Political Intelligence

Spying and Splurging


A Quiet Victory

On October 10, the governor’s office quietly signed over all control of the Texas Data Exchange, or TDEx, to the Department of Public Safety. As Observer readers might recall, we first exposed the program this past April (see “The Governor’s Database,” April 20). TDEx’s apparent goal was to vacuum up information on every Texan, starting with those who had come into contact with law enforcement, and put the information into a searchable database. The governor’s office had control of the treasure trove of data and granted access to any law enforcement agency that wanted it.

After the Observer story broke, a bipartisan group of legislators struggled to rein in the program, or at least transfer it from the political office of the governor into DPS, a professional law enforcement agency. The governor’s office and its controversial Homeland Security Director, Steve McCraw, fought the changes. In the waning days of the session, the authoritarian wing of the Republican Party managed to rescue TDEx. The Legislature adjourned with the program untouched.

Now, for unknown reasons, Gov. Rick Perry’s office has decided it doesn’t want the hot potato after all. Interestingly, the October agreement ceding control of TDEx was not signed by McCraw but by Brian Newby, the governor’s chief of staff. The program will now be under DPS’s Texas Crime Information Center, where, according to a DPS spokesperson, “there are strict rules about how information is placed into the system and how it is accessed.”

Iran Frighthouse cartoon

Regent to Nowhere

In October, Gov. Rick Perry appointed three new regents to the University of Texas System Board of Regents. The prestigious posts usually go to loyal party members who have donated generously to the governor. One of the new regents is James Dannenbaum, president of Houston-based Dannenbaum Engineering, who has stuffed Perry’s campaign purse with $247,500 since 2000. That’s business as usual. What’s new is that Dannenbaum’s company is embroiled in a border scandal that involves a $21 million bridge that doesn’t exist, Mexican shell companies, and pending legal troubles.

The story begins in 1991 when South Texas voters approved $21 million in bonds for the construction of an international bridge to connect the Port of Brownsville to Matamoras, Mexico. The Brownsville Navigation District tapped Dannenbaum Engineering to manage and engineer the job. Although the firm received $15.4 million, the bridge was never built. Presently, $9.2 million of the $15.4 million simply can’t be accounted for, according to the 2005 findings of a special investigator appointed by the navigation district. The investigator traced the sum to three Mexican shell companies with ties to Dannenbaum principal Louis H. Jones. The only products from the 17 subcontractors hired by Dannenbaum were 49 black binders with a few sheets inside.

In February, the navigation district and Dannenbaum reached a settlement in which the district agreed to surrender its ability to collect on the missing funds. In exchange, Dannenbaum agreed to perform the equivalent of $2.9 million in engineering work on the U.S. portion of the bridge. The company has the right to recover that sum from whatever Mexican company is eventually selected for the Mexican half of the bridge. Navigation district commissioner and attorney Peter Zavalletta voted against the settlement, calling it “indefensible” at the time. “I cannot overstate how upset people were about that settlement,” Zavalleta tells the Observer.

Now Zavalleta is suing Dannenbaum on behalf of nine taxpayers, of which he is one. “My case is a very specific challenge asking the court to rule that the settlement must be declared null and void,” Zavalletta says. He argues that Dannenbaum has violated the settlement because, eight months later, they haven’t bothered to start on the project. Meanwhile, a special grand jury is looking into the possibility of criminal wrongdoing surrounding the bridge deal. As of yet, James Dannenbaum has not been directly implicated in the scandal, although he might at a minimum become a witness in the grand jury probe. “Regarding legal issues, the governor is not aware of any criminal investigation into Mr. Dannenbaum or his company,” says Krista Moody, a spokesperson for Perry. “The governor believes Dannenbaum will serve as a good steward of the people of Texas with integrity and character.”

Cell Game

For some reason, voters almost always approve amendments to the Texas Constitution. There are 16 propositions on the ballot this November 6. Five authorize the state to borrow money for various purposes. You would think that might give voters pause, but even the expensive propositions usually pass without much debate. In truth, even the ones that don’t put the state into debt deserve careful consideration.

The proposition that has excited opposition from progressives is Proposition 4. It would authorize three new prisons, giving Lt. Gov. David Dewhurst something to run on when he takes a shot at the governor’s office. Texas already has plenty of costly prisons. The ballot proposal does not include the money that will be needed to actually operate the new lockups. As Scott Henson has noted on his blog, Grits for Breakfast, the reason these prisons are being built seems to be “to further the ambitions of politicians who take us for fools.”

The best source we have found for the lowdown on all the propositions is on Houston state Rep. Scott Hochberg’s Website, scotthochberg.com. Hochberg is an engineer and is famed for his ability to understand the nitty-gritty of complex legislation.

Fund Foolery

The most expensive proposition on the November ballot is Proposition 12, “providing for the issuance of general obligation bonds by the Texas Transportation Commission in an amount not to exceed $5 billion.” Like all government agencies with their hands out, TXDOT is pleading poverty to justify its need for the money. The agency is so bare bones that it can’t build new roads or even keep up the ones it has, agency representatives say. “People need to understand that, within a very short period of time, there will be no new capacity added,” Texas Transportation Commission member Ned Holmes warned the Houston Chronicle in September.

Funny, then, that a large chunk of the more than $14-billion-dollar state highway fund is being used for purposes that don’t actually have anything to do with putting down asphalt. Instead, it’s become something of a piggy bank that lawmakers raid when they’re short on cash. Consider State Highway Fund No. 006, which accounts for 87 percent of TXDOT’s budget. That money comes from gas taxes and other sources. According to an analysis completed by the Texas Legislative Council last February, up to 12 percent of the revenue in the fund goes to pay for non-TXDOT items. By far the biggest expenditure is for the Department of Public Safety. The state highway fund pays 98 percent of the DPS annual appropriation, according to testimony last year by Senator Robert Nichols, then a member of the Texas Transportation Commission. In the 2006-2007 appropriations, DPS received $787.7 million from Fund 006, approximately 5.3 percent of the fund. Money from Fund 006 also goes to insurance, retirement, Social Security, and other costs for employees and retirees of TXDOT, the Department of Public Safety, the Office of the Attorney General, the State Office of Administrative Hearings, and the Texas Transportation Institute. A number of legislators have decried Fund 006’s use as a general appropriations grab bag, but nothing has been done.