Tony Sanchez’s War Chest: Who Gives To A $600 Million Man?
V. Contributions By Interest Category
Interest Category Breakout
| [ Tony Sanchez’s War Chest: Who Gives To A $600 Million Man? V. Contributions By Interest CategoryInterest Category Breakout |
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Subsector Amount Percent Plaintiff Lawyers 65% Other Lawyers 14% Defense Lawyers 12% Lobbyists 9% 100%
Sector's Top Donors Interest Amount Gallagher Law Firm Plaintiff firm Jamail & Kolius Plaintiff firm Nick Kralj Lobby firm Schechter Mcelwee & Shaffer Plaintiff firm Andrews & Kurth Defense firm Vinson & Elkins Defense firm Freeman & Castillon Defense firm Watts & Heard Plaintiff firm Callejo & Callejo Plaintiff firm Canales & Simonson Other law firm Lawyers and lobbyists were by far Sanchez’s largest source of external money. Plaintiff attorneys dominated, accounting for two-thirds of this sector’s money. Three of the sector’s top five donors were plaintiff firms. A fourth, Nick Kralj, is a lobbyist whose clients include the Texas Trial Lawyers Association.17
Conspicuously absent from this list are Texas’ “Big Five” trial lawyers, who collectively won an astonishing $3.3 billion in fees after they settled the state’s anti-tobacco lawsuit for $17.3 billion.18 (The Texas Democratic Party, a major recipient of the Big Five’s money, gave Sanchez a comparatively modest $10,000). Still, the Big Five have signaled their support for Sanchez and still have ample time to influence the gubernatorial race.19 The Big Five have been at odds with fellow trial lawyer Joe Jamail of Jamail & Kolius in a dispute over whether or not ex-Attorney General Dan Morales sought payments from law firms that he interviewed for the historic tobacco lawsuit (Sanchez trounced Morales in the 2002 Democratic primary).
Several business defense firms also made this sector’s top-donor list, including Andrews & Kurth and Vinson & Elkins. The partners at a smaller Laredo business firm, Freeman & Castillon, include Sanchez cousin Robert Freeman and banking attorney Carlos Castillion.
Finally, two top law-firm donors, Watts & Heard and Canales & Simonson, were major backers of Barbara Canales-Black, who recently lost a costly Democratic primary bid for a Texas Senate seat. While Barbara belongs to the Texas Trial Lawyers Association, her Canales Simonson family firm has a big criminal law practice. Her father, Tony Canales ($10,000 to Sanchez), is Sanchez’s private attorney. In that capacity in 2001, he directed two former FBI agents in a political dirty trick worthy of the Watergate plumbers. Targeting Henry Cuellar, whom Governor Perry had nominated as secretary of state, the private dicks told Cuellar’s friends and some state senators that Cuellar was the suspected author of an anonymous death threat against Sanchez. Under the guise of investigating the threat, the agents insinuated that Cuellar was a homosexual who enjoys group sex. The senators targeted with this disinformation said it appeared to be a bizarre attempt to smear Governor Perry by association.20
Subsector Amount Percent Securities & Investment 60% Banks 38% Other 3% 100%
Sector's Top Donors Interest Amount International Bank of Commerce Bank White Rock Capital Securities Hicks Muse Tate & Furst Corporate takeovers Q Funding Investments Exeter Investment Co. Investments Madison Financial Bank Sandlers O'Neill & Partners Investments Principal Wingate Partners Corporate takeovers Finance interests were Sanchez’s next-largest source of external money, led by Securities & Investment firms. The takeover firm Hicks Muse Tate & Furst is a top investment donor to both Sanchez and Perry. Pragmatist Tom Hicks gave $50,000 to Sanchez and $93,981 to Perry.21 Sanchez and Hicks, who rank among George W. Bush’s top 5 “career patrons”22 boosted Bush’s squeaker ascent to the White House. As a Bush-appointed University of Texas (UT) regent, Sanchez sat on the board of the UT Investment Management Co. (UTIMCO), which Hicks masterminded to oversee billions of dollars of UT endowment investments.23 The Houston Chronicle revealed in 1999 that big Bush donors on UTIMCO’s board awarded fat investment contracts to firms close to Bush and then-UTIMCO Chair Tom Hicks. Oft-outspoken Sanchez, who joined UTIMCO’s board the year of this expose, missed an opportunity to demand a public airing of this affair (even if it would have been awkward for Bush’s presidential bid). When the Chronicle reported renewed UTIMCO attempts to dodge public disclosure of its investments in 2002, however, Perry and Sanchez joined the critics who urged UTIMCO to back down.24 One UTIMCO contract benefited the oil-rich Bass family, a top supporter of Bush and Perry.25 Geoffrey Raynor, the founder of Sanchez-backer Q Funding, previously managed Bass wealth.
