Saturday, February 13, 2010

“Politicians want to pass the ball forward, and if a banker can show them a way to pass a problem to the future, they will fall for it.”

Wall St. Helped to Mask Debt Fueling Europe’s Crisis

greek tragedy
The Greek Tragedy


The New York Times
Copyright 2010

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.

As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.

Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama.

As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.

In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come.

Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities.

Some of the Greek deals were named after figures in Greek mythology. One of them, for instance, was called Aeolos, after the god of the winds.

The crisis in Greece poses the most significant challenge yet to Europe’s common currency, the euro, and the Continent’s goal of economic unity. The country is, in the argot of banking, too big to be allowed to fail. Greece owes the world $300 billion, and major banks are on the hook for much of that debt. A default would reverberate around the globe.

A spokeswoman for the Greek finance ministry said the government had met with many banks in recent months and had not committed to any bank’s offers. All debt financings “are conducted in an effort of transparency,” she said. Goldman and JPMorgan declined to comment.

While Wall Street’s handiwork in Europe has received little attention on this side of the Atlantic, it has been sharply criticized in Greece and in magazines like Der Spiegel in Germany.

“Politicians want to pass the ball forward, and if a banker can show them a way to pass a problem to the future, they will fall for it,” said Gikas A. Hardouvelis, an economist and former government official who helped write a recent report on Greece’s accounting policies.

Wall Street did not create Europe’s debt problem. But bankers enabled Greece and others to borrow beyond their means, in deals that were perfectly legal. Few rules govern how nations can borrow the money they need for expenses like the military and health care. The market for sovereign debt — the Wall Street term for loans to governments — is as unfettered as it is vast.

“If a government wants to cheat, it can cheat,” said Garry Schinasi, a veteran of the International Monetary Fund’s capital markets surveillance unit, which monitors vulnerability in global capital markets.

Banks eagerly exploited what was, for them, a highly lucrative symbiosis with free-spending governments. While Greece did not take advantage of Goldman’s proposal in November 2009, it had paid the bank about $300 million in fees for arranging the 2001 transaction, according to several bankers familiar with the deal.

Such derivatives, which are not openly documented or disclosed, add to the uncertainty over how deep the troubles go in Greece and which other governments might have used similar off-balance sheet accounting.

The tide of fear is now washing over other economically troubled countries on the periphery of Europe, making it more expensive for Italy, Spain and Portugal to borrow.

For all the benefits of uniting Europe with one currency, the birth of the euro came with an original sin: countries like Italy and Greece entered the monetary union with bigger deficits than the ones permitted under the treaty that created the currency. Rather than raise taxes or reduce spending, however, these governments artificially reduced their deficits with derivatives.

Derivatives do not have to be sinister. The 2001 transaction involved a type of derivative known as a swap. One such instrument, called an interest-rate swap, can help companies and countries cope with swings in their borrowing costs by exchanging fixed-rate payments for floating-rate ones, or vice versa. Another kind, a currency swap, can minimize the impact of volatile foreign exchange rates.

But with the help of JPMorgan, Italy was able to do more than that. Despite persistently high deficits, a 1996 derivative helped bring Italy’s budget into line by swapping currency with JPMorgan at a favorable exchange rate, effectively putting more money in the government’s hands. In return, Italy committed to future payments that were not booked as liabilities.

“Derivatives are a very useful instrument,” said Gustavo Piga, an economics professor who wrote a report for the Council on Foreign Relations on the Italian transaction. “They just become bad if they’re used to window-dress accounts.”

In Greece, the financial wizardry went even further. In what amounted to a garage sale on a national scale, Greek officials essentially mortgaged the country’s airports and highways to raise much-needed money.

Aeolos, a legal entity created in 2001, helped Greece reduce the debt on its balance sheet that year. As part of the deal, Greece got cash upfront in return for pledging future landing fees at the country’s airports. A similar deal in 2000 called Ariadne devoured the revenue that the government collected from its national lottery. Greece, however, classified those transactions as sales, not loans, despite doubts by many critics.

These kinds of deals have been controversial within government circles for years. As far back as 2000, European finance ministers fiercely debated whether derivative deals used for creative accounting should be disclosed.

The answer was no. But in 2002, accounting disclosure was required for many entities like Aeolos and Ariadne that did not appear on nations’ balance sheets, prompting governments to restate such deals as loans rather than sales.

