Asher Price reports at the Austin American-Statesman on how a top Abbott aide became one of Texas' highest paid lobbyists.  |
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Showing posts with label Revolving Door. Show all posts
Showing posts with label Revolving Door. Show all posts
Friday, June 28, 2019
Friday, March 2, 2018
Legislators play with their war chests
Without competitive primaries, some Texas politicians choose to donate to their colleagues
A 2017 report from Texans for Public Justice,
a campaign finance watchdog group, said five members who left the Texas
Legislature that year became lobbyists within four months of leaving.
“A couple of people have gone into the lobby in recent years with pretty
decent-sized war chests,” said Craig McDonald.
Friday, May 26, 2017
Lawmakers Rub Out Emergency Ethics Reforms -
TPJ, Public Citizen Statement
Gov. Abbott's "Emergency" Goes Unheeded - Again!
For the second legislative session in a row, lawmakers largely ignored Gov. Greg Abbott's emergency call for ethics reform.
See the fate of 10 Key Reform Bills and TPJ's reaction.
Thursday, May 4, 2017
Lobby Watch: The Newest 'Revolving Door' Lobbyists.
With five of Speaker Joe Straus' former lieutenants stepping
straight into the lobby this session, a Straus-appointed committee
eviscerated a reform to slam the brakes on the revolving door.
Members
seem to regard the revolving door as a personal entitlement, as the
House trains future lobbyists at public expense. Which 2015 committee
chair now boasts the fattest retainers? Who lugged the biggest leftover
war chest into the lobby?
Tuesday, June 9, 2015
Lobby Watch: Pitts Hits Lobby with $500,000
Four 2013 lawmakers collected up to $675,000 to lobby their old
colleagues this session. Half of that money went to ex-Appropriations
Chair Jim Pitts, whose clients include a strip-club trade group. Pitts
entered the lobby with almost $500,000 leftover in his war chest--money
that he can hand out to his lobby targets.
Thursday, September 11, 2014
Austin's Oldest Profession
Tracks 2013 Texas Lobby Spending
During 2013, 2,932 clients paid 1,704 lobbyists up to $349 million to
influence Texas government decisions, according to TPJ’s biennial
analysis of Texas lobby spending. 2013 lobby spending nosed out
pre-recession lobby expenditures for the first time.
To identify Texas' biggest lobbyists and lobby clients, you need:
"AUSTIN'S OLDEST PROFESSION"
Tuesday, April 23, 2013
Lobby Watch: 12 Republicans Flip From Lege to Lobby
A dozen recent members of the Texas Legislature already are reporting up to $2 million in lobby income this session. The 12 revolving-door lawmakers left office with $2.4 million in left-over campaign funds, which they can legally use to buy influence with state officials. Many new revolvers are hustling for the very interests that they regulated. Predatory lenders and education interests rank high on their client lists.
A new Lobby Watch reveals who sold out--for what.
A new Lobby Watch reveals who sold out--for what.
Thursday, February 7, 2013
Lobby Watch: Revolver Vicki Truitt Claims her Payday
The first two clients to hire ex-Rep. Vicki Truitt within days of her leaving office last month are interests that she serviced as chair of the House Pensions, Investments & Financial Services Committee. Last session Rep. Truitt championed bills for the predatory lending industry and the Teachers Retirement System. After voters kicked her out of office, Truitt now serves the same interests as a revolving-door lobbyist for ACE Cash Express and the Texas Retired Teachers Association.
The new Lobby Watch celebrates Vicki Truitt's payday.
The new Lobby Watch celebrates Vicki Truitt's payday.
Tuesday, February 5, 2013
TPJ Lawsuit Fails to Open Legislative Pension Info
From the Austin American-Statesman, by Mike Ward.
Texas taxpayers cannot find out how much retired lawmakers as a group are collecting in retirement benefits from the state, an Austin judge ruled this morning.
The reason: Lawmakers have passed laws to keep that information secret, even if the retirees are not identified individually.
The decision by State District Judge Lora Livingston came in a lawsuit filed by the government-watchdog group Texans for Public Justice. The group is seeking to find out the total cost of retirement benefits being paid to 103 former lawmakers who are now lobbyists.
Read the full story.
Texas taxpayers cannot find out how much retired lawmakers as a group are collecting in retirement benefits from the state, an Austin judge ruled this morning.
The reason: Lawmakers have passed laws to keep that information secret, even if the retirees are not identified individually.
The decision by State District Judge Lora Livingston came in a lawsuit filed by the government-watchdog group Texans for Public Justice. The group is seeking to find out the total cost of retirement benefits being paid to 103 former lawmakers who are now lobbyists.
Read the full story.
Tuesday, October 23, 2012
TPJ Suit Seeks Pension Payouts to
Revolving-Door Lobbyists
TPJ filed a lawsuit in Travis County Court today to compel the state to disclose the aggregate amount of taxpayer-funded pension money paid to ex-lawmakers who became revolving-door lobbyists. The Texas Comptroller and officials at the Employees Retirement System recently denied TPJ's request for the data.
Read the details here.
Read the details here.
Thursday, January 19, 2012
Shark Week Explores the Ties Between Perry and the Corporate Lobby.
Texas leads the pack when it comes to public officials swimming through the "revolving door" and morphing into special-interest lobbyists. Nothing stops our lawmakers or the governor's staff and appointees from selling their connections to the highest bidder. Reformers have long tried to put the brakes on Texas' revolving door. TPJ takes a close look at Governor Perry's revolving door during Shark Week.Day One: Perry's Roomie Toomey Mobilizes the Corporate Lobby.
Day Two: The Governor's Office Runs a Farm Team for Lobbyists.
Day Three: Perry Appointees Morph Into Lobbyists.
Monday, May 9, 2011
DMN: Revolving Door Unlikely to Stop Spinning
Karen Brooks of the Dallas Morning News reports that bills to slow or stop the revolving door that turns lawmakers into lobbyists won't likely see the light of day in the legislature.
Read her report at the Dallas Morning News.
Read her report at the Dallas Morning News.
Thursday, April 7, 2011
Lobby Watch: Tracking the New Revolving Door Lobbyists.
The GOP sweep last November established a House super-majority that forced many Democrats out of the Texas House. Ordinarily we would expect many of these refugees to resurface in the lobby. But Lobby Watch finds just five new revolving-door lobbyists--including three Republicans.
Apparently the surviving Democrats in the House wield so little power that special interests won't waste money hiring their former colleagues to lobby them.
Read about the new Revolvers in Lobby Watch.
Apparently the surviving Democrats in the House wield so little power that special interests won't waste money hiring their former colleagues to lobby them.
Read about the new Revolvers in Lobby Watch.
Thursday, September 16, 2010
Lubbock Avalanche-Journal:
Critics assail practice of ex-legislators becoming lobbyists
Too many former legislators are going directly from public office to a lucrative life of lobbying former colleagues, critics say — but those advocates of barring or limiting the practice agree the effort is an uphill push.
Read the article by Enrique Rangel at Lubbock On-line.
Read the article by Enrique Rangel at Lubbock On-line.
Thursday, May 6, 2010
Lobby Watch:
Sibley Asks Voters to Rehire a Hired Gun
Revolving-door lobbyist David Sibley, who has earned up to $15.6 million from special-interests since departing the legislature in 2002, is expected to ride back into the Pink Building on the strength of his huge, client-funded war chest.
Read the new Lobby Watch.
Read the new Lobby Watch.
Thursday, May 21, 2009
El Paso Times: Ex-lawmakers' lobbying looks bad, group says
Former El Paso state Rep. Pat Haggerty has contracts worth as much as $425,000 to lobby his former colleagues, according to a report a political watchdog group released Wednesday. Read the article at the El Paso Times
05/21/2009
AUSTIN -- Former El Paso state Rep. Pat Haggerty has contracts worth as much as $425,000 to lobby his former colleagues, according to a report a political watchdog group released Wednesday.
