Tuesday, January 29, 2002

"The smell test"

In Williamson, politics, roads and money mix

Some critics question circle linking contractors, consultant and county

January 29, 2002

By Carter Nelsen
Austin American-Statesman
Copyright 2006

Few people work as close to the heart of Williamson County's political establishment as Pete Peters.

More than a dozen of the area's most powerful politicians have used his public relations company, The Communicators, to help run their election campaigns, including all four county commissioners and the county judge.

When the same commissioners asked voters to approve $350 million worth of road bonds in the fall 2000 election, Peters formed a political action committee to promote the idea.

The PAC, called Roads Now, raised more than $62,000, most of it from contractors. Roads Now, in turn, paid Peters' firm more than $28,000 for public relations work, fund raising and expenses.

Then, when the bond proposal passed by a 3-1 ratio and the commissioners hired a team of consultants to run the project, they included Peters at $130 an hour.

Commissioners, relying largely on the recommendations of the engineer who leads that team, have since awarded more than $25 million in road contracts. About $15 million worth has gone to companies that contributed to Roads Now.

That chain of events raises ethical concerns, said University of Texas law professor Charles Silver.

"That's exactly the kind of thing that you see over and over and over again, and the only thing that surprises me is how cheaply this sort of thing can be purchased," said Silver, who teaches legal ethics. "It just makes me fume when I see things like this happen."

All but one of the contracts awarded to the 15 companies are professional-services agreements. State law does not require competitive bidding for those agreements.

Unlike construction companies and suppliers, which usually must bid for contracts, professional-services companies -- including engineers, consultants, law firms and architects -- typically submit proposals outlining their qualifications. They do not need to offer the lowest price to win a job.

Peters said he has played no part in contract discussions and saw nothing unusual in the PAC's activities. Campaigns supporting municipal bond proposals frequently raise money from contractors, he said.

"These are the top engineering firms in the area," he said of several Roads Now contributors. "They would get work anyway. A lot of people who gave (to the PAC) didn't get work, and a lot who didn't give got work."

Lawyer Ed Shack, a campaign finance expert hired by Peters last week, said he didn't consider Peters' connections to the bond project out of the ordinary.

"He's not being paid to help select anybody or make judgments about who's the appropriate contractor," said Shack, who worked for the Texas secretary of state's office before entering private practice. "So I guess I don't see a real issue there."

`The smell test'

Austin engineer Mike Weaver, who heads the team of consultants supervising the roads projects, decides whether professional-services contractors are qualified to work for the county before commissioners vote to hire them. Among other tasks, he requests proposals from dozens of companies, then recommends who should get jobs based on their qualifications, he said.

Commissioners hired Weaver's company, Prime Strategies Inc., in 1998 to plan the bond package. In December 2000, after voters approved the proposal, the county put Weaver in charge of the project and let him hire a group of consultants, including Peters' company, to help him oversee it.

Weaver said he cleared many of the companies for contracts in the weeks before commissioners let him hire a consultant team. And contractors are routinely the most generous contributors to PACs that support bond projects, he said.

But Tom "Smitty" Smith, director of the consumer and government watchdog group Texas Public Citizen, said Peters' connections to both the PAC and the consultant team create an "inappropriately complete circle" linking contractors to county officials.

"It doesn't pass the smell test," Smith said. "There ought to be distance between people who are in decision-making positions and people who are raising funds for these kinds of elections."

Over the past decade, Peters has worked for almost every major candidate in local Republican politics -- in a county where Republicans hold every elective office. His involvement in Central Texas elections spans more than 30 years. He has worked for Round Rock City Council members, Williamson County Sheriff John Maspero and former District Attorney Ken Anderson, now a judge, and he recently joined the campaign team of Temple-area congressional candidate Ramsey Farley.

County-contractor link

Peters helped form Roads Now in early October 2000 by lending the group about $2,000. Over the next three months, the PAC raised $40,000 from 15 companies that since have won county bond contracts.

Almost all those contracts, worth about $15 million, stem from the road bond package, although at least $700,000 worth fall under a $25 million parks project approved in the same election. The companies range from a Round Rock architecture firm to a Florida company with projects around the country.

Roads Now started raising money on Oct. 12, 2000, just four weeks before the bond election. The PAC raised more than $54,000 before the election and $8,000 afterward.

Former Round Rock Mayor Mike Robinson served as the group's treasurer, and area developer Jim Mills was assistant treasurer. But Peters said he created the PAC.

"I've done elections in Williamson County for over 14 years," he said. "I helped with that campaign. I masterminded it. I did it."

By state law, any effort to promote a county bond proposal must rely on private contributions.

Most of the PAC's money paid for obvious road bond promotions: yard signs, opinion polls, tickets to political meetings, a mass-mailed brochure. Peters' firm, The Communicators, was the second-largest beneficiary of Roads Now.

In December 2000, the PAC paid Peters' company $10,000 for public relations work and fund raising.

A month earlier, Roads Now had issued a check to reimburse the firm for more than $18,000 in expenses. Peters provided the Austin American-Statesman with copies of receipts accounting for the $18,000. But aside from the $2,000 loan, the PAC's disclosure documents never indicated that Peters' firm was spending its own money for PAC purposes.