Still, as recently as 2008, Eurostat, the European Union’s statistics agency, reported that “in a number of instances, the observed securitization operations seem to have been purportedly designed to achieve a given accounting result, irrespective of the economic merit of the operation.”

While such accounting gimmicks may be beneficial in the short run, over time they can prove disastrous.

George Alogoskoufis, who became Greece’s finance minister in a political party shift after the Goldman deal, criticized the transaction in the Parliament in 2005. The deal, Mr. Alogoskoufis argued, would saddle the government with big payments to Goldman until 2019.

Mr. Alogoskoufis, who stepped down a year ago, said in an e-mail message last week that Goldman later agreed to reconfigure the deal “to restore its good will with the republic.” He said the new design was better for Greece than the old one.

In 2005, Goldman sold the interest rate swap to the National Bank of Greece, the country’s largest bank, according to two people briefed on the transaction.

In 2008, Goldman helped the bank put the swap into a legal entity called Titlos. But the bank retained the bonds that Titlos issued, according to Dealogic, a financial research firm, for use as collateral to borrow even more from the European Central Bank.

Edward Manchester, a senior vice president at the Moody’s credit rating agency, said the deal would ultimately be a money-loser for Greece because of its long-term payment obligations.

Referring to the Titlos swap with the government of Greece, he said: “This swap is always going to be unprofitable for the Greek government.”

© 2010 The New York Times:

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"Leaders must stop pretending that there is a something-for-nothing solution to our traffic problems. The people of Texas know better."

Getting off a slow road to nowhere

With current funding, state can’t keep Texans moving


Houston Chronicle
Copyright 2010

You know Texas traffic is bad. You've heard that it will soon get worse. But what about the state's efforts to get you out of traffic?

Unfortunately, transportation policy in Texas is moving just as slowly as that 18-wheel truck sitting in front of you at rush hour. If there's a difference, though, it's that the trucker is in less denial about the state's road situation than its elected leaders are.

Right now, traffic — and the state's inability to deal with it — is merely maddening. But a decade from now, when tens of millions more people will be pouring onto little more than the current road network, it will become an economic disaster for individuals as well as businesses.

The state Senate Transportation and Homeland Security Committee recently heard testimony from mayors, county judges, business leaders, transportation experts, finance experts and the public. The message, overwhelmingly, was clear:

When it comes to transportation, Texas is broke. The state can't afford the infrastructure it needs to keep goods flowing and our economy thriving, let alone accommodate future generations. Stop doing nothing, all agreed.

Today, the state's transportation revenue is almost equal to the maintenance costs for our current system — meaning Texas can barely maintain the roads it has, let alone build new ones. The state can't even borrow its way out of the problem, since so much transportation money is already going toward debt service on billions of dollars previously loaned to us.

Yes, voters in 2007 approved $5 billion in bonds — debt that will be repaid primarily through sales taxes. But that's a tiny fraction of the tens of billions of dollars required for essential projects that are well into the planning stages.

As grim as the funding situation is, however, it's not nearly as depressing as the failure of elected leaders in every branch of government to acknowledge the problem, let alone begin grappling with it.

More than a year ago, we co-authored an op-ed piece outlining steps that need to be taken to build the roads, rail lines and other projects that will move Texans through their communities and across the state. Those steps included ending transportation funding diversions, giving regions the ability to pay for their own transportation projects upon local voter approval, rewriting a nearly 20-year-old gas tax system and reforming the Texas Department of Transportation through comprehensive audit and policy changes.

Since then, there's been a legislative session, a special session and the better part of a political primary season. Yet there has been virtually no movement in any of these areas. Even a serious discussion of them — acknowledging the difficult choices Texas faces — has been hard to come by.

Instead, politicians of every stripe rely on simplistic solutions and expectations removed from reality. Some pretend the state can find billions of dollars through some sort of bureaucratic reorganization. Others say the answer is in the embrace of privately owned toll roads — which are not only more expensive than traditional highways but also are viewed skeptically, and rightfully so, by Texans who worry about their cost and losing control of our infrastructure.

Incorrectly, some assume that fixing the diversion problem alone will provide the necessary funds — which it will not. And, of course, anti-government demagogues, masquerading as conservatives, have embarked on frantic e-mail campaigns filled with misinformation and lacking practical solutions.

Right now, Texas needs leaders who will honestly present the tough choices that Texans face. It's our opinion that, at the very least, the Legislature should continue to look for departmental efficiencies while revisiting Texas' motor fuels tax — which hasn't been changed since 1991 and no longer keeps pace with the state's growing needs. This represents the most fiscally responsible approach.