"This kind of thing looks bad, it smells bad and it is bad, but the only control on it is self-regulation," said Andrew Wheat, research director at Texans for Public Justice.
Haggerty declined to comment for this story.
The group's report criticized what it called a revolving door between the Texas Legislature and lobbying jobs. It detailed contracts between 10 lawmakers who recently left the Legislature and groups that have special interests at the Capitol.
Wheat said lawmakers should approve regulations requiring a cooling- off period between the time legislators stop making laws and start lobbying their former colleagues.
"I think people rightfully wonder when did they stop being a lawmaker and when did they start to become a special-interest lobbyist," Wheat said.
He said the practice creates questions about whe ther lawmakers are making public policy decisions with their future lobbying jobs in mind.
"Is that legislator going to stand up to (a special interest) if they are contemplating a future career as a hired gun in Austin?" Wheat asked.
Haggerty, whose first term in the Texas House was in 1989, lost the Republican primary election last year to El Paso businessman Dee Margo. Margo then lost in the general election to Democrat Joe Moody.
This year, according to the report, Haggerty has signed eight lobbying contracts worth between $210,000 and $425,000.
His biggest client is Fort Worth-based Bingo Interest Group. Other clients include AT&T, tobacco giant American Reynolds Inc., and Licensed Beverage Distributors.
Other lawmakers-turned-lobbyists mentioned in the report include former state Rep. Mike Krusee, who was chairman of the House Transportation Committee, and former state Rep. Fred Hill, who was chairman of the House Local Government Ways and Means Committee.
It is a long-standing practice in Austin for lawmakers to become lobbyists after their political careers end.
Many of the most influential lobbyists at the Capitol are former lawmakers or high-level staffers, said Ross Ramsey, editor of the online political journal Texas Weekly.
For example, former state Sen. J.E. "Buster" Brown, who represents the Tiguas, has more than 22 lobbying contracts worth up to nearly $1.8 million, according to Texas Ethics Commission reports.
"They're people with the expertise, so it's easy to see why the private sector would want to hire them," Ramsey said.
Lawmakers, he said, are the only ones with the power to slow or limit the practice of legislators becoming lobbyists.
"We've been here for 160 years and they haven't fixed it yet, so they obviously don't think it's a problem," Ramsey said.
Ex-lawmakers' lobbying looks bad, group says
By Brandi Grissom / Austin Bureau05/21/2009
AUSTIN -- Former El Paso state Rep. Pat Haggerty has contracts worth as much as $425,000 to lobby his former colleagues, according to a report a political watchdog group released Wednesday.
"This kind of thing looks bad, it smells bad and it is bad, but the only control on it is self-regulation," said Andrew Wheat, research director at Texans for Public Justice.
Haggerty declined to comment for this story.
The group's report criticized what it called a revolving door between the Texas Legislature and lobbying jobs. It detailed contracts between 10 lawmakers who recently left the Legislature and groups that have special interests at the Capitol.
Wheat said lawmakers should approve regulations requiring a cooling- off period between the time legislators stop making laws and start lobbying their former colleagues.
"I think people rightfully wonder when did they stop being a lawmaker and when did they start to become a special-interest lobbyist," Wheat said.
He said the practice creates questions about whe ther lawmakers are making public policy decisions with their future lobbying jobs in mind.
"Is that legislator going to stand up to (a special interest) if they are contemplating a future career as a hired gun in Austin?" Wheat asked.
Haggerty, whose first term in the Texas House was in 1989, lost the Republican primary election last year to El Paso businessman Dee Margo. Margo then lost in the general election to Democrat Joe Moody.
This year, according to the report, Haggerty has signed eight lobbying contracts worth between $210,000 and $425,000.
His biggest client is Fort Worth-based Bingo Interest Group. Other clients include AT&T, tobacco giant American Reynolds Inc., and Licensed Beverage Distributors.
Other lawmakers-turned-lobbyists mentioned in the report include former state Rep. Mike Krusee, who was chairman of the House Transportation Committee, and former state Rep. Fred Hill, who was chairman of the House Local Government Ways and Means Committee.
It is a long-standing practice in Austin for lawmakers to become lobbyists after their political careers end.
Many of the most influential lobbyists at the Capitol are former lawmakers or high-level staffers, said Ross Ramsey, editor of the online political journal Texas Weekly.
For example, former state Sen. J.E. "Buster" Brown, who represents the Tiguas, has more than 22 lobbying contracts worth up to nearly $1.8 million, according to Texas Ethics Commission reports.
"They're people with the expertise, so it's easy to see why the private sector would want to hire them," Ramsey said.
Lawmakers, he said, are the only ones with the power to slow or limit the practice of legislators becoming lobbyists.
"We've been here for 160 years and they haven't fixed it yet, so they obviously don't think it's a problem," Ramsey said.
Wednesday, May 20, 2009
Lobby Watch:
Ten New Lawmaker Retreads Merge Into the 2009 Lobby
Ten 2008 lawmakers have stumbled into the 2009 lobby, collectively claiming 68 contracts worth up to almost $4 million. Read who's doing whom in the new Lobby Watch
Tuesday, January 6, 2009
Dallas Morning News: Revolving door lets lawmakers profit from Capitol floor time
If J.E. "Buster" Brown had done it in Sacramento, Albany, more than two dozen other state capitals or in Washington, D.C., he might have been fined or sent to jail. Because he did it in Austin, it was all legal, and in just the first three months of doing it, he made half a million dollars. Read the article at the Dallas Morning News
By RANDY LEE LOFTIS / The Dallas Morning News
rloftis@dallasnews.com
Tuesday, January 6, 2009
For the weak and the vulnerable, Texas has long been an especially hard place. Year after year, national surveys place the state at or near the bottom in such categories as assistance to poor children and the malnourished, treatment of the mentally ill and care of the disabled. This story is part of The Dallas Morning News' 'State of Neglect' series examining how the state determines whom it protects and whom it excludes– and how special interests and their lobbyists strongly influence the writing of laws and the workings of state government.
If J.E. "Buster" Brown had done it in Sacramento, Albany, more than two dozen other state capitals or in Washington, D.C., he might have been fined or sent to jail.
Because he did it in Austin, it was all legal, and in just the first three months of doing it, he made half a million dollars.
Brown went through the revolving door – left the Legislature and immediately became a lobbyist. While most states and the federal government make former lawmakers wait a certain period before they start lobbying, Texas doesn't. Scores of ex-lawmakers now make a living trying to influence their former colleagues, and like Brown, they didn't have to pause between jobs.
Brown first registered as a lobbyist just one month after leaving the state Senate on Aug. 29, 2002, following 22 years as one of the state's most powerful politicians. In the remainder of 2002, five clients paid the Lake Jackson Republican between $400,000 and $650,000 to lobby on energy and water – topics that had been under his purview just weeks earlier as chairman of the Senate Natural Resources Committee – as well as on shipping and Indian gambling.
In the years since Brown left the Senate, he has reported being paid between $6.49 million and $9.65 million by interests as varied as liquor stores and T. Boone Pickens. The Texas Ethics Commission requires only that lobbyists report ranges of income, not exact figures.
Brown said that while his job change didn't cause problems, he understands revolving-door concerns and wouldn't have objected to a waiting period. As long as Texas doesn't have one, he said, ex-legislators need to avoid conflicts of interest.
"If lobbyists who have been [legislative] members conduct themselves well, there won't be a flareup," he said. "You can't write enough ethics rules to make people act right if they're determined not to."
Cashing in on legislative experience is a favorite Texas calling – a 2005 investigation by the nonprofit Center for Public Integrity found that Texas led all states, with 70 former legislators registered as lobbyists. But it doesn't sit well with everyone.
