Sunday, August 21, 2011

Tales of a Phony Capitalist Part IV: Rick Perry's Cronyism Problem

Yep, another one. More problems pop up by the day, so it's likely that this series will continue for quite some time... or at least until Slick Rick decides he's had enough and drops out for the good of the entire GOP. I really don't understand how someone so flawed could jeopardize the entire 2012 race, knowing his own scandals, and yet jump into the race anyway. But jump in he did (breaking his word), and so he's going to get the vetting he asked for. Maybe he just wants to get everything out in the open so he can apologize profusely and run again in 2016 (after Palin's 2nd term :).

Crony capitalism is actually the overall theme of this entire series, but we have not detailed some of the specifics yet. First, this from Politico about the "gifts" (bribes?) Perry received while in office:

Cowboy boots — 22 pairs. Stetson hats. Belt buckles. Cuff links. A TV. Medical tests for him and his wife. Nine hunting trips. Dozens of tickets to sports games and concerts.

Rick Perry earns a $150,000 annual salary and has a blind trust. But he’s also received over 90 personal gifts — many of them from top donors and political appointees — during his 11 years as Texas governor, according to personal financial statements he filed with the state.


However, since gifts must be worth at least $250 to trigger the gift disclosure requirement, the total value of the 90 gifts Perry accepted during his governorship is at minimum $22,500, and potentially much more.


Perry’s gift givers are also among his most generous campaign backers, putting at least $6.4 million in contributions from themselves and their families into his three gubernatorial bids, according to a POLITICO analysis of data compiled by the watchdog group Texans for Public Justice. And at least 10 gift givers have gotten state appointments during the Perry administration. (emphasis mine)

Making the Perry all star list are the following good ol' boys:

Name: Phil Adams
Town: Bryan, Texas
Occupation: Insurance Company Owner
Contributions: $290,000 to Perry's gubernatorial campaigns, employment for his two children as secretaries, tickets to football and basketball games (incl. 2007 Big 12 basketball tournament) along with transportation and lodging
Reward: Appointed to the Texas A&M board of regents in 2001 and 2009

Name: Dan Freidkin
Town: Houston, Texas
Occupation: Auto Dealer
Contributions: $715,000 to campaigns, 2007 hunting trip
Reward: Appointment to Texas Parks and Wildlife Commission

Name: Peter Holt
Town: San Antonio, Texas
Occupation: Owner of the San Antonio Spurs
Contributions: $538,000 to campaigns, tickets to Spurs games

Name: James Leininger
Town: San Antonio, Texas
Occupation: Biotech Investor
Contributions: $239,000 to campaigns, hunting trips, Spurs tickets, retreat to plan Presidential campaign

Name: Rocky Carroll
Town: El Paso, Texas
Occupation: Famous boot maker (made boots for Queen Elizabeth, Carter, Reagan, and both Bushes)
Contributions: 10 pairs of boots (valued at $500 each)
Reward: Appointment to Texas Parks and Wildlife Commission

Name: Roger Williams
Town: Fort Worth, Texas
Occupation: Auto Dealer
Contributions: boots
Reward: Appointment to Secretary of State

Other reported gifts include tickets to concerts and football games from media consultant David Weeks, a television and DVD player from campaign strategist Dave Carney, medical tests from Dr. Kenneth Cooper and Dr. Randy Hickle, and boots from oilman Harry Courson and real estate developer Fausto Yturria.

Sure ok, you say, Perry had some friends that gave him gifts whom he appointed to political office. He had to appoint someone right? Maybe the choices were a little bit clubby, but he wasn't going to appoint someone who didn't support his campaign after all. Well, you would be right. The political appointments are small potatoes compared to the more devilish ways Perry found to shovel money to his best buds.

You may have heard about the Texas Emerging Technology Fund if you read Charles Dameron's article in the Wall Street Journal last week. According to the article,

The Emerging Technology Fund was created at Mr. Perry's behest in 2005 to act as a kind of public-sector venture capital firm, largely to provide funding for tech start-ups in Texas. Since then, the fund has committed nearly $200 million of taxpayer money to fund 133 companies.

Unfortunately, tens of millions of those dollars have become enmeshed in what is essentially a pay-to-play scheme. The tangled web of shady connections is a bit complicated, but I'll do my best to summarize.

