[ Report Home | Previous Page | Next Page ] Austin’s Oldest Profession: Texas’ Top Lobby Clients & Those Who Service Them 2002 Edition II. Lobby Clients Communications & Electronics

Accounting for 13 percent of Texas’ lobby spending in 2001, Communications & Electronics interests spent from $13 million to $27 million on 530 lobby contracts.

Telephone companies accounted for six of the top 10 interests in this sector. Texas’ No. 1 lobby client spent up to almost $7 million on 96 lobby contracts. SBC Corp’s Southwestern Bell provides local service for 77 percent of the state’s phones, according to the Texas Telephone Association trade group (Verizon has 13 percent of the market). Regulators also have allowed Southwestern Bell to compete with AT&T, Sprint and MCI WorldCom in long-distance service. A smaller firm that spent up to $50,000 on lobbying, Vista Services Corp., got slammed with a $680,000 federal fine in 2000 for switching consumers’ phone companies without their permission.

This sector’s top-10 list also includes two computer companies: Electronic Data Systems (EDS) and Texas Instruments. EDS made headlines in February 2001, when the Travis County District Attorney’s Public Integrity Unit raided an EDS subsidiary. Its prosecutors were investigating allegations that EDS’ National Heritage Insurance Co. (NHIC) defrauded Texas’ Medicaid program out of $10 million. Allegations aired in anonymous letters to House Appropriations Chair Rob Junell accused NHIC of conspiring to overcharge the state for administering Texas’ Medicaid program after it arranged to eliminate price caps from its state contract in 1998. Although state officials expressed outrage at the allegations, they were stymied by the perception that another company would be hard pressed to take over the contract midstream. EDS settled the charges in June 2001, paying a $250,000 fine and reimbursing $3.4 million of state funds. The sector’s other top lobby clients are the Outdoor Advertising Association and Orbis Online, which provides online procurement services to the State of Texas and other clients.
 
 

Top Communications 
& Electronics Clients

	Max. Value	No. of
Lobby Client	of Contracts	Contracts
Southwestern Bell	$6,925,000	175
Electronic Data Systems	$2,020,000	24
AT&T	$1,145,000	28
Verizon Services Group	$1,075,000	46
TX Telephone Assoc.	$750,000	12
Sprint	$700,000	7
TX Instruments	$700,000	20
MCI WorldCom	$650,000	11
Outdoor Advertising Assoc.	$485,000	11
Orbis Online, Inc.	$450,000	3

A Winning Bid

San Antonio-based Orbis Online is Texas’ only firm conducting Internet-based “reverse auctions,” according to Senator Todd Staples’ office.9 The Texas Attorney General found in December 2000 that Texas government entities lack authority to conduct such auctions (in which vendors bid against each other for contracts online).10 The next month, as the first report surfaced that Orbis hired the Loeffler Jonas & Tuggey lobby firm, Rep. Rick Green—who is of counsel to that firm—expressed his “concern” about the opinion to Attorney General John Cornyn. “I would like to work with you and your staff to craft legislation that would allow the reverse auctions to be used by our state agencies,” he wrote. A legislative fix that Sen. Staples authored (presumably without the Attorney General’s help) passed that same year (SB 221).