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Texas PACs: 2004 Election Cycle Spending
II. Comparing Business, Ideological & Labor PACs

Business PACs accounted for 67 percent of all PAC spending in the 2004 cycle. Meanwhile Ideological and Single-Issue PACs spent 26 percent of all PAC money and Labor PACs spent just 7 percent of the total.

This sectoral distribution marks a significant swing of the pendulum, particularly for Ideological PACs. During the 1996 through 2000 election cycles, the average distribution for PAC spending was: 63 percent Business PACs; 33 percent Ideological and Single-Issue PACs; and 5 percent Labor PACs.3 As the previous edition of this report discussed, Ideological PAC spending shot up to 39 percent in 2002, as Republican-leaning PACs successfully sought House control. In 2004, however, Ideological PAC spending plummeted to 26 percent of the total--well below the one-third share it claimed in the late 1990s.

As overall PAC spending dropped, Labor was the only major sector to increase PAC spending from 2002 to 2004. While Labor’s $4.5 million expenditure is small compared to the two other sectors, this marked a 19 percent increase for Labor PACs. The Fort Worth Firefighters committee was the only Labor PAC to make the list of 2004’s fastest-growing large PACs (discussed below). Their spending leapt from less than $50,000 in 2002 to $454,890 in 2004, thanks in part to the $154,636 it received from Granbury Lieutenant Tommy Abercrombie. The firefighters’ largest expenditures—topping $200,000—went to political consultants and advertising. This PAC appears to have spent this money to mobilize voters for a 2003 constitutional amendment that now requires Texas cities to honor their pension contracts with employees. Similarly, the El Paso Municipal Police PAC more than doubled its expenditures to $131,304.
 

PAC Spending By Sector
Sector 1996
Cycle		 1998
Cycle		 2000
Cycle		 2002
Cycle		 2004
Cycle		 Growth From
2002-2004 (%)
Business $27,314,623 $31,516,817 $34,416,627 $48,000,676 $46,088,137 -4%
Ideology $13,713,797 $17,719,192 $16,870,715 $33,466,788 $17,789,167 -47%
Labor $1,886,325 $2,259,742 $2,707,704 $3,776,290 $4,512,391 +19%
Unknown $167,801 $48,068 $1,929 $76,473 $514,829  
TOTAL  $43,082,546 $51,543,820 $53,996,975 $85,320,226 $68,904,524 -19%

The forthcoming analysis of PAC spending changes from 2002 to 2004 suggests that two factors contributed to the dramatic contraction of Ideological PAC spending in Texas:

Indeed, Tom DeLay’s Texans for a Republican Majority PAC (TRMPAC)—a central focus of the grand jury’s probe—casts its shadow over many of the PAC spending patterns analyzed below.

Major PAC Spending Shifts

Insights into recent PAC-spending shifts can be gleaned from an analysis of the large PACs (spending more than $100,000 in 2002) that reported the greatest spending changes from 2002 to 2004. Business PACs dominate the list of large PACs with the fastest growth rates. In contrast, Ideological and Single-Issue PACs account for most of the large PACs that reported the greatest spending cuts.

Democratic demolition
Democratic Party wreckage is liberally littered across the list of large Texas PACs that suffered the worst contractions in the 2004 election cycle. The biggest PAC on the list is that of the Texas Democratic Party itself, which plummeted from $15 million in expenditures in 2002 to less than $2 million in 2004. The defunct Texas Partnership PAC—organized to maintain a House Democratic majority when there was one—filed its last PAC report a few months after Republican Speaker Tom Craddick took office in 2003. Its disappearance was only partly offset by the rapid growth of the Majority PAC, which House Democrats optimistically created shortly before the 2002 Republican House takeover that rendered this PAC’s name anachronistic. Also taking a nosedive was the Democratic Party of Tarrant County. This Fort Worth region is the home base of former Democratic Congressman Martin Frost, whom Republicans redistricted out of office. Frost’s Lone Star Fund, which spent $220,219 in 2002, vanished from the Texas Ethics Commission’s radar screen. All this Democratic hemorrhaging could not be stanched by the birth of two other large Democratic PACs that wielded $820,689 between them: the House Democratic Campaign Committee and Annie’s List. A co-founder of Annie’s List is Anne Kitchen, who got knocked out of the House in 2002 after being targeted by TRMPAC.
 

