Associa CEO and State Senator John Carona's Many Colorful Conflicts of Interest
John Carona, our Republican state senator from Dallas, learned some hard lessons this session about how his fellow lawmakers' business interests tend to dominate the doings in the legislature. Last month, Carona's bill to try to reform the incredibly predatory payday loan industry was picked down to its skeletal bones by other state senators, several of whom were on the phone with loan industry lobbyists as Carona spoke on the Senate floor.
But as Texas Tribune's Jay Root reports today, in a particularly excellent installment of their "Bidness as Usual" series, Carona has also benefited spectacularly from the uncomfortably close relationship between business and politics that flourishes in the Legislature.
That's because when he's not doing his part-time thing as a state senator, Carona is the CEO of an enormous homeowners association management company called Associa. As a state senator, he's had plenty of chances to legislate issues dealing with HOAs, which, not surprisingly, he's managed to turn to his enormous advantage. Because it's totally legal to do that. Fun, right?
HOA companies are big business in Texas and elsewhere these days, earning an estimated $40 billion annually in revenue from homeowners who, increasingly, have a hard time living any place that isn't overseen by one. And no HOA management company is bigger than Associa, which according to the Tribune oversees some 9,000 HOAs in 31 states, Mexico, and Canada.
All that happened under the tender care of Carona, who founded Associa back in 1979 and today serves as its president, CEO and chairman of the board. He's shared the love with his family, as Associa's "Leadership" page shows: Son Joey serves as an "executive vice president," chief operating officer and director, and wife Helen serves as another executive vice president and director, as well as the company's chief corporate officer.
Carona was first elected to the state Senate in 1996. In 2001, he authored a bill to allow HOAs to foreclose on homeowners without any oversight whatsoever from the state. In 2011, he merrily defended that law from being reformed. (In something of a Dallas politician's tradition, he also apparently ran away from Brett Shipp as the newsman was brandishing a copy of Associa's company policies at him, trying to show him a rule that said homeowners could be foreclosed on if they fall four months behind in HOA fees. Carona had previously denied that Associa had that policy. When Shipp tried to give chase, Carona ordered him removed from the Senate floor. We like to picture all this happening with the Benny Hill theme music playing in the background.)
Root also notes that former state Senator and fellow Republican John Lindsay was scandalized by the lack of consumer protections in the 2001 bill, and pointedly asked Carona to discuss how companies like Associa work.
"That's not anything we're gonna discuss on the Senate floor," Carona replied. And they didn't.
In 2003, when Lindsay attempted a huge overhaul of the HOA industry, Carona didn't speak directly against it. But, Root writes, "Associa dispatched droves of employees to Austin to testify against it, recalls Gary Stone, a former property manager for a Dallas-based Associa subsidiary. Stone says he and other employees were told to use the names of their nonprofit neighborhood associations when they registered in opposition to Lindsay's bill, though some did disclose their management company's affiliation, according to committee witness records."
Root points out, too, that Carona's influence and power over one industry are unusual even among Texas lawmakers:
Given the nature of his business, Carona has an impact on the lives of people far outside his Senate district because he sits at the top of the food chain for the 2 million or more people living under the rules of the privatized governments Associa helps operate. No other state legislator has that kind of power. He is a senator and a special-interest group rolled into one."
That certainly sounds efficient, doesn't it? Carona's also done his damndest to bring our other Dallas-based senator, Royce West, on board, donating some $73,500 to his campaign in the last five years, either directly or through wife Helen or Associa's attorney, Paul Reyes. Despite Carona's best efforts, though, West still managed to get an HOA reform bill passed in 2011 , albeit a significantly weakened one that didn't change the foreclosure rules.
A spokesperson with Senator Carona's office tells us that he's seen the Tribune story, and will give us a call if he's interested in commenting.