In addition, the Legislature must follow through immediately on commitments to stop diverting funds away from transportation infrastructure.

These steps would begin to provide desperately needed funds to help get Texas moving again, while restoring confidence in the Texas Department of Transportation.

But before those things can happen, leaders must stop pretending that there is a something-for-nothing solution to our traffic problems. The people of Texas know better.

Nothing creates congestion faster than ignoring the obvious … in this case, rush-hour traffic.

Carona, a Republican from Dallas, and Watson, a Democrat from Austin, serve as chair and vice chair of the state Senate Transportation and Homeland Security Committee.

© 2010 Houston Chronicle:

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Friday, February 12, 2010

"Some Dallas-Fort Worth officials say they are uncomfortable with what they say is a financial shell game that's taking place to seal the deal."

Area officials raise concerns about Southwest Parkway/Texas 161 deal


Fort Worth Star-Telegram
Copyright 2010

ARLINGTON -- Negotiations to turn over construction of Southwest Parkway and Texas 161 to the North Texas Tollway Authority are on course to meet a Feb. 28 deadline, but some Dallas-Fort Worth officials say they are uncomfortable with what they say is a financial shell game that's taking place to seal the deal.

A $300 million funding gap remains, and to help fix that problem, $91 million in Regional Transportation Council funds meant for other Metroplex road projects would be diverted to the Southwest Parkway/Texas 161 deal.

But some area elected leaders, particularly those from the Dallas area, say they're worried that the deal is potentially a roadblock to the region's ability to perform other work for years to come.

Dallas County Commissioner Maurine Dickey said those concerns are being glossed over in a furious attempt to get the deal completed by the deadline.

"I feel we're being held hostage," Dickey told members of the Regional Transportation Council, Dallas-Fort Worth's official planning body, during a monthly meeting Thursday in Arlington. "I've never been on a board where I've been so absolutely pressed to make a decision on an issue without being able to discuss it."

Despite those concerns, the 43-member RTC agreed on a voice vote Thursday to allow funds to be used as a bargaining chip.


Southwest Parkway, a proposed 28-mile toll road from downtown Fort Worth to Cleburne, and Texas 161, which is under construction in Grand Prairie and Irving, are being developed as toll roads because for decades the state has been short of the cash needed to build them as freeways.

In Cleburne, the Southwest Parkway project is known as the Chisholm Trail.

Texas 161 runs parallel to Texas 360 in Arlington and is considered a main route to Cowboys Stadium.

The Texas Transportation Commission agreed last month to use the state's gas taxes as collateral for debt issued to build the roads, though a rival agency, the North Texas Tollway Authority, would control the project. The two roads will share toll revenue -- as if they were a single project -- until both are fully paid for.

That agreement all but assured that Southwest Parkway, which has been on the planning books for four decades, would be under construction by year's end and open by 2013.

All that remains is negotiating the final details of the deal.

Tricky proposition

But that's proving to be a tricky proposition because, even with the state co-signing debt for the road, there is still a $300 million gap between the cost of building the roads and the amount of revenue the roads can raise.

One of the key negotiators is Michael Morris, transportation director for the North Central Texas Council of Governments.

Morris' latest proposal involves taking $91 million in funds that the RTC expects to receive beginning in 2014 and using tollway authority debt to convert the funds to cash so it can be used immediately for construction.

That would mean $91 million less for the RTC to spend on other Dallas-area projects in 2014. Morris said, however, that funds from state-issued Proposition 14 bonds could make up the difference. The Legislature has authorized the sale of Proposition 14 bonds to build roads today and repay the debt with future gas tax revenues.

The deal would also include language requiring the tollway authority to raise tolls on Southwest Parkway if necessary to satisfy debts, which means motorists could be asked to pay more for using the road if the project hits any fiscal snags down the road.

Several RTC members said it's important to take the painful step of including their $91 million to ensure that the tollway authority -- and not the state Transportation Department -- takes the project.

If the tollway authority determined that the project wasn't feasible, the alternatives would be to have the state build the project as a state-run toll road or to find a private partner to enter into a comprehensive development agreement -- or CDA. Otherwise, construction could be postponed again.

But state lawmakers have repeatedly said they want the Transportation Department out of the toll business.