Fastest Shrinking Large PACs
PAC Interest 2002
Rank		 2002
Spending		 2004
Spending		 2002-2004
% Change
Texas 2000 Lawyers/Lobbyists 8 $1,500,132 $567 -99.96%
Texans For Governmental Integrity Ideological 50 $261,563 $100 -99.96%
Constitutional Defense Fund Lawyers/Lobbyists 78 $200,857 $4,950 -97.54%
American Airlines Transportation 24 $515,755 $16,500 -96.80%
Progressive Voters In Action Ideological 43 $272,147 $9,746 -96.42%
Texas Partnership Ideological 11 $955,102 $52,517 -94.50%
Texas Tea PAC Ideological 128 $108,246 $10,410 -90.38%
El Paso Energy Corp.  Energy 39 $313,200 $35,416 -88.69%
Texas Democratic Party Ideological 1 $15,041,055 $1,922,185 -87.22%
Tarrant Co. Democratic Party Ideological 69 $210,906 $27,507 -86.96%
Free Enterprise PAC Ideological 21 $597,238 $79,135 -86.75%
Campaign for Republican Leadership Ideological 90 $171,039 $26,297 -84.63%
Texans for a Republican Majority Ideological 13 $800,441 $133,784 -83.29%
Texas Assn. of Business Misc. Business 42 $275,956 $48,720 -82.34%

Two large 2002 PACs that all but disappeared represented trial lawyers, who long stood as leading Democratic underwriters. Unlike the Democrats, however, the trial lawyers replaced their retiring PACs with larger new ones. After moving $1.7 million through the Texas 2000 PAC and the Constitutional Defense Fund in 2002, trial lawyers pumped a combined $2.3 million through two new PACs in 2004: Texans for Insurance Reform and the Good Government PAC. Here again, however, the Democrats took a whipping. While the Texas Democratic Party and its candidates received almost all of the money that trial lawyers moved through the two 2002 PACs discussed here, this no longer held true in 2004.

In the 2004 cycle, the trial lawyers’ Texans for Insurance Reform and the Constitutional Defense Fund spent most of their money on a narrowly defeated effort to shoot down a 2003 constitutional amendment (Proposition 12) that now authorizes lawmakers to cap damages awarded in lawsuits. Most of this money went to political consultants and media buys rather than to Democrats. What’s more, some of the candidates who did get trial-lawyer money were—gasp—Republicans. Good Government PAC gave $10,000 to Lieutenant Governor David Dewhurst and even gave $25,000 to TRMPAC-backed House candidate Bryan Hughes. It gave $100,000 more to the HillCo lobby PAC, which gave 65 percent of its money to Republicans. Medical and business interests led by Texans for Lawsuit Reform (TLR) opposed the trial lawyers in the battle over lawsuit damages. TLR spent more than $3.1 million, usurping the Texas Democratic Party as Texas’ largest PAC in 2004. The newborn Heart Place PAC also spent heavily to cap the legal damages faced by cardiologists who commit malpractice.

Curbing abuse
While a wide swath of Democratic PACs took financial hits in 2004, most of the conservative PACs that withered were ones that developed a reputation in 2002 for playing fast and loose with Texas elections laws. Notable among them are Texans for a Republican Majority (TRMPAC) and the Texas Association of Business. Both of these organizations are the subjects of a Travis County District Attorney criminal investigation into allegations that they illegally spent corporate funds to win a Republican House majority in 2002.

