Governor Perry’s War Chest: Who Said ‘Yes’ To ‘Governor No’?
VI. Contributions By Interest Category
Interest Category Breakout
| [ Governor Perry’s War Chest: Who Said ‘Yes’ To ‘Governor No’? VI. Contributions By Interest CategoryInterest Category Breakout |
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- Energy & Natural Resources Money
- Financial Industry Money
- Miscellaneous Business Money
- Lawyers & Lobbyists Money
- Construction Industry Money
- Health Money
Energy & Natural Resources Money
Subsector Amount Percent Oil & Gas 65% Chemicals 16% Electric Utilities 11% Waste Disposal 6% Mining 2% Other 0% 100% * Perry donated $85,000 of this Enron money to an education fund.
Sector's Top Donors Interest Amount Sterling Group Chemicals *Enron Corp. Oil & Gas Hunt Oil Co. Oil & Gas TXU Corp. (TX Utilities) Electricity USA Waste Services Waste Cogen Technologies Electricity Hyperion Resources Oil & Gas Reliant Energy Electricity Hixon Properties Oil & Gas Southeastern Drilling Oil & Gas Perry received more money from Energy & Natural Resources interests ($5.3 million) than any other single business sector, with most of this money coming from the powerful Oil and Gas industry, followed by the related Chemicals and Electric Utilities industries. These polluters want gubernatorial appointees to the Texas Commission on Environmental Quality (TCEQ) to keep state environmental cops neutered, keeping Texas No. 1 in many forms of pollution.16
With every major urban area in the state flunking or almost flunking federal air standards, the TCEQ is under a federal gun to come up with credible air compliance plans. Instead, TCEQ commissioners proposed weakening cuts in nitrogen oxide emissions (NOx) for smog-choked Houston in June 2002. The proposed weaker standards, which the TCEQ expects to vote on in December, are a victory for the “Business Coalition for Air Appeal Group.” Led by Reliant Energy, these polluters—who produce more than half of Houston’s smog-producing NOx emissions—gave Perry $408,256 between June of 1997 and the end of 2001.17
Perry picked Enron executive Max Yzaguirre to head the Texas Public Utility Commission (PUC) as the state embarked on electric deregulation (Yzaguirre resigned during the Enron scandal in January 2002). Texas granted substantial control over its deregulated power grid, known as ERCOT, to power companies that regulators have accused of uncompetitively “gaming” the system to price gouge or pad their financial books.18 The two surviving PUC commissioners are scheduled to consider a staff-proposed $17.5 million settlement of such charges against Enron, Reliant, Texas Utilities, American Electric Power and Mirant in October.19 A Consumers Union analyst says the proposed deal stiffs the public, which is barred from seeing “any evidence of monkey business” that regulators might have uncovered.
Subsector Amount Percent Securities & Investment 73% Banks 19% Accounting 5% Finance & Credit 3% 100%
Sector's Top Donors Interest Amount *Wyly brothers Corporate takeovers *Hicks Muse Tate & Furst Corporate takeovers Contran Corp. Corporate takeovers Momentum Securities Securities Beecherl Investments Investments Interfase Capital Partners Venture capital Lay Capital Group Investments *John McStay Investment Co. Securities Meridian Advisors Securities *SCF Partners Energy securities * UTIMCO link Finance interests delivered 12 percent of Perry’s money. A scandal from the preceding administration still casts a dark shadow over the top Finance donors to Perry. The University of Texas System (UT) in 1996 transferred control of billions of dollars of endowment funds to the quasi-public UT Investment Management Co. (UTIMCO) board, which is dominated by UT Regents appointed by the governor. The Houston Chronicle revealed in 1999 that UTIMCO’s board awarded lucrative investment contracts to firms close to then-Governor Bush and UTIMCO’s first chair, Tom Hicks of Hicks Muse Tate & Furst.20 Some of the contracts benefited such big Bush and Perry donors as financiers Charles and Sam Wyly and the oil-rich Bass family. Another such contract went to SCF Partners, whose president, Laurence Simmons, is a big Perry donor. With the notable exception of Tony Sanchez, current and past UTIMCO board members have given Perry more than $685,000. When the Chronicle reported another UTIMCO attempt to dodge public disclosure of its investments in 2002, UTIMCO backed down, following sharp criticism by Perry, Sanchez and UT Regents Chair Charles Miller of Meridian Advisors.21The next largest source of Perry’s Finance contributions—banks—surfaced in recent Perry attack ads that reminded voters that Sanchez’s Tesoro Savings & Loan laundered drug money and cost taxpayers $161 million when it failed in the 1980s. A follow-up Fort Worth Star-Telegram investigation revealed that Perry himself has taken $1.6 million from individuals who were intimately involved with failed S&Ls.22
The accounting industry—which abetted the S&L scandal and the current corporate crime wave—is the next largest source of Perry’s Finance money. The Texas State Board of Public Accountancy revoked Arthur Andersen’s license in August 2002, two months after a jury convicted the firm of obstructing justice in the Enron probe. Shortly before Enron admitted that its financial statements were fictitious, the Texas Society of CPAs ($51,500 to Perry) signed off on a 2001 trade magazine cover story that dubbed Enron’s CPAs “accounting leaders.”
