[ Report Home | Previous Page | Next Page ] Tony Sanchez’s War Chest: Who Gives To A $600 Million Man?   II. Introduction

Gubernatorial candidate Tony Sanchez is the money man behind the “Dream Team,” the Texas Democratic Party’s multi-ethnic ticket to reclaim some of Texas’ top statewide political offices—which are all controlled by Republicans. Indeed, the Sanchez campaign is dreamlike, though not always in the way that it intends.

The Dream Team dreams of awakening the slumbering potential of the minority vote by pitching to shifting demographics with a multi-ethnic slate. Yet Sanchez himself did not vote in the last three Democratic primaries that preceded his own.¹

The Dream Team dreams of wooing back one-time Democratic voters who strayed from the party in recent years. Yet Sanchez himself not only defected to George W. Bush but was his No. 2 career donor—surpassed only by Enron.²

The Dream Team dreams of capitalizing on the Enron-led corporate-crime wave. Yet Sanchez’s energy and banking concerns did business with Enron, his campaign took $10,000 from Enron lobbyist George Strong and, as a University of Texas Regent, Sanchez unsuccessfully promoted Enron for a mega-contract to supply UT’s utility needs.³  The reckless growth, risky loans and conflicts that fed the current corporate crisis also eerily mirror the 1988 failure of Sanchez’s Tesoro S&L (see Financial Industry Money).

Sanchez belatedly sought the ethical high ground in June 2002, when he proposed a series of ethics reforms and accused his opponent of turning the Governor’s Office “into little more than a checkout line” for special interests.⁴  Yet Sanchez, along with the business empire and campaign that he controls, has been repeatedly hamstrung by ethical pitfalls.

After Sanchez completed a stint on the Texas Parks and Wildlife Commission, that agency granted him a 1993 permit to drill gas wells in Falcon State Park.⁵  Sanchez said of the controversial windfall, “There would be no greater joy than to see a beautiful park that our children and adults can go to and learn about the oil and gas industry.”

About the time that a scandal broke over the University of Texas’ endowment awarding lucrative investment contracts to firms with close ties to then-Governor Bush, Sanchez joined the endowment’s board as a Bush-appointed UT Regent. Oft-outspoken Sanchez then fumbled that opportunity to demand a full public airing of this affair (see Financial Industry Money).

Watergate-style plumbers working for Sanchez’s personal attorney in 2001 conducted a bizarre sexual smear campaign against then-Secretary of State nominee Henry Cuellar (see Lawyers & Lobbyists Money). A Sanchez campaign worker got sacked the following year for issuing a casting call for actors of specific races to appear in ads attacking Governor Rick Perry’s attack ads.⁶

The Texas Ethics Commission levied a record—albeit miniscule—fine against the political action committee of Sanchez’s International Bank of Commerce (IBC) in 2002 for failing to disclose its political activity for the previous two years. Sanchez’s campaign said that he had nothing to do with the PAC, despite the fact that it and Sanchez made similar contributions to the same candidates on the same days.⁷

Against this backdrop, Sanchez’s vast personal fortune would create a Texas-sized ethical thicket if he were governor. Sanchez has not revealed his net worth, which is impossible to calculate from the ludicrous disclosures that Texas politicians file (their largest asset category is “$25,000 or more”).⁸  Estimates of Sanchez’s worth range as high as $600 million, though so far Sanchez has flown below the radar of Forbes’ estimated list of the 400 richest Americans (the cut-off point for Forbes’ 2001 list was an estimated net worth of $600 million.

The initial font of Sanchez’s wealth is the gusher Sanchez-O’Brien Oil and Gas Corp., which he and his father built with petroleum geologist Brian O’Brien ($25,000 to Sanchez campaign). Sanchez has deep ties to energy companies and industry groups that often clash with environmentalists.⁹  Sanchez has greatly diversified this fortune, buying major stakes in banking (see Financial Industry Money), media (Viacom) and high-tech interests (the short-lived Sanchez Venture Capital Corp. and Internet security firm Zix Corp.). Given that Sanchez cites his business acumen as a major qualification for office, it is interesting that, apart from companies that he controls, Sanchez’s campaign has received little financial support from industries in which he made a killing.

These business tentacles already have interfered with Sanchez’s attempts to seize the high ground on such campaign issues as the Enron scandal and insurance reform. These conflicts would only intensify if he is elected governor. Indeed, Sanchez legally could use the “late-train” weeks separating his election from his inauguration to squeeze special interests to help him repay his campaign’s huge bank loans (as Perry did after his 1998 lieutenant governor election). Dogged by Public Citizen’s Tom Smith, Sanchez pledged in June 2002 not to use late-train money to retire the millions of dollars of campaign loans that he has personally guaranteed.¹⁰  While this pledge neutralizes immediate post-election concerns, Sanchez still would move into the Governor’s Mansion with the baggage of hundreds of millions of dollars in personal economic interests. If Sanchez put these assets in a blind trust, as some ex-governors did, problems would persist, according to Smith. Sanchez would still know, for example, that he has enormous energy and banking interests.¹¹

Much has been written about Sanchez’s vast personal fortune, which undoubtedly would trigger a recurring series of ethical problems if he is elected governor. While Sanchez’s fortune has provided the vast majority of the money fueling his campaign (through contributions and loan guarantees), this report analyzes the remainder of Sanchez’s campaign money, which originated outside of his own family circle.