Mitt Romney may not be Texas Gov. Rick Perry’s biggest problem. The nonprofit group Texans for Public Justice, a good-government foundation that has been keeping tabs on him for years, may claim that title. Its Web site’s homepage features a quote from its Crony Capitalism report: “As Texas Governor Rick Perry’s influence at the RGA increased over the past five years the political finances of both the governor and the Governors Association skyrocketed. The RGA raised a record $216.9 million during the Perry years between January 2006 and June 30, 2011. A remarkable 32 percent of this money ($68.7 million) came from just 139 crossover donors who also gave $13.7 million to Perry’s gubernatorial campaigns. Scattered through the ranks of these donors are gubernatorial appointees, state-regulated businesses and businesses with state-conferred monopolies, taxpayer grants or contracts.”
The report itself explains, “Texas regulators often seem to be held captive by the industries they are supposed to regulate.” Moreover, there is a strong correlation between major donors (both to Perry directly and the Republican Governors Association he headed) and favorable treatment by the state.
Bob Perry [no relation to the governor] ($14 million to Perry/RGA) sought and received his own regulatory agency. Texas lawmakers created the Texas Residential Construction Commission in 2003. The agency ostensibly was supposed to mediate disputes between the buyers and builders of new homes. But construction defects made a lemon of this lemon-home agency. John Krugh, Bob Perry’s general counsel, helped draft legislation to create the agency. Governor Perry then skewed the agency’s foundation by only appointing housing-industry representatives—including Krugh—to the new commission. “In Texas you can buy your own state agency, then regulate yourself,” Houston Democratic Rep. Garnet Coleman quipped at the time.The Texas Sunset Advisory Commission, which reviews bureaucracies to see if they should be eliminated, issued a scathing 2008 review, finding that the Construction Commission tied up lemon-home buyers in red tape. In a rare move, the legislature abolished the agency in 2009. . . .
Dallas billionaire Harold Simmons and his Contran Corp. holding company ($3 million to Perry/RGA) rank No. 2 among . . . donors. Simmons’ Waste Control Specialists successfully lobbied the legislature in 2003 to create a private monopoly franchise for a low-level nuclear waste dump. Governor Perry’s Texas Commission on Environmental Quality appointees awarded Waste Control that license in 2009. Overruling their staff (including three who quit in protest), Perry appointees expanded Waste Control’s license in recent years to take a broad spectrum of civilian and military radioactive junk. Waste Control’s original license just covered waste from Texas and Vermont, Texas’ waste-compact partner. A Perry-appointed majority of the Texas Low-Level Radioactive Waste Compact Commission voted in 2011 to open Waste Control’s dump to 36 other states. Worried about the outcome of that vote, Reuters reported that Perry’s office offered to appoint Commissioner Bob Gregory to be a university regent to prevent him from voting against that plan. Gregory turned down the appointment and cast one of two votes against expanding Simmons’ waste stream. Simmons now owns what has become the nation’s default low-level nuclear waste dump. “It took us six years to get legislation on this passed,” Simmons told the Dallas Business Journal. “We first had to change the law to where a private company can own a license [to handle radioactive waste], and we did that. Then we got another law passed that said they can only issue one license. Of course, we were the only ones that applied.”
The 23-page report documents scads of these sorts of arrangements.
I spoke on the phone to TPJ’s Andrew Wheat, who went through a number of the cases documented in the report. He told me that Perry “very much” runs a system built on cronyism. In a separate report titled “Governor Perry’s Patronage” TPJ found “Texas Governor Rick Perry tapped 3,995 appointees 5,662 times to serve on hundreds of state agencies, boards and commissions between January 2001 and February 23, 2010 (some appointees were appointed multiple times). From 2001 through June 2010 Perry’s campaign received $17,115,865 from 921 of these appointees or their spouses. Gubernatorial appointees accounted for an impressive 21 percent of the $83.2 million that Perry’s campaign has raised since 2001.” Wheat says he was shocked to learn that “one in five dollars came from people he appointed to office. It’s clearly a patronage system.”
Perry is not unique among Texas governors, but Wheat says, “Nobody has ever appointed this many people as this governor.” By virtue of his longevity in office, Perry therefore has appointed more donors to posts than any predecessor. Wheat tells me, “There is also a clear pattern of retribution.” The New York Times reported:
Mr. Perry insists on unquestioned political loyalty in exchange for his patronage, no matter how inappropriate or out of place. In 2009, two members of the Board of Regents of Texas Tech University said the Perry administration pressured them to resign because they supported Mr. Perry’s challenger in the gubernatorial race, Senator Kay Bailey Hutchison. One regent, Windy Sitton, told The Austin American-Statesman that she was given a choice to disavow Senator Hutchison or resign; when she refused, she was replaced. Mark Griffin, the other regent, said he was told by Mr. Perry’s chief of staff that the governor “expects loyalty out of his appointees and if you can’t be loyal, it’s probably not best to be on the team.”
Perry’s spokesman insists that Perry appoints people on merit. Wheat says this “stretches disbelief given the correlation between giving to the governor and appointments.”
In the latest debate Perry defended himself against accusations that his decision to order mandatory HPV vaccination was influenced by his former chief of staff and lobbyist extraordinaire Mike Toomey. I asked Wheat if it was right that, as Perry claimed, Toomey only gave Perry $5,000. Wheat says that is a “very selective” accounting and refers only to a $5,000 check that landed on Perry’s desk when the HPV plan was under discussion. But Wheat says that ignores the $29,500 donated by Merck, the vaccine manufacturer, to Perry over the course of his governorship or the $377,500 Merck gave to the RGA since 2006, the year Perry ramped up his activity on behalf of the group.
The Republican Party is ramping up a campaign against President Obama based on accusations that companies like LightSquared and Solyndra represent an epidemic of favoritism and misuse of the taxpayers’ money. They argue that as government expands, the opportunities for legalized bribery increase, and those same beneficiaries then become advocates for an ever-growing government. How is Perry supposed to talk about that during the campaign, should he get the nomination? Moreover, does his style of governance represent the Tea Party ethos or the worst of old-style government? Perry better have good answers to these or he’ll find himself the target of the base’s wrath, not its affection.