Who Really Runs Texas?

The seven major donors who spend the most on, and get the most from, Texas politics.
by Published on
ILLUSTRATION BY GREG HOUSTON

It’s hard to overstate the power of money in Texas politics. If you’re wealthy, the state offers numerous ways to buy influence and implement policy.

Texas has no limits on campaign contributions. Unrestrained spending—in a state with extremely low voter turnout—means very rich people can donate a lot of money to influence a few voters and swing a state election. But that’s just the beginning. Rich individuals and corporations can spend unlimited cash on lobbyists, too, and use the legislative session to fete state lawmakers—who earn a measly $7,200 a year—with food, drinks and gifts. They can contribute to the Texas Public Policy Foundation (TPPF), a conservative think tank with close ties to Gov. Rick Perry, that’s largely funded by the corporate interests that benefit from the free-market policies it advocates. And thanks to the U.S. Supreme Court’s Citizens United ruling, wealthy individuals and corporations can now fund third-party groups that influence elections without ever disclosing their donors.

Behind the scenes of many Texas political debates, there’s a wealthy individual or company feeding huge amounts of money into the system. When they get their way, as they often do, the policy they’ve purchased impacts people’s lives.

Who are these donors? We’ve compiled a list of the seven individuals and companies that spend the most and get the most in Texas politics. During the first 18 months of the 2012 election cycle—from January 1, 2011, to June 30, 2012—these seven donors have contributed a combined $10.3 million to state candidates, according to an analysis by the watchdog group Texans for Public Justice. There are many other powerful people in Texas, including elected officials, lobbyists and advocates. But these seven mega-donors essentially run the state. In Texas politics, money rules.


Tim Dunn

Tim Dunn is out to purify the Republican Party, and he’s bankrolling the tea party group Empower Texans to do it. Fronted by provocative activist Michael Quinn Sullivan, the group pushes for extremely limited government and has tried to defeat any Republican who strays from its orthodoxy.

Sullivan may be the face of Empower Texans, but it’s Dunn’s money that makes the operation go. The 57-year-old Midland oilman is chair of the organization’s board and provided nearly $400,000 to the Empower Texans PAC since 2007—more than 40 percent of its total contributions, according to Texans for Public Justice. After tea party victories in 2010, Empower Texans gained new prominence. Pressure from Sullivan (and the threat of Dunn’s money) helped push the Texas Legislature significantly rightward in 2011, contributing to deep budget cuts, especially for public schools, while the $9 billion Rainy Day Fund was left mostly unspent.

The unprecedented education cuts didn’t bother Empower Texans. Dunn is no fan of public ed. A devout Christian, he founded Midland Classical Academy, which, according to the school’s website, offers students an “academic foundation from a Biblical worldview.” If Dunn has his way, many Texas kids will soon use publicly funded vouchers to attend private schools.

To make that happen, Empower Texans and Dunn took aim in 2012 at House Republicans who support public schools or who support House Speaker Joe Straus. Dunn contributed $40,000 toward defeating Straus in the May Republican primary. The speaker retained his seat, but five House committee chairs lost their primaries, thanks largely to Dunn’s efforts. Dunn’s crusade against the speaker—and against public schools—will surely continue.


Bob Perry

It’s been a quiet few years for Bob Perry, relatively speaking.

The reclusive owner of Houston-based Perry Homes has been the most prolific and controversial GOP donor in Texas, if not the nation, donating millions every campaign cycle. He famously helped fund the Swift Boat attacks on John Kerry in 2004. He prodded Rick Perry (no relation) and the Legislature to create a state agency in 2003 just for him. OK, not just for him. Other homebuilders benefited, too. But it was Bob Perry’s attorney who wrote the law that created the Texas Residential Construction Commission. The agency was nominally supposed to regulate the building industry and protect homeowners, but it did nothing of the sort. Instead, it favored builders in arbitration disputes with consumers. Eventually the Legislature heard enough consumer complaints and did away with it.

Though he lost his friendly state agency, Bob Perry kept on writing checks, continuing to support the powerful Texans for Lawsuit Reform, a major backer of tort reform. It’s become increasingly difficult for consumers with faulty homes to sue or win claims against homebuilders.

Perry has largely avoided political controversies in recent years, but that doesn’t mean he’s any less influential. In the first 18 months of the 2012 election cycle, Bob Perry contributed more than $4.8 million to Texas candidates.


AT&T

The pertinent question isn’t who AT&T gives money to, but rather who doesn’t AT&T give money to?

The Dallas-based telecom giant is ubiquitous in Texas politics. Campaign contributions? Check. More than $1.1 million donated to state candidates for the 2012 election through June 30. High-powered lobbyists? For sure. The company spends nearly $10 million a year to employ more than 80 registered lobbyists, including annual contracts ranging from $50,000 to $150,000 for high-powered lobbyists and former lawmakers like Mike Toomey, Buddy Jones, Dianne Delisi and Eddie Cavazos and Tracy King. Corporate sponsorships? Of course. The AT&T logo, and the corporate money that comes with it, backs numerous policy conferences and banquets, both parties’ state conventions, and the recent Texas Tribune Festival. The company also donates money to lawmakers’ favorite charities. As The Dallas Morning News reported, AT&T even bought 700 copies of Rick Perry’s book Fed Up! to give to attendees at a 2010 Washington luncheon.

Still, we don’t know exactly how much money AT&T spends to influence public policy in Texas, since the company also donates corporate money to nonprofits, think tanks and third-party groups that don’t have to disclose their donors. For instance, the Observer has learned that AT&T donated $76,500 to the TPPF in 2010.

What we do know is that in the tangled world of telecom policy, AT&T nearly always gets its way. Think about that next time you look at your phone bill.

