Sunday, October 1, 2006

Comptroller Carole Keeton Strayhorn and Gov. Rick Perry, the two big-money, veteran politicians running for governor, each have rough allegations to deny — that they're too cozy with high-dollar donors. The campaigns have hurled the accusations across the capital and the charges are likely to become even more caustic in the final five weeks of the race.

Perry, Strayhorn spar over coziness with big campaign donors

AP Political Writer

AUSTIN — Comptroller Carole Keeton Strayhorn and Gov. Rick Perry, the two big-money, veteran politicians running for governor, each have rough allegations to deny — that they're too cozy with high-dollar donors.

The campaigns have hurled the accusations across the capital and the charges are likely to become even more caustic in the final five weeks of the race.

Perry's camp wants everyone to know that officials associated with the Dallas tax consulting firm Ryan & Company, which represents major corporations in tax disputes with Strayhorn's state agency, have given nearly $2 million to her campaign the past four years.

Her agency also has made hundreds of millions of dollars in state tax settlements around the time Strayhorn took campaign contributions from those taxpayers or their agents, auditors found.

Strayhorn's supporters, meanwhile, are complaining that Perry has gotten campaign contributions from officials of one of the companies that forms Cintra-Zachry, the Spanish-American consortium that won a state contract to begin developing Perry's proposed toll road network, the Trans-Texas Corridor — a superhighway that's infuriating many landowners in its path.

Cintra-Zachry's contract was kept partly secret until a decision to disclose it this past week and was the target of intense criticism among toll road opponents.

Strayhorn also says Perry operates a come-and-go administration for lobbyists.

She points out Perry's former legislative director, Dan Shelley, worked as a consultant for Cintra before working for Perry during the 2005 Legislature. Now, Shelley is lobbying with a Cintra contract that earns between $50,000 and $99,999, state records show.

Strayhorn said she'll push for a law banning lobbying by former state employees or officials for at least four years and said even before a law is enacted she'll make anyone who works for her pledge they won't lobby state government for that amount of time after leaving.

"Right now we've got a revolving door. I'm going to have a granite wall," Strayhorn said in a recent interview with The Associated Press.

Perry has said his former top aides cannot lobby his office for at least a year and one regular legislative session following their departure. Under those rules, Shelley is still banned from lobbying Perry's office but can lobby other arms of state government. Kathy Walt, a spokeswoman for the governor's office, said that when Shelley worked in the governor's office he was not allowed to take part in discussions involving the Trans-Texas Corridor.

Perry suggested Strayhorn wants to change the subject from her own ethical problems and said she ought to "take care of her own department" before throwing rocks.

"The glass house she lives in is rather fragile," Perry told the AP last week in El Paso.

Whether the candidates' complaints have resonated with voters or not, they could once the allegations are boiled down into quick, catchy campaign slogans and television ads, said Gary Halter, a political science professor at Texas A&M University.

"That's how you turn complicated things into issues that have some traction," Halter said.

Halter said he can already hear possible negative ad slogans: "Rick Perry's Trans-Texas Corridor giveaway to some foreign Spanish ... construction company — foreigners!" or "She's taking money from people with tax appeals cases before her. Shame on that grandmother!"

Strayhorn, an independent candidate who calls herself "one tough grandma," already has a television ad that talks disparagingly of "foreign-owned toll roads."

Democrat Chris Bell, independent Kinky Friedman and Libertarian James Werner also are on the Nov. 7 ballot for governor.

Strayhorn, as comptroller, is the state's chief financial officer and overseer of state tax collections. A 2005 state audit report that Strayhorn claims is politically motivated found that her office settled 3,656 tax cases totaling $461 million within a year of Strayhorn receiving $2 million in campaign contributions by people connected to those cases.

The audit examined settlements from January 1999, when she first took office, through August 2004. Auditors did not allege wrongdoing, but did make recommendations, such as banning campaign contributions to the comptroller or comptroller candidates from anyone representing taxpayers before the state agency.

Strayhorn still accepts such contributions but has said she doesn't take donations from anyone with a tax dispute directly before her. She called the audit a political "witch hunt" orchestrated by Perry and his allies.

Perry's campaign has repeatedly criticized her large Ryan & Company contributions.

Principals and others from the consulting firm gave her $375,000 in late June, right around the time one of its major clients, Texas Instruments, was being awarded a $130 million tax refund from the comptroller's office. Strayhorn said she knew nothing about the refund then and that the decision was handled by her staff.

Her tax agency has about 2,200 ongoing taxpayer audits at a time, only a few of which ever make it to her own desk, she said in the AP interview.

In November 2004, Ryan & Co. officials gave Strayhorn a bundle of $200,000 in combined individual contributions, a month before Texas Instruments and Strayhorn announced in court they had agreed to resolve a sales tax dispute, documents show.

Strayhorn said there's nothing improper about her actions or her campaign cash.

"Anyone who contributes to my campaign or supports my campaign — there are many grassroots supporting, don't give dollars but give of their valuable time — does it for one reason, and it's good government," she said.

Perry also has come under scrutiny for campaign contributions he's received from principals of Zachry Construction Corp., a San Antonio-based company that's teaming with Cintra to develop the Trans-Texas Corridor. High-ranking officials from Zachry have given Perry $59,000 in contributions in the past year, state documents show.

Strayhorn also chides Perry for how he uses his legislature-approved Texas Enterprise Fund, set up to help lure businesses to the state. Strayhorn calls it a "corporate welfare slush fund."

Citing a Houston Chronicle report, she noted that a $35 million grant from the fund went to Lexicon Genetics Inc., a company whose major investors included some of Perry's top campaign contributors, like Houston Texans owner Robert McNair.

Perry said he gets campaign contributions from tens of thousands of Texans and that donations don't affect the awarding of contracts or grants.

"We do all our decision making in the open," he said.


Associated Press writer Alicia Caldwell in El Paso contributed to this report. Kelley Shannon has covered Texas politics and government in Austin since 2000.