Dallas Morning News: Legislators chafe over voucher backer's donations

Republican state Rep. Tommy Merritt is facing a more conservative challenger in next week's primary. But his real opponent is school voucher advocate James Leininger, who has spent more than half a million dollars to defeat the Longview lawmaker. Read the article at the Dallas Morning News

Legislators chafe over voucher backer's donations

5 recipients say they aren't swayed by PAC; critics call for reforms

Wednesday, March 1, 2006
By ROBERT T. GARRETT / The Dallas Morning News

AUSTIN – Republican state Rep. Tommy Merritt is facing a more conservative challenger in next week's primary. But his real opponent is school voucher advocate James Leininger, who has spent more than half a million dollars to defeat the Longview lawmaker.

Mr. Merritt, a well-to-do businessman who has spent a decade in the House, is staggering from daily attacks on TV and radio and in the mail paid for by Dr. Leininger, a San Antonio businessman.

"It's all about intimidation," Mr. Merritt said.

Through a political-action committee he dominates, Dr. Leininger is providing more than 90 percent of the money spent against three of five moderate Republicans who opposed vouchers in last year's regular legislative session. Almost alone, he has provided warchests to his favored candidates exceeding, in four instances, $375,000 apiece. His giving may propel them to break spending records for House races.

"We've never seen numbers like this, as far as percentage of support from one entity," said Craig McDonald, director of Texans for Public Justice, a nonpartisan group that tracks campaign money.

"The Leininger PAC has showed that the Texas campaign finance system is totally out of whack," Mr. McDonald said. "One person should not be able to bankroll a slate of candidates.

"These candidates will become private representatives, not public servants."

Dr. Leininger could not be reached for comment. But in a newspaper column last week, he wrote that he would "vigorously oppose" lawmakers who don't support his pet cause, private school vouchers for poor children.

Rep. Roy Blake Jr., R-Nacogdoches, another of the five targeted House moderates, says Dr. Leininger is laying down an unprecedented method of supporting a campaign. The Texas Republican Legislative Campaign Committee, created last fall, pays for polls, ads, mail, phones and research on the incumbent. It then donates them as "in kind" contributions to the challengers.

"He's always got control of these people," Mr. Blake said. "He's controlling the campaigns, he's controlling the message."

Former Rep. Wayne Christian, a Republican in Center, Texas, who lost a bid for Congress and is trying to get back in the Legislature by beating Mr. Blake, has denied he's beholden to Dr. Leininger, as have all of the Leininger-backed challengers.

Voucher opponents denounce Dr. Leininger's effort, and Mr. McDonald says it illustrates a need for limits on how much rich people may give in state elections. One political scientist, though, called it a refreshing example of unselfish patronage.

"You know, a lot of people who spend a lot of money on campaigns, they have something personal that might help their business interests," said Allan Saxe, associate professor at the University of Texas-Arlington.

"I don't see how the voucher system is going to help directly his business interests or anything like that," Dr. Saxe said. "He definitely feels this is so critical ... to the future of education that he's willing to put up a lot of money to change it. That's worthwhile."

The latest filings with the Texas Ethics Commission show that in the last month, Dr. Leininger has given $1.25 million to the Texas Republican Legislative Campaign Committee to try to defeat the five moderates. In addition, he has given nearly $500,000 through another committee that seeks to help pro-voucher incumbents stay in office. His total spending on House races in this campaign has hit about $2.3 million.

Experts say that if all five House moderates targeted by Dr. Leininger lose, it would improve chances for passage of a voucher bill next year – at least in the House.

Former Lt. Gov. Bill Ratliff, a longtime Republican state senator from East Texas and opponent of vouchers, said the Senate is still unlikely to approve vouchers, though.

"So I don't know that it's going to pass," Mr. Ratliff said. "But if [pro-voucher forces] win this time, the intimidation factor will accelerate significantly."

Also, such large contributions in the final weeks before the March 7 primary is important, he said, because money is especially precious in a campaign's final days – and awfully hard to counter if it's flowing to the other side.

"It sort of puts you in a panic mode because you're just being flooded with this stuff," he said.

The intra-party challenges hint at a deeper rift among Republicans over public education. And while House Speaker Tom Craddick has tried to support some of the lawmakers targeted by Dr. Leininger, at least one has suggested that the effort to purge House GOP moderates had the tacit approval of Republican leaders.

"Key people within the party and within elective offices should not hide behind folks like Jim Leininger, letting them do their dirty work, and call that staying out of it," said Rep. Delwin Jones of Lubbock.

Mr. Craddick has declined to say whether he tried to dissuade Dr. Leininger from trying to oust House GOP incumbents, though a spokeswoman has said Mr. Craddick opposes efforts to beat incumbents. He has campaigned for three of the lawmakers – Mr. Blake; Rep. Charlie Geren of Fort Worth; and Rep. Carter Casteel of New Braunfels. He has not done so for Mr. Merritt or Mr. Jones.

Also causing some within the party to grumble is work done by pollster Mike Baselice of Austin, who is Gov. Rick Perry's pollster, for four of the five challengers financed by Dr. Leininger. Also, expenditures outlined in the campaign finance reports of Mr. Merritt's opponent, Mark Williams, show that the daughter of the state GOP's executive director is working for Mr. Williams.

"This is simply an indication again of 'All right, if you do not toe the line, you're going to pay a price,' " said Jerry Polinard, a political scientist at UT-Pan American in Edinburg.

