South Padre Island ethics board tables conflict-of-interest complaints against mayor and local businessman

SOUTH PADRE ISLAND, Texas — The South Padre Island Board of Ethics on Monday heard hours of testimony and documentary evidence on complaints alleging Mayor Patrick McNulty and local businessman Joe Rico had potential financial conflicts tied to the city—s newly designated arts and entertainment district, then voted to defer any final decision until members have had more time to review filings.

Complainant Stephen McCauley and his attorney, Bridal Lederma, argued the creation of the arts district gave distinguishable economic benefits to businesses and property inside the district and that McNulty and associates stood to gain. The board voted to permit McCauley a hearing and later tabled formal decisions on the complaints, placing conditions on the continuation of the record.

Why it matters: The complaint centers on whether elected officials— private business interests or partnerships were likely to be affected by a city zoning action that created an arts/cultural district. McCauley—s presentation cited franchise tax records, a map of the district boundaries and state-level grant programs that apply only to properties inside cultural districts.

During the meeting, Lederma summarized evidence alleging that McNulty has ownership or partnership interests in several LLCs operating in or adjacent to the district and that a business partner, Alter Holland, owns land and parking lots within the designated area. "If you look at the Texas Commission on the Arts website," Lederma said during her presentation, "these strategies are place-based, in that…