After Republicans took the House and installed Tom Craddick as speaker they created a new PAC in 2003 to help Craddick retain his new title. This Stars Over Texas PAC (SOT) is 2004’s largest new PAC after Texans for Insurance Reform. SOT’s actions suggest that the District Attorney’s probe is exerting a chilling effect on political fundraising abuses. In September 2004 SOT acknowledged that it had failed to disclose $108,900 in corporate funds that it received six months earlier; the PAC then returned these questionable funds to AT&T and a group of predatory lending corporations.
 

Largest New PACs in 2004
PAC Interest Category 2004
Spending		 2004
Rank
Texans for Insurance Reform Lawyers & Lobbyists $1,911,888 6
Stars Over Texas Ideological $956,675 12
Good Government PAC Lawyers & Lobbyists $465,915 27
Annie's List Ideological $454,177 30
House Democratic Campaign Committee Ideological $366,512 36
Texas Federation of Republican Women Ideological $347,460 40
BG Distribution Partners Miscellaneous Business $162,300 93
Citizens For A Better Fort Worth Miscellaneous Business $148,133 105
Heart Place PAC Health $136,262 109
Occidental Petroleum Corp. Energy & Natural Resources $127,759 121
Carter & Burgess, Inc. Construction $119,425 128
American Electric Power Energy & Natural Resources $111,300 129
Citizens For Public Transportation Ideological $110,138 132
All Children Matter, Texas Ideological $100,456 139

Prosecutors also reportedly are investigating if Craddick broke state laws that bar speaker candidates from contributing anything of value to other House candidates whom—if elected—elect a speaker from their ranks. The withered Campaign for Republican Leadership (CRL) PAC could figure into such a probe. Craddick’s regular House campaign committee was the top donor to CRL, which doled out $176,500 to eight GOP House candidates in 2002.

Another withering conservative fund, the former Free Enterprise PAC, earned notoriety in the 2002 primary for attack ads portraying moderate Republicans as champions of gays, abortionists and mercy killers (Free Enterprise rechristened itself the Heritage Alliance PAC later that year). The dwindling of the Texas Tea PAC was partly offset by the birth of the Texas Federation of Republican Women, which counts Texas Tea among its members. The Associated Republicans of Texas (ART), by far the largest of 2004’s fast-growing PACs, expanded in the void left by these contracting conservative PACs. ART’s expenditures more than tripled in the 2004 cycle to almost $1.7 million.

The newborn All Children Matter PAC lost its school-voucher battle late in the 2005 session—even after the PAC’s sole sugar daddy, James Leininger, personally visited the House to twist members’ arms. Businesses supplied most of the money that Citizens for a Better Fort Worth spent to help pass $274 million worth of local infrastructure bonds in 2004. Citizens for Public Transportation raised much of its money from contractors favoring the light-rail initiative that Houston voters narrowly approved in November 2003. On the losing side of this fight were Citizens to Lower Our Unfair Taxes (CLOUT), which spent $77,566, and Texans for True Mobility (TTM), which refused to disclose its finances. CLOUT reported receiving $15,000 from TTM, which got a total of $30,000 from Tom DeLay’s ARMPAC and congressional committee, according to disclosures filed by DeLay PACs.

Surging business PACs
Thirteen PACs that spent at least $100,000 apiece in the 2004 cycle posted spending increases of more than 250 percent over the previous cycle. Nine of these fast-growth funds are Business PACs. Not surprisingly, they hail from highly regulated industries that read like a who’s who of the special interests that have been clamoring state officials.
 

