investor in and owner of a wooden-pallet manufacturing company. Top contributors to Fraser include Bob Perry, founder of Houston's Perry Homes and a major Republican contributor, and Dick Weekley, co-founder of David Weekley Homes, who are involved with the Texans for Lawsuit Reform political action committee, which seeks to limit liability lawsuits. (The law requires homeowners to take their complaints to the TRCC before they can file a lawsuit.)

In 2003, the year the bill passed, the National Association of Home Builders named Ritter and Fraser two of its eight "state officials of the year" for their work in the TRCC legislation.

The law calls for the commission to have representation from four builder members, an engineer, an architect or inspector and three members of the public. The governor appoints all the members, who must be approved by the Senate. Six of the nine commissioners now are members of builders groups. At least two, John Krugh and Glenda Mariott, are connected to companies that contributed to Gov. Rick Perry's political campaigns.

No consumer experts

Homeowners groups note that no commissioners have experience helping consumers.

"If you look at the background and makeup of all of the members of the commission, they all come from an industry background," said Alex Winslow, executive director of Texas Watch, an Austin-based consumer-advocacy group. "There's no one currently sitting on the TRCC who comes from a background of representing homeowners or consumers in any capacity."

E-mail correspondence that was collected during the investigation by the comptroller's office suggests that the builders' association keeps in close contact with the agency. On several occasions, the TRCC adopted verbatim suggestions for rules by TAB representatives.

Duane Waddill, the TRCC's executive director, said the commission looked at all comments from various sources before adopting rules for the agency. Builders have been paying close attention, he said, because the agency affects their livelihood.

"Clearly, the industry is concerned and wants to monitor what happens in the agency that regulates them, and that happens in every state agency," Waddill said.

Suggestions rejected

Janet Ahmad, president of Homeowners for Better Building, said the commission rebuffed every one of her group's suggestions. Those included requiring all builders to build to the agency's Texas Star Builder standards, making the dispute-resolution process optional and free, and requiring the three public commissioners to have experience representing homeowners, she said.

Waddill said the agency has tightened its registration rules at the suggestion of homeowners groups.

Smith said the builders will have to be involved in any legislative changes to the TRCC. He said he has not decided on what changes he will propose in next year's legislative session.

Rep. Jessica Farrar, D-Houston, introduced a bill last year that would have made the TRCC free to homeowners, required continuing education for builders and allowed the commission to take action against builders who abandoned jobs. It died in committee.

"It's the fox guarding the henhouse," Farrar said. But she expects changes in the new session. "A lot of these home-building projects happen to be in majority-Republican districts, and their representatives are not speaking out about it," she said.

'Enough independence?'

Sen. Robert Duncan, R-Lubbock, sponsored the bill creating the TRCC in the Senate but dropped it when he saw that it would not produce as much enforcement authority or as neutral a commission makeup as he had wanted. He tried to make those changes in 2005, by drafting a bill that would have required a builder to disclose that a house was not inspected by the city and require the governor to consider experienced homeowner advocates for public commission spots. The bill never received a committee hearing.

In May 2005, Duncan questioned the commission's makeup during a TRCC confirmation hearing for Krugh, Gov. Perry's appointee. Krugh is general counsel for Perry Homes. Duncan asked whether Krugh could separate his interests as a home builder from his interests in representing the people of Texas. He also objected to Krugh's work opposing his bill that would have made changes to the TRCC, and later that month voted against Krugh's confirmation.

"My concern is that, is there enough independence on the majority of this board to be able to make sure that this is a balanced commission and that the decisions that are made by the commission are those that are in the best interest of all Texans and not in the best interest of home builders and the Texas Association of Builders?" Duncan said at the hearing.

Krugh said he objected, as an attorney for a home-building company, to about 30 percent of Duncan's bill, specifically the part requiring builders to disclose that a house had not been inspected by the city and financial information about litigation. Scott Porter, a commissioner as well as a builder, testified that he would "not have a big problem" with the disclosure requirement.

After that, Paulo Flores, one of the commission's three public members, responded to Duncan by saying he takes personally insinuations that the commission is not independent. He said all actions are taken in public meetings and pointed to a daylong hashing out of warranties and performance standards two months earlier.

"I don't think anybody who sat through that process could accuse this commission as a whole of being anything but fair and balanced," Flores said in his testimony. "There are many many pro-consumer aspects to our statute in my opinion."

'Worthless warranty'

Ahmad disagreed with Flores. She said the warranties approved in that meeting benefited only home builders.

"We have a worthless warranty now that is an illusion. It gives a false sense of security to the homeowners," she said. "They have limited the builders' liability, and they can't force the builder to comply with the law."

Today, Duncan said, he believes that the commissioners are "making a sincere effort to make this commission work in a fair and neutral way." But he has some lingering concerns about so many of the commissioners having industry ties.

"There's nothing wrong with being a member of [the builders' association]; it's a great group, and they do a good job,' Duncan said, who said he has had a good working relationship with the TAB for years. "But it's definitely a trade association. And a trade association is going to be biased in favor of the issue and concerns of the home builder. When the majority of the board is a member of a trade association, the appearance is that that board is stacked."

Consumer groups also get irritated when they read letters like this one from Toy Wood, chief executive of the Greater Houston Homebuilder Association, which appeared in the August issue of Home Builder Magazine and was reprinted by the Houston Chronicle:

"And although our reasons for creating the TRCC and the various associated processes were very worthy, we were creating another bureaucracy. While we maintain control of the commission, we must be just as vigilant with the TRCC as we are with any other agency or commission."

Norman said Wood does not speak for the state group.

"Those are independent, government-appointed commissioners who run that agency," Norman said. "They make their own decisions."

IN THE KNOW

The birth of an agency

The Texas Residential Construction Commission since its creation by the Legislature in 2003.

Sept. 1, 2003: First day of the agency

Sept. 17, 2003: Commission's first meeting

November 2003: Executive Director Stephen Thomas hired

January 2004: Builders required to register new homes

March 2004: Commission starts registering builders

October 2004: Agency Web site starts online public record search

January 2005: Commission votes on warranties and performance standards

June 2005: Warranties and performance standards go into effect

September 2005: Duane Waddill takes executive director spot

March 2006: Agency launches optional Star Builder program, with elevated building standards

SOURCE: Texas Residential Construction Commission