Berlanga’s Cozy Deal Corpus Christi state Rep. Hugo Berlanga sold his Austin condo in November, and he struck a good bargain: The buyer was a well-heeled constituent and the selling price $89,000 was $20,000 more than market value. But as the Observer went to press news of these financial details had yet to surface in the Corpus Christi Caller-Times, despite the paper’s scoop on the transaction. The condo had caused raised eyebrows for some time. In August 1989, Austin American-Statesman reporters Laylan Copelin and Mike Ward broke the story; the Statesman reported that $1,200 monthly interest and maintenance payments were made by Berlanga’s political donors. Meanwhile the representative himself paid only $100 per month toward the principal. After the Statesman article appeared, Berlanga tried to sell his condo on the sagging Austin market. It finally sold in November. The buyer, Robert Kendricks, is a Corpus Christi real-estate investor and attorney; he has been acquainted with Berlanga for four or five years. Kendricks now rents the condo back to Berlanga for $1,200 a month. According to the Statesman, Berlanga’s political contributors pick up the tab. The sale was first reported in the Corpus Christi Caller-Times by Janet Warren of Harte-Hanks \(“Tired of ‘innuendo,’ Berlanga sells condominium”, Statesman on the second half of its own story. But the Harte-Hanks story did not include several important aspects of the transaction. In the Harte-Hanks story Berlanga described the condominium as a “terrible investment in the depressed Austin market,” and claimed that he sold the property for a price in the “nineties.” Berlanga bought the condo in 1984 for $95,400. The Harte-Hanks reporter never re ported the exact selling price a matter of public record. Nor did Berlanga’s account of a “terrible investment,” an investment that resulted in a trivial loss, lead to questions about the actual tax valuation of the property. The Statesman reported on February 5 that Kendricks bought the Westgate condo, located near the Capitol, for $89,000. The unit’s tax-roll valuation is listed at $58,647, and according to several Austin real-estate agents would sell for $70,000 $75,000. The actual property values were brought to light by Laylan Copelin of the Statesman. Copelin was tipped off to the story by Warren’s scoop. “I just saw another angle that hadn’t been covered and I covered it,” Copelin said. “There are few pieces of real estate in Austin that sell for that much, much less a condo.” Jim Davis, the head of the Harte-Hanks Austin bureau, defended the coverage. He said it is unfair to compare the work of the much larger Austin paper to the HarteHanks bureau. “We work our butts off doing the baby stories. I don’t think we should be criticized for not trying to compete with the . . . Austin AmericanStatesman,” he said. “You guys are supposed to be for the little guys,” he told the Observer. “Well, we’re the little guys.” Harte-Hanks owns 12 small and medium-sized papers in Texas. Said Copelin: “It takes more than one paper . . . these stories come in bits and pieces.” But the more complete version of the story has not yet been aired by the Caller-Times. Davis did say Harte-Hanks is investigating “some ongoing stuff’ in connection with campaign finance. Perhaps the story of Berlanga’s cozy deal will reach Corpus Christi yet. Stephen Merelman POLITICAL INTELLIGENCE WHEN PRESIDENT Bush attended a December 7 campaign fundraiser in Houston for Phil Gramm, he praised Gramm for understanding “the value of good education he co-sponsored our Educational Excellence Act.” But when the Senate voted recently on the bill, Gramm was one of only eight senators who voted against it. “Gramm already has a perfect record on funding education,” said Hugh Parmer, Gramm’s likely Democratic challenger. “He has never voted to fund any education program. This time he even voted against the principle of improving educational excelence.” PARMER’S CHANCES of unseating Gramm haven’t improved much in recent months. Gramm’s most recent campaign contribution filing with the Federal Election Commission is six inches thick, is divided into four parts and weighs about five pounds. Inside are hundreds of pages of individual contributions, ranging from $100 to $1,000, most of them dated in December. Gramm has raised more, spent more, and has more money on hand now than any other senator up for reelection. Since taking office in 1985, Gramm has raised $10.6 million and has spent $4.5 million, leaving him with a $6.1 million campaign war chest. In 1989, Gramm raised $5.6 million, $3.7 million of which came from the latter part of the year. Expenses were particularly heavy toward the year’s end as his campaign staff geared up for the December 7 Astrodome fundraiser, where President George Bush spoke and country singer Lee Greenwood sang. GOP officials had said at the time that Gramm grossed $2.4 million from the event. Based on a review of the FEC report, that figure appears accurate. Among other expenses listed are: $278,290 on catering for the event. This apparently includes rental of the Astrodome and the price of chicken dinners and Texas wine served that night. $75,000 paid to the Republican National Committee to reimburse the travel expenses of President Bush and other big names and out-of-towners. Other expenses which appear to be related to the fundraiser include $32,100 listed as event expenses paid to two consulting firms shortly before the night. The Gramm campaign also spent thousands on apartments for staffers who worked the event and for special telephone service. The cost of mail was the biggest expense. Various direct-mail firms and the Postal Service divided up $439,576 in the last quarter of the year, the report showed. PERSONAL ALLEGATIONS from El Paso Senator Tati Santiesteban are causing a stir in West Texas. The El Paso Times reports that the 13-member New Car Dealers Association has made its first political endorsement. Citing concerns with Santiesteban’s integrity and morality, the association endorsed his opponent, former Public Utility Commissioner Peggy Rosson, in the March Democratic primary. On the campaign trail, Santiesteban has sought to turn the character issue against his opponent. “There’s something I think you ought to know about this consumer-oriented alleged person that is my opponent,” he told the Times. “Mrs. Rosson voted for PaloVerde. . . to increase rates that to this day this district is paying $60 million because of her votes.” In fact, as member of the Public Utility Commission, Rosson earned a reputation as a knowledgeableconsumeradvocate.On the vote cited bySantiesteban, she only ruled on afinding of fact. Santiesteban’s law firm has been retained for years to represent El Paso Electric. THE TEXAS OBSERVER 19
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