Fastest Growing Large PACs
PAC Sector 2002
Spending		 2004
Spending		 2002-2004
Growth (%)
MAXXAM, Inc. Finance $9,000 $277,768 2,986%
Jobe PAC Construction $7,951 $162,103 1,939%
Majority PAC of Texas Ideological $49,806 $660,310 1,226%
Friends of Phil Gramm Ideological $48,254 $514,274 966%
Fort Worth Firefighters Labor $45,495 $454,890 900%
Centex Corp. Construction $13,000 $110,822 752%
TX Assn. of Mortgage Attorneys Lawyers/Lobbyists $95,090 $647,500 581%
TXU Power & Energy PAC Energy $41,516 $230,418 455%
Apartment Assn. of Tarrant Co. Real Estate $36,200 $154,452 327%
Grande Communications Communications $55,000 $212,950 287%
TX Podiatric Medical PAC Health $46,677 $177,618 281%
Vought Aircraft Industries Transportation $33,000 $120,750 266%
Associated Republicans of TX Ideological $480,820 $1,688,087 251%
  TOTAL:  $961,809 $5,411,942  

Texas’ fastest growing big PAC is that of corporate-raider Maxxam, Inc. A 2002 TRMPAC memo recorded a $5,000 pledge from Maxxam CEO Charles Hurwitz along with a note on Hurwitz’s agenda: “Horseracing, #1.” Maxxam owns two Texas race tracks and has applied to regulators to open a third. Heavily funded efforts to legalize slot machines at Texas race tracks failed in the 2005 session. Yet too much money is at stake to declare this horse dead yet.

El Paso-based Jobe Concrete PAC increased its spending by almost 2,000 percent. The industry that mines and combines gravel and cement into concrete has been battling demands for greater environmental regulation. Neighbors of quarries, cement kilns and mixing plants have long complained about the industry’s air and water pollution. But the industry finally may have gone too far when it trashed a stretch of the Brazos River that runs past a billionaire’s ranch. WalMart heiress Alice Walton got Texas Commission on Environmental Quality Chair Kathleen Hartnett White and gubernatorial advisor Wendy Wyman on a helicopter to survey the damage in 2004. Regulators quickly launched a crackdown on hundreds of unlicensed rock quarries operating around the state. The industry tried to retaliate in 2005 with a failed bill that would have eviscerated regulators’ authority to penalize quarries and concrete plants operating without valid Clean Air Act permits.3 Jobe Concrete settled a longstanding environmental battle over its quarrying next to Franklin Mountains State Park by donating 20 acres of the land to this El Paso reserve in 2004.

Although it is classified here as an Ideological PAC, former Senator Phil Gramm effectively converted his leftover Senate campaign fund into a business PAC when he became a federal lobbyist for investment bank UBS. In this role, Gramm lobbied Governor Rick Perry in 2003 on a controversial “dead-peasant” scheme that was derided as too ghoulish once the media exposed it. The state essentially would have taken out life insurance policies on retired teachers in order to later plow their posthumous insurance payouts back into the Teacher Retirement System.

Homebuilder Centex fought a big battle during the 2004 cycle to evict vehicles from a strip of Galveston Island beach that it slated for a $500 million resort. More generally, the homebuilding industry fought an uphill battle to win respect for the Texas Residential Construction Commission, the new industry-dominated state agency that oversees lemon-home disputes.

In 2004 TXU became the state’s first major power company to endorse charging higher rates to customers with poor credit ratings. Severely criticized, the utility postponed this proposal, which it planned to inflict on predominantly Hispanic customers in South Texas. The Texas Public Utility Commission fined TXU $530,000 in 2004 for ads that falsely claimed that its rates were lower than those of its competitors. Generating goodwill with lawmakers in 2005, TXU provided Senators Troy Fraser and Ken Armbrister with coveted tickets to the Masters golf tournament in Georgia and TXU lobbyist Paul Blanton passed the hat to buy House Energy Committee Chair Buddy West a shotgun.

When Governor Rick Perry’s Texas Enterprise Fund gave $35 million in tax dollars to Vought Aircraft in 2004, the recipient pledged to create 3,000 jobs near Dallas by the end of the year. One year later, the Dallas Morning News reported that only 200 of the promised jobs had materialized, with the company postponing further hires indefinitely. The next section of this report touches on the interests of several other fast-growth PACs: Grande Communications, the Texas Podiatric Medical PAC and the Tarrant County Apartment Association.