Mike Collier’s Corner

Remember what Mike Collier said when he ran for Texas State Comptroller? What was the moniker he used more than any other? He said he would be the Texas watchdog. Mike is continuing on that path even though he was unfortunately not elected in that race. A few weeks ago he exposed the Great Texas swindle. He appeared on Politics Done Right on KPFT 90.1 FM to explain in simple terms how the current Republican administration was pilfering the coffers on the sly.

His latest article reprinted below questions the resignation of Texas State Auditor John Keel. While it may seem like a boring topic to most, in a time when the Texas government is up for sale with a Lieutenant Governor like Dan Patrick and his cabal in control, we must all become watchdogs until we extricate the political cancer in Austin

Why did the state auditor resign?

State Auditor John Keel’s surprise resignation, to take effect just before the state’s Comprehensive Annual Financial Report is issued, may seem inconsequential to most Texans.

But in fact it’s one of the most important recent developments in our state. If ever there was a time to focus on a nerdy topic like auditing, this is it. Here’s why:

Texas’ fiscal year ends on August 31. It takes several months for accountants to finalize their work, and it takes several months for the State Auditor’s staff to issue their audit report. Normally the state’s audited financial statements are issued in late February. That’s why it is astounding that Mr. Keel would leave his post on January 4, essentially in the middle of the audit.

If the auditor of a major corporation were to resign abruptly mid-audit, the story would make headlines. Shareholders would demand a full accounting. The value of the company’s stock might even decline until the facts were established. Shareholders would want to know urgently whether the resignation had anything to do with bad accounting, fraud, or corruption inside the company.

Mr. Keel, who has a very good reputation, owes it to us to either stay on the job and sign his name to the state’s financial statements or provide an explanation for his mid-audit departure.

But Mr. Keel’s resignation is not consequential to Texans only because of the circumstances. Texas is also losing a fiercely independent State Auditor, and now Dan Patrick gets to select Keel’s replacement.

Corporate investors know that nothing is more important than the independence of the company’s auditor. That’s why the company selects a third-party audit firm whose partners and staff are strictly forbidden from working for or investing in the companies they audit. Companies go even further and create a committee of board members called the Audit Committee, with an independent director as its Chairman.

Unbelievable as it may seem, the State of Texas, with its $100 billion+ income statement, does not have an independent auditor. Mr. Keel reports to Lt. Governor Dan Patrick and the politicians (all Republicans) who sit on the Legislative Audit Committee. Mr. Keel may well be stubbornly independent, but he nevertheless reports to Dan Patrick.

How likely is Mr. Patrick to select another stubbornly independent auditor? And how foolish would we be to trust Mr. Patrick? After all, as Lt. Governor (and strongman of his party) Dan Patrick controls the state’s finances. Now he gets to control the State Auditor. This is very dangerous stuff.

To solve the problem once and for all, Governor Abbott should assemble an ad-hoc committee of experts in the field of financial control, fraud detection, and efficiency to design a truly independent audit function for the State of Texas. The new structure should ensure that the State Auditor is as far removed from electoral politics as possible. And he or she should have a completely free hand in conducting audits and investigations as he or she sees fit.

Once the ad-hoc committee’s recommendations are in hand, Governor Abbott should spend every bit of political capital he has to secure passage in the next Legislature and send the proposal to voters for approval. If done right, Governor Abbott can make history by creating a muscular, truly independent audit capability for Texas. He will be remembered as the Governor who killed corruption in Texas once and for all.

As for Dan Patrick, he should put his weight behind an Abbott-lead plan to restructure and strengthen the State Auditor, even though it means weakening himself as Lt. Governor. If Abbott and Patrick do nothing other than install a crony to the State Auditor position, they will remembered for promoting – rather than fighting – corruption in Texas.

Mike Collier