Playing the Odds
Exclusive: Correlation denied, but company stands to gain from sale
February 13, 2007
By CHRISTY HOPPE
The Dallas Morning News
AUSTIN – UBS, one of two large financial firms consulting with the governor's office over the possible sale of the Texas lottery, hired Gov. Rick Perry's son to work in its Dallas office about two weeks ago.
The governor's office said that there is no relationship between the two events and that Griffin Perry, 23, is a bright young economist who is pursuing a career on his own merits.
"He stands on his own two feet. And he got this job on his own," press secretary Robert Black said Monday.
The younger Mr. Perry graduated from Vanderbilt University with an economics degree in May. He spent the summer and fall working on his father's re-election campaign.
Karina Byrne, a UBS spokeswoman, said that Griffin Perry was hired for a specific program in which about a dozen entry-level employees rotate through various parts of the company. The company has 11 such programs nationwide.
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"We have a vigorous interview and application process. He would have been subjected to the same criteria that would have applied to any other young person applying for the associate program," Ms. Byrne said.
She said the fact that his father is governor would not have weighed into the calculation.
But the hiring comes amid concern that several of the governor's bold policy ideas stand to benefit his associates.
Critics of his decision to order vaccines for schoolgirls to help prevent cervical cancer noted that his former chief of staff, Mike Toomey, is registered to lobby for Merck, the only company that makes the vaccine.
Craig McDonald, director of the group Texans for Public Justice, which pushes for campaign finance changes, said that the Griffin Perry hiring and its timing should raise some concern.
"Hiring the governor's son seems to be a way to enamor yourself with the man at the top," Mr. McDonald said.
He said he recognized that it's not always easy to pick your way through opportunities when you're related to the governor.
"But he doesn't have to work for the firm that has a lot of potential business in front of his father," Mr. McDonald said.
Last week, Mr. Perry laid out his idea for selling the Texas lottery in his State of the State speech, saying that marketing a lottery concession to private interests could raise $14 billion. He proposed placing the proceeds in three separate trusts, with investment earnings funding public education, health insurance for low-income Texans and one of the largest cancer research projects in the nation.
The brokering of a $14 billion lottery concession could mean tens of millions to the chosen firm.
"Are some firms, if you take this to the next step, going to make some money off of this? Yes," Mr. Black said.
But he pointed out that every time the state lays a roadway, purchases a building or sells bonds to do it, a private firm makes money.
"We didn't just talk to UBS. We talked to others, and we'll continue to talk to others," Mr. Black said.
No fees or contracts have been paid as of yet, he said.
The staff of the governor's office called both Morgan Stanley and UBS for expert advice on the potential sale price of the lottery, Mr. Black said.
UBS is consulting with Illinois and New Jersey, which are also considering selling their lotteries.
Also involved in the UBS consulting team is former U.S. Sen. Phil Gramm, a longtime friend of the governor. He has met with one of the governor's top aides to discuss the idea but not with Mr. Perry, Mr. Black said last week.
Mr. Gramm, a UBS vice president of investment banking, works out of the company's New York office. Griffin Perry will be working in the separate area of personal wealth management, Mr. Black said.
© 2007 The Dallas Morning News Co
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