Sunday, January 07, 2007

"The decision on who is going to be speaker of the House will have enormous pocketbook impact on all Texans."

Lobby firms, businessmen, colleagues have plenty riding on Texas House speaker vote

Jan. 7, 2007

Austin Bureau
Houston Chronicle
Copyright 2007

AUSTIN — Far more is at stake in the race for Texas House speaker than just whose hand will wield the oversized pecan gavel used to bring the unruly chamber to order.

There also is influence. And there is the ability to implement laws that could affect billions of dollars in business profits or state spending.

Lobby firms whose members vacation with incumbent Speaker Tom Craddick or help him get an appointment with the pope stand to lose influence if he is ousted. So do tort reformers and businessmen Bob Perry of Houston and James Leininger of San Antonio.

If Appropriations Chairman Jim Pitts prevails in his challenge, Democratic legislators and personal injury trial lawyers could gain a seat at the legislative negotiating table. Proponents of more state spending on public education or children's health programs may gain clout as well.

Winners and losers in the legislative balance of power will be determined Tuesday, the opening day of the legislative session, as House members choose between the two Republicans to lead them.

"The decision on who is going to be speaker of the House will have enormous pocketbook impact on all Texans," said Tom Smith of Public Citizen, a consumer group.

"The decisions the next speaker makes on who to appoint as committee chairs and what legislation comes to the floor and what is in tax and appropriations bills is going to affect each and every one of us."

Aligned with Craddick is a pair of powerful lobby firms — Hillco Partners and the Texas Capitol Group — which collect more than $1 million a year each in fees to represent a who's-who of business clients before the Legislature.

Texas Capitol Group lobbyist Bill Messer vacations with Craddick and his family. Messer's brother, Joe Cox, is a key researcher on Craddick's speaker staff. Mike Toomey, another lobbyist at the firm, helped Craddick win the speakership in 2003.

Hillco partner Bill Miller often serves as Craddick's political spokesman. He also arranged for the Catholic politician to have an audience with the pope at the Vatican.

Democratic political consultant Glenn Smith said the biggest loser in a Craddick defeat would be Gov. Rick Perry. Smith said Perry has been dependent in the past on Craddick to push his agenda through the Legislature.

Highway funding

William Lutz, managing editor of the conservative Lone Star Report, said the governor also could find opposition from Pitts to the centerpiece of his administration: expanding the state highways and building the Trans-Texas Corridor.

"Jim Pitts is not a friend of TxDOT (the Texas Department of Transportation)," Lutz said. "If Jim Pitts is speaker, the governor might get a few bills sent to his desk that he doesn't like."

Smith said other major losers would be Hillco and the Texas Capitol Group. Smith said the lobbyists relied on Perry to serve as a veto block on legislation they opposed and relied on Craddick to push what they wanted through the House.

"Their empire has been dependent on this speaker and the financial backing of Bob Perry," Smith said.

In the past five years, Bob Perry, no relation to Gov. Perry, has donated $915,000 to the Hillco PAC, about 43 percent of all the PAC's fundraising. The money was then donated to legislators.

Ethics advocate Fred Lewis said he thinks the money was not just meant to sway legislators but also to keep Craddick in power by financing lawmakers who support him. (Since Craddick was elected speaker in 2003, he has received $25,000 from Hillco and $35,000 from Bob Perry.)

Lewis said he also thinks a state law prohibiting lobbyists from influencing a speaker's race may have been violated when Hillco's Miller served as Craddick's spokesman in the early stages of the campaign last month. He said Craddick also should have reported Miller's services as an expense on his speaker's race financial disclosure statements.

"It is clear Bill Miller is providing professional services to Speaker Craddick, and they are not reported," Lewis said.

Forming relationships

Miller said his activities as a friend of Craddick's have nothing to do with his work at Hillco. Miller said he was friends with Craddick years ago when Craddick had no power in the House because Craddick had gotten crossways with former Speaker Pete Laney.

"My relationship with Craddick preceded Hillco. It goes back to when he was poison," Miller said. "We have a lot of clients. Do you think we'd subvert our clients for one member of the Legislature?"