One of the companies that the Emerging Technology Fund invested in was Convergen LifeSciences, Inc., which received a $4.5 million grant, the second largest ever in the history of the fund. Prior to the 2009 grant, the company's founder and executive chairman David Nance had invested only $1,000, together with the other partners. This, despite the fact that Nance had contributed $75,000 to Perry's campaigns between 2001 and 2006. But it gets worse. The application was initially denied by the fund. Nance appealed to the Perry appointed statewide advisory committee (which, of course, Nance had previously been a member of) which mysteriously reversed the original decision without giving any details other than that the company had been "thoroughly vetted". Barra bing barra boom, $4.5 million of taxpayer money! Perry managed to top that off with $2 million more from the Wagner-Peyser Act to Nance's nonprofit, Innovate Texas, which he launched after bankrupting a previous company. Nance was paid $250,000 for the two years he ran Innovate Texas.

ThromboVision, Inc. received $1.5 million in 2007. Charles Tate, a major Perry contributor, was the chairman of the state committee that reviewed their application, and voted to approve their request. Not wanting to be left out of the cash windfall, however, he immediately invested his own money in the company and owned 200,000 preferred shares of the company by 2010. The oh-so-vetted company failed to file the required reports and promptly went bankrupt in 2010. Another Perry backer, Charles Miller, was found to own 250,000 preferred shares of the company, having contributed $125,000 to Perry's campaigns.

Although the state auditor's office and some lawmakers have tried to reform the fund, especially in a time of budget shortfalls, they have been unsuccessful thus far. Dameron sums up Perry's pork-laden cash grab boondoggle quite succinctly:

Michael Quinn Sullivan, the president of Texans for Fiscal Responsibility, sees in the Emerging Technology Fund a classic example of the perils of government pork. "The problem with these kinds of funds is that even when they're used with the best of intentions, it looks bad," says Mr. Sullivan. "You're taking from the average taxpayer and giving to someone who has a connection with government officials."

The Boston Globe reports that a company called G-Con received $3 million from an economic development fund. Founder John McHale then contributed $50,000 to Perry's gubernatorial campaign, and has contributed $50,000 more to Perry's presidential campaign. Others associated with the company have contributed tens of thousands of dollars as well. According to the Globe,

Over three terms in office, Perry’s administration has doled out grants, tax breaks, contracts, and appointments to hundreds of his most generous supporters and their businesses. And they have helped Perry raise more money than any politician in Texas history - donations that have periodically raised eyebrows in Texas but, thanks to loose campaign finance laws and a business-friendly political culture dominated in recent years by Republicans, have only fueled Perry’s ascent.


But because he has been in office more than a decade, he has had greater opportunity than any of his predecessors to stock the government with loyalists - he has appointed roughly 4,000 individuals to state posts - while enacting policies that have benefited allies and contributors.

And Perry has been much more aggressive than any past governor in soliciting from them. According to a study last year by Texans for Public Justice, a watchdog organization, Perry has raised at least $17 million from more than 900 appointees or their spouses, roughly $1 out of every $5 that he has raised as governor.

As it turns out, the Texas Enterprise Fund has doled out a whopping $435 million since its inception in 2003, more than twice what the Emerging Technology Fund has given out. And Perry's returns have been breathtaking:

More than a quarter of the companies that have received grants from the enterprise fund in the most recent fiscal year, or their chief executives, made contributions to either Perry’s campaign dating back to 2001 or to the Republican Governors Association since 2008, when Perry became its chairman, according to an analysis by The New York Times.

Folks, this is just the tip of the iceberg. It will take time to develop a full accounting of the myriad of characters which have received millions from these government funds, supposedly established to support "private" enterprise, only to turn around and donate tens or hundreds of thousands of dollars to Rick Perry in his quest for ever higher office. The players are so numerous, and the company names under which they operate so obtuse, that the web will not be untangled easily. But unravel it will. You can't run for president and not expect to have somebody look into this stuff. Back-slapping Texas businessmen may have given Perry the benefit of the doubt when it came to his trading of money for power, but you can be sure the nation won't give him the wink and the nod so easily.

Next up: rumors abound about extramarital dalliances, with both sexes. I'm fairly dismissive toward this stuff, because no proof has ever been found. Right about now someone would be stepping forward if any of the allegations were true. However, I can confidently say this much: Rick Perry's wife hardly ever smiles. Their relationship seems to be...  icy, at best. I ask you, does this look like a man who enjoys kissing his wife?

1 comment:

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