The Washington Post

Rick Perry’s donors fare well, Texas-style

Just before Labor Day weekend, two San Antonio multimillionaires will co-chair a $25,000-a-couple country club fundraiser for Republican Gov. Rick Perry, an event meant to persuade business leaders beyond Texas to help their friend win the White House.

Texas business legends Peter Holt, owner of the San Antonio Spurs, and Billy Joe “Red” McCombs, an auto and real estate magnate and former sports team owner, are typical of the large campaign donors who helped Perry raise more cash than any Texas governor. Together, these two men with diverse business interests personally donated more than $936,000 to Perry’s campaigns, in a state that does not limit the amount individuals can donate to local politicians.

Perry’s ability to raise $102 million in his gubernatorial campaigns from this network of wealthy Texans has helped him position himself as a leader in the Republican presidential field. Veteran campaign hands say that in national fundraising, Perry must lean heavily on this old network while expanding it beyond Texas.

He also will have to deal with mounting criticism that his administration has rewarded large donors with favors that have enhanced their personal and business interests. Public interest groups contend that the linkage is too strong to be explained by the business-friendly climate that Perry has worked hard to create.

“Perry has taken it to a whole new level,” said Public Citizen’s director in Texas, Tom Smith. “Time after time, there’s often a direct link between Perry’s decisions and payments to his campaign coffers.”

Perry spokesman Mark Miner said the governor alone does not make the decisions that helped certain businesses. Independent state officials and commissions are often involved, he said.

“These issues have been looked into before, and there’s never been any wrongdoing substantiated,” Miner said. “These are political accusations.”

The Washington Post looked at Perry’s top 50 donors, who collectively gave more than $21 million, and found that 34 received some benefit from Perry’s administration or the state, including grants, contracts and appointments. The donor list was compiled by the nonprofit Texans for Public Justice.

Twenty-three donors won Perry’s appointment to state boards, often the boards of regents at the University of Texas or Texas A&M.

Roughly one in three of the top Perry donors had business interests that secured grants, tax subsidies or project approvals under his administration, the Post review found. Five donors gained both an appointment and a state boost to their specific company or interests.

Holt, who owns the nation’s largest Caterpillar dealership, urged Perry to lure a Caterpillar manufacturing plant to Texas, and a company official told reporters in an interview last year that such a plant would help the dealership get equipment. Perry’s office agreed in 2008 to award an $8.5 million incentive grant for a proposed new Caterpillar factory promising 1,714 jobs.

Holt said in an e-mail that the plant’s move to Texas would not directly benefit his dealership.

McCombs is leading a push to bring a Formula One racing stadium to Austin; under Perry, the state has pledged $25 million in project subsidies. McCombs said that the funding help comes from a special-event fund controlled not by Perry but by the Republican state comptroller.

“Every single business I’m involved with, we have added jobs here in Texas,” McCombs said, explaining his pitch to other busi­ness­ peo­ple considering donating to Perry. “In your lifetime, you couldn’t have a better opportunity to have a president who understands the importance of a job.”

McCombs said Perry’s donors may appear to have benefited from state action, but the governor does not single them out for favor.

“There’s no question he is a business-friendly governor,” he said. “But I don’t think there is any direct connection.”

Perry’s largest single individual donor, who has given more than $2.5 million, is Bob Perry (no relation to the governor), the founder of a large home-building company.

In 2003, Perry Homes helped persuade the governor and Republican lawmakers to create the Texas Residential Construction Commission. One of the commission’s goals was to limit lawsuits by home buyers complaining of shoddy construction.

Bob Perry donated $100,000 to the governor as the commission was being formed. A top official of the firm, John Krugh, the general counsel, was named to the panel by the governor.

Bob Perry’s spokesman, Anthony Holm, said Perry supported the governor before the commission was created, and the appointment was not related to the donation.

“John Krugh is an industry expert, and it’s perfectly expected an industry expert would be appointed to oversee this legislatively created body,” Holm said.

In 2005, the governor tapped the Texas Enterprise Fund — an economic development fund he created — for its largest grant to date: $50 million to a joint research venture between Texas A&M University and a fledgling biotech company, Lexicon, that promised to create 1,616 jobs. Lexicon got $35 million of the grant.

The company’s investors included a Texas congressman and two others who were among Perry’s top donors.

One was Robert McNair, an investor and former energy executive, who has given $330,000 to Perry. McNair controlled 9.3 percent of Lexicon’s stock at the time of the state grant.

Recently, Lexicon backed off on its jobs promise. The Texas media reported last year that Perry had renegotiated the deal with Lexicon so that Texas A&M took responsibility for creating more of the promised jobs over a longer time period.

McNair said in an interview that he never asked for the grant and learned about it from a news article.

“As far as I know, they got what they got on their merits, and good for them,” he said. McNair, who also invests in horse racing, said he remembers calling Perry’s office only once: to recommend two experts he knew to the state racing commission.

Perry’s second-largest donor, billionaire Harold C. Simmons, contributed $1.1 million. Simmons had worked for six years to open a radioactive-waste facility in West Texas.

In 2008, Perry’s political appointees on the Texas Commission on Environmental Quality overruled scientists and staff objections to grant a license for the dump that Simmons’s company, Waste Control Specialists, wanted to build. According to local news reports, three agency staffers resigned in protest.

Perry’s campaign spokesman said agencies made their decisions based on the public interest. Perry’s critics disagree.

Martin Frost, a retired Democratic congressman from Texas and who served as a caucus leader, said the high incidence of donors reported to have received favorable treatment in state decisions raises questions. “You can’t explain this away as a coincidence,” he said.

Staff writer Karen Tumulty and research editor Alice Crites contributed to this report.

Carol Leonnig covers federal agencies with a focus on government accountability.

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