Houston homebuilder Bob Perry, the state's biggest political contributor, has pumped, all together, $115,000 into the candidacies of the Leininger-backed candidates in Fort Worth, Lubbock and Longview. A spokesman for Mr. Perry has said he looks to business-related issues, not vouchers, when judging candidates – and isn't acting in concert with Dr. Leininger.

Staff writer Karen Brooks contributed to this report.

Dallas Morning News: Nonprofit: IRS audit spurred by DeLay ally was abuse

The Austin nonprofit group whose complaint sparked U.S. Rep. Tom DeLay's indictment on campaign finance charges accused one of his allies of dirty tricks, saying Monday that U.S. Rep. Sam Johnson of Plano used his influence to prompt a tax audit. "It's intimidation," said Craig McDonald, founder and director of Texans for Public Justice, which was cleared this month after a 13-month inquiry into whether it violated a ban on partisan activity by tax-exempt groups. "The IRS has every right to audit nonprofit organizations, but we think this was an abuse." Read the article at the Dallas Morning News

Nonprofit: IRS audit spurred by DeLay ally was abuse

Rep. Johnson of Plano defends action; after 13 months, group cleared
Tuesday, February 28, 2006
By TODD J. GILLMAN / The Dallas Morning News

WASHINGTON – The Austin nonprofit group whose complaint sparked U.S. Rep. Tom DeLay's indictment on campaign finance charges accused one of his allies of dirty tricks, saying Monday that U.S. Rep. Sam Johnson of Plano used his influence to prompt a tax audit.

"It's intimidation," said Craig McDonald, founder and director of Texans for Public Justice, which was cleared this month after a 13-month inquiry into whether it violated a ban on partisan activity by tax-exempt groups. "The IRS has every right to audit nonprofit organizations, but we think this was an abuse."

Mr. Johnson, who serves on the House tax-writing committee that oversees the IRS, wrote the agency's commissioner in mid-2004 urging him to open an inquiry.

"Anytime I have reason to believe someone may be breaking the law, I have an obligation to report it to the responsible authorities," he said.

Mr. McDonald's group drew Republican ire in March 2003, when it alleged that a DeLay-founded committee, Texans for a Republican Majority, had illegally raised and spent $600,000 during the 2002 state legislative campaigns. The GOP won control of the state House and subsequently redrew congressional districts at Mr. DeLay's urging.

The group filed a complaint with Travis County District Attorney Ronnie Earle, who obtained indictments against three DeLay lieutenants and several corporations. Mr. DeLay, R-Sugar Land, was indicted in September, costing him his powerful post as House majority leader. He denies the charges, alleging they are driven by politics.

IRS documents and other correspondence show that in July 2004, Mr. Johnson received a letter from Barnaby Zall, a lawyer with ties to Mr. DeLay, alleging that Mr. McDonald's group had targeted Mr. DeLay "for special partisan attack." He urged Mr. Johnson to use his influence on the tax panel to initiate an IRS investigation.

Mr. Zall did not return calls Monday. Mr. McDonald obtained the letters under federal open records law, and they were first reported in Monday's Washington Post.

Two weeks after receiving Mr. Zall's letter, Mr. Johnson forwarded it to IRS commissioner Mark Everson, mentioning his position on the supervisory committee and recommending an investigation.

The IRS opened an audit of Texans for Public Justice in January 2005 and closed it Feb. 3, when it told the group its tax-exempt status remained intact after a review of 2003 filings.

An IRS spokesman said Monday that that federal law bars the agency from discussing the existence or details of any audit.

The congressman defended his actions, stressing that he left it to the IRS to decide whether and how to investigate.

"Just as if someone told me that a neighbor allegedly was stealing cars or vandalizing homes, I would have to report that to the local police," he said.

Staff writer Jake Batsell in Plano contributed to this report.

E-mail tgillman@dallasnews.com

Washington Post: Texas Nonprofit Cleared After GOP-Prompted Audit

The Internal Revenue Service recently audited the books of a Texas nonprofit group that was critical of campaign spending by former House majority leader Tom DeLay (R-Tex.) after receiving a request for the audit from one of DeLay's political allies in the House. Read the article at the Washington Post

Texas Nonprofit Is Cleared After GOP-Prompted Audit

Group Says Probe Was 'Political Retaliation' by DeLay Allies
By R. Jeffrey Smith
Washington Post Staff Writer
Monday, February 27, 2006; Page A03

The Internal Revenue Service recently audited the books of a Texas nonprofit group that was critical of campaign spending by former House majority leader Tom DeLay (R-Tex.) after receiving a request for the audit from one of DeLay's political allies in the House.

The lawmaker, House Ways and Means Committee member Sam Johnson (R-Tex.), was in turn responding to a complaint about the group, Texans for Public Justice, from Barnaby W. Zall, a Washington lawyer close to DeLay and his fundraising apparatus, according to IRS documents.

Johnson, a member of the subcommittee responsible for oversight of the tax agency, sparked the IRS's interest by telling IRS Commissioner Mark W. Everson in a letter dated Aug. 3, 2004, that he had "uncovered some disturbing information" and received complaints of possible tax violations.

Johnson said he was sure the IRS would follow up. "I ask you to report back your findings of each of these investigations directly to me," he told Everson in the letter, according to a copy obtained by The Washington Post.

The IRS sent two auditors last year to comb the 2003 books of Texans for Public Justice and an affiliated foundation that collected donations for the organization. No tax violations were found, according to a letter the IRS sent the group.