Tarrant County Judge Glen Whitley worries that if the tollway authority deal falls apart, Southwest Parkway would not get built.

"You're running the risk of being at the mercy of the Legislature," he said, "and whatever their feelings are about CDAs and toll roads."

© 2010 Fort Worth Star-Telegram:

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Wednesday, February 10, 2010

Sen. Ogden: “TTC was always just an idea — something to be studied and looked into...the legislature never appropriated a dime."

Senate, judge candidates face-off at forum


By Mary Rainwater
The Huntsville Item
Copyright 2010

Residents gathered at the Katy and E. Don Walker Education Center Tuesday to hear from candidates of two contested GOP primary races in Walker County.

The Republican Party of Walker County sponsored Tuesday’s forum, which featured candidates seeking the GOP nomination for the state Senate District 5 position and the 278th State District Judge’s position.

Sen. Steve Ogden of Bryan is opposed by Huntsville businessman Ben Bius for the Senate District 5 position, while 278th District Court Judge Kenneth H. Keeling is opposed by Leslie G. Hardy.

Hardy and Keeling were first to face off, fielding questions about important qualities of a judge, appointment versus election of judges and the impeachment process of judges.

Experience and support, Keeling said, were two qualities he felt were vital to his role as district judge.

“Those things are what it is really all about,” he said. “One day it could be about a fender bender and the next day a capital murder trial — experience allows a judge to be knowledgeable about both.”

In discussion on the appointment or election of judges, both candidates agreed that judges should be held accountable to the constituents they serve.

“I feel that judges should be elected,” Hardy said. “In appointments, the candidate is often chosen based on who the person wants, which has nothing to do with the judge’s experience or the makeup of the community they live in.”

“Partisan politics should not be used in the selection of a judge,” Keeling added. “I think if they took the politics out of it, the process would be a lot better.”

Ogden and Bius took various stances on many state issues brought before them at the forum, including the controversial Trans-Texas Corridor, the state’s teacher retirement system, property taxes and the state budget.

As to a predicted budget deficit, Ogden was unable to give any numbers as to the deficit, but reported that Texas “is in better shape than any other state.”

“We did not touch the state’s $8.9 billion rainy day fund,” he said, “and with that will balance the budget and avoid any deficits.”

Bius felt that decreasing excessive spending would alleviate any potential budgetary problems faced by state lawmakers.

“We cannot continue to allow the deficit to grow at the rate it is,” he said. “Their current method of moving funds around — funds that were promised to be used elsewhere — is not effective.”

While Bius voiced opposition to a business tax recently imposed by the state as a means to lower property taxes, Ogden clarified the legislature’s reason behind the action.

“Texas has always had the franchise tax in place, but many businesses were avoiding that tax through the formation of partnerships,” Ogden said. “We changed that to make all businesses eligible for the tax, and in doing so, we were able to make the biggest property tax cut in history.”

The candidates were in agreement on some issues, like the governor’s rejection of federal grants, voter photo identification and the “death” of the Trans-Texas Corridor.”

“The TTC has taken on a life of its own,” Odgen said. “But I believe it was killed and there is no chance as originally conceived that it will come back.

“TTC was always just an idea — something to be studied and looked into,” he continued. “There was never a chance to get it funded through Walker County and the legislature never appropriated a dime.”

Tuesday’s candidate forum was the second of two sponsored by the Republican Party of Walker County in preparation for the March 2 primary election. The group held a forum Feb. 2, featuring the four contested races for county offices.

Early voting for the March 2 election begins Tuesday, Feb. 16, and continues through Friday, Feb. 26. It will be held from 8 a.m. to 5 p.m. at the Walker County Annex off Sam Houston Avenue.

The last day to apply for a ballot by mail is Feb. 23.

© 2010 The Huntsville Item:

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"Medina's got the Big Mo."

Medina-mentum in GOP Gubernatorial Primary


Katherine Haenschen
The Burnt Orange Report
Copyright 2010

Polling released by PPP today confirms what many have felt for months in the Republican gubernatorial primary: Medina's got the Big Mo'.

It's been evident on the ground since the summer. At countless "Tea Party" events and counter-protests to health reform, conservative activists have made themselves visible with signs such as
the one at right.

At first, Medina might have been easily dismissed as a bigger secessionist than Rick Perry. However, her willingness to court these enthusiastic voters and acknowledge their growing frustration with the Republican status quo is now paying dividends in terms of both polling and fundraising.