"Right now, I can leave the Legislature and, the next day, hang out my shingle. It is amazing," said state Sen. Jane Nelson, R-Flower Mound, who said she favors a mandatory cooling-off period, if not an outright ban, on former members lobbying current ones.
"I have always been vocally opposed to the revolving door," Nelson said. "It just doesn't feel right. I don't want people questioning: Is she filing that bill because she hopes to cash in on that at some point in the future? I would rather be boiled in oil."
Thirty states require some kind of cooling-off period when their legislators leave office, according to the National Conference of State Legislators. Six states – Alabama, Colorado, Florida, Iowa, Kentucky and New York – mandate a two-year ban. One year is the law in 19 states. Others have varying restrictions.
Former U.S. representatives are banned for a year; former U.S. senators, for two years. Under a 2007 law passed in the wake of the Jack Abramoff influence-peddling scandal, names of those in the waiting period are published on the Internet.
Although Texas doesn't restrict former legislators, a state ban does apply to ex-state agency heads and commissioners. They can't lobby their old agencies for two years; they can lobby other entities, such as the Legislature.
Gov. Rick Perry has a written policy of making former senior aides wait a year before lobbying the governor's office. Covered employees must acknowledge the policy in writing, Perry spokeswoman Allison Castle said in an e-mail.
At least 17 former Perry aides are now registered lobbyists, a comparison of payroll and lobbying records shows.
A 2007 bill by Sen. Eliot Shapleigh, D-El Paso, that would have made the waiting period for the governor's staff a requirement of state law instead of an office policy never emerged from the Senate State Affairs committee.
Attempts to rein in ex-legislators have met similar fates. In 2007, Reps. Donna Howard, D-Austin, and Juan Garcia, D-Corpus Christi, filed bills to mandate a two-year wait. Both bills died in the House Elections committee.
"The rationale is easy and straightforward," Garcia said in a recent interview. "It's so a serving member doesn't spend the final part of a term feathering the bed for some contractor." He cited five former legislators from his district who are now lobbyists.
Garcia said his bill never had a chance. "Folks said, 'Somebody files this biannually, and we just laugh it off.'"
During his 2008 re-election campaign, Garcia portrayed his Republican opponent, Todd Hunter, as a symbol of the revolving door.
Hunter was a four-term legislator who left the House in early 1997. Already the head of a Corpus Christi law firm, he immediately became a lobbyist for interests including hospitals, chemical makers and insurance companies, receiving as much as $2.83 million through 2007, the last year he registered as a lobbyist.
Hunter responded by noting that Garcia's campaign received money from some of the same legislators-turned-lobbyists he was targeting. So did Hunter's campaign, reports show.
Hunter beat Garcia in November and this month returns to Austin, once again a representative.
As a lobbyist, Hunter said, knowing procedures and issues was more important than knowing individuals. Now that he's back in office, Hunter said he would have no objection to a mandatory waiting period for lobbying by ex-legislators, but he'd want a really tough one, perhaps five years – a move that would almost certainly doom any such attempt.
"I think one or two years is ineffective," he said. "If there is a concern by the public, then it needs to have teeth."
Staff writer Gregg Jones and researcher Molly Motley Blythe contributed to this report.
Texas' highest-paid lobbyists
Texas lobbyists are, in most cases, required by law only to report broad ranges of earnings, not specific amounts. The totals below are based on the maximum the lobbyists reported earning in 2007, the last year the Legislature was in session. Lobbying totals are always higher in legislative years.
State of Neglect: Revolving door lets lawmakers profit from Capitol floor time
By RANDY LEE LOFTIS / The Dallas Morning News
rloftis@dallasnews.com
Tuesday, January 6, 2009
For the weak and the vulnerable, Texas has long been an especially hard place. Year after year, national surveys place the state at or near the bottom in such categories as assistance to poor children and the malnourished, treatment of the mentally ill and care of the disabled. This story is part of The Dallas Morning News' 'State of Neglect' series examining how the state determines whom it protects and whom it excludes– and how special interests and their lobbyists strongly influence the writing of laws and the workings of state government.
If J.E. "Buster" Brown had done it in Sacramento, Albany, more than two dozen other state capitals or in Washington, D.C., he might have been fined or sent to jail.
Because he did it in Austin, it was all legal, and in just the first three months of doing it, he made half a million dollars.
Brown went through the revolving door – left the Legislature and immediately became a lobbyist. While most states and the federal government make former lawmakers wait a certain period before they start lobbying, Texas doesn't. Scores of ex-lawmakers now make a living trying to influence their former colleagues, and like Brown, they didn't have to pause between jobs.
Brown first registered as a lobbyist just one month after leaving the state Senate on Aug. 29, 2002, following 22 years as one of the state's most powerful politicians. In the remainder of 2002, five clients paid the Lake Jackson Republican between $400,000 and $650,000 to lobby on energy and water – topics that had been under his purview just weeks earlier as chairman of the Senate Natural Resources Committee – as well as on shipping and Indian gambling.
In the years since Brown left the Senate, he has reported being paid between $6.49 million and $9.65 million by interests as varied as liquor stores and T. Boone Pickens. The Texas Ethics Commission requires only that lobbyists report ranges of income, not exact figures.
Brown said that while his job change didn't cause problems, he understands revolving-door concerns and wouldn't have objected to a waiting period. As long as Texas doesn't have one, he said, ex-legislators need to avoid conflicts of interest.
"If lobbyists who have been [legislative] members conduct themselves well, there won't be a flareup," he said. "You can't write enough ethics rules to make people act right if they're determined not to."
Cashing in on legislative experience is a favorite Texas calling – a 2005 investigation by the nonprofit Center for Public Integrity found that Texas led all states, with 70 former legislators registered as lobbyists. But it doesn't sit well with everyone.
"Right now, I can leave the Legislature and, the next day, hang out my shingle. It is amazing," said state Sen. Jane Nelson, R-Flower Mound, who said she favors a mandatory cooling-off period, if not an outright ban, on former members lobbying current ones.
"I have always been vocally opposed to the revolving door," Nelson said. "It just doesn't feel right. I don't want people questioning: Is she filing that bill because she hopes to cash in on that at some point in the future? I would rather be boiled in oil."
Thirty states require some kind of cooling-off period when their legislators leave office, according to the National Conference of State Legislators. Six states – Alabama, Colorado, Florida, Iowa, Kentucky and New York – mandate a two-year ban. One year is the law in 19 states. Others have varying restrictions.
Former U.S. representatives are banned for a year; former U.S. senators, for two years. Under a 2007 law passed in the wake of the Jack Abramoff influence-peddling scandal, names of those in the waiting period are published on the Internet.
Although Texas doesn't restrict former legislators, a state ban does apply to ex-state agency heads and commissioners. They can't lobby their old agencies for two years; they can lobby other entities, such as the Legislature.
Gov. Rick Perry has a written policy of making former senior aides wait a year before lobbying the governor's office. Covered employees must acknowledge the policy in writing, Perry spokeswoman Allison Castle said in an e-mail.
At least 17 former Perry aides are now registered lobbyists, a comparison of payroll and lobbying records shows.
A 2007 bill by Sen. Eliot Shapleigh, D-El Paso, that would have made the waiting period for the governor's staff a requirement of state law instead of an office policy never emerged from the Senate State Affairs committee.
Attempts to rein in ex-legislators have met similar fates. In 2007, Reps. Donna Howard, D-Austin, and Juan Garcia, D-Corpus Christi, filed bills to mandate a two-year wait. Both bills died in the House Elections committee.
"The rationale is easy and straightforward," Garcia said in a recent interview. "It's so a serving member doesn't spend the final part of a term feathering the bed for some contractor." He cited five former legislators from his district who are now lobbyists.
Garcia said his bill never had a chance. "Folks said, 'Somebody files this biannually, and we just laugh it off.'"
During his 2008 re-election campaign, Garcia portrayed his Republican opponent, Todd Hunter, as a symbol of the revolving door.