But the circumstances behind the effort -- which were uncovered by the group's director and founder, Craig L. McDonald, using the Freedom of Information Act -- prompted him to allege that the audit was an abuse of the IRS's mandate. He said there was no evidence of wrongdoing in the complaints.

"This audit was political retaliation by Tom DeLay's cronies to intimidate us for blowing the whistle on DeLay's abuses," McDonald said. "Enlisting the IRS to intimidate critics is a dirty trick reminiscent of Richard Nixon. . . . It is not a crime to report a crime, as we did with DeLay."

IRS spokesman Terry Lemons said that federal law barred him from providing a detailed response. But he said, "The IRS makes its audit decisions based on the law. Political considerations do not play a role. We are an agency of career civil servants," excluding Everson and the IRS chief counsel.

Steven T. Miller, the senior IRS official in charge of tax-exempt organizations, said that though he could not address how Johnson's request was handled, referrals related to improper political activity generally must be judged reasonable by two career employees before an audit can proceed.

Texans for Public Justice, based in Austin, has been a thorn in the side of the state's politicians since its founding in 1997. It bills itself as "a non-partisan, non-profit policy and research organization which tracks the influence of money and corporate power in Texas politics." According to McDonald and the group's tax returns, about 45 percent of its $310,000 budget in 2003 came from individual donors. The rest came from an affiliated, tax-exempt group the IRS also audited, the Public Justice Foundation of Texas.

The group regularly publishes detailed reports on campaign spending and corporate lobbying. It is perhaps best known for its March 2003 allegation of illegal spending by corporations during DeLay's successful 2002 campaign for a Republican takeover of the Texas legislature -- claims that culminated last year in the indictment of DeLay and two campaign aides for money laundering and conspiracy to hide corporate donations.

The events leading to the IRS probe are laid out in documents the agency released to McDonald in response to his request for all records related to allegations of wrongdoing by the foundation. It began when Zall wrote a July 19, 2004, letter to Johnson complaining about the Texas nonprofit group and noting that the lawmaker had "jurisdiction to review the Internal Revenue Service's supervision of tax-exempt organizations," according to a copy.

Zall's biography on his law firm's Web site notes that he was "of counsel" from 1990 to 1998 to the Williams & Jensen law firm, which has long represented DeLay's leadership political action committee, Americans for a Republican Majority (ARMPAC). Barbara Bonfiglio, a principal at Williams & Jensen, was subpoenaed in January 2004 by Travis County District Attorney Ronnie Earle as part of his inquiry into DeLay.

Contacted by telephone on Friday, Zall declined to say if he had done legal work for ARMPAC, explaining that "I don't ordinarily discuss my clients." He said he was not representing the committee when he wrote his letter.

Zall said he could not recall exactly why he became involved, but added that "maybe somebody said something to me." He also confirmed that Bonfiglio was "a longtime friend," and when asked if she had requested his assistance, replied that "anything is possible."

Bonfiglio did not return several phone calls for comment Friday.

In his letter to Johnson, Zall was clear about his desire to protect DeLay.

"The continuing investigation led by . . . Earle against Texas Republicans is becoming a national problem," Zall wrote. "Recent news reports indicate a growing concern in Washington that Earle is attempting to use his local office as part of a calculated scheme to remove a federal elected official from a position of authority in Congress."

The problem, Zall explained, is that Earle "is not acting alone" but with the assistance of "an ostensibly tax-exempt organization." The IRS, he said, "should investigate organizations whose public records indicate . . . apparent noncompliance with tax laws at a time when they are engaging in an apparent attempt to influence national politics."

Portions of Zall's letter were redacted in the copy obtained by McDonald and The Post. But parts that were disclosed included an allegation that the group "may have been engaging in activities which are forbidden by the Internal Revenue Code, and may not have filed" accurate tax returns. It also alleged -- without providing evidence in the IRS-released portions -- improper links between the group and the Texas Democratic Party.

Johnson sent his letter to the IRS requesting the probe on Aug. 3, 2004, and two weeks later, the tax policy adviser on his personal staff, Kathleen Black, sent what she described as "follow-up info" to Floyd Williams, the head of the IRS Office of Legislative Affairs.

In his letter, Johnson said he had "uncovered some disturbing information" about the two Texas nonprofit groups on his own, "as a member of the oversight subcommittee." He added that "coincidentally, I have received a letter from an attorney experienced in tax-exempt law raising significant questions about exemptions and activities of these organizations."

Asked to cite specific information about the groups that the chairman had learned through his service on the oversight committee, Johnson's spokeswoman McCall Cameron said she would look into the matter but did not call back. Neither group has been investigated by the subcommittee, McDonald said.

Everson responded in a letter to Johnson on Sept. 16, 2004, that he had sent the complaint to the IRS office in Dallas -- the national headquarters for examination of nonprofit groups -- under "our standard procedure when we receive referrals for information from third parties."

He wrote that although no results could be provided directly to Johnson, the results could be legally requested by the House Ways and Means committee chairman, Bill Thomas (R-Calif.). Those requests are not subject to public disclosure, according to the IRS.

In December 2004, the IRS's Austin office informed the group that the agency had received an allegation that it may have jeopardized its tax-exempt status "by intervening in a political campaign." McDonald denied it categorically, but the IRS audit went forward from January 2005 until early this month.

Examiners from Austin and Oklahoma City looked at minutes from the group's meetings, its files of correspondence, contracts, donor records and other documents before concluding in a letter dated Feb. 3, 2006, that the group's tax return for 2003 required no change.

