Houston mayor blasts controller over investor conference sponsorships

Houston Mayor John Whitmire took aim Thursday at city Controller Chris Hollins for soliciting sponsorships from municipal bond firms for an upcoming investor conference, saying it smacks of pay-to-play and calling for an investigation.

The mayor said he received calls from bond underwriting firms about sponsorships for Tuesday’s event with price tags ranging from $10,000 to $100,000 and a corresponding list of what those contributions would earn sponsors in terms of recognition, networking, and access.

“This is nothing but the appearance of pay-to-play in Houston, Texas, done with city resources, city employees, and it’s damaged Houston,” Whitmire told reporters at a city hall press conference, adding that Hollins “is a part of the selection team that chooses the underwriters.”

Bond firms already working with the city and others hoping to obtain bond business were “alarmed” and raised concerns about violating Securities and Exchange Commission rules, according to the mayor, who said there had never been corporate sponsorships for Houston’s previous eight investor conferences.

Whitmire noted that while sponsorship proceeds were earmarked for the non-profit Houston Forward Fund, “the controller does have the influence of where those funds are spent.”

Hollins called the mayor’s allegations “baseless” and said he is not on the fund’s board, which controls how donations are used. He also pointed out that only the mayor and city council can award bond-related contracts, while his office, along with the mayor’s, are members of a finance working group that makes recommendations.

“This is a huge nothing burger that is meant to distract from the mayor’s failed leadership on fiscal responsibility at the city,” he said at his own press conference later on Thursday. “It’s something that’s been a concern of mine, personally, but not only me, but many concerned custodians, city employees and city stakeholders, and I think very importantly, the national rating agencies that have started to take a negative outlook on Houston because of the bloated spending and debt the city has taken on with no plan to offset that with revenue.”

Whitmire and Hollins, who both took office in January after winning run-off elections, had tense exchanges over Houston’s structural budget deficit, as well as about a bond-financed settlement with firefighters and rating outlooks that were revised to negative from stable by S&P Global Ratings and Fitch Ratings.

In a letter Thursday to conference participants, Whitmire said he asked Houston’s Office of the Inspector General to investigate any city ordinance or ethics violation, adding he fully expects the office “to engage with outside law enforcement agencies as they come across any nexus to criminality.”

The letter also stated that the mayor and his staff will not participate in the conference “until these issues are resolved.”

Hollins said Whitmire was being “highly hypocritical” given the mayor’s Sept. 17 State of the City event had more than 70 sponsors.

Several municipal bond and law firms are listed as sponsors on the conference website. Loop Capital is the sole “platinum” sponsor at a cost of $50,000, with Jefferies, Ramirez, and Siebert Williams Shank appearing as “gold” sponsors, which carried a price tag of $25,000, “Silver” $10,000 sponsors include Baird, Bank of America, Blaylock Van, JP Morgan, Mesirow, Norton Rose Fulbright, Raymond James, and RBC Capital Markets.

In Chicago, another city that holds regular conferences for municipal bond investors, there were no corporate sponsors for the most recent investor conference in May, which marked the first under current Mayor Brandon Johnson, according to the city’s finance department. Two Chicago chief financial officers under previous mayors said conferences during their tenures did not have corporate sponsors.

Hollins’ office confirmed Friday that Houston’s all-day conference will be held on Tuesday even without the participation of the mayor and officials in his administration.

Speakers for the conference, which costs $750 to attend, had included the city’s finance, airport, public school, convention center, public works, and pension officials, along with officials from other Texas cities, counties, and school districts.

Jennifer Shea contributed reporting to this story.