TXU's Takeover Lobby
Cost About $17 Million

• $11 Million in Ads, $6 Million in Lobbyists and $200,000 in Gifts

TXU and its suitors spent approximately $17 million in early 2007 to convince state officials not to impose significant consumer or environmental restrictions on the giant utility or its pending takeover by the Texas Pacific Group and Kolberg Kravis Roberts & Co.

This is about twice what TXU officials expected to spend on the session before the buyout plan became public in late February.¹ TXU’s lobby push occurred as powerful legislators promised a major crack down on the company for exploiting the legislature’s disastrous 1999 deregulation of Texas electricity markets.

TXU Corp. and its buyout partners—calling themselves Texas Energy Future Capital Holdings (TEF)—ranked as the top lobby powers in Texas after AT&T.² TXU Corp. spent up to $3.8 million on 65 Texas lobbyists during the 2007 legislative session. Its suitors spent up to $2 million on 21 additional lobby contracts.

TXU’s lobby effort did not stop there. During the session, its swarm of lobbyists reported spending almost $11 million on advertising and more than $200,000 on gifts to state officials.

Although lobbyists rarely specify which client benefited from such expenditures, half of the TXU-takeover lobbyists had no other client. The $10.9 million that Clifford Angelo of Public Strategies reported spending on ads accounted for the vast majority of all the spending by TXU lobbyists. Angelo’s sole client was Texas Energy Future Capital Holdings, the TXU-suitor group that ran a saturation ad campaign promoting the buyout.

Two exclusive TXU lobbyists—ex-lawmaker Curtis Seidlits, Jr. and Rudy Garza—reported almost $4,000 more in media expenditures.

The TXU -Takeover Lobby, June 2007

Wining & dining

TXU lobbyists spent $146,851 wining and dining state officials and their staff. This may include the reported $6,000 that TXU spent to provide legislators and their aides with 2,400 breakfast tacos on the session’s opening day.³ Conveniently, the legislature rarely requires lobbyists to disclose what they bought for which officials. No such accountability is required, for example, unless a lobbyist spent more than $83 at one time wining, dining or entertaining an official.

Just two lobbyists itemized food and drink expenditures. TXU lobbyist Chris Shields reported spending up to $150 apiece to take Senators John Carona (R-Dallas), Rodney Ellis (D-Houston) and three aides to Sullivan’s Steakhouse in April. TXU lobbyist Kelli A. Rod reported spending up to $100 apiece at Sullivan’s on Reps. Chuck Hopson (D-Jacksonville) and Tommy Merritt (R-Longview) in February. That same day Rod spent up to $100 apiece more on the same two lawmakers at the Doubletree Guest Suites.

Lawmaker’s night out

TXU lobbyists Rudy Garza and Michael MacDougall reported spending up to $1,000 apiece to give San Antonio Spurs tickets to Rep. Rene Oliveira and Chief of Staff J.J. Garza. The tickets were for May 2, the night that the Spurs took an NBA semi-finals spot from the Denver Nuggets at AT&T Center.

TXU lobbyist Travis Jernigan reported spending up to $150 apiece on tickets to the Music Hall of Fair Park in Dallas for Rep. Wayne Christian (R-Center) and his wife. On the reported April ticket date this venue hosted a performance of the musical Wicked.

Hunting other gifts

TXU lobbyist Dianne Yanaway generously spent $11,320 on political gifts. The only ones that she itemized, however, were the “calendar bases” worth up to $100 apiece that she gave to 27 freshmen legislators at the start of their first session.

TXU lobbyist Raul Liendo paid up to $430 a pop for the “deer processing” costs of 13 politicos—all of whom were male. The House’s deer hunters were Reps. Warren Chisum, Harvey Hiderbran, Charlie Howard, Carl Isett, Tracy King, Armando Martinez, Trey Martinez-Fischer and Buddy West, joined by Speaker Craddick’s counsel Royce Poinsett. Kip Averitt and Jeff Wentworth represented the Senate, joined by Senator Leticia Van De Putte’s aide Gilbert Loredo. Governor Perry’s Business Development Director Roberto DeHoyos also joined TXU’s March hunt.

TXU lobbyist Chris Shields gave Perry Legislative Director Ken Armbrister and his son-in-law, Greg Hnath, unspecified NCAA tickets worth up to $150 apiece in March.

Governor Rick Perry was a TXU corporate cheerleader long before the start of the 2007 legislative session. During that session, TXU lobbyists focused their gift giving on the legislature, where some members—led by Senate Business & Commerce Chair Troy Fraser (R-Horseshoe Bay)—had threatened to give the powerful utility giant its belated comeuppance. TXU’s $17 million lobby helped derail any such plans.
 
Legislators and their staff members accounted for 89 percent of all gift expenditures reported by TXU-related lobbyists. Executive-branch officials and their staff members received 2 percent of the largess. Finally family members and other guests of Texas politicos accounted for 9 percent of the gift expenditures made by TXU lobbyists.

¹ See “TXU fights for 11 new coal plants,” Houston Chronicle, February 11, 2007.
² AT&T spent up to $9.6 million on 127 lobby contracts during the 2007 legislative session.
³ “TXU fights for 11 new coal plants,” Houston Chronicle, February 11, 2007.