SAEN: It’s payback time for voucher foes

When Rep. Carter Casteel worked to kill a proposed school voucher program last year, she told colleagues she was taking a political risk. "I've made a decision. It may send me home," the New Braunfels Republican said in a speech against a proposed pilot program to allow taxpayer money to be used for private school tuition for at-risk students. Read the article at the San Antonio Express-News

It's payback time for voucher foes

San Antonio Express-News
2/11/06

AUSTIN — When Rep. Carter Casteel worked to kill a proposed school voucher program last year, she told colleagues she was taking a political risk.

"I've made a decision. It may send me home," the New Braunfels Republican said in a speech against a proposed pilot program to allow taxpayer money to be used for private school tuition for at-risk students.

"I'm here to do what's right for public school children and ... make the public school system the best in this nation," she said, "not take money away from it because I may want my little grandson to go to Sts. Peter and Paul because he's Catholic."

She made the public speech fresh from a private meeting with wealthy and influential school-choice advocate James Leininger of San Antonio, who she said was "very pleasant" as he tried unsuccessfully to win her support for vouchers. She said he didn't threaten to unseat her.

But now Leininger is trying to send her home, along with four other GOP lawmakers who helped derail last year's voucher effort.

A physician who founded a medical company — and who has been a big donor to GOP candidates over the years — Leininger is responsible for the overwhelming majority of money contributed to the campaigns of Casteel's challenger, Nathan Macias of Bulverde, and four GOP primary challengers to Reps. Roy Blake Jr. of Nacogdoches, Charlie Geren of Fort Worth, Delwin Jones of Lubbock and Tommy Merritt of Longview.

Up to 95 percent of the challengers' war chests comes from Leininger-related money. Their donations largely have come through a Leininger-funded political action committee called the Texas Republican Legislative Campaign Committee. As of Jan. 26, according to reports filed with the Texas Ethics Commission, Leininger had donated $550,000 and pledged $250,000 more to the PAC. Almost all of its money comes from him.

"He single-handedly seems to want to cleanse the Texas Legislature of moderate Republicans," said Craig McDonald of Texans for Public Justice, which monitors money in politics.

Leininger didn't return repeated calls for comment.

Macias, a retired Air Force lieutenant colonel, and others receiving Leininger-related donations discount the idea he's trying to buy legislative seats.

"It's an insult to me," Macias said. "Second, it's an insult to the primary voters of the district, (to suggest) that they could be bought."

Macias, who is getting 93 percent of his campaign money from Leininger, said the issue of vouchers is a small one in his race with Casteel, but he would support a pilot program to help "those children trapped in some of the worst schools in the state." He said such a program wouldn't pertain to House District 73, which he is running to represent, because "we have some of the finest schools in the state."

Casteel said she's not set against vouchers. But she said she first wants public schools to be fully funded, and that she wants to ensure entities getting taxpayer money are accountable to the taxpayers. She said she would be willing to work on the idea with Leininger.

"This is not a race between me and Mr. Macias," she said. "This is a race about the process and the future of Texas politics ... At the same time when I say that — that I think there is a man trying to buy my seat — I'm holding my hand out to him saying, 'Look. This is silly. We could have resolved this issue.'"

Casteel said she expects to be far outspent by Macias, who as of Jan. 26 had received $182,911 in Leininger-related contributions, out of $198,275. Casteel, who started with $11,741 cash on hand last year, had raised another $139,027 by Jan. 26.

McDonald said his group is considering filing a complaint with the ethics commission about the Leininger-related PAC, citing a law that requires PACs to have 10 contributors before making a donation. The PAC report shows it got money from Leininger and a Midland man who gave $100, plus $225 that wasn't itemized. The $225 would have to come from at least eight people to meet the standard.

A message left Thursday at the phone number of the man listed as the committee treasurer wasn't returned.

McDonald noted, however, that in a state without limits on the size of campaign contributions, the size of Leininger's effort doesn't run afoul of any law.

"Regretfully, under Texas law, this is just fine," he said.

Leininger's decision to fund opponents of GOP incumbents comes despite House Speaker Tom Craddick, R-Midland, having backed several of them, including Casteel. GOP Gov. Rick Perry, who supports the idea of a pilot voucher program and has received contributions from Leininger, said he would disclose "at the appropriate time" whether he'll weigh in on any of the races. But Perry defended Leininger's right to support the candidates of his choice.

"I support any citizen of this state to engage in the First Amendment process, whether it's Dr. Jim Leininger or whether it's Joe Jamail," Perry said, referring to the Houston lawyer who has contributed to Democratic candidates.

Leininger engaged in the process last year in the governor's press conference room, across the hall from Perry's Capitol reception room and close to the House chamber. That's where Rep. Jones of Lubbock said Leininger tried to change his mind on vouchers.

"He called me out to meet with him and wanted to know if I would support his pilot project," said Jones, who added that he has always opposed vouchers and that the venue didn't bother him. The press conference room is where Perry appears before media and is used for meetings by his staff and by others, subject to his office's approval.

"I imagine any billionaire in Texas could get into that office and use it on request," Jones said. "I'm not criticizing the governor for it. If I were governor, I'd visit with billionaires."

Perry press secretary Kathy Walt said the room is available on a case-by-case basis.

"His assumption that anyone with money could use the room is incorrect," Walt said. "It was made available because they (lawmakers) were in session. He wanted to meet with a number of legislators who, frankly, were probably on the floor at that time."

pfikac@express-news.net

Staff Writer Gary Scharrer contributed to this report.