 

Williams Brothers Construction

Thousands of years from now, what will endure of Rick Perry’s reign as governor? When the remnants of refineries have rusted to dust, and the radiation from West Texas’s buried waste begins to subside, our monstrous highway network—beguiling shamrocks high above the plains, impossibly straight causeways across the swamps—may be our most enduring achievement.

When that day comes, we can thank Williams Brothers Construction for the monuments. The Houston-based firm is Texas’ biggest recipient of highway contracts, earning just under a quarter billion dollars in 2012. The company built Baytown’s Fred Hartman Bridge, the overpass-rich U.S. 59 Gateway in Houston, and big pieces of the President George Bush Turnpike around Fort Worth.

So who are the Williams Brothers? Look past brothers J.K. and C.K. Williams, each of whom has sold his share of the company they founded in 1955 to third partner James Douglass Pitcock. Today, 84-year-old Doug Pitcock is the sole shareholder in Texas’ biggest road-building enterprise, and he rewards his allies.

Harris County Judge Ed Emmett is a particularly close friend, and the recipient of more than $100,000 in campaign money from Pitcock. In 2010, the Houston Chronicle reported that Williams Brothers had been awarded more than $182 million in toll-road contracts from Harris County during Emmett’s three years in office.

Pitcock keeps a low profile, but he has good friends in Austin, too. In 2007, he loaned his private jet to Gov. Perry for a trip to Israel that prompted the formation of the Texas-Israel Chamber of Commerce. As of 2010, he’d given $400,000 to Perry’s campaigns, and Pitcock was the second-biggest benefactor of the Super PAC Americans for Rick Perry during the governor’s doomed presidential run.


State Farm

Like a good neighbor who can raise your insurance bill whenever it wants—according to abstruse financial models you’ll never get to see, with little accountability from regulators—State Farm is there, more or less running the show. It’s not the only player in the Texas insurance market, but it is the biggest.

“This is not your typical market. You can’t easily compare, and you have no option to opt out,” says Alex Winslow of the consumer-advocacy group Texas Watch. So you’d expect the regulators at the Texas Department of Insurance to keep State Farm and other big players on a pretty short leash. You’d be wrong. The department has little power to reduce rates.

At the Legislature, the misleadingly named Texas Coalition for Affordable Insurance Solutions represents the combined interests of industry mammoths like State Farm, Farmers and Allstate. State Farm’s PAC spreads tens of thousands around campaign accounts each election cycle—especially to favored candidates like Republican (and State Farm agent) Wayne Faircloth, who’s trying to unseat Galveston Democratic state Rep. Craig Eiland this year. It’s no accident that in their day jobs, more than one-tenth of Texas’ legislators are insurance agents.

Just how comfortable is State Farm in Texas? On the same day the Travis County District Attorney’s office announced a major investigation into State Farm for systematically avoiding payouts for roof damage from Hurricane Ike, the company announced a statewide home insurance rate hike of 20 percent.


Harold Simmons

D Magazine once dubbed him “Dallas’ Most Evil Genius,” but that might be selling Harold Simmons short. Not content with funding the swiftboating of John Kerry in 2004, Simmons was the No. 2 donor to secretive anti-Obama Super PACs. On advice from Karl Rove, no less, the 81-year-old pumped more than $15 million into conservative PACs. Simmons told The Wall Street Journal that his goal was to defeat “that socialist, Obama.” Obama, he said, is “the most dangerous American alive … because he would eliminate free enterprise in this country.”

That’s a hilarious thing to say for a guy who spent a fortune on lobbyists and campaign contributions to get the Texas Legislature to privatize radioactive waste disposal in Texas. Then he talked Andrews County, where the dump is located, into financing construction of the dump for him. He employs the former executive director of Texas’ environmental agency, which approved the dump, as a lobbyist. One of the dump’s top customers is the federal government, which is paying for the cleanup of a Fernald, Ohio, uranium-enrichment plant owned by one of Simmons’ companies. Ultimately, Simmons could reap billions in revenue from the project. With all that loot, perhaps he can afford to add to the collection of 17,000 tulips that surround the lake at his Dallas home.


Energy Future Holdings/TXU

Energy Future Holdings, the parent company that contains TXU Energy, Luminant and Oncor, may be stumbling under a mountain of debt acquired in an ill-fated private equity buyout in 2007, but the utility is still the King Kong of the state’s power companies.

In Texas, private electricity utilities occupy a strange space: They function within an almost fully deregulated market, but still have to play politics with regulators and politicians who worry about rates and keeping the lights on. Dallas-based EFH throws its weight around quite effectively. Since the beginning of 2011, EFH and its Wall Street owners have invested more than $840,000 in Texas political action committees and politicians.

That kind of largesse can come in handy. When the EPA proposed rules to crack down on pollution from coal-fired power plants, the state’s political establishment took up EFH’s cause. The company claimed that it would have to shut down two of its coal plants if it were required to reduce pollution blowing into other states. The EPA rule was struck down in court but—guess what?—the utility will idle the plants anyway.

EFH has also been a prominent cheerleader for lifting a cap on wholesale power prices and creating a secondary market in which the state would essentially pay companies to build new power plants.

If EFH does file for bankruptcy, which many analysts consider inevitable, we can thank our legislators. In 2007, TXU and its buyout partners spent $6 million on an army of 86 lobbyists to help seal the deal.

 

The Tracy King mentioned in the AT&T section of this story is not the Tracy King who is a current Democratic state representative. The Texas Observer regrets the error.  

Dave Mann has been with the Observer since 2003. Before that, he worked as a reporter in Fort Worth and Washington, D.C. He was born and raised in Philadelphia. He thinks border collies are the world’s greatest dogs, and believes in the nourishing powers of pickup basketball.