Truth be told, the Medina supporters are on to something, and their sign speaks more truth than lunacy. Hutchison voted to confirm Justices Alito and Roberts, whose votes on the Citizen United case recently did indeed further open the floodgates to corporate money influencing our public policy. Perry, of course, has a long history of close ties to corporate lobbyists, as Hutchison's latest attack ads make clear. He has also been endorsed by just about every special interest group seeking protectionist policies in the state house.

Medina, on the other hand, may be only the Republican Party Chair of Wharton County, but at least she knows her principles and she sticks to them. She even took the Republican Party of Texas to court because she found the state convention insufficiently open to activists such as herself and her supporters. And while Democrats are quick to dismiss her as "just another crazy," she's speaking to a growing electoral base who are frustrated with what they see in DC and in Austin.

Now, as a wider swathe of Republican primary voters have started paying attention, polling reflects the growing momentum behind Medina's candidacy. Similarly, flagging numbers for the Senior Senator illustrate the continued troubles of Hutchison to pick up any energy.

Perry's numbers have largely held steady over the course of the campaign. However, it's Medina who has gone from zero to Tea Party Hero, drawing support steadily away from Hutchison and undecideds a like. Many Hutchison voters are simply anti-Perry, and Medina now provides an equally compelling choice for folks dissatisfied with the status quo. And for the Republican activist base who are unhappy with both Austin and Washington, Medina is a clear alternative, a fresh voice for their far-right ideals.

And every added ounce of media attention only helps Medina. After having to fight her way in to the first Republican debate, Medina showed down Hutchison and gained serious ground in the 1/17 post-debate poll. She also raised $200,000 in the week after her first debate appearance, a huge boost to her campaign.

Meanwhile, Perry has finally started taking a few hits, with Hutchison's solid negative ads on the incumbent. Both "New One" and "Perry Attack Lab" dish it right back out at Perry, pointing out his own hypocrisy on the bail-out and stimulus funds, while also questioning his social conservative bona-fides. However, it may be too late for her to regain any traction in this race, especially with the surging Medina.

To keep the mojo rising, Medina's supporters are even planning a Money Bomb on February 15, the day before Early Voting, to help push their candidate into the run-off. The date commemorates the adoption of the Texas State Constitution in 1876. They're bringing the angry rhetoric to bear, castigating Perry and Hutchison for a failure to adhere to real conservative principles. From their website:

Unfortunately today, we no longer have elected leaders who believe in such principles - at least not in the Governor's seat! Instead, our leaders believe it perfectly normal to steal land, restrict gun rights, ignore the existence of a southern border, force untested medical treatments on our daughters, and allow the Federal Government to walk all over our contract with them known as the U.S. Constitution.

Practically sounds like they're talking about what they think of Democrats. Just goes to show how out-of-touch many establishment Republican candidates are with the activist base that is fueling their resurgence.

With early voting one week away the PPP poll would suggest only 9% remain undecided, and with the close margins, it looks as though the race may well go to a run-off. The real question now is if Medina's organized, vigorous supporters can overcome Hutchison's institutional support and make it into the final round with Rick Perry.

It's ironic. At the outset of this campaign, a lot of the talking heads and punditocracy wanted to see Perry vs. Hutchison as a battle over the future of the Republican Party between a Washington "moderate" and a self-styled pseudo-secessionist. Instead, Hutchison never really put up much of a fight, and Medina was there to capitalize from the far-right.

Now, Texas voters may be treated to a Perry-Medina run-off. And that, dear readers, could indeed be the epic show-down amongst the Republican Party faithful that we've been waiting for.

© 2010 The Burnt Orange Report:

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Tuesday, February 09, 2010

The Lush life of Rick Perry: "Gingerbread creamed pedicures and chocolate strawberries covered body wrap"---on the taxpayer's dime?!!

Rick Perry: charging taxpayers for a life of luxury


By Joe Pounder
Texans for Kay
Copyright 2010

Today, Texans for Kay Bailey Hutchison released its newest web video, “Life of Luxury.” Throughout his time in government, Rick Perry’s travel has cost taxpayers almost half a million dollars. Last year alone, Perry spent over $115,000 on taxpayer-funded trips, including a bachelor party in Las Vegas and a stay at a “swanky” hotel in Israel for a night at a “scotch and cigar bar.”