Hunter was a four-term legislator who left the House in early 1997. Already the head of a Corpus Christi law firm, he immediately became a lobbyist for interests including hospitals, chemical makers and insurance companies, receiving as much as $2.83 million through 2007, the last year he registered as a lobbyist.
Hunter responded by noting that Garcia's campaign received money from some of the same legislators-turned-lobbyists he was targeting. So did Hunter's campaign, reports show.
Hunter beat Garcia in November and this month returns to Austin, once again a representative.
As a lobbyist, Hunter said, knowing procedures and issues was more important than knowing individuals. Now that he's back in office, Hunter said he would have no objection to a mandatory waiting period for lobbying by ex-legislators, but he'd want a really tough one, perhaps five years – a move that would almost certainly doom any such attempt.
"I think one or two years is ineffective," he said. "If there is a concern by the public, then it needs to have teeth."
Staff writer Gregg Jones and researcher Molly Motley Blythe contributed to this report.
Texas' highest-paid lobbyists
Texas lobbyists are, in most cases, required by law only to report broad ranges of earnings, not specific amounts. The totals below are based on the maximum the lobbyists reported earning in 2007, the last year the Legislature was in session. Lobbying totals are always higher in legislative years.
|
SOURCES: Texas Ethics Commission, Texas Public Employees Association, Legislative Reference Library of Texas, official biographies, staff reports from The Dallas Morning News and the Austin American-Statesman.
Analysis and research: staff writer Ryan McNeill
Monday, January 5, 2009
Dallas Morning News: Outsourcing enriches contractors, ex-legislators
Texas will pay private companies billions of dollars this year to provide health and human services to its neediest residents. Contractors will coordinate care and process benefits, operate call centers for welfare applicants and cut checks for state health workers. The national economy may be collapsing, but it's another boom year in the state's effort to outsource functions it once performed. Read the article at the Dallas Morning News
By GREGG JONES / The Dallas Morning News
gjones@dallasnews.com
Monday, January 5, 2009
For the weak and the vulnerable, Texas has long been an especially hard place. Year after year, national surveys place the state at or near the bottom in such categories as assistance to poor children and the malnourished, treatment of the mentally ill and care of the disabled. This story is part of The Dallas Morning News' 'State of Neglect' series examining how the state determines whom it protects and whom it excludes– and how special interests and their lobbyists strongly influence the writing of laws and the workings of state government.
Texas will pay private companies billions of dollars this year to provide health and human services to its neediest residents. Contractors will coordinate care and process benefits, operate call centers for welfare applicants and cut checks for state health workers.
The national economy may be collapsing, but it's another boom year in the state's effort to outsource functions it once performed.
Government outsourcing in Texas expanded dramatically with 2003 legislation that crunched 12 health and human services agencies into five, negotiated lower prices with drug companies and replaced state workers with private contractors to screen and administer welfare benefits. It has since grown to include such functions as data management across state agencies and payroll processing for state employees.
"Anytime state government can provide the same or better services more efficiently and cost-effectively, the citizens benefit," said Allison Castle, spokeswoman for Gov. Rick Perry.
Some have benefited more than others: Former Perry aides, state agency staff and legislators have gone to work for private companies that have profited from the outsourcing.
The architect of the landmark legislation, for example, has earned between $1 million and $2 million as a lobbyist specializing in health care over the past four years.
Former state Rep. Arlene Wohlgemuth said the result of her legislation, known as House Bill 2292, has been smaller government that still served the needs of vulnerable Texans.
"By reducing administrative costs, more money was available for social services programs, the benefits of the poor were protected and funding for foster-care programs actually increased," Wohlgemuth said.
The revolving door from public to private sector does more than enrich former public officials, critics contend.
"It undermines public faith in government when they see that kind of thing happening," said Andrew Wheat of Texans for Public Justice, a liberal group that tracks lobbying and campaign contributions. "It reconfirms the sense that these people are operating on the take and not in the public's best interest."
Policies and profits
The state Health and Human Services Commission reported more than $15.5 billion in contracts in fiscal year 2007, according to the most recent figures available from the Legislative Budget Board, the Legislature's fiscal and budgetary office. That was 58 percent of overall state spending on health and human services and an 11 percentage-point increase over fiscal year 2003 contracting.
This year's health and human services budget is $29.3 billion. Commission spokeswoman Stephanie Goodman said nearly $25 billion was for contracts, including payments to doctors, pharmacies, hospitals and private companies.
The belief that outsourcing promotes efficiency and cost savings is one that conservative activists and corporate interests have promoted in Austin over the last decade. It shaped HB 2292.
Gregg Phillips had a foot in both the corporate and political worlds that produced the legislation. He was hired as a senior official at the Health and Human Services Commission just as Wohlgemuth was introducing the first draft of HB 2292.
As a deputy executive commissioner at Health and Human Services, Phillips played a leading role in shaping the legislation and promoting some of its more controversial elements. When state Rep. Brian McCall, a Plano Republican, expressed concerns about the plan to replace state welfare administrators with privately run call centers, Wohlgemuth arranged for him to tour an Austin call center that was handling applications for another state program. Phillips was his guide, McCall said.
Later, Phillips directed the agency's business case analysis, which predicted that the call centers would be cost-effective. (The call center program has cost taxpayers more than $250 million and is still not fully functional three years after its launch.)
Phillips was a former Republican Party fundraiser who presided over privatization initiatives as Mississippi's human services chief in the 1990s. A Mississippi legislative committee concluded in 1995 that Phillips had created "an appearance of impropriety" by going to work for a company after awarding it a $557,000 contract while in his state job.
From 1997 until August 2002, Phillips worked on health-care contracts for Deloitte Consulting LLP, a major government outsourcing firm, according to his state personnel file.
Chris Britton, a former Republican legislative aide who had worked for Wohlgemuth and had advised Perry on health and human service issues when he was lieutenant governor and governor, was also heavily involved in the legislation.
Just weeks after leaving the governor's staff in late 2002, Britton was hired by Wohlgemuth to perform budget and legislative policy analysis, Britton said in an e-mail response. State campaign finance records show Wohlgemuth paid him $10,000 from campaign funds in 2003. Britton now works for Accenture LLP, another big outsourcing firm that along with Deloitte won contracts with the state after the passage of HB 2292.
Deloitte and Accenture also may have been involved in discussions about the outsourcing legislation. Phillips' office calendar shows that he met repeatedly with representatives of the two companies during the time he was working on the legislation. The Houston Chronicle first reported those meetings in 2005.
In a recent telephone interview, Phillips told The Dallas Morning News that he had "a lot of interaction with a lot of folks" but could not remember whether he met with Deloitte and Accenture while working on the bill.
Deloitte spokeswoman Melissa Norcross Wolf said the company "had no involvement in the drafting of HB 2292."
Health and Human Services Executive Commissioner Albert Hawkins said Accenture and Deloitte were among many parties interested in HB 2292. He defended the involvement of private contractors in discussions regarding the legislation.
"There's all kind of input that is provided into the legislative process from people who have expertise or those that might be interested in some business opportunity down the road," he said.
Hawkins said he was confident that Deloitte and Accenture did not improperly influence the legislation.
"The drafting process is under the control of the Legislature," Hawkins said. "While we share information about it, it's up to the author and the legislative committees as to what to include in their bills."
In this case, Wohlgemuth and her colleagues included the prevailing orthodoxy on outsourcing state health services, including the use of call centers to process applications for Medicaid, food stamps and cash assistance.
Supporters said that would save time and millions of dollars by eliminating the jobs of thousands of state workers who accepted benefit applications in offices around Texas.
From March 11, 2003, when Wohlgemuth filed HB 2292 in the Texas House, until it was signed three months later, the bill grew from 20 pages to 300 pages, including more than 150 amendments.