State law requires that a PAC report any money used on its behalf as a loan or contribution, said Karen Lundquist, general counsel for the Texas State Ethics Commission.

"If a member of a PAC was making an expenditure for the PAC, then really either they're making a contribution to the PAC or they're acting as the PAC's agent," said Lundquist, who did not comment on Roads Now in particular. "You can't just lump-sum everything as a reimbursement."

Shack, the lawyer and campaign finance expert hired by Peters, said such reimbursements are common in politics -- if not the best practice.

"What he did was kind of the normal and usual business," Shack said. "I don't think it's the right way that political consultants around the state have done, but I think it's certainly not unusual."

The commissioners and county judge said they saw nothing troubling in the awarding of contracts to Roads Now contributors.

"I know for sure he never contacted me and said, 'Hey, you need to hire this guy because they gave to the PAC,' " said Commissioner David Hays. "We sat down and looked at all the different engineers and contractors and made the determination as to who we thought was capable to handle the work."

Along with the contributions to Roads Now, at least 23 companies with county contracts gave more than $25,000 last year to the campaigns of Commissioners Greg Boatright and Frankie Limmer and County Judge John Doerfler, who are running for re-election this year. Those contributions make up more than 30 percent of each official's fund-raising total for 2001.

Limmer said he had removed more than one engineering firm from projects in his precinct because of their campaign contributions, though he declined to name them. Boatright said contractors gave to his campaign organization because they care about local issues.

"They are involved with helping shape the future of Williamson County," Boatright said. "So the normal, everyday citizen that lives in Williamson County does not have what I would call an everyday, close working relationship with their elected officials. And so when it comes to fund raising, the people that you work closely with and work with professionally are going to be the ones that help you and support you in your campaign."

Doerfler, who has raised significantly less money than Limmer or Boatright, said the contributions would have no effect on his votes.

"From any kind of donations I get, I'm not obligated to anyone on anything," Doerfler said. "And if they don't understand that, they ought to."

A criminal history

Amos "Pete" Peters III, 53, began his career as a political consultant in the 1970s, when he worked mainly for Austin Democrats.

When the area's conservative Democrats became Republicans in the early 1990s, Peters followed suit, offering his services to GOP candidates in Williamson County.

But years before he became one of the most influential nonelected officials in the county, Peters racked up a 20-year criminal record in Central Texas, including a dozen charges of check swindling, credit card abuse and criminal mischief. He pleaded guilty or no contest to three felonies and three misdemeanors between 1969 and 1989.

A Travis County judge in 1983 sentenced Peters to two years in state prison for writing a worthless check, although Peters was released on parole five months later. He landed in the Travis County Jail at least twice, including an 80-day stint in 1970 and eight days in 1989, each time for writing bad checks. He spent more than a decade on probation.

But his criminal record ended with the 1989 conviction. He said he regrets his behavior during those years and has been a successful recovering alcoholic since July 1985.

"I realize everybody has had problems," Peters said. "I should have stopped before I did, but I didn't."

The county commissioners said they trust Peters fully in his position on the road bond team and have no problems with his past.

"He really has made a complete turnaround," Limmer said. "I'm really proud of Pete. He just got into bad circumstances in the late '70s and early '80s."

And the law enforcement officials who have hired Peters' services said his history didn't pose a problem for them. Maspero said he wasn't aware of Peters' criminal record until recently, but said it didn't worry him. Anderson, who first hired Peters in 1994, said he knew but felt it was no longer relevant.

"It's just never been an issue, and it's just something I'm not horribly proud of," Peters said.

Peters' company earns about $4,000 a month from Williamson County's bond budget, mainly for work promoting the roads project. He bills the county for meeting with the media, for preparing news conferences and press releases and for discussing the project with state politicians, among other tasks.

But he is so closely tied to county Republican politics that he sometimes seems to wear two hats at the same time. A brochure Peters crafted at county expense last year displayed the names of every commissioner and included quotes from each touting his involvement in the roads project.

Last summer, the county paid Peters more than $600 for three meetings with American-Statesman Editor Rich Oppel -- meetings Oppel said didn't happen.

In June, Peters billed the county $260 for what he described in his monthly invoice as "American Statesman Editor Rich Oppel to (Round Rock) Express game about regional roads and Austin challenges to area plan." His July invoice included $227.50 for "Editor Oppel of American Statesman on road challenges in region." And in August, Peters charged the county $130 for a "TTA (Texas Turnpike Authority) meeting with Editor Oppel on Williamson County projects."

Oppel said he did not see Peters at the Express game and had never met or talked with him about Williamson County's roads projects until a meeting last week that included Peters, Shack and American-Statesman editors.

Peters and Shack described the three billing entries as incomplete and said Peters in fact billed the county for time spent preparing materials he tried to deliver to Oppel and for time spent talking about roads with others who did meet with Oppel.

You may contact Carter Nelsen at cnelsen@statesman.com or 246-0008.

© 2002 Austin American-Statesman: www.statesman.com