Perry’s history of living high off the hog at taxpayer expense goes back years; in 1992, then-Agriculture Commissioner Perry enjoyed a three-night stay at the Greenbrier Resort, where he charged Texas taxpayers for spa therapeutic services, tennis & golf dining, and a limo service to the airport. The Perry record: living a life of luxury on the taxpayers’ dime.

Text of "Life of Luxury"

Once again Rick Perry is letting false accusations fly while ignoring his own record.

The truth is that in just six years, Perry's travel has cost Texas taxpayers nearly $400,000.

Perry charged Texas taxpayers a quarter million dollars for foreign travel alone.

Taxpayers even put in the bill for Perry's trip to a bachelor party in Las Vegas.

Perry charged taxpayers another $32,000 so he could fly to New York to meet with campaign donors. And that's only the beginning...

Perry's past also includes charging taxpayers $1300 for a ritzy retreat outside of Washington DC which offers "gingerbread creamed pedicures" and "chocolate strawberries covered" body wrap.

We are not making this up.

In fact, Perry charged Texas $140 for "spa therapeutic services."

Rick Perry: charging taxpayers for a life of luxury

© 2010 Perry's political playground:

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"There’s no doubt Medina is riding the wave of discontent with the political establishment."


Medina becoming a factor in Texas


Public Policy Polling
Copyright 2010

Raleigh, N.C.– Rick Perry continues to hold onto a double-digit lead in the Republican
Primary for Governor of Texas but the biggest story may be that Debra Medina is coming on strong.

Perry is at 39% to 28% for Kay Bailey Hutchison and 24% for Medina.

There are major splits within the race along ideological lines. Perry is at 42% with conservatives, and Medina is now outpolling Hutchison with them by a 25-23 margin. Hutchison cleans up with moderates, leading Perry 49-29, but unfortunately for her prospects they account for only 20% of GOP primary voters.

One finding in the poll helps sum up the mood in the country right now and may give a
clue as to why Hutchison is having so much trouble. Asked whether they trust Austin or
Washington politicians more to solve Texas’ problems, state level politicians win out by a margin of 78-3.

There’s no doubt Medina is riding the wave of discontent with the political establishment.

She actually leads the race, 37-32 over Perry, with the third of primary voters who
Disapprove of Washington politicians. With those who are happy she trails well behind at 17%.

“The big question for Debra Medina is whether there’s enough unhappy voters out there for her to get into a runoff with Rick Perry,” said Dean Debnam, President of Public Policy Polling. “That would rank up there with the results of the Massachusetts Senate election as an early shocker in the 2010 political season.”

There is less drama on the Democratic side- Bill White leads Farouk Shami 49-19.

PPP surveyed 400 likely Democratic primary voters and 423 likely Republican primary voters from February 4th to 7th. The margin of error for the Democratic survey is +/- 4.9% and for the Republicans it’s +/-4.8%. Other factors, such as refusal to be interviewed and weighting, may introduce additional error that is more difficult to quantify.

Complete results are attached and can be found at

© 2010 Public Policy Polling:

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Senator Ogden's daughter graduates college, goes to work as lobbyist for road builders' trade group

Bius charges conflict, Ogden fires back


By Mike Ward
Austin American-Statesman
Copyright 2010

Texas Senate wannabe Ben Bius charged today that veteran Sen. Steve Ogden has been hiding “a glaring conflict of interest” for years: That Ogden’s daughter, Kristen, is a lobbyist for a road-builders’ trade group.

Bius, a Huntsville Republican who is challenging Ogden’s reelection bid in the March 2 GOP primary, said Ogden should have recused himself from voting since 2003 on issues involving the Texas Department of Transportation — including the Trans-Texas Corridor, Comprehensive Development Agreements among other things.

“What were these highway contractors trying to buy from Steve Ogden?” Bius said in a statement. “This is exactly the kind of conflict of interest that has caused the people to lose trust in their elected leaders. Sen. Ogden owes the people of Texas an explanation.”

No problem with that, Ogden quickly shot back:

My daughter was in college when (the Legislature) passed the Trans-Texas Corridor bill [in 2003], and had nothing to do with it. She doesn’t lobby me, and we try to keep a firewall between what she does and anything I do.

We have always filed the necessary reports with the Ethics Commission.”

Ogden’s daughter is a registered lobbyist for the Associated General Contractors, which Ogden said opposed both the TTC and the CDAs — which Ogden has been highly critical of in recent years.

Ogden-R-Bryan, has represented Senate District 5 since 1997.