Wohlgemuth told colleagues the bill would "cut out inefficient bureaucracy, streamline programs that belong together, delete the duplication of services provided by the state and make government more user-friendly to the citizens of Texas." It would also save the state $1.1 billion, she said.
That was an irresistible pitch for lawmakers facing a $10 billion budget shortfall.
Landing contracts
Once signed, the law set in motion another high-stakes competition as companies vied for contracts, drawing on well-established ties to key lawmakers.
Texas law bans contributions to lawmakers while the Legislature is in session and generally prohibits corporations and labor unions from directly contributing to politicians. But they are allowed to give money through political action committees, or PACs, registered groups set up by corporations, labor unions, professionals and others to accept and make campaign contributions.
The money given to officeholders by the Deloitte & Touche Texas Political Action Committee typifies the sort of targeted contributions made to advance a corporation's interests in Austin.
Since 2002, the Deloitte PAC has contributed more than $270,000 to political candidates and causes in Texas, according to state records. The largest contributions typically go to top officeholders – it has contributed more than $30,000 to Perry since 2004 and $17,500 to House Speaker Tom Craddick, who wields vast influence over legislation. Dozens of other contributions have gone to lawmakers on committees that deal with issues and legislation of interest to Deloitte.
In July 2003, the first month that Deloitte could resume contributions to lawmakers following the end of the legislative session, the Deloitte PAC made only one donation: $1,000 to Wohlgemuth, at the time a member of the powerful House Appropriations Committee and chairwoman of its subcommittee on health and human services.
In September 2003, the Deloitte PAC contributed $1,000 to Rep. Dianne Delisi, then chairwoman of the State Health Care Expenditures Select Committee. She is also the mother-in-law of Deirdre Delisi, the governor's then-deputy chief of staff.
The next month, Deloitte Consulting won the first contract resulting from Wohlgemuth's legislation. The Health and Human Services Commission chose Deloitte as the lead consultant in the consolidation of agencies, a contract worth more than $1.8 million. A $1.2 million consulting contract went to Accenture. And Virginia-based Maximus Inc., another outsourcing firm that has since become a major player in Austin, won a $712,000 contract.
HB 2292's grand prize, however, was a contract to outsource the screening process for welfare benefits and to create call centers for accepting applications. The competition pitted outsourcing rivals Accenture and IBM, both of which hired a well-connected cast of lobbyists that included former legislators or executive branch staff.
In 2005, Health and Human Services awarded the $899 million call center contract to Accenture. IBM formally protested and later sued the state, alleging contract irregularities.
IBM later withdrew the lawsuit. It declined to discuss its decision with The News, and Hawkins said IBM's complaints "were unfounded."
About 16 months later, IBM won an $863 million contract to manage state data for Texas. Supporters said the contract would save the state $159 million over seven years. (In October, after the state had already fined IBM $900,000 for failing to complete timely backups, Perry suspended further data transfers to IBM.)
Delayed care
When Accenture's four call centers began taking social services applications in January 2006, delays immediately plagued the system. Thousands of applications piled up, and by May the state halted further rollout of the call centers.
In 2007, the state canceled the contract at Accenture's request. A report by the Health and Human Services inspector general later criticized the agency for a flawed bid evaluation and inadequate contract oversight. It also found the Deloitte-designed software was significantly slower than the old state-run system.
Hawkins had supported the call centers as a way to save $600 million over five years. But problems have indefinitely delayed the system's statewide rollout, and so "we didn't achieve the savings," agency spokeswoman Goodman said.
Instead, Texas spent $30 million dealing with various problems with the Accenture contract and another $10 million on retention bonuses to keep experienced staff from leaving. For less than two years of work on the project, Accenture and its subcontractors were paid about $210 million.
The state paid Deloitte $116.6 million before the company turned the new computer system over to Accenture in 2005, even though there were still more than 500 defects, the inspector general's office later noted. After Accenture gave up the call centers contract, the state hired Deloitte back and is paying the company $115.6 million to help maintain the system through 2010.
Texas hired Maximus to take over operation of the four call centers and to perform other health and human services work. It has paid Maximus $141.2 million over the last two years.
Those who rely on health and human services programs, and their advocates, say the state has saved money through outsourcing but in a way that is seldom discussed: by delaying or denying care to people in need, inadvertently or by design.
Roxanne Anderson, 39, a part-time library aide for the city of Grand Prairie, said she couldn't afford to take her three children – ages 7, 9 and 11 – to the doctor if they weren't covered through the subsidized Children's Health Insurance Program for working-poor families. Anderson said she liked the convenience of a call center in applying for benefits, but lost paperwork at one of the centers resulted in her children losing their coverage for a month in early 2008. Front-line staff at the call centers also don't know much about the program, she said.
"It takes them a long time to find out answers to questions, and quite often I have to get transferred to a second layer," Anderson said.
Celia Hagert, an expert on state social programs at the nonpartisan Center for Public Policy Priorities in Austin, said these are common complaints since the state began outsourcing applicant screening.
Outsourcing this work raises a potential conflict between a private company's need to maximize profits and the state's emphasis on providing benefits to qualified applicants, regardless of the time or effort required, she said.
Whether that conflict has cost Texas taxpayers is not fully known. Government oversight agencies – particularly the state comptroller and auditor – have analyzed only a few troubled contracts to determine what, if anything, was saved by shifting government functions to private contractors.
A 2006 federal review found that Accenture's call center workers performed so badly that a "high percentage of cases" had to be returned because of missing information and other errors.
A Texas comptroller's office review that same year said the call center project was a case study in poorly executed outsourcing.
"Successful outsourcing relies on two things: well-written contracts that base payment on the contractor's good performance, and strong contract management practices to oversee the contractor's work," the review concluded. "The Accenture arrangement has neither of these. HHSC's lack of proper contracting practices has led directly to project delays, cost overruns and failed service to Texans."
Last month, after 20 months of negotiations, the Health and Human Services Commission announced that the Accenture team had agreed to forgo $70.9 million in payments it was seeking from the state. The team also agreed to repay $20 million and provide a $10 million credit against future work performed by Maximus.
Winners and losers
Health and human services officials said taxpayers have profited from HB 2292, specifically $962 million in savings from the consolidation of state agencies and workforce reductions, as well as the introduction of a preferred drug list for Medicaid patients.
"More importantly, I think, for the long run, we have put in place a more rational structure and way of providing those services that will be cost-effective over years to come," Hawkins said.
Lawmakers, lobbyists, former health and human services staff and former Perry aides have profited in various ways, as well.
Craddick, who became House speaker after the 2003 Republican takeover of the Legislature, secured a call center and a document processing center for the entire system for his hometown, Midland.
Britton, the former Perry aide who now works for Accenture, got part of a state contract awarded to a company founded by Phillips, the former Health and Human Services official.
Britton's wife, Tiffiny, a former Texas House and Senate staffer, works for Wohlgemuth's Austin lobbying and consulting firm, Three Point Strategies, according to the firm's Web site. Like Wolhgemuth, her clients are mainly in the health-care sector, Texas Ethics Commission records show.
Since leaving his Health and Human Services Commission position in 2004, Phillips has won government outsourcing contracts from Texas and other states. In 2007, he hired Wohlgemuth for up to $25,000 to lobby for one of his firms, GHT Development Corp.
Wohlgemuth, in turn, persuaded a former House colleague to insert an amendment in a bill that would have steered a state contract to GHT Development. That former colleague was Appropriations Committee Chairman Warren Chisum, who 18 months earlier had received a $9,000 contribution from a Wohlgemuth campaign fund, according to Texas Ethics Commission records.
After questions were raised by lawmakers, the amendment was stripped from the final budget legislation.
Phillips denied any attempt to steer a contract to his firm.
"I guess I don't understand what's inappropriate about a private business person hiring someone who's able to help them in the Legislature," he said. "Neither we nor she have violated any rules, laws or anything else."
