A Bill White Scandal?

The Bill White campaign today finally released the Democratic candidate’s tax returns dating back to 2004, after refusing to do so for the past three months.

The tax documents—from the years 2004-2008—reveal a business relationship that could cause political problems for the candidate. The documents show that White profited from investing in a company he personally enlisted to help with Houston’s recovery from Hurricane Rita. 

After the storm devastated Houston in 2005, White reached out to BTEC Turbines to help provide emergency power, White told the AP today.

White knew the company well. He had served on its board until 2004, and The Wedge Group—the holding company White headed before he became mayor—was a majority shareholder in BTEC. 

White reached out to BTEC to help avert a looming crisis. The storm had knocked out power to the Trinity River pumping station, which feeds the Lynchburg Reservoir. The reservoir had five days of water left. If power wasn’t restored quickly, 500,000 residents of Harris County would have lost water service and several large refineries would have shut down, endangering the nation’s refining capacity already reduced by Hurricane Katrina.

BTEC Turbines received an emergency contract from the local water utility and supplied urgently needed power to the pumping station, according to news accounts at the time. (Read a Houston Chronicle account of the incident here.) 

It’s not clear how much the company earned for this work. 

More than a year later, White earned more than $556,000 from his investments in BTEC Investments—the parent company of BTEC Turbines, according to his 2007 tax returns that were released today.

White has continued to earn money from BTEC, pocketing $163,000 in “passive” income in 2009, according to tax documents.

This would seem a looming scandal for White. The insinuation is clear enough: he personally profited from disaster recovery that he oversaw as mayor. 

But that doesn’t seem to be the case.

There are some important mitigating details:

1. White had no financial ties to BTEC Turbines at the time the company received its contract. Although he had served on the board previously, he wasn’t invested at the time.

2. White spokesperson Katy Bacon said White’s investment in BTEC came more than a year later and was unrelated to the company’s hurricane recovery work. She said investors who were looking to purchase BTEC called White in 2006 to ask his opinion on the company. The then-mayor said it was an excellent company—one he would personally invest in. In fact, the investment group later asked him to do just that.

3. And, finally, it seems unlikely that White’s $556,000 profit stemmed from BTEC”s work on Hurricane Rita. It’s doubtful a temporary emergency contract for mobile generators could have provided enough money to BTEC to enrich a single investor. (Again, it’s not clear how much money—if any—BTEC earned from the emergency contract. Calls to the company for comment weren’t returned this afternoon.)

Bacon pointed out that it was the water utility—not the city of Houston—that handed out the contract. White had no direct control over the utility. But, facing an emergency, he worked with power companies and the water utility to ensure that residents didn’t lose their water. He recommended BTEC because he knew it could respond quickly.

“When Bill’s dealing with an emergency, he picks up the phone and gets things done,” she said.

White was first asked to release his tax returns by the Houston Chronicle in March. He’d made his 2009 returns public, but hadn’t divulged returns from earlier years. Gov. Rick Perry’s campaign had been demanding White release the returns and reveal how he’s made his many millions — even refusing to debate until the former mayor did so. 

Later this week, the Observer will release a feature story detailing White’s business career.

It doesn’t appear that White acted unethically by investing in BTEC.

Still, it doesn’t look good. And the campaign will certainly have to spend time and energy answering questions about White’s relationship with BTEC Turbines. 

Dave Mann is a former editor of the Observer.

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Published at 11:42 pm CST
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