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District 118 Republican John Lujan defends $5.4 million state contract against ethics criticisms

Joey Palacios
Texas Public Radio
John Lujan, center.

John Lujan, the Republican running for re-election in Texas House District 118 on the south and east sides of San Antonio, denied wrongdoing during a candidate forum on TPR’s “The Source” over sitting on a committee that oversees a $5.4 million contract his personal business has with the state.

Lujan’s business, an IT company called Sistema Technologies, has a contract with the Texas Alcoholic Beverage Commission (TABC) to help businesses acquire their alcohol licenses online.

Lujan, who won the seat in a 2021 special election, said he hadn’t done anything improper.

“I immediately called the attorneys there at the House and said there’s a potential conflict of interest, and they assured me there’s no voting being done, 'you don’t have any say over anything, no influence over anything,' ” Lujan said.

Lujan committed to selling all his shares in his company if he were re-elected.

“The worst case would be just to give up all my shares and not own that company, and I’ve decided to do that if I get re-elected,” Lujan said. “But I had that plan from day one when I won the special [election].”

Frank Ramirez, Lujan’s Democratic challenger who also participated in the candidate forum, said he appreciated Lujan’s commitment but that it spoke to a bigger issue.

“The fact of the matter is this: $5.4 million thus far in this biennium has been spent towards this company, and I truly believe — and I believe that Representative Lujan might believe this as well — that conflicts of interest do not belong in the public sphere,” Ramirez said.

Ramirez said if he were elected this November, he would introduce a bill to prohibit members of the state legislature from having business contracts with the state.

“I’ll make it my business, once elected as state representative … to file a bill at least and to push it as hard as I can through the committee process that would not allow for this situation to happen ever again,” Ramirez said.

Another criticism of the contract comes from complaints that the software Sistema has provided TABC is not functioning properly. Ramirez said he’s spoken with owners of restaurants that have struggled to get their alcohol licenses using the software.

“To me, it’s disappointing to hear from folks in our community who might be restaurant owners that sell alcohol that have not been able to renew their licenses to sell that alcohol, which is a significant part of their revenue,” Ramirez said.

Lujan defended his company and said some bugs are always inevitable when new software is rolled out.

“If you asked all their [TABC’s] leadership, and this was before I was a state rep, it’s a great product,” Lujan said. “It’s saving the Texans a lot of money. It’s streamlining process. It’s taken a paper-based way of doing business to an electronic way of doing business.”

Lujan's and Ramirez’s race is a rematch of the 2021 special election where Lujan beat Ramirez by two points. The seat was formerly held by Democrat Leo Pacheco.

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