Wohlgemuth didn't respond when asked about the amendment recently, but in 2007 she told The News: "I was trying to advantage my client."
GHT Development won a $275,000 no-bid contract in 2007 to supply the Texas Youth Commission with an automated placement system for juvenile inmates, state records show. Wohlgemuth had recommended Phillips, according to Jay Kimbrough, who was brought in to reform TYC and now serves as Perry's chief of staff.
A staff report in November by the Legislature's Sunset Advisory Commission found that Phillips' system had experienced such "significant problems" that TYC was still operating its old system.
Wohlgemuth ran unsuccessfully for a seat in the U.S. Congress in 2004 and resurfaced two months later as a lobbyist. One of her first clients was the Texas Optometric Association. Two years earlier, while still a legislator, Wohlgemuth had voted to cut optometry benefits for the children of working poor. The 2005 Legislature restored them.
Wohlgemuth's daughter, Cristen, a former lobbyist, served on the governor's staff from January 2007 until June 2008 when, the governor's office said, she went to work for Chisum.
"Former legislators who lobby do not violate either the spirit or the letter of Texas ethics laws," Arlene Wohlgemuth told The News in an e-mail. "People ... know that when I talk with them on behalf of a client they can rely on two things: first that what I tell them is absolutely truthful, and second that I bring to them only those ideas I believe are in the best interests of the State and her citizens."
Texans for Public Justice, which is critical of lobbyists and the influence of corporate money in state politics, said former lawmakers who use their legislative contacts and expertise for later profit erode confidence.
"Not many of these lawmakers remain there for life, and a shocking number of them wind up in the lobby," Wheat said. "If you have that in the back of your mind, you don't want to offend the biggest lobby interests in the state."
Staff writer Ryan McNeill contributed to this report.
Texas campaign finance facts
• Texas does not limit the size of campaign contributions to nonjudicial candidates.
• Corporations and labor unions may not give to candidates. They can give to political parties for administrative costs, spend on ballot measures and pay overhead of political action committees, which collect donations and give to candidates.
• Legislators and top state officials cannot take contributions during the Legislature and for 30 days before and after, or inside the Capitol or its annex. Both restrictions came from a 1989 incident in which poultry magnate Lonnie "Bo" Pilgrim passed out $10,000 checks on the Senate floor during a workers' compensation debate.
• Limits on judicial candidate contributions vary by office. For a Texas Supreme Court candidate, limits are $5,000 from an individual and $30,000 total from a law firm or its members. A Supreme Court candidate can take a total of $300,000 from all general-purpose political action committees. Judicial candidates may raise money from seven months before they file until four months after election day.
Campaign contributions to House Human Services Committee members
State of Neglect: Outsourcing enriches contractors, ex-legislators
By GREGG JONES / The Dallas Morning News
gjones@dallasnews.com
Monday, January 5, 2009
For the weak and the vulnerable, Texas has long been an especially hard place. Year after year, national surveys place the state at or near the bottom in such categories as assistance to poor children and the malnourished, treatment of the mentally ill and care of the disabled. This story is part of The Dallas Morning News' 'State of Neglect' series examining how the state determines whom it protects and whom it excludes– and how special interests and their lobbyists strongly influence the writing of laws and the workings of state government.
Texas will pay private companies billions of dollars this year to provide health and human services to its neediest residents. Contractors will coordinate care and process benefits, operate call centers for welfare applicants and cut checks for state health workers.
The national economy may be collapsing, but it's another boom year in the state's effort to outsource functions it once performed.
Government outsourcing in Texas expanded dramatically with 2003 legislation that crunched 12 health and human services agencies into five, negotiated lower prices with drug companies and replaced state workers with private contractors to screen and administer welfare benefits. It has since grown to include such functions as data management across state agencies and payroll processing for state employees.
"Anytime state government can provide the same or better services more efficiently and cost-effectively, the citizens benefit," said Allison Castle, spokeswoman for Gov. Rick Perry.
Some have benefited more than others: Former Perry aides, state agency staff and legislators have gone to work for private companies that have profited from the outsourcing.
The architect of the landmark legislation, for example, has earned between $1 million and $2 million as a lobbyist specializing in health care over the past four years.
Former state Rep. Arlene Wohlgemuth said the result of her legislation, known as House Bill 2292, has been smaller government that still served the needs of vulnerable Texans.
"By reducing administrative costs, more money was available for social services programs, the benefits of the poor were protected and funding for foster-care programs actually increased," Wohlgemuth said.
The revolving door from public to private sector does more than enrich former public officials, critics contend.
"It undermines public faith in government when they see that kind of thing happening," said Andrew Wheat of Texans for Public Justice, a liberal group that tracks lobbying and campaign contributions. "It reconfirms the sense that these people are operating on the take and not in the public's best interest."
Policies and profits
The state Health and Human Services Commission reported more than $15.5 billion in contracts in fiscal year 2007, according to the most recent figures available from the Legislative Budget Board, the Legislature's fiscal and budgetary office. That was 58 percent of overall state spending on health and human services and an 11 percentage-point increase over fiscal year 2003 contracting.
This year's health and human services budget is $29.3 billion. Commission spokeswoman Stephanie Goodman said nearly $25 billion was for contracts, including payments to doctors, pharmacies, hospitals and private companies.
The belief that outsourcing promotes efficiency and cost savings is one that conservative activists and corporate interests have promoted in Austin over the last decade. It shaped HB 2292.
Gregg Phillips had a foot in both the corporate and political worlds that produced the legislation. He was hired as a senior official at the Health and Human Services Commission just as Wohlgemuth was introducing the first draft of HB 2292.
As a deputy executive commissioner at Health and Human Services, Phillips played a leading role in shaping the legislation and promoting some of its more controversial elements. When state Rep. Brian McCall, a Plano Republican, expressed concerns about the plan to replace state welfare administrators with privately run call centers, Wohlgemuth arranged for him to tour an Austin call center that was handling applications for another state program. Phillips was his guide, McCall said.
Later, Phillips directed the agency's business case analysis, which predicted that the call centers would be cost-effective. (The call center program has cost taxpayers more than $250 million and is still not fully functional three years after its launch.)
Phillips was a former Republican Party fundraiser who presided over privatization initiatives as Mississippi's human services chief in the 1990s. A Mississippi legislative committee concluded in 1995 that Phillips had created "an appearance of impropriety" by going to work for a company after awarding it a $557,000 contract while in his state job.
From 1997 until August 2002, Phillips worked on health-care contracts for Deloitte Consulting LLP, a major government outsourcing firm, according to his state personnel file.
Chris Britton, a former Republican legislative aide who had worked for Wohlgemuth and had advised Perry on health and human service issues when he was lieutenant governor and governor, was also heavily involved in the legislation.
Just weeks after leaving the governor's staff in late 2002, Britton was hired by Wohlgemuth to perform budget and legislative policy analysis, Britton said in an e-mail response. State campaign finance records show Wohlgemuth paid him $10,000 from campaign funds in 2003. Britton now works for Accenture LLP, another big outsourcing firm that along with Deloitte won contracts with the state after the passage of HB 2292.
Deloitte and Accenture also may have been involved in discussions about the outsourcing legislation. Phillips' office calendar shows that he met repeatedly with representatives of the two companies during the time he was working on the legislation. The Houston Chronicle first reported those meetings in 2005.
In a recent telephone interview, Phillips told The Dallas Morning News that he had "a lot of interaction with a lot of folks" but could not remember whether he met with Deloitte and Accenture while working on the bill.
Deloitte spokeswoman Melissa Norcross Wolf said the company "had no involvement in the drafting of HB 2292."
Health and Human Services Executive Commissioner Albert Hawkins said Accenture and Deloitte were among many parties interested in HB 2292. He defended the involvement of private contractors in discussions regarding the legislation.
"There's all kind of input that is provided into the legislative process from people who have expertise or those that might be interested in some business opportunity down the road," he said.