Subsector Amount Percent Food & beverages 44% Miscellaneous services 15% Retailers & wholesalers 14% Miscellaneous mfg. 14% Entertainment 8% Other 5% 100%
Sector's Top Donors Interest Amount Home Interiors & Gifts Decorative accessory & gift sales Wal-Mart Retail giant Silver Eagle Distributors Alcohol Brown Distributing Co. Alcohol American Garment Finishers Clothes launderers, importers McLane Co. Wal-Mart-owned grocery supplier Bobby Cox Co. Restaurant franchises Service Corp. International Funeral home giant Cinemark USA Movie theater chain Texas Seafood Co. Seafood supplier The Miscellaneous Business category is the third largest source of Perry’s money. Food and Beverages are the largest Miscellaneous subsector, led by alcohol industry donors ($757,710), as well as grocery and restaurant interests, many of which rely on alcohol sales. It is no coincidence that an alcohol vendor, Richard Trabulsi, Jr. of Richard’s Liquors, is a founder of Texans for Lawsuit Reform (TLR). When TLR was buying during the Texas Legislature’s 1995 tort-reform bender, lawmakers slapped stiff limits on so called joint and several liability laws. As a result, those who sell alcohol to someone who is visibly intoxicated cannot be held responsible for resulting injuries unless a jury finds that they were at least 51 percent responsible. The Texas chapter of Mothers Against Drunk Driving said this “reform” virtually eliminated the alcohol industry’s liability for drunk driving, since drunken drivers are almost always found to be more than 50 percent responsible for their destructive behavior.
For better or worse, another major Miscellaneous Business donor, Service Corp. International (SCI), is there when people do drink and drive. A state Funeral Service Commission (FSC) panel recommended fining SCI a record $445,000 in 1998 for not cooperating with a regulator probe into allegations that the company secretly sent its customers to unlicensed embalmers (the case is still pending).23 Before getting fired, former FSC Director Eliza May got summoned to the Governor’s Office, where she got chewed out for the SCI probe by top aides to former Governor Bush—as an SCI lobbyist and executive looked on.
Subsector Amount Percent Defense Lawyers 55% Lobbyists 31% Other Lawyers 7% Plaintiff Lawyers 6% Other 1% 100%
* Big-Perry donors from Arter & Hadden formed Loeffler Jonas & Tuggey in May 2001.
Sector's Top Donors Interest Amount Vinson & Elkins Defense firm *Arter & Hadden Lobby firm Hance Scarborough Wright… Lobby firm †Locke Liddell & Sapp Defense firm *Loeffler Jonas & Tuggey Lobby firm Linebarger Goggan Blair Peña Plaintiff firm Fulbright & Jaworski Defense firm McFall Sherwood & Breitbeil Defense firm Baker & Botts Defense firm Jenkens & Gilchrist Defense firm
† From 1999 merger of Liddell Sapp Zivley and Locke Purnell Rain Harrell.Corporate attorneys and lobbyists dominated Perry’s Lawyers & Lobbyists contributions, led by Vinson & Elkins. A recent Texas Watch study of the Texas Supreme Court found that Perry-appointed justices have increased the court’s bias for corporations over consumers and defendants over plaintiffs. “Governor Perry’s judicial appointees Wallace Jefferson and Xavier Rodriguez gave new power to Justices Hecht and Owen, the court’s two most pro-corporate, activist justices,” the report says.24 Not surprisingly, then, Perry received comparatively little money from plaintiff lawyers, who favor his opponent. Perry also used his veto pen to kill a bill that would have required state court law clerks to disclose the potential conflicts that arise when they accept job offers from law firms that may have cases before a clerk’s court. The top subsidizers of high court clerks in recent years were Baker Botts, Vinson & Elkins and Fulbright & Jaworski.25
Perry’s biggest lobby cash cow has been Tom Loeffler—along with the lobbyists and the Metabolife account that Loeffler brought with him when he left Arter & Hadden to found Loeffler Jonas & Tuggey in 2001. Responding to eight deaths in the state in the mid-1990s, the Texas Department of Health staff proposed strict marketing rules for herbal diet remedies containing ephedrine stimulants. After industry leader Metabolife mobilized its lobby, the Texas Board of Health (TBH) trashed the proposed rules in 1999, substituting weak ones drafted by the industry.26 Later that year, TBH adopted rules requiring that ephedrine products in Texas carry a toll-free number where consumers can report adverse health effects to the FDA. Industry lobbyists, including Texas Senator Jeff Wentworth and Rep. Rick Green, worked diligently to delay implementation of this new rule, even persuading U.S. Health Secretary Tommy Thompson to weigh in. But in August 2002, federal prosecutors announced a criminal probe to determine if Metabolife covered up consumer health complaints about ephedrine. In response, the company suddenly pledged to release 13,000 complaints, including 80 citing serious injury or death.