“The guy (Bius) is untruthful. The accusation has no accuracy to it,” Ogden said, insisting he thinks it’s wrong to bring family into a political race. “He’s not even going to carry his home county.”

Nonetheless, Bius continued to insist the issue was a fair one to bring up.

“(Ogden) should have recused himself from voting on those issues while his daughter was lobbying for AGC would have been the most honorable and ethical thing to do,” he said. “As chairman of the Senate Finance Committee, he certainly has a lot to do with funding that affects the people who build roads.”

Today’s fireworks highlight growing tensions in the GOP primary, where Ogden is running on his record and long years of service, and Bius is campaigning that Ogden has strayed far from the district’s conservative roots.

The district stretches roughly from Huntsville to Williamson County.

© 2010 Austin American-Statesman:

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Legal council for Central Texas toll road authority loses license for professional misconduct in land speculation deal

Toll road agency lawyer resigns after bar suspension

Tom Nielson served on Round Rock City Council for six years before joining Central Texas Mobility Authority as general counsel in 2006


By Ben Wear
Austin American-Statesman
Copyright 2010

Tom Nielson, a former Round Rock City Council member and general counsel of the Central Texas Regional Mobility Authority since 2006, quietly left the toll road agency several weeks ago after the State Bar of Texas suspended his law license.

The five-year suspension of Nielson's right to practice law, for "professional misconduct," grows out of a 2000 land deal that went awry several years before he became the toll authority's lawyer, according to a six-page suspension judgment by the bar. Nielson, according to the judgment, falsely claimed to have put $25,000 in a trust account and gave a "false document" to a partner in the deal purporting to show that the money had been deposited with a title company.

Nielson, 49, who officially left his $164,388-a-year position at the toll authority Jan. 15 after his license was suspended Jan. 1, said that although there was a "discrepancy" involving a document, "I still contend there was no issue with it." The charges confirmed in the Dec. 28 judgment were of the "he-said-she-said" variety, Nielson said.

"Hey, I've lost my career," Nielson said. "But I'm not a bad guy. It's not like I made off with millions."

Instead, Nielson said that he and Byron "Dick" Wilson, of Hutto, were "squeezed out" of the sale of land on U.S. 183 near Anderson Mill Road, well south of where the mobility authority would later build the 183-A toll road. Then Wilson sued in 2006, and Nielson said he paid about $50,000 in a settlement in which he didn't admit guilt.

He also must pay the State Bar almost $6,000 in attorney fees.

Wilson, who in August 2008 filed the grievance with the State Bar that led to the license suspension, could not be reached for comment.

Mobility authority Executive Director Mike Heiligenstein, whose friendship with Nielson goes back two decades to when their children played youth sports together, said he knew nothing about the disputed land deal between Nielson and Wilson.

"It was never brought up during his employment, or before that during the interview process," Heiligenstein said. "He obviously thought it had been worked out."

Nielson told Heiligenstein in mid-December about the bar complaint and that he was resigning, Heiligenstein said. Nielson's picture and his position with the agency were still posted on the agency's Web site Monday afternoon. Agency spokesman Steve Pustelnyk , alerted to this, had the post removed later in the day.

Nielson, who graduated from the University of Texas School of Law in 1986, according to the bar, served on the Round Rock City Council from 1999 to 2005. He became general counsel for the mobility authority several months later, in effect replacing private attorney Brian Cassidy, who had been doing legal work for the agency on a contract basis almost since its creation in 2002.

Cassidy, who had continued to provide some services for the authority, including lobbying at the Capitol, was back in the counsel's chair when the mobility authority board of directors met Jan. 27.

The bar decision said that Nielson, representing a landowner, in late 2000 had approached another person, identified in the original grievance as Wilson. Nielson and Wilson, anticipating a $100,000 profit on what Nielson described Monday as a "land flip," agreed that Wilson would put up $25,000 "earnest money." Two years later, according to the judgment, the partner questioned Nielson about when they would see the profits. Only at that point, the document says, did Nielson reveal that the deal had soured and returned the $25,000.

It was unclear Monday whether that $25,000 was a part of the $50,000 settlement of the lawsuit.

Heiligenstein is interviewing candidates for general counsel, he said Monday.

© 2010 Austin American-Statesman:

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Monday, February 08, 2010

Palin: "Rick Perry is setting an example that a lot of others want to follow.”

Palin beats drum for Perry

Sarah Palin (Gov. R-AK):: Obstructionist Republican Clown by WMxdesign.