Hawkins said he was confident that Deloitte and Accenture did not improperly influence the legislation.
"The drafting process is under the control of the Legislature," Hawkins said. "While we share information about it, it's up to the author and the legislative committees as to what to include in their bills."
In this case, Wohlgemuth and her colleagues included the prevailing orthodoxy on outsourcing state health services, including the use of call centers to process applications for Medicaid, food stamps and cash assistance.
Supporters said that would save time and millions of dollars by eliminating the jobs of thousands of state workers who accepted benefit applications in offices around Texas.
From March 11, 2003, when Wohlgemuth filed HB 2292 in the Texas House, until it was signed three months later, the bill grew from 20 pages to 300 pages, including more than 150 amendments.
Wohlgemuth told colleagues the bill would "cut out inefficient bureaucracy, streamline programs that belong together, delete the duplication of services provided by the state and make government more user-friendly to the citizens of Texas." It would also save the state $1.1 billion, she said.
That was an irresistible pitch for lawmakers facing a $10 billion budget shortfall.
Landing contracts
Once signed, the law set in motion another high-stakes competition as companies vied for contracts, drawing on well-established ties to key lawmakers.
Texas law bans contributions to lawmakers while the Legislature is in session and generally prohibits corporations and labor unions from directly contributing to politicians. But they are allowed to give money through political action committees, or PACs, registered groups set up by corporations, labor unions, professionals and others to accept and make campaign contributions.
The money given to officeholders by the Deloitte & Touche Texas Political Action Committee typifies the sort of targeted contributions made to advance a corporation's interests in Austin.
Since 2002, the Deloitte PAC has contributed more than $270,000 to political candidates and causes in Texas, according to state records. The largest contributions typically go to top officeholders – it has contributed more than $30,000 to Perry since 2004 and $17,500 to House Speaker Tom Craddick, who wields vast influence over legislation. Dozens of other contributions have gone to lawmakers on committees that deal with issues and legislation of interest to Deloitte.
In July 2003, the first month that Deloitte could resume contributions to lawmakers following the end of the legislative session, the Deloitte PAC made only one donation: $1,000 to Wohlgemuth, at the time a member of the powerful House Appropriations Committee and chairwoman of its subcommittee on health and human services.
In September 2003, the Deloitte PAC contributed $1,000 to Rep. Dianne Delisi, then chairwoman of the State Health Care Expenditures Select Committee. She is also the mother-in-law of Deirdre Delisi, the governor's then-deputy chief of staff.
The next month, Deloitte Consulting won the first contract resulting from Wohlgemuth's legislation. The Health and Human Services Commission chose Deloitte as the lead consultant in the consolidation of agencies, a contract worth more than $1.8 million. A $1.2 million consulting contract went to Accenture. And Virginia-based Maximus Inc., another outsourcing firm that has since become a major player in Austin, won a $712,000 contract.
HB 2292's grand prize, however, was a contract to outsource the screening process for welfare benefits and to create call centers for accepting applications. The competition pitted outsourcing rivals Accenture and IBM, both of which hired a well-connected cast of lobbyists that included former legislators or executive branch staff.
In 2005, Health and Human Services awarded the $899 million call center contract to Accenture. IBM formally protested and later sued the state, alleging contract irregularities.
IBM later withdrew the lawsuit. It declined to discuss its decision with The News, and Hawkins said IBM's complaints "were unfounded."
About 16 months later, IBM won an $863 million contract to manage state data for Texas. Supporters said the contract would save the state $159 million over seven years. (In October, after the state had already fined IBM $900,000 for failing to complete timely backups, Perry suspended further data transfers to IBM.)
Delayed care
When Accenture's four call centers began taking social services applications in January 2006, delays immediately plagued the system. Thousands of applications piled up, and by May the state halted further rollout of the call centers.
In 2007, the state canceled the contract at Accenture's request. A report by the Health and Human Services inspector general later criticized the agency for a flawed bid evaluation and inadequate contract oversight. It also found the Deloitte-designed software was significantly slower than the old state-run system.
Hawkins had supported the call centers as a way to save $600 million over five years. But problems have indefinitely delayed the system's statewide rollout, and so "we didn't achieve the savings," agency spokeswoman Goodman said.
Instead, Texas spent $30 million dealing with various problems with the Accenture contract and another $10 million on retention bonuses to keep experienced staff from leaving. For less than two years of work on the project, Accenture and its subcontractors were paid about $210 million.
The state paid Deloitte $116.6 million before the company turned the new computer system over to Accenture in 2005, even though there were still more than 500 defects, the inspector general's office later noted. After Accenture gave up the call centers contract, the state hired Deloitte back and is paying the company $115.6 million to help maintain the system through 2010.
Texas hired Maximus to take over operation of the four call centers and to perform other health and human services work. It has paid Maximus $141.2 million over the last two years.
Those who rely on health and human services programs, and their advocates, say the state has saved money through outsourcing but in a way that is seldom discussed: by delaying or denying care to people in need, inadvertently or by design.
Roxanne Anderson, 39, a part-time library aide for the city of Grand Prairie, said she couldn't afford to take her three children – ages 7, 9 and 11 – to the doctor if they weren't covered through the subsidized Children's Health Insurance Program for working-poor families. Anderson said she liked the convenience of a call center in applying for benefits, but lost paperwork at one of the centers resulted in her children losing their coverage for a month in early 2008. Front-line staff at the call centers also don't know much about the program, she said.
"It takes them a long time to find out answers to questions, and quite often I have to get transferred to a second layer," Anderson said.
Celia Hagert, an expert on state social programs at the nonpartisan Center for Public Policy Priorities in Austin, said these are common complaints since the state began outsourcing applicant screening.
Outsourcing this work raises a potential conflict between a private company's need to maximize profits and the state's emphasis on providing benefits to qualified applicants, regardless of the time or effort required, she said.
Whether that conflict has cost Texas taxpayers is not fully known. Government oversight agencies – particularly the state comptroller and auditor – have analyzed only a few troubled contracts to determine what, if anything, was saved by shifting government functions to private contractors.
A 2006 federal review found that Accenture's call center workers performed so badly that a "high percentage of cases" had to be returned because of missing information and other errors.
A Texas comptroller's office review that same year said the call center project was a case study in poorly executed outsourcing.
"Successful outsourcing relies on two things: well-written contracts that base payment on the contractor's good performance, and strong contract management practices to oversee the contractor's work," the review concluded. "The Accenture arrangement has neither of these. HHSC's lack of proper contracting practices has led directly to project delays, cost overruns and failed service to Texans."
Last month, after 20 months of negotiations, the Health and Human Services Commission announced that the Accenture team had agreed to forgo $70.9 million in payments it was seeking from the state. The team also agreed to repay $20 million and provide a $10 million credit against future work performed by Maximus.
Winners and losers
Health and human services officials said taxpayers have profited from HB 2292, specifically $962 million in savings from the consolidation of state agencies and workforce reductions, as well as the introduction of a preferred drug list for Medicaid patients.
"More importantly, I think, for the long run, we have put in place a more rational structure and way of providing those services that will be cost-effective over years to come," Hawkins said.
Lawmakers, lobbyists, former health and human services staff and former Perry aides have profited in various ways, as well.
Craddick, who became House speaker after the 2003 Republican takeover of the Legislature, secured a call center and a document processing center for the entire system for his hometown, Midland.
Britton, the former Perry aide who now works for Accenture, got part of a state contract awarded to a company founded by Phillips, the former Health and Human Services official.
Britton's wife, Tiffiny, a former Texas House and Senate staffer, works for Wohlgemuth's Austin lobbying and consulting firm, Three Point Strategies, according to the firm's Web site. Like Wolhgemuth, her clients are mainly in the health-care sector, Texas Ethics Commission records show.
