Thursday, February 17, 2005

Five months ago, Mike Toomey was Gov. Rick Perry's chief of staff, directing virtually every aspect of state government. Now he's a high-dollar lobbyist for gambling, tobacco and health care interests that will win or lose hundreds of millions in the evolving policies that Mr. Toomey helped craft.

Revolving roles stir concerns in Austin

Interest groups fear conflicts of interest as Perry aides switch roles

By CHRISTY HOPPE / The Dallas Morning News
February 17, 2005

AUSTIN _ Five months ago, Mike Toomey was Gov. Rick Perry's chief of staff, directing virtually every aspect of state government. Now he's a high-dollar lobbyist for gambling, tobacco and health care interests that will win or lose hundreds of millions in the evolving policies that Mr. Toomey helped craft.

Five months ago, Dan Shelley was a top lobbyist helping corporations such as Cintra win the multibillion-dollar contract to build the Trans Texas Corridor, a superhighway championed by Mr. Perry. Now he is the governor's point man in the Capitol, helping write transportation law.

The revolving door from lobbyist to executive officer and back to the lobby is spinning under the Perry administration, alarming interest groups who fear hidden conflicts of interest.

The governor's press secretary said the office has hired lobbyists for staff jobs because of their knowledge and experience.

"You want to bring someone in who knows the legislators, who knows the process and who can present the governor's policy interests with legislators," said Kathy Walt. "It's not a job for a rookie."

Five former members of the governor's executive staff are lobbyists who earn $250,000 to $1.25 million, according to financial disclosure forms at the Texas Ethics Commission. Four began as lobbyists, served a year or two for the governor and then went back to being hired guns, taking up with many of the same clients.

Mr. Perry's ethics policy _ one of the stiffest of any Texas governor _ prohibits exiting executive staff from lobbying his office for one year and one legislative session after they leave. The policy does not preclude former top staffers from lobbying the Legislature or state agencies.

The governor also requires members of his executive team to fill out financial disclosure forms so he is aware of any potential conflict.

But those safeguards won't always protect the public against special interests and ingrained favoritism, said SMU political science professor Cal Jillson.

Governors, he said, "will always say that these guys have deep expertise, that they have a tremendous knowledge of state government and how it works."

But when someone goes from working for a big client to working for the governor, then back to the client, "The question is on whose behalf was that knowledge of state government being used?" he said.

"It is inherently murky and fraught with conflicts of interest," Dr. Jillson said.

Appearances raise questions

Mr. Toomey's new job as a top lobbyist for health-maintenance organizations is one recent example of how appearances can raise questions _ whether or not conflicts exist.

Mr. Toomey encountered state Health and Human Services chief Albert Hawkins in a hall last week after the health commissioner spent hours answering lawmakers' sometimes-thorny questions about his plan to shift billions of dollars in Medicaid payments to HMOs.

A lobbyist opposed to Mr. Hawkins' plan overheard Mr. Toomey tell the chief that he should have moved on the plan sooner, before the Legislature was in session.

While Mr. Toomey and Mr. Hawkins acknowledged the exchange, Mr. Toomey said that it was in jest and that he did not lobby Mr. Hawkins on the HMO plan.

Mr. Toomey represents clients who are among the state's largest HMOs, but he said he was at the hearing, "for a totally different reason."

Similar questions have been raised by Mr. Shelley's move to Mr. Perry's staff from Cintra, a Spanish construction company. State records showed Mr. Shelley met at least five times with state transportation officials on behalf of Cintra before the company won a multibillion-dollar road deal.

Mr. Perry's office has said Mr. Shelley's activities on behalf of Cintra did not constitute lobbying and had no role in the awarding of the $7.2 billion contract.

Craig McDonald, executive director of the watchdog group Texans for Public Justice, said the state should employ a strict moratorium that prohibits any government staff members from lobbying for two years after they leave public office.

Mr. McDonald said most major bills are written out of public view, with input from the governor's staff and paid lobbyists.

"This is a closed society. You don't see who's getting the special favors in bills," Mr. McDonald said.

Louisiana and Alabama have such laws, while 11 other states _ including Pennsylvania and California _ prohibit government executives from doing any lobbying for at least one year after they leave office, according to the National Conference of State Legislatures.

Peggy Kerns with the conference said there are probably other states where the governor has given executive orders prohibiting lobbying immediately after public service.

Governor Bush tapped lobbyists

In Texas, Gov. George W. Bush was one of the first to tap high-level lobbyists when he asked Reggie Bashur and Cliff Johnson to help guide his legislative agenda.

After wide success in Mr. Bush's first legislative session, the two men returned to their lobbying business with the proviso that they not lobby the governor's office.

The revolving door has become routine in Mr. Perry's administration, with four lobbyists being hired in just over two years. Four have returned to the lobby.

Faced with a second legislative session that promised budget shortfalls and other troubles, the governor recruited Mr. Johnson and Mr. Toomey to join his staff in late 2002. The three served together in the House.

Mr. Toomey and Mr. Johnson put million-dollar lobbying businesses on hold, and both returned to the lobby within weeks of leaving the governor's office.

Other now-again-lobbyists include former legislative director Patricia Shipton and communications director Robert Howden.

Former senior adviser Ray Sullivan didn't lobby before, but he does now.

Among his clients is UBS, the Switzerland-based financial institution recently picked to be the main bond underwriter for part of Mr. Perry's superhighway.

Mr. Sullivan said his clients benefit from his years of service, which include working at the U.S. Capitol, running political campaigns and working for the governor.

"I really view my job and my advice as finding ways to help the state's elected officials and the employers and associations that I work for succeed. I've never taken off my what's-best-for-Texas hat," Mr. Sullivan said.

Mr. Howden, who lobbied for a large business association before working for the governor, said he joined the staff because he believed in Mr. Perry and wanted to help him achieve his policies. But he said he always believed he would return to the lobby.

"I did it to help myself with professional development and to help a friend," Mr. Howden said.

Another lobby connection is Mr. Shelley, a state senator who worked for Mr. Bush, became a lobbyist and now is Mr. Perry's legislative director.

Mr. Shelley left his former clients with his daughter, with whom he shared a lobby business.

Ms. Walt said the governor's rules prohibit the spouse of a top aide from working as a lobbyist, but no rule exists about other family members.

"Dan quit his lobby practice to go to work for the governor, but it would be unreasonable to demand or expect everyone else in the firm to go out of business," Ms. Walt said.

Mr. Johnson said when he went to work for the governor, he severed relations with his former clients and did not feel conflicted in his loyalty.

"You gotta come in clean. You're working for the state of Texas," he said.

Staff writer Robert T. Garrett contributed to this report.