ustxtxb_obs_2010_06_11_50_00009-00000_000.pdf

Mayor White meets with the Hurricane Katrina Task Force PHOTO COURTESY BILL WHITE FOR TEXAS “He’s not a knee-jerk reaction kind of guy. He’s a very good strategic thinker. He could see both sides of an issue. He’s very, very thoughtful.” Austin and spent 14 years as a litigator, working mainly on anti-trust and corporate law, White remained fascinated with energy policy. As an attorney, he represented both energy companies and private citizens fighting industry. He also helped investigate the cause of several accidents, including a gas-well blowout in Mississippi. Investigating accidents, White says, “You learn a lot about drilling for oil and gas.” This work led to his first political break. White’s firm, Susman Godfrey, had represented the state of Arkansas in an anti-trust case. In early 1991, White met thenGov. Bill Clinton just as he was gearing up for his first presidential run. White went on to raise millions for the campaign, and his efforts and connections helped him score an appointment as deputy secretary in Clinton’s Department of Energy in 1993. Suddenly White was helping oversee a department with more than 140,000 employees and a budget of $19 billion. “I was a big believer that the United States needed a more secure, affordable and sustainable energy policy with less foreign imports and more domestic energy,” White says. But he also pushed the United States to develop oil in the Caspian Sea. He traveled to the Caucasus a handful of times, partly to cajole the leaders of Armenia and Azerbaijanbitter long-time enemies to work out some of their differences and open the region for oil production. White says those negotiations showed his diplomat’s skill for bringing opposing sides together whether it’s trying to get Central Asian leaders to agree or working with energy executives in Houston to lower emissionsor, he hopes, bargaining with Texas legislators. “It’s often the case that people you think would be bitter antagonists are seeing the same circumstances or drawing the same conclusion,” he says. “Then it’s a matter of mobilizing the constituencies behind those legislators, with their help, in order to accomplish a common goal. That’s what real leadership means. That’s what we’re lacking as governor.” After he left the Energy Department in 1995, White returned to Houston to launch his own company, Frontera Resources. This began perhaps the most disputed part of White’s business careerand the least successful. Frontera set out to extract oil from the Caspian Sea. It struck one of the first production-sharing agreements in the region, with the Azerbaijan state oil company. Those efforts engendered criticism. In a spring 2000 story, Mother Jones ripped Fronteraand singled out Whitefor working with Central Asian strongmen, especially President Heydar Aliyev of Azerbaijan. “According to [Human Rights Watch], his government tortures prisoners, detains journalists, and suppresses opposition parties,” the magazine wrote. “Despite such abuses, White and his company portray Aliyev as a bold Houston mayor in 2003, White was also criticized for trying to use his experience in government, and his contacts in Central Asia, to profit with Frontera. White has continually denied that he did anything improper. “Certainly the knowledge that I gained as a deputy secretary of energy of the United States helped me handicap what every international businessman does,” he says. “In every international business, there’s political riskto what extent is a country going to be stable, in what direction is the public leadership in. That’s not inside information. It’s knowledge of the countries of the world. There were no guaranteed returns.” Indeed, the venture wasn’t nearly as profitable as White had hoped. The production deal in Azerbaijan faltered, and Frontera eventually defaulted on a large loan from the European Bank for Reconstruction and Development, which aided projects in former Soviet republics. Investors lost millions on Frontera. The company is still developing oil projects in Central Asia, but White no longer has any rolehe stepped down as CEO in 1997 and left the board of directors in 2001, though he still holds stock valued at $11,000, according to his campaign. White found more success in his next rolerunning the Wedge Group, a Houston-based holding company. Wedge isn’t your typical investment firm. It doesn’t flip companies for quick profit. The firm’s motto is “Time is the most valuable asset,” and Wedge boasts in promotional materials that it gives investments “time to mature and gain in growth.” Wedge has owned some of its ventures for decades before selling them. White took over as CEO in 1997 and left only when he was elected mayor in 2003. He scoured the market for good investments, primarily in energy and real estate. Under White’s tenure, Wedge nurtured seven or eight ventures at any one time. He still retains an ownership stake in a Wedge spinoff called BTEC Turbines, from which White earned tens of thousands in 2008, according to his tax returns. Much of White’s work at Wedge proved profitable for the company. One venture that prospered was a Tyler-based outfit named Howe-Baker International, which produces oil-refining equipment. The firm was eventually sold off, but White’s tenure was a very profitable time for Howe Baker, says the company’s former CEO Ron Brazzel. “He’s not a knee-jerk reaction kind of guy” says Brazzel, a life-long Republican who’s supporting White for governor. “He’s a very good strategic thinker. He could see both sides of an issue. He’s very, very thoughtful.” IT DIDN’T TAKE LONG for White to show how he would translate his business background into a governing style. In early 2004, just months into his tenure, White confronted his first major crisis as mayor of Houston. His administration had inherited a city pension system that was a mess. The system had a projected shortfall of hundreds of millions per year and was threatening to swamp the city budget. White proposed cuts in the both the civilian and police retirement systems, including reducing benefits for some long-time city employees. City workers were furious, but the cuts helped avert a deeper crisis. “He moved very quickly and decisivelyand very much, I think, as a businessman would have done, which is, when times are bad, you cut your costs,” says Bob Stein, a political science professor at Rice University. “He incurred enormous wrath from public employees. It’s not what a [conventional] politician would do.” Stein has been closely observing Houston mayors for three decades. His political science students often conduct policy research for the mayor’s office, and his wife has worked as an agenda director for several mayors, including White and his successor, READ Bill White’s 2009 tax CI returns at www.billwhitefortexas.com/taxreturns JUNE 11, 2010 THE TEXAS OBSERVER 9