Saturday, September 26, 2009

"Rick Perry should do an infomercial on how to become a millionaire as a professional politician."

Perry's wealth fueled by land deals, investments

Related Article: Campaign contributions subsidize cushy lifestyle of Texas politicians


By Jay Root
The Associated Press
Copyright 2009

Gov. Rick Perry never had much money growing up, and he has spent most of his adult life in public office, drawing a part-time salary as a legislator and relatively modest earnings in statewide office for the last quarter-century.

But thanks to his investments and a series of private land deals, some that took advantage of his political connections, Perry has squeaked over the millionaire line, records examined by The Associated Press show.

Perry's Democratic opponents have suggested in the past that Perry traded on his power and influence to turn a buck. Now Sen. Kay Bailey Hutchison, Perry's opponent in a tough Republican primary as he fights for a third full term, is raising the same accusations.

"Rick Perry should do an infomercial on how to become a millionaire as a professional politician," said Hutchison campaign manager Terry Sullivan. "From abusing his power over appointments to getting sweetheart real estate deals from supporters, he's a regular get-rich-quick icon."

Perry aides say the governor has benefited from nothing more than strong business acumen and good timing. He has also lost some dough along the way, most notably last year, when a trust fund he owns took a huge hit during the Wall Street meltdown and shed more than a half-million dollars in short- and long-term losses, tax records show. Aides note that he has one home and is putting a child through college, like many Texans.

The West Texas ranch boy won a state House seat in 1984 as a Democrat and has never lost an election. A former Texas A&M yell leader and Air Force pilot, Perry switched to the Republican Party in 1989, was elected agriculture commissioner in 1990 and then lieutenant governor in 1998. He took over as governor in 2000 when Gov. George W. Bush became president and has become the longest serving governor in Texas history.

When he entered the Legislature, the Haskell County native was still working on the family ranch, farming cotton and ranching cattle. But he's made most of his wealth buying and selling real estate — earning him about $2 million in pretax profits since 1991, records and interviews show.

Perry once sold a 9.3-acre tract to computer magnate Michael Dell for nearly four times what he paid for it; influential Texas lobbyist Mike Toomey represented Perry at the sale. The West Austin property sold for $465,000 in 1995 and gave the Dell estate badly needed access to an adjacent municipal sewage district.

A little more than a year later, Perry snapped up 60 acres southwest of Austin, after acting on a tip from flamboyant developer Gary Bradley, whose real estate empire fell into bankruptcy in 2002. The property was sold 2½ years later at a $239,000 profit.

Perry has also bought and sold houses and raw land for various gains since he won statewide office in 1990.

"He just manages to fall into these deals over the years," said Houston accountant Bob Martin, who helped analyze 18 years' worth of Perry's tax returns for the AP.

"It looks like his net worth increased while he was in office, in the relative scheme of things, on a small salary." Perry made about $85,000 a year as agriculture commissioner and now draws $150,000 annually as governor, but as a legislator and lieutenant governor, he made a part-time salary of just $7,200.

He also was entitled to daily expense payments during legislative sessions and later, as lieutenant governor in 1999 and 2000, Perry boosted his take-home pay by filling in for then-Gov. Bush, who spent a lot of time outside Texas running for president.

His wife, Anita, helped boost the family's income during the lieutenant governor years, making about $67,000 as a salaried employee for the Perryman Group, a business consulting firm based in Waco.

Perry's biggest real estate payday came in 2007, when he sold two-thirds of an acre of lakefront property he had acquired in 2001 from friend Troy Fraser, a Republican state senator who owns a nearby tract in Horseshoe Bay. Perry sold the property in March 2007 for $1.14 million — for a profit of $823,766, tax records show.

That helped produce the highest annual income Perry and his wife have ever reported — about $1.1 million in adjusted gross income, according to their 2007 tax return.

Perry put the profits from the sale into his blind trust, an instrument politicians use to shield themselves from conflicts between public actions and private wealth.

Though Perry knows what has gone into the trust, including proceeds from land sales, aides say he has no control over what's done with the assets once they're deposited.

Spokeswoman Allison Castle said she did not have a figure for Perry's net worth, but she said his blind trust is worth about $896,000. Perry also owns a home in College Station valued at $243,900 this year.

"The real estate investments they have been involved with have been fully disclosed and reported," Castle said. "They own one home with a mortgage that is approximately the same value as the house. The governor and first lady both work, have a mortgage and are paying off student loans for one child while putting another through college."

Anita Perry now works as a $65,000-a-year consultant to the Texas Association Against Sexual Assault.

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