New Legislation to Ban State Contractors from Spying on Lawmakers and Whistleblowers
AUSTIN — State contractors would be banned from spying on or doing surveillance of lawmakers, whistleblowers, and state employees under legislation that is on its way to Gov. Greg Abbott’s desk. Lawmakers overwhelmingly supported the proposal by Rep. Jeff Leach, R-Allen. House Bill 5061 cleared its final legislative hurdle when it flew through the Texas Senate with no objections on Friday, just a week after the House approved it without opposition.
Abbott has the authority to veto the legislation for 10 days after it lands on his desk, although his office has given no sign that he will. He doesn’t have to sign it in order for it to become law on September 1. Leach filed the bill two weeks before revelations that Superior HealthPlan hired a background investigation firm to collect files on lawmakers while the company was embroiled in a lawsuit several years ago. The Austin-based company is a national for-profit managed care organization that has delivered Medicaid insurance to low-income Texans for decades.
The files included political backgrounds, professional information, divorce records, and online satellite photos of cars and homes of Texas lawmakers — including Rep. Giovanni Capriglione, R-Southlake, Texas Land Commissioner Dawn Buckingham, then a state senator, according to court documents that have been public for several years. “It’s incredibly troubling and, frankly, shocking,” Leach said during the House vote.
Background of the Legislation
At a March 26 legislative hearing, former CEO Mark Sanders acknowledged ordering a private background investigations firm to collect information on patients, providers, a journalist, and several Texas lawmakers from 2017 to 2019. He was fired the next day. Company officials have said the firm it hired never performed surveillance or took photographs of its subjects and that it did none of the things that are covered under the bill.
The revelations triggered an investigation by the Texas attorney general’s office in addition to the inquiry. In April, Capriglione, chairman of the House Committee on Delivery of Government Efficiency, enlisted the state auditor’s to help look into Superior. On Friday, Capriglione thanked the bill’s sponsors for what he called an “important piece of legislation.”
“It’s time we put an end to contractors using nefarious practices against the very people they are meant to serve, as I saw firsthand in our DOGE committee,” he said. Lawmakers acknowledge companies regularly gather information on those who could impact their businesses, finances, or ability to deliver services.
Company Says Actions Were Legal
Superior health officials have defended the company’s investigations as needlessly broad but legal, ethical, standard background research commonly used in the corporate and political world. They say the research practices ended in November 2019 — and were much less invasive than Capriglione and others described in what company officials called “false allegations” in an April 22 letter to the committee.
“No legislator or government employee was followed or photographed. Not once. Not ever,” read the letter, which was signed by the company’s attorney, Christopher Koster. At the March hearing, Sanders acknowledged the company did “what I would call general research, anything that‘s publicly available … but nothing beyond what‘s publicly available.”
Standard background research is allowed under House Bill 5061. Social media monitoring is excluded from acts considered illegal under the bill, as is “collecting information that is publicly available or … through a subscription service” — the sort of research that officials from Centene, Superior’s parent company, maintain was done in this case.
Provisions of the Bill
The bill prohibits a state agency contractor or potential vendor from using a third party to engage in surveillance, intimidation, coercion, extortion, undue influence, or similar conduct against state lawmakers, employees of the Legislature and state agencies, or an individual who raises concerns about state agency operations or contracting.
The bill prohibits the use of private or confidential information to manipulate or influence a state contracting decision or proceeding. It defines undue influence as “an improper use of power, position, or information to manipulate a decision-making process, including the use of private or confidential information for personal or organizational gain.”
A confidential hotline and online portal for complaint submissions would be created. The state auditor’s office would have 90 days to determine whether a violation occurred and could refer a matter to the Texas Rangers if officials suspect a criminal offense was committed.
Penalties for Violations
First-time violators would be subject to immediate termination of state contracts and liable for a penalty of up to $500,000. Penalties could jump to $2 million in cases where the violation involved undue influence or the misuse of private or confidential information.
Violators would be banned from seeking a state contract for 10 to 15 years. Additional violations would result in the immediate termination of contracts, penalties up to $2 million, and a permanent ban from business agreements with the state.
Billions in Contracts at Stake
In an April letter to Texas Health and Human Services, Capriglione demanded Superior face billion-dollar repercussions for its actions, which were first revealed to him and others several years ago after the investigatory files were included in court papers.
Meanwhile, Superior is embroiled in a heated court battle to hang on to nearly $1 billion in Texas state contracts to administer the Medicaid STAR/CHIP programs. Last year, Texas Health and Human Services announced a procurement worth up to $116 billion over the next 12 years that would shuffle the health plans of some 1.8 million low-income Texans.
Conclusion
The new legislation aims to prevent state contractors from engaging in surveillance or intimidation of lawmakers, whistleblowers, and state employees. The bill provides for penalties and fines for violators and creates a confidential hotline for complaint submissions. With billions of dollars in contracts at stake, the legislation is a significant step towards ensuring transparency and accountability in state contracting.
Frequently Asked Questions
Q: What does the new legislation prohibit? A: The legislation prohibits state contractors from spying on or doing surveillance of lawmakers, whistleblowers, and state employees.
Q: What are the penalties for violating the legislation? A: First-time violators would be subject to immediate termination of state contracts and liable for a penalty of up to $500,000. Additional violations would result in the immediate termination of contracts, penalties up to $2 million, and a permanent ban from business agreements with the state.
Q: How will complaints be handled? A: A confidential hotline and online portal for complaint submissions would be created. The state auditor’s office would have 90 days to determine whether a violation occurred and could refer a matter to the Texas Rangers if officials suspect a criminal offense was committed.
Q: What is the significance of the legislation? A: The legislation is a significant step towards ensuring transparency and accountability in state contracting, with billions of dollars in contracts at stake.