Since leaving his Health and Human Services Commission position in 2004, Phillips has won government outsourcing contracts from Texas and other states. In 2007, he hired Wohlgemuth for up to $25,000 to lobby for one of his firms, GHT Development Corp.
Wohlgemuth, in turn, persuaded a former House colleague to insert an amendment in a bill that would have steered a state contract to GHT Development. That former colleague was Appropriations Committee Chairman Warren Chisum, who 18 months earlier had received a $9,000 contribution from a Wohlgemuth campaign fund, according to Texas Ethics Commission records.
After questions were raised by lawmakers, the amendment was stripped from the final budget legislation.
Phillips denied any attempt to steer a contract to his firm.
"I guess I don't understand what's inappropriate about a private business person hiring someone who's able to help them in the Legislature," he said. "Neither we nor she have violated any rules, laws or anything else."
Wohlgemuth didn't respond when asked about the amendment recently, but in 2007 she told The News: "I was trying to advantage my client."
GHT Development won a $275,000 no-bid contract in 2007 to supply the Texas Youth Commission with an automated placement system for juvenile inmates, state records show. Wohlgemuth had recommended Phillips, according to Jay Kimbrough, who was brought in to reform TYC and now serves as Perry's chief of staff.
A staff report in November by the Legislature's Sunset Advisory Commission found that Phillips' system had experienced such "significant problems" that TYC was still operating its old system.
Wohlgemuth ran unsuccessfully for a seat in the U.S. Congress in 2004 and resurfaced two months later as a lobbyist. One of her first clients was the Texas Optometric Association. Two years earlier, while still a legislator, Wohlgemuth had voted to cut optometry benefits for the children of working poor. The 2005 Legislature restored them.
Wohlgemuth's daughter, Cristen, a former lobbyist, served on the governor's staff from January 2007 until June 2008 when, the governor's office said, she went to work for Chisum.
"Former legislators who lobby do not violate either the spirit or the letter of Texas ethics laws," Arlene Wohlgemuth told The News in an e-mail. "People ... know that when I talk with them on behalf of a client they can rely on two things: first that what I tell them is absolutely truthful, and second that I bring to them only those ideas I believe are in the best interests of the State and her citizens."
Texans for Public Justice, which is critical of lobbyists and the influence of corporate money in state politics, said former lawmakers who use their legislative contacts and expertise for later profit erode confidence.
"Not many of these lawmakers remain there for life, and a shocking number of them wind up in the lobby," Wheat said. "If you have that in the back of your mind, you don't want to offend the biggest lobby interests in the state."
Staff writer Ryan McNeill contributed to this report.
Texas campaign finance facts
• Texas does not limit the size of campaign contributions to nonjudicial candidates.
• Corporations and labor unions may not give to candidates. They can give to political parties for administrative costs, spend on ballot measures and pay overhead of political action committees, which collect donations and give to candidates.
• Legislators and top state officials cannot take contributions during the Legislature and for 30 days before and after, or inside the Capitol or its annex. Both restrictions came from a 1989 incident in which poultry magnate Lonnie "Bo" Pilgrim passed out $10,000 checks on the Senate floor during a workers' compensation debate.
• Limits on judicial candidate contributions vary by office. For a Texas Supreme Court candidate, limits are $5,000 from an individual and $30,000 total from a law firm or its members. A Supreme Court candidate can take a total of $300,000 from all general-purpose political action committees. Judicial candidates may raise money from seven months before they file until four months after election day.
Campaign contributions to House Human Services Committee members
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Campaign contributions to Senate Health and Human Services Committee members
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* The Texas Ethics Commission does not require filers to report the names of donors with uniformity or consistency. Nor does it routinely monitor reports for accuracy. Consequently, misspellings are common and contributors' names can be presented inconsistently. The variations in information make it impossible to know with absolute certainty the total amount of money received by a lawmaker.
SOURCES: Texas Ethics Commission, Texas Legislature
Analysis: Staff writer Ryan McNeill
Dallas Morning News: Legislature needs ethics makeover
Joe Straus, expected to become the Texas House's new reform-minded speaker, undoubtedly has to-do issues being shoved under his nose this very moment. But none would show more that he intends to change House culture than leading an effort to close the Legislature's revolving door.Read the editorial at the Dallas Morning News
Monday, January 5, 2009
DALLAS MORNING NEWS
Joe Straus, expected to become the Texas House's new reform-minded speaker, undoubtedly has to-do issues being shoved under his nose this very moment. But none would show more that he intends to change House culture than leading an effort to close the Legislature's revolving door.
A team of Dallas Morning News reporters are detailing in the newspaper's "State of Neglect" series the ease with which legislators move from making laws to lobbying former colleagues. And, oh, by the way, making serious bucks once they leave the Capitol and return as lobbyists.
A case in point is the lobbying role former GOP Rep. Arlene Wohlgemuth played in getting contracts lined up for private companies – after she spearheaded the 2003 Legislature's decision to let private companies manage various parts of the state's health services.
We have no doubt the devoted conservative would prefer that the private sector manage services, even if she didn't make a penny from it. Nor are we saying that legislators should stop outsourcing contracts to private companies. We'd rather that watchdog conservatives like GOP Sen. Jane Nelson of Flower Mound redouble their efforts to make sure privatization schemes aren't run by people who don't tend to Texans' needs.
But there is a problem when a former legislator like Wohlgemuth starts lobbying on behalf of others to get contracts. It makes Austin look like nothing but a network of backscratchers helping one another make money on the backs of taxpayers.
This is where Straus could make a difference as speaker. He should push for an ethics bill that:
•Requires legislators to wait two years before returning as lobbyists. A two-year wait is necessary because the Legislature meets in regular session every other year. As it stands today, a legislator can quit one day and start lobbying former colleagues without sitting out even one session.
•Requires lobbyists to be more explicit about their connections. Lobbyist disclosure forms should include any years of service in the Legislature, the name of their firm and the specific legislation they seek to influence.
Straus understandably has many people trying to get his ear. Changing this critical piece of the Legislature's culture would assure Texans they have the speaker's attention.
Editorial: Legislature needs ethics makeover
Monday, January 5, 2009
DALLAS MORNING NEWS
Joe Straus, expected to become the Texas House's new reform-minded speaker, undoubtedly has to-do issues being shoved under his nose this very moment. But none would show more that he intends to change House culture than leading an effort to close the Legislature's revolving door.
A team of Dallas Morning News reporters are detailing in the newspaper's "State of Neglect" series the ease with which legislators move from making laws to lobbying former colleagues. And, oh, by the way, making serious bucks once they leave the Capitol and return as lobbyists.
A case in point is the lobbying role former GOP Rep. Arlene Wohlgemuth played in getting contracts lined up for private companies – after she spearheaded the 2003 Legislature's decision to let private companies manage various parts of the state's health services.
We have no doubt the devoted conservative would prefer that the private sector manage services, even if she didn't make a penny from it. Nor are we saying that legislators should stop outsourcing contracts to private companies. We'd rather that watchdog conservatives like GOP Sen. Jane Nelson of Flower Mound redouble their efforts to make sure privatization schemes aren't run by people who don't tend to Texans' needs.
But there is a problem when a former legislator like Wohlgemuth starts lobbying on behalf of others to get contracts. It makes Austin look like nothing but a network of backscratchers helping one another make money on the backs of taxpayers.
This is where Straus could make a difference as speaker. He should push for an ethics bill that:
•Requires legislators to wait two years before returning as lobbyists. A two-year wait is necessary because the Legislature meets in regular session every other year. As it stands today, a legislator can quit one day and start lobbying former colleagues without sitting out even one session.
•Requires lobbyists to be more explicit about their connections. Lobbyist disclosure forms should include any years of service in the Legislature, the name of their firm and the specific legislation they seek to influence.
Straus understandably has many people trying to get his ear. Changing this critical piece of the Legislature's culture would assure Texans they have the speaker's attention.
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