Political Intelligence

Tom Craddick's Good Fortune

CRADDICK’S CRUDE

American families are being hammered by plunging real estate values and soaring oil prices. But one person’s loss is another’s gain.Texas House Speaker Tom Craddick’s investment portfolio appreciated an enviable 92 percent over the past four years. Records kept by the Midland County tax assessor show that this Midland oilman has held small shares of the mineral rights underlying 45 Midland properties for four years or more. County assessors estimate that the value of Craddick’s oil properties almost doubled in this period, from $537,130 to just more than $1 million.

The appreciation is comparable to increases countywide, where aggregate mineral valuations almost doubled, from $1.1 billion to $2.1 billion, from 2004 to 2007, according to Brian McDonald of the Midland Central Appraisal District. Key factors influencing these valuations, McDonald says, are the amount of oil a well produces and oil’s market price. From 2004 to 2007, the average annual price of West Texas Intermediate crude oil went from $42 a barrel to $72, according to the U.S. Energy Information Administration. In the first two months of 2008, the average price leapt to $94 a barrel.

Rising crude prices have pumped up the value of Craddick’s oil properties even as they increased the value of the royalty income that he pocketed from his oil interests. In a recent personal financial disclosure filed with the Texas Ethics Commission, Craddick reported royalty income from 33 energy companies in 2007 (some of this oil income may have come from wells outside Midland County). Because Texas officials disclose income in ranges, Craddick’s precise oil income is unknown. Moreover, the speaker reported royalty income from five companies worth open-ended amounts of “$25,000 or more.” Assuming that these big payouts were worth just $25,000 each, Craddick’s total oil royalty income in 2007 fell between $242,000 and $455,000.

One company that paid Craddick oil royalties in excess of $25,000 last year is Irving-based Pioneer Natural Resources Co. In 1999, Craddick and then-Gov. George W. Bush led the push for a special tax cut for marginal oil wells. Some Democrats at the time (including Craddick’s current lame-duck ally, Houston Democrat Rep. Kevin Bailey) denounced the tax cut as corporate welfare. Dismissing critics, Bush said that the aid would “help small producers.” Following up a year later, the Dallas Morning News found that the No. 1 beneficiary-with a tax cut exceeding $1 million-was Pioneer Natural Resources. Fort Worth investor Richard Rainwater created Pioneer in 1997 through the merger of MESA Inc. and Parker & Parsley Petroleum Co. (Rainwater also orchestrated the purchase of the Texas Rangers ball team that made Bush $16 million).

LAMPSON’S NIGHTMARE

It’s official: We won’t have Shelley Sekula Gibbs to kick around anymore. And more is the pity. It has been a great ride: from Sekula Gibbs’ riotous romp through her seven-week congressional term in 2006 to her seeming confusion over the separation of church and state. Despite outspending Republican primary opponent Pete Olson almost 2-to-1, Sekula Gibbs lost her Republican primary runoff. Olson, a former staffer of Phil Gramm and John Cornyn, was the GOP establishment candidate.

It’s a bleak Republican electoral landscape for winning U.S. House seats in 2008. Olson’s challenge to Democratic incumbent Nick Lampson for Congressional District 22 is one of the few possible pick ups for Republicans nationwide. But winning it might not be as easy. Lampson is a tough campaigner who has built strong relationships in the district and used the support provided by a Democrat-controlled Congress to bring home plenty of goodies.

A UNION WINS ONE

The National Nurses Organizing Committee, née the California Nurses Association, broke through an important barrier last month. On March 28, a majority of participating nurses at the Cypress Fairbanks Medical Center voted to let the union negotiate a contract on their behalf, making the Houston facility the first privately owned hospital in the state to unionize.

Cypress Fairbanks is owned by scandal-plagued Tenet Healthcare Corp. The Dallas-based company has been on an upswing after years of government investigations and lawsuits, including one that resulted in a $900 million settlement with the Justice Department in June 2006. Private hospitals are notoriously hard to organize. Tenet has refused to comment publicly on the union vote, but in a written statement said it was disappointed, according to the Houston Chronicle. The company owns two other hospitals in Harris County.

The California nurses have had a rocky road to victory in Texas. Their first foray here involved a high-profile effort to pass legislation mandating higher nurse-patient ratios. Their bill didn’t get a hearing. Then the group was publicly rebuked this past January at the AFL-CIO state convention. Delegates approved a resolution that contained language by AFSCME that chided the California committee for trying to poach nurses the larger union represented at public healthcare facilities in Houston.