Houston Chronicle: Ex-Abramoff client subpoenaed in Republican fundraising probe

New subpoenas issued by Travis County prosecutors on Thursday cast light on a campaign contribution made by Primedia Inc. in 2002 just two days before the State Board of Education cast a vote that could have affected the company's profits in Texas. Documents requested by the subpoenas show the New York publishing company gave $2,500 to Texans for a Republican Majority, the political action committee founded by U.S. Rep. Tom DeLay, on Nov. 13, 2002. The money was solicited for TRMPAC by the husband of a board member, Dallas businessman Vance Miller, according to a document obtained by the Houston Chronicle. Read the article at the Houston Chronicle

Channel One’s parent donated to TRMPAC before education board’s vote

Feb. 10, 2006
By CLAY ROBISON and R.G. RATCLIFFE
Houston Chronicle Austin Bureau Staff

AUSTIN - New subpoenas issued by Travis County prosecutors on Thursday cast light on a campaign contribution made by Primedia Inc. in 2002 just two days before the State Board of Education cast a vote that could have affected the company's profits in Texas.

Documents requested by the subpoenas show the New York publishing company gave $2,500 to Texans for a Republican Majority, the political action committee founded by U.S. Rep. Tom DeLay, on Nov. 13, 2002. The money was solicited for TRMPAC by the husband of a board member, Dallas businessman Vance Miller, according to a document obtained by the Houston Chronicle.

While the subpoenas call attention to the Primedia donation to TRMPAC at the time of the board vote, they do not appear to signal an expansion of District Attorney Ronnie Earle's investigation of DeLay and TRMPAC to include the State Board of Education.

Two days after the contribution, the education panel was scheduled to vote on a nonbinding resolution by board member Judy Strickland urging school districts to cancel their contracts with Primedia's Channel One education service because it subjects children in the classroom to commercials.

Channel One co-founder Jim Ritts flew in from New York to appear before the board in opposition to the resolution.

Miller's wife, Geraldine, offered an alternative resolution that simply emphasized that school districts should give close scrutiny to relationships with commercial entities and the marketing of products to children in schools.

The Miller resolution thwarted a possible statewide fight for Primedia to retain its Texas contracts. The resolution passed the board 12-3.

Miller is now chairman of the state education board. She said Primedia's donation to TRMPAC through her husband was not connected to the Channel One vote. "I have nothing to do with this. It (the TRMPAC contribution) had no relationship with Channel One, whatsoever," she said.

Whit Clay, a spokesman for Channel One, said the company had not yet been served with the subpoena but will comply.

The subpoenas specifically request documents relating to Primedia in regard to "pending or proposed federal legislation intended to affect the interests" of Primedia in 2002 or 2003.

The subpoenas seem to target relationships that DeLay, R-Sugar Land, had with convicted influence peddler Jack Abramoff and his Washington lobby clients' donations to TRMPAC.

Abramoff was the registered lobbyist for Primedia at the time of the 2002 donations.

The subpoenas do not mention him, but former Christian Coalition Executive Director Ralph Reed also was lobbying for Channel One at the time.

Several Texas public interest groups have complained to Travis County Attorney David Escamilla that Reed violated state law by failing to register as a lobbyist in 2002. Among the claims is that he called board of education members urging them to vote against Strickland's resolution.

"Clearly, Ralph Reed was contacting members of the State Board of Education on behalf of Channel One and its owner, Primedia," said Craig McDonald of Texans for Public Justice.

DeLay is accused of participating in a 2002 scheme to launder illegal corporate money through the Republican National Committee in exchange for legal donations to seven candidates for the Texas House.

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Dallas Morning News: Agency OKs gift disclosure

A Dallas businessman who sits on the state employees' retirement board does not need to reveal the size of a monetary gift from the biggest GOP donor in the state, the state ethics agency has ruled. Texans for Public Justice, the group that asked the ethics commission to order more detail from Mr. Bill Ceverha, said the decision renders the law requiring disclosure of gifts meaningless. Trips, cash and other goodies of unknown worth could be veiled within similarly vague descriptions, the group argued. Read the article at the Dallas Morning News

Agency OKs gift disclosure

Watchdog group says ex-PAC official ruling diminishes ethics law

January 31, 2006
By PETE SLOVER / The Dallas Morning News

AUSTIN – A Dallas businessman who sits on the state employees' retirement board does not need to reveal the size of a monetary gift from the biggest GOP donor in the state, the state ethics agency has ruled.

The approval was given to Bill Ceverha, who on his state financial disclosure form last year used the single word "check" to describe a gift made by Houston homebuilder Bob Perry.

Texans for Public Justice, the group that asked the ethics commission to order more detail from Mr. Ceverha, said the decision renders the law requiring disclosure of gifts meaningless. Trips, cash and other goodies of unknown worth could be veiled within similarly vague descriptions, the group argued.

In a Jan. 26 letter, the commission said that although state ethics laws require officials to disclose any gifts valued over $250, they do not require the value of the gift to be reported.

Mr. Ceverha, who could not be reached for comment, formerly served as treasurer for the Texans for a Republican Majority political action committee, which is now defunct.

The PAC's use of about $600,000 in corporate contributions led to criminal charges against three of U.S. Rep. Tom DeLay's top lieutenants. Mr. Ceverha, a former state representative, filed for personal bankruptcy last year after losing a lawsuit over the expenditures and being ordered to pay $197,000.