Miller said he took reporters' calls during the holidays only because official spokeswoman Alexis DeLee was on vacation. He said he did it as a favor to the reporters and to Craddick.

Other potential losers in a Craddick defeat include Houston homebuilder Perry and San Antonio investor Leininger, both of whom are major Republican donors.

Under Craddick, the House approved creation of the Texas Residential Construction Commission, which protects homebuilders from lawsuits.

And Craddick pushed for a floor vote in 2005 on doomed private school voucher legislation, Leininger's top legislative goal. Leininger's mostly unsuccessful funding of efforts to unseat Republican incumbents who voted against that bill is partly responsible for the current rebellion of House members against Craddick.

Perry spokesman Anthony Holm said Perry makes political donations to both Democrats and Republicans who support a business-friendly agenda. Holm said that will not change if there is a new speaker.

Perry was Pitts' largest donor last year, giving him $15,000.

Leininger spokesman Ken Hoagland said the businessman accepts that trying to create a majority for vouchers by funding legislative campaigns was a mistake. Hoagland said Leininger has "apologized for excesses" and is working to persuade lawmakers he once opposed that vouchers would be good for the school children.

Variety of interests

As for Pitts, the Waxahachie lawmaker comes to the speaker's race with his own set of encumbrances.

Though he was the 10th-largest fundraiser among House members in 2006, his donations came from a broad array of interests. His brother, John, and nephew, John Jr., are lobbyists whose clients mostly include charter schools and businesses associated with the low-income-housing industry.

What worries some conservatives is Pitts' legislative history and the alliances he is making in the speaker's race.

In 2004, Pitts pushed legislation supported by the governor to legalize video slot machines at racetracks. Pitts' contributions last year included $7,500 from the political committee of Houston-based Maxxam Inc., a company interested in passage of such legislation.

To win the speakership, Pitts is putting together a coalition of Democratic and Republican lawmakers. He has promised to be more open than Craddick and give all sides of an issue a seat at negotiations on bills.

To conservatives, that means Pitts could be more willing to give in to Democratic demands on spending, social issues and lawsuit-reform legislation.

"That means our conservative agenda would be endangered if not DOA," said Cathie Adams, president of the Texas Eagle Forum.

'Tail wagging the dog'

Jim Cardle, president of the conservative Texas Citizens Action Network, said state government spending grew 19 percent with Pitts as Appropriations chairman during times when state revenue was tight. Cardle said he is worried about what will happen if Pitts is speaker and has to satisfy Democrats who helped elect him.

"Democrats would win. If Pitts wins, you've got the tail wagging the dog," Cardle said.

There also are political risks involved for House members in how they decide to vote.

Democrats who back Craddick could face retribution from their party in next year's primaries.

Republicans who bolt to Pitts face the similar possibility.

Smith said he does not think the Republican members need to worry. He said three of the five Republican incumbents targeted for defeat by Leininger last year survived.

Cardle agreed. He said Craddick Democrats have more to worry about, and he noted that the party defeated state Reps. Ron Wilson and Al Edwards of Houston and the late state Sen. Frank Madla of San Antonio in the primaries based on party-loyalty votes.

"The Democrats have a better enforcement mechanism than the Republicans do," Cardle said.

Money flows from lobbyists

Hillco and the Texas Capitol Group may be the most high-profile lobby firms with vested interests in a Craddick speakership, but they are not alone.

Through June 30, Craddick raised $1.2 million from lobbyists and business interests for his campaign, even though he faced no re-election challenge. He had $3 million in political cash in the bank.

Pitts raised $812,000 last year, but he also faced challenges in both the GOP primary and general election. His reports cover all but the last two months of 2006. He had $484,334 in political cash in his bank account.

Craddick's report for the second half of 2006 and a final tally on Pitts will not be available until after the speaker's race.

Because state law prohibits fundraising during a regular legislative session, if Pitts wins, lobby interests will be unable to make so-called late train donations to him until 20 days after the session ends.

© 2006 Houston Chronicle: