Page 15


IN MARCH, just days after White won the Democratic primary, the Houston Chronicle reported that throughout his three terms as mayor, White served on the board of BJ Services, a Houston-based energy services company that specializes in drilling for natural gas. White has earned more than $2.6 million in total compensation from BJ Services. Much of that money came from payments for his service on the board. But White also owns more than 10,000 shares of BJ Services stock, according to his financial disclosures, and $245,000 in stock options. BJ Services was recently bought out by the oil-field services company Baker Hughes. As of April 30, when the sale was finalized, White was no longer on the BJ Services board, according to his campaign. But he’s still financially tied to the company. BJ Services stockholders, including White, received nearly $1 billion in cash from the stock merger and also hold more than $6 billion worth of shares in the new merged company, according to documents filed with the Securities and Exchange Commission. It’s rare for big-city mayorsor public officials of any kindto be so closely aligned with a large corporation. A Dallas Morning News survey of mayors of the nation’s 10 largest cities found that only three, White included, served on corporate boards. “I wanted to keep a business involvement, to keep my hand in business, because I enjoy business. It still is a great company,” White says. There was no conflict of interest between city business and BJ Services, he says. The state of Texas, however, approves and regulates natural gas drilling done by firms like BJ Services. Now that White is running for governor and remains invested with BJ Services, the potential for conflicts of interest is greater. For instance, BJ Services has drilling contracts for more than 2,000 wells in the natural gas-rich Barnett Shale formation in North Texas, according to the company. Drilling in the Barnett Shale has become increasingly controversial. Residents and environmentalists have protested that the process used to extract the gas hydraulic fracturing, in which a combination of salt water and other chemicals is injected into rockhas led to pollution of ground and surface water with benzene and other carcinogens. BJ Services is part of a current congressional inquiry into fracturing. The industry says the risks of fracturing are minimal. But some landowners near drilling sites have submitted soil samples from their properties for testing and found elevated levels of carcinogens. Some activists have called for a moratorium on drilling. Others have called for tighter restrictions so that the drilling doesn’t pollute drinking water supplies. Mayors and city councils in communities all over North Texassome in typically Republican areashave turned against the drilling. Sharon Wilson, an activist who lives in Wise County and has been advocating for safer drilling practices, has invited White to tour the area. She said she doesn’t think anyone can understand the situation unless “you see it for yourself on the ground and you see what’s going on.” The White campaign hasn’t responded to her offer. White opposes a drilling moratorium. It’s not a surprising position for him, given his background in the industry. But it does leave him open to criticism. A drilling moratorium in the Barnett Shale would be financially damaging to BJ Services. Moreover, the company’s CEO, J.W. Stewart, and his wife have given $50,000 to White’s campaign so far, according to campaign filings. “I’ve believed strongly, and I do believe, that natural gas and unconventional gas should be an important part of the energy mix,” White says. “I think it’s critically important if we want to have cleaner air, if we want to have a growing economy and we want to cut our dependence on foreign oil, then domestic natural gas is a very important part of that. Period. “Now, we should have good environmental standards and practices, and companies should abide by environmental standards, and, in particular, if there are detections of excessive amounts of benzeneI’ve heard most are in connection with a processing plant there ought to be a standard, it ought to be applied, it ought to be monitored, and they ought to be shut down if they don’t apply to the standard.” White says the failure to have good standards and strict regulation lies with the Texas Commission on Environmental Quality and the Railroad Commission. The Perry campaign is sure to use the BJ Services connections against White; the incumbent governor’s campaigns historically have been devastatingly effective at portraying their opponents negatively. Perry’s people have already done a job on White over his refusals to release his tax returns prior to 2009 and continually assailed him as a “liberal trial lawyer.” It’s not surprising that White’s polling numbers, even in Houston, have begun to drop. White fully expects Perry’s campaign to make BJ Services an issue in the campaign. But he also notes that the governor’s campaign recently sent out a fundraising letter that labeled White an enemy of the Texas energy industry. “So he’ll talk out of both sides of his mouth.” That might have been White’s best line in our hourlong interview. When you talk with him, it’s hard not to wonder if statewide voters will flock to him. As in business, there’s a supply-and-demand in Texas politics. Most successful candidates have charm and charismawhat the late Molly Ivins used to call “a little Elvis”because that’s what people want. Like it or not, that’s what wins. White believes that his record of success in business and in government will win people over, even if he’s not the most charismatic guy in the race. It’s a difficult pitch. Despite all Bill White’s success in business, his toughest sales job yet may be himself. CI rounds during his time as Houston mayor PHOTO COURTESY BILL WHITE FOR TEXAS “He moved very quickly and decisively and very much, I think, as a businessman would have done, which is, when times are bad, you cut your costs READ more about pollution in the Barnett Shale at tx1o.comidestruction JUNE 11, 2010 THE TEXAS OBSERVER 11