A spokesman for Mr. Perry likened the Ceverha check to charitable – not political – giving.

"Like all Mr. Perry's gifts to orphanages, foster homes and educational foundations, he prefers not to publicize them," said Anthony Holm.

Mr. Ceverha was required to file a public financial disclosure form because he sits on the Texas Employees Retirement System board, which manages benefits for state workers and retirees.

Texans for Public Justice director Craig McDonald said that by not demanding specificity, the Ethics Commission opens the door to public officials categorizing a gift as – for example – a "thing."

"The disclosure becomes almost meaningless," Mr. McDonald said. "All we know is it's more than $250. ... Is it a million? The public has a right to know."

State law allows gifts to public officials in limited circumstances. They are generally illegal if the gift is given to an official who regulates or affects the business of the donor. There are exceptions for gifts exchanged by friends or business acquaintances.

The gift from Mr. Perry has not been detailed by Mr. Ceverha in his personal bankruptcy, said Cristen Feldman, an attorney trying to collect the civil judgment.

E-mail pslover@dallasnews.com

SAEN: Texas Capitol's lobby has a revolving door

The day before Ray Allen resigned his seat as a state representative a week ago, he announced he was setting up shop as a lobbyist. By hanging out his shingle, he'll take the expertise and contacts amassed in his seven terms in office representing the public — and put them to work for private concerns. Read the article at the San Antonio Express-News

Texas Capitol's lobby has a revolving door

San Antonio Express-News
1/29/06

AUSTIN — The day before Ray Allen resigned his seat as a state representative a week ago, he announced he was setting up shop as a lobbyist.

By hanging out his shingle, he'll take the expertise and contacts amassed in his seven terms in office representing the public — and put them to work for private concerns.

Allen, a Republican from Grand Prairie, is following a well-trampled path in Texas, a way for state lawmakers who are paid only $600 a month to cash in on their insider status. If he continues down the path of the so-called superlobbyists, he will complete the circle by returning to government.

An ongoing scandal in Washington has focused on fancy meals and overseas trips for politicians arranged by a highly successful lobbyist, Jack Abramoff, who pleaded guilty this month to corruption and fraud charges.

He's now cooperating with federal investigators targeting his former allies in Congress.

In Texas, watchdog groups say ethics reforms in the early 1990s largely have curtailed the wining, dining and high-priced hotel stays provided by lobbyists and their clients.

What those reforms didn't address, the watchdogs say, is the so-called revolving door that can entice public officials to put the priorities of their potential employers ahead of constituents.

Over the past 18 months, five state lawmakers who lost or surrendered their elective posts have resurfaced as lobbyists, collectively amassing contracts worth up to $1.7 million from clients whose interests they once affected in the Legislature.

Besides Allen, the list includes two former House Republicans, Arlene Wohlgemuth and Todd Baxter; and two former House Democrats, Jaime Capelo and Barry Telford.

"They know the secrets that go on behind closed doors, they know the committee members, they know the arguments for and against and they've got on-the-job training," said Tom "Smitty" Smith, director of the Austin-based Public Citizen. "Their value to (special interests) is enormous."

Andrew Wheat, research director of the watchdog group Texans for Public Justice, also in Austin, said the issue posed serious challenges for democracy.

"What does that do to the public's faith in the integrity of their government?

"The essential problem is wealthy special interests have better access and representation in Austin than does the general public," he said.

Need the money

Allen, 55, who resigned his seat Jan. 20, has said he's merely trying to make ends meets.

"The reason is plain and simple: I simply cannot afford to serve on a $600-a-month salary with no other source of income with the prospect that we will soon be in special session until June," Allen, 55, told the Fort Worth Star-Telegram last week.

Neither Allen, Wohlgemuth, Baxter nor Capelo returned calls for comment.

In a phone interview from DeKalb, where he lives and works part time as a propane dealer, Telford dismissed concerns about wealthy special interests benefiting unfairly by the revolving-door lobby.

He said he wasn't ashamed of landing a contract worth as much as $150,000 with the Texas Retired Teachers Association after not seeking re-election in 2004.

The private, not-for-profit group's nearly 60,000 members have a keen interest in making sure the state's pension system for teachers is fully funded. The group also is working to raise teacher pensions. Telford served for years on the House Pensions and Investments Committee.

"The only thing I do is go to the members of the Legislature and talk about things I know," he said.

Though not neutral, lobbyists supply factual information and that alone serves an important function, Telford said, adding he relied on them during his 18 years in office to verse him on the ins and outs of issues.

"The people in the state of Texas are busy with their lives. If it hadn't been for the people who knew the issues ... we'd have had a helluva mess," he said.

Telford took the lobbying job with the teachers association because he believed in its cause and because it came with the very thing the watchdog groups fear: money.

Lobbyists have been around for about as long as there have been people who want to influence government. They are hired guns used by virtually every industry and interest group in the country. Newspapers employ them, as do pharmaceutical, telecommunications, oil, grocery and auto companies, cities and counties, labor unions and professional associations.

They are paid to convince lawmakers to back their clients' particular agendas and they do so with charm, research — and money, sometimes lots of it, often channeled into campaign coffers.

Their expertise allows them to write bills, or portions of bills, if a lawmaker wants to help their cause but doesn't know enough about it to draft legislation.

Across the country, a hodgepodge of regulation governs lobbyists' relationships with legislators.

Texas doesn't ban lawmakers from accepting trips, gifts and fancy meals but it does require that they report any meals or travel worth more than $76.80 per day or gifts worth more than $50 per day. Some states don't require any disclosure.