In an e-mail, organizing committee coordinator Ed Bruno wrote that the union has been working to expand to hospitals throughout Texas since 2006. “NNOC organizing today is for all practical purposes statewide and includes RN organizations from El Paso east to the Gulf and Dallas south to the Valley,” Bruno wrote. Come next legislative session, the union plans to re-introduce its hospital patient protection act, according to Bruno. Now that the union officially represents Texas nurses, it might have more luck.

Regardless, oft-beleaguered Lone Star union leaders were thrilled by the victory. “The vote shows that despite exceptionally difficult conditions for organizing in any so-called ‘right-to-work’ state, it can be done in Texas,” said Becky Moeller, Texas AFL-CIO president.

INTEGRITY MAINTAINED

Despite a well-financed advertising blitz and an impassioned plea from her ex-husband, Austin City Council Member Brewster McCracken, Mindy Montford lost overwhelmingly in the Democratic primary runoff to succeed Ronnie Earle as Travis County district attorney. Rosemary Lehmberg-for the past decade Earle’s second in command-bested Montford with 65 percent of the vote. Montford benefited from her extensive connections to the state’s political lobby, outraising Lehmberg by at least $200,000. McCracken’s glowing letter, e-mailed to county Democrats, seemed more a petition for canonization than an endorsement, calling his ex-wife a “genuinely good person.” Still, it was not enough to overcome Earle’s endorsement of Lehmberg or the disquiet many voters felt at putting the public integrity unit, charged with prosecuting political corruption, in the hands of someone so close to the state’s political influence peddlers.

PLOT TWIST

Movie star and environmentalist Robert Redford visited Houston on March 27 to present Fighting Goliath: Texas Coal Wars a short documentary he commissioned and narrated about the fight to stop the former TXU Corp. from building 11 new coal plants. (After a buyout, the company is now called Energy Future Holdings Corp.) A group of ranchers and farmers, along with 36 Texas mayors and a law firm working pro bono, managed to stall the plant permits. It was a major victory against a formidable foe. After TXU was bought out, eight plants were canceled. That favorable twist put a hefty dent in the movie’s titular theme. It was like fighting Goliath, but then Goliath had a heart attack. With one coal plant under construction in the state and four more on deck, Goliath appears to have responded well to the pacemaker.

With the triumph-of-the-little-guy angle set askew, Redford and the stars of the film took stabs at alternate take-home messages for the Progressive Forum audience. Most convincing was the story of people who set aside political agendas and traditions to take on big coal. Conservative mayors put their offices and party support on the line to oppose TXU. Lawyers worked free. Rural folks came to the Capitol lawn and protested alongside hippies. Rancher Marc Scott explains in the film that “to a farmer, an environmentalist was a tree hugger who didn’t want us to use pesticides on anything.”

On stage at the Wortham Center, in his perfect white cowboy hat, Scott told the audience about the loss the local school took by not welcoming TXU, which had promised to invest several million dollars in the struggling district once the plant was active. “It’s a poor area, and to turn down all that money, then have to have a bond proposal just to get a new gym, it says a lot about the people.”

The crowd and panel seemed taken with the unlikely anti-coal activists. “It was great to see those local people getting into environmentalism,” one fellow remarked. “You know they probably all voted for Bush.”

Craddick’S Army

House Speaker Tom Craddick likely gained one more ally in the Legislature’s lower chamber on April 7. Challenger Tryon Lewis thumped Odessa state Rep. Buddy West in a Republican primary runoff.

West, a retired oil field engineer, was bidding for a ninth term. His opposition to Craddick in last session’s speaker’s race proved costly. Craddick didn’t openly support Lewis, but it wasn’t hard to tell which sides West and Lewis were respectively on. Opponents of the speaker, such as Waxahachie Republican Rep. Jim Pitts, campaigned for West and contributed to his campaign. West received no support from some major Republican donors with close ties to Craddick.

Lewis, a former state district judge, easily won the runoff, 76 to 24 percent. He will face what should be only token opposition from a Libertarian candidate in the general election. Predictably enough, Lewis has already pledged his support to Craddick in the speaker’s race.

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Published at 12:00 am CST
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