Subsector Amount Percent Homebuilders 35% Heavy Construction 23% Construction Materials 15% Construction Support Srvcs 14% Other Contractors 13% 100%
Sector's Top Donors Interest Amount Bob Perry Homes Homebuilding Williams Brothers Construction Heavy Construction Hunt Building Corp. Homebuilding Holt Caterpillar Building Equipment Chasco Investments Heavy Construction Dannenbaum Engineering Corp. Construction Srvcs. Associated General Contractors General Contractors Goodman Homes Homebuilding TX Manufactured Housing Assoc. Homebuilding H. B. Zachry Company Heavy Construction The powerful homebuilder industry leads Perry’s construction donors, led by the state’s No. 1 campaign contributor: Bob Perry of Bob Perry Homes (no relation to the governor). Homebuilders in recent years have fought increasingly well-organized consumers who are saddled with lemon homes and binding arbitration clauses that strip them of basic legal rights. With Texas also suffering a full-blown homeowner’s insurance crisis that insurers blame on mold claims, the next legislative session will be a hot one for homebuilders. For all the mold furor, however, nobody is talking about prevention. To get to the bottom of the problem, the state must crunch claims data to identify the specific home designs, building materials and homebuilders that cause the biggest mold losses. The problem cannot be cured if public officials are afraid to diagnose the cause.
Heavy Construction, led by road and bridge builder Williams Brothers Construction, was the next largest Perry donor in this sector. Governor Perry electrified this industry in the summer of 2001 when he barnstormed the state promoting a vision of a $1 billion increase in state transportation spending (even as a budget crisis was forcing the Texas Department of Transportation to hit the brakes on spending). In the three years prior to this road trip, TXDOT road contractors contributed $235,133 to Perry’s campaign coffers.27
Subsector Amount Percent Physicians 27% Other Health Professions 17% Drugs & Biotech 14% Hospitals & Clinics 13% Health Products 12% Health Services & Education 7% Health Insurers 5% Nursing Homes & Home Care 5% 100%
Sector's Top Donors Interest Amount Kinetic Concepts Health Products Owen Healthcare Drugs TX Dental Assoc. Health Professions Accident & Injury Pain Centers Health Clinics TX Hospital Assoc. Hospitals TX Medical Assoc. Physicians As discussed in the introduction, the signature act of Governor Perry’s adminstration arguably was his veto of legislation to strengthen a health insurer’s legal obligation to pay health-care providers quickly. Perry also vetoed two bills that would have restored public access to complaints filed against potentially dangerous medical facilities or medical practitioners—access that the Texas Hospital Association managed to cut off in the 1999 session.28 The problem with such sensible measures is that they benefit an amorphous public but are opposed by narrow special interests that are well-funded and organized.29
Perry’s No. 1 source of health-industry money is Kinetic Concepts, Inc. (KCI), which makes hi-tech hospital beds that have been associated with numerous injuries, according to plaintiff lawsuits and reports filed with the FDA. Founder James Leininger, one of Texas’ top political donors, has used his wealth to promote legal-liability limits, abortion restrictions, school vouchers—and Rick Perry. Indeed, Perry might not be running as an incumbent governor today if Leininger and chemical magnate William McMinn had not guaranteed a last-minute, $1.1 million loan to Perry’s 1998 lieutenant governor campaign, which won by a razor-thin margin. Perry also personally made a quick $38,000 off KCI stock in 1996.30 Perry suspiciously bought one-third of his shares on the day that he addressed Leininger’s Texas Public Policy Foundation think tank—and just before an investment company bid up KCI’s price by buying 2 million shares. Perry initially said his broker independently made the purchase, but later said that he himself ordered the transaction.31 In August 2001, Perry appointed ex-KCI CEO Raymond Harrigan to the Texas Board of Health. That agency has invited scandal in its handling of herbal diet remedies that have triggered fatal health complaints (see “Lawyers and Lobbyists”).