Federal law requires a one-year "cooling off" period before outgoing members of Congress can become lobbyists. According to the Washington-based Center for Public Integrity, Texas is one of 27 states with no such revolving-door ban on its legislators, although Gov. Rick Perry has a limited rule affecting his own senior staff.

The other states have either a one- or two-year ban, the latter including Florida, Kentucky and New York.

What's clear around the country is that reforms almost always follow scandal, said the center's Leah Rush.

In Texas, some watchdog groups say the Abramoff mess isn't likely to be scandalous enough to convince state lawmakers to pass a new ethics bill.

"I think they'll work in the dark to kill any meaningful reforms," Wheat said. "There are two huge, very powerful (forces) — lawmakers and lobbyists — who'll work to sabotage in the back room whatever might get proposed."

Close to 1,400 lobbyists are registered in Texas, and more than 36,000 are registered around the country. Nationally, that works out to be about five lobbyists and almost $130,000 in expenditures per state lawmaker, according to the Center for Public Integrity.

Texas has eight lobbyists per state lawmaker, more than most states, and it ranks second only to California in the total value of lobby contracts, according to Texans for Public Justice.

The watchdog groups agree that in certain respects, Texas does a fair job of regulating lobbyists. They say the state's disclosure provisions have reined in the luxurious junkets that politicians — Texas House Speaker Gib Lewis among them — were caught taking from special interests in the late 1980s.

Big loopholes

But in other areas, Texas laws are weak, they complain. It's one of 42 states to require some disclosure of lobbyists' earnings, but contracts worth $200,000 or more can be disclosed as "$200,000 and more."

"So is the contract worth $250,000, $500,000, a million dollars or 2 million dollars? Is that disclosure?" Wheat asked, noting that contracts worth $200,000 or more have shot up from six in 1999 to 39 in 2005.

The reforms were considered far-reaching when passed in 1991, Smith said. Today, his group is more concerned with the superconnected revolving-door lobbyist who joins other superconnected lobbyists in a team, Smith said.

He refers to people like Mike Toomey, a onetime lobbyist who earlier this decade became Gov. Perry's chief of staff before returning to the Texas Lobby Group, where he picked up many of his old clients. Critics say the biggest beneficiaries were clients like Texans for Lawsuit Reform, which saw its interests prevail when Toomey served the governor.

Four former members of Perry's staff worked as lobbyists both before and after their public service, according to Texans for Public Justice.

Like his predecessor, Perry bars senior staffers from lobbying his office for one year and one legislative session after they depart. The policy says nothing about lobbying the Legislature, requires no "cooling off" period for lobbyists hired by the governor; and carries no criminal sanctions.

Perry's spokeswoman, Kathy Walt, said hiring lobbyists to senior staff positions has been common practice among Texas governors and is "not something that's peculiar to Perry."

"The governor hires people he has confidence in and knows and who are good. It would not be good government to hire somebody who doesn't know anything about the Legislature."

If the Abramoff fallout is intense enough, Texas could see reforms in 2007, Smith said. But, he added, no matter how tight you make a loophole, someone will always find a way through.

As for Telford, he said his contract with the Retired Teachers Association ends later this year. He's hoping it'll be extended.

lsandberg@express-news.net

Texas Observer: Thin Reed

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Dallas Morning News: Ethics complaint filed against ex-PAC official

An ethics watchdog group filed a complaint against Dallas businessman Bill Ceverha on Thursday, saying he failed to disclose the amount of a cash gift given to him by the biggest GOP donor in the state. Mr. Ceverha is the former treasurer of the embattled, and now defunct, Texans for a Republican Majority political action committee. Read the article at the Dallas Morning News

Ethics complaint filed against ex-PAC official

Group seeks disclosure of amount of cash given to TRMPAC treasurer

January 20, 2006
By CHRISTY HOPPE / The Dallas Morning News

AUSTIN – An ethics watchdog group filed a complaint against Dallas businessman Bill Ceverha on Thursday, saying he failed to disclose the amount of a cash gift given to him by the biggest GOP donor in the state.

Mr. Ceverha is the former treasurer of the embattled, and now defunct, Texans for a Republican Majority political action committee.

TRMPAC's spending of about $600,000 in corporate contributions has resulted in the indictments of three of U.S. Rep. Tom DeLay's top lieutenants and led to Mr. Ceverha being held liable for $197,000 in a civil lawsuit.

The damage award and another pending lawsuit prompted Mr. Ceverha, a former state representative, to file for personal bankruptcy last year.

The ethics complaint by Texans for Public Justice stems from a personal disclosure form Mr. Ceverha filled out last year as a trustee on the Texas Employees Retirement System board, which manages benefits for state workers and retirees. Under the heading of gifts received, Mr. Ceverha noted that he had accepted a gift from Houston homebuilder Bob Perry.

The existence of a gift must be disclosed only if it exceeded $250. Under the portion of the form that requests a description of the gift, Mr. Ceverha wrote, "check."

Craig McDonald, director of Texans for Public Justice, called that a "nondisclosure disclosure" that is "woefully inadequate." Mr. McDonald has asked the Ethics Commission to find that the filing is incomplete and force Mr. Ceverha to state the amount of money he took from Mr. Perry.

Mr. McDonald said the public deserves to know the amount of cash gifts board members are receiving, and he drew comparisons to problems at TRMPAC, which never disclosed its corporate contributions in state filings.

