In an abundance of caution and to prevent any inadvertent violations of campaign finance laws or city statutes, Houston City Controller Annise Parker has shut down 11 special bank accounts set up by various Houston City Council members. The accounts, some of which date back to 2001, were set up to raise donations for community events. Controller's Office audit staff discovered them during the course of assisting Harris County District Attorney Chuck Rosenthal with the ongoing investigation into bonuses and other activity in the Office of the Houston Mayor Pro Tem.

“Record keeping resided with the Office of the Mayor Pro Tem and has been spotty at best,” said Controller Parker. “From the limited paperwork available for review, it appears that required city oversight of the money was lacking and the activities did not relate to the business of city government. Any expenditure of money deposited with the city must occur in accordance with city budget policies and state laws on disbursements, procurements and contracts. These accounts operated, in effect, as non-profits under the sole control of individual council members.”

City Council was notified of the closure of the accounts in a joint memo from Mayor White and Controller Parker. The Controller's Office is working with the city legal department on disposition of the remaining funds.

“As long as they are not violating campaign finance laws, it is perfectly acceptable for elected officials to solicit donations for groups and events not organized by city government, but we cannot have those donations routed through the city's bank accounts,” Parker said. “In the future, council members will need to identify appropriate 501 (c) (3) organizations to receive these donations.”

If a donor wishes to give money to the City of Houston for a particular purpose in support of city activities, there are a number of 501 (c) (3) organizations that can accept the contribution on the city's behalf. To assist council members in identifying these organizations, the Controller's Office has compiled a comprehensive list of non-profits that accept donations on behalf of the city. The

http://www.houstontx.gov/controller/sourceofcharitablefundingupdatemarch2006.pdf .