Sanchez’s No. 2 Finance donors—Banks—surfaced in Perry attack ads that remind voters that Sanchez’s Tesoro Savings & Loan laundered $25 million in drug money and cost taxpayers $161 million when it failed in 1988. Sanchez says he was unaware of the drug-money and that a federal probe cleared him of wrongdoing (yet he will not authorize the government to release related records).26 Sanchez defends Tesoro’s failure—which regulators blamed on risky loans, reckless growth and conflicts of interest (hallmarks of the recently burst economic bubble)—by saying that Tesoro behaved like other S&Ls and was confused by conflicting federal regulations.27 This explanation ignores how financial institutions forcefully lobbied for the regulatory loopholes that they exploited. As recently as 2000, Sanchez’s International Bank of Commerce (IBC) lobbied to defeat a federal bill to discourage money laundering.28 IBC’s insurance subsidiary also has weakened Sanchez’s efforts to capitalize on Texas’ insurance crisis.29 While Sanchez backer Gerald J. Ford of Madison Financial made a fortune reviving five failed Texas S&Ls, it is remarkable how little money Sanchez raised from banks other than his own.
Ex-Railroad Commissioner Arthur Temple III, of Exeter Investment Co., sits on Temple-Inland’s board. It dropped plans to put a golf course on a sensitive San Antonio aquifer in 2002.30
Subsector Amount Percent Physicians 94% Other 6% 100%
Sector's Top Donors Amount Dr. J. Santiago Gutierrez Health Care Alliance of Laredo Texas Medical Association The signature act of Governor Perry’s administration was the 2001 Father’s Day Massacre, when he vetoed a record 78 bills. Perry’s single most-controversial veto was the “prompt-pay” bill (HB 1682), which would have strengthened a health insurer’s legal obligation to pay health-care providers quickly. This veto stunned and enraged the powerful Texas Medical Association (TMA), which said that the Governor’s Office offered no pre-Massacre indication of impending veto. TMA suggested that the veto was a giveaway to HMOs and TMA’s former ally, Texans for Lawsuit Reform (TLR). (Although TLR and TMA previously worked to reduce the legal liabilities of doctors who commit medical malpractice, TLR objected to “prompt-pay” provisions that would have interfered with HMOs imposing binding arbitration on medical billing disputes.)31
After the veto, TMA President Tom Hancher said doctors would “withhold their support of Governor Perry pending their review of these issues and how they’re addressed in the coming year and a half.”32 TMA then endorsed Sanchez “by an overwhelming majority” in April 2002.33 Since the veto, physicians have contributed $349,312 to the campaigns of the gubernatorial frontrunners, with Sanchez receiving 64 percent of this money. Sanchez’s post-veto donors include the TMA PAC and Longview surgeon John Coppedge, who was the TMA’s point man on the prompt-pay bill.
Nonetheless, given the extent of outrage among doctors over the prompt-pay veto, the Sanchez contributions made to date by TMA ($5,750) and Coppedge ($1,435) seem puny, as does the relative share of doctor money flowing to Sanchez. This could suggest that Perry placated doctors to some degree with post-veto regulatory rules and enforcement actions.34 Or it could suggest that doctors want to cover their bases in the event that Sanchez loses.
Most of Sanchez’s doctor money came from relatively small donations by individual physicians. His top Health donor was ob-gyn J. Santiago Gutierrez. Dr. Gutierrez belongs to the Healthcare Alliance of Laredo (Sanchez’s No. 2 Health donor), a group of physicians who operate independently of health insurance interests. Dr. Gutierrez supported a one-day strike by South Texas physician in April 2002 to protest soaring medical malpractice rates. Business tort groups and some physicians have singled out lawsuits filed by trial lawyers (the principal source of Sanchez’s external money) as the cause of this problem. Dr. Gutierrez attributed the problem to both litigation costs and to money that insurance companies lost in the stock market. “Health insurance companies had a bad year for investments (such as those that invested in Enron),” he said, “and they will pass it on to doctors and let them pay for it.”35