"Mr. Ceverha has a disturbing history of misleading the people of Texas through incomplete financial disclosures," Mr. McDonald said.

Mr. Ceverha and Mr. Perry, who has given millions to Republican causes, could not be reached for comment.

Tim Sorrells, deputy general counsel to the ethics commission, said a complaint made to the agency is confidential and that he could not acknowledge the action by Mr. McDonald.

He said that he was unaware whether the commission had previously studied "what specificity is required to meet the requirements" of gift disclosure.

Those who have a complaint filed against them have up to 25 business days to respond. Mr. Sorrells said that commission staff investigate the case and make a recommendation to commissioners, who can dismiss the complaint, find it valid but waive a penalty, or assess a penalty.

E-mail choppe@dallasnews.com

Houston Chronicle: Lobbyist's giving nature questioned

A legislative Democratic leader Wednesday accused a state lobbyist of serving as a conduit to convert taxpayer dollars into Republican campaign contributions. House Democratic Chairman Jim Dunnam said lobbyist Drew Maloney had made $250 in political donations before Gov. Rick Perry hired Maloney's Federalist Group for $180,000 a year to lobby Congress for the state. Read the article at the Houston Chronicle

Critic says state money turned into donations to GOP

Jan. 19, 2006
By R.G. Ratcliffe, Houston Chronicle Austin Bureau Staff

AUSTIN - A legislative Democratic leader Wednesday accused a state lobbyist of serving as a conduit to convert taxpayer dollars into Republican campaign contributions.

House Democratic Chairman Jim Dunnam said lobbyist Drew Maloney had made $250 in political donations before Gov. Rick Perry hired Maloney's Federalist Group for $180,000 a year to lobby Congress for the state.

Dunnam said that since that time, Maloney has given $75,000 to Republican congressional committees - including $750 meant to help defeat an incumbent Texas congressman.

Maloney appears to be "laundering" taxpayer payments into Republican campaign contributions, Dunnam said, adding that Perry should immediately terminate Maloney's contract.

Perry has primary responsibility for overseeing the national lobby office. Perry spokeswoman Rachael Novier called Dunnam's complaint a "baseless partisan attack."

Maloney, a former chief of staff for U.S. Rep. Tom DeLay, R-Sugar Land, did not directly respond to Dunnam but said it is not unusual for states or cities to hire Washington lobbyists.

"Working with the Texas delegation and other states and coalitions we have achieved considerable success in allowing for state sales tax deduction, Medicaid savings, increased transportation dollars among a host of other issues," Maloney said. "The Texas contract represents less than 1 percent of the Federalist Group's revenue."

Dunnam and House Democrats have been trying to cut off funding for the hiring of outside lobbyists by the Texas Office of State-Federal Relations since 2003. Texas had never employed a private lobbyist until Maloney's Federalist Group was hired in 2003.

The state added to the lobby team last year by hiring Cassidy & Associates with a team headed by Todd Boulanger, who worked closely with convicted influence peddler Jack Abramoff at three different Washington, D.C., firms. Boulanger has not been directly implicated in any of the wrongdoing by Abramoff, who was close to DeLay.

The Maloney and Boulanger contracts together will cost taxpayers $1.1 million through August 2007.

The national lobby office contracts are approved by Perry, House Speaker Tom Craddick and Lt. Gov. David Dewhurst. But Craddick and Dewhurst said the hiring of lobbyists was Perry's choice, and Craddick said he opposes hiring outside lobbyists.

"I never approved of these contracts, I did not recommend these lobbyist groups, and I have publicly stated that I am against this decision," Craddick said. "The board on which I serve is explicitly an advisory board and the power to make those decisions ultimately rests in the hands of the governor."

Craddick on Wednesday released a letter he sent to Perry on Nov. 3, 2005, opposing extending contracts for Maloney and Boulanger's firms.

"In 2003, the Legislature agreed to cut funds for (the state-federal relations office) due to excess funding. However, there was never any intention to replace those cuts with spending on lobbyists," Craddick said.

In the letter, Craddick told Perry the power to hire the outside lobbyists "ultimately rests in your hands."

Novier said the hiring of both Maloney and Boulanger was done through competitive bidding. She said state funding for the national lobby office has decreased by 15 percent since it began hiring outside lobbyists, but the flow of federal funds into Texas has increased by billions of dollars.

Novier refused to say whether it is appropriate for a taxpayer-funded lobbyist to be participating in partisan congressional elections in Texas.

"Their work on behalf of the state of Texas was absolutely appropriate, and a good return on our investment," Novier said.

Prior to being hired by Texas, Maloney had lobby clients such as Reliant Energy, El Paso Corp. and TXU (Texas Utilities), but Dunnam said he was not making campaign contributions until after the state hired him.

Dunnam, of Waco, noted that in one instance, Maloney gave $750 to Republican Arlene Wohlgemuth when she was challenging incumbent U.S. Rep. Chet Edwards, D-Waco, in 2004. Edwards defeated Wohlgemuth in the heavily Republican district.

"Why should the constituents of Chet Edwards have their (taxpayer) money go to his opponent," Dunnam said.

Dunnam said he would be making the same complaint if a state taxpayer-funded lobbyist was giving money to Democrats, but he noted that all of Maloney's donations went to Republicans.

Dunnam also said Perry should fire Boulanger. Dunnam said in addition to the Abramoff ties, the money paid Boulanger could be better used on other state programs.

Boulanger was a Republican campaign donor both before and after being hired by the state. He has made $16,470 in campaign contributions since 2003.

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