By Joe Holley
Houston Chronicle
Copyright 2010

CYPRESS — Former Alaska Gov. Sarah Palin, the Republican Party's reigning rock star, parachuted into suburban Houston on Super Bowl Sunday and tied her trademark anti-Washington message to the re-election of a Texas governor who's locked in an increasingly bitter primary contest with a longtime U.S. senator.

Palin told an enthusiastic crowd of about 6,000 in Cypress' Berry Center that Alaskans and Texans “pretty much want the same things — a good job in our hometown, safety and security for our loved ones, and we just want a small and smarter government that'll kind of get out of our way. And no one understands that better than Rick Perry.”

The Cypress event offered all the trappings of a rock concert — driving music, a boisterous crowd and a genuine star. It also included a screeching guitar rendition of the “Star Spangled Banner” by Ted Nugent that sounded as if the vintage rocker and outspoken conservative had channeled Jimi Hendrix.

Wearing a black velvet dress and knee-high suede boots of an Aggie-maroon hue, Palin entered the darkened arena on Perry's arm. The audience responded with a raucous standing ovation, whistles, “We love you, Sarah” shouts and flashing cameras. Some had waited outside for a couple of hours in chilly, overcast weather. The 9,500-seat arena was about two-thirds full for the free event.

The 2008 vice-presidential candidate told the cheering crowd that Perry's re-election “will send a message to Washington ... Washington is broken, but your state, under Rick Perry, is setting an example that a lot of others want to follow.”

Palin said she told her daughter Piper, who stood on the stage, that Texas was Alaska's “little-sister state.”

“A lot of us in our states proudly cling to our guns and religion,” she added.

Palin never mentioned the name of Kay Bailey Hutchison, but Perry had no such compunction.

“Something is clearly wrong when an administration rolls out a spending plan that anticipates more than $5 trillion of deficits over the next five years, and we've got a senator from Texas that's voted for 95 percent of all the spending during her time in Washington,” he said.

Hutchison, elected to the Senate in 1994, has been endorsed by former Secretary of State James Baker, former Vice President Dick Cheney and former President George H.W. Bush. Her campaign released a statement Sunday that said, “Despite today's theatrics, there's no covering up Rick Perry's decadelong record of cronyism in office that brought us the Trans-Texas corridor and HPV mandate.”

Perry was effusive in his praise of the former Alaska governor.

“I doubt there is another public figure in our country who gives liberals a bigger case of the hives than our special guest today,” he said. “At the very mention of her name, the liberals, the progressives, the media elites, they literally foam at the mouth.”

Palin and Perry got to know each other at the Republican Governor's Association, and he toured with her across Texas when she was Sen. John McCain's running mate.

“He walks the walk of a true conservative,” she wrote in a recent letter to the Texas Federation of Republican Women. “And he sticks by his guns — and you know how I feel about guns.”

Perry, already the longest-serving governor in Texas history, is seeking a third four-year term. Recent polls give him a sizable lead over Hutchison and insurgent candidate Debra Medina, who has anti-establishment Tea Party and Libertarian support.

“So on March 2, you have a clear choice,” Palin said. “I want to hear, Texas, what's it gonna be: The way they operate in D.C. or the way y'all get things done in Texas?”

Palin's Texas appearance came one day after she addressed the first national convention of the Tea Party, in Nashville, where she tweaked Democrats by asking, “How's that hopey changey stuff working out for ya?”

In Nashville, she also said it was time for the United States to “start seeking some divine intervention ... so that we can be safe and secure and prosperous again.”

On the “Fox News Sunday” program before her Texas appearance, Palin said she “won't close the door” on a potential presidential bid. She has been a contributor for Fox News since January.

“It would be absurd to not consider what it is that I can potentially do to help our country,” she said on the Sunday program. She said she would run for president “if I believe that this is the right thing to do for our country and for the Palin family.”

Asked whether a Palin-Perry ticket might be a possibility in 2012, Perry communications director Mark Miner said, “Never gonna happen.”

Perry, he said, is happy staying in Texas.

© 2010 San Antonio Express-News:

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"At some point, somebody really needs to ask if we need more roads in Texas than we already have. The answer is that we probably don't."

For Texans and TxDOT, the 'cake and eat it too' isn't working

If TxDOT is as broke as they claim, and demand is flat, then why would they worry so much about anything beyond maintaining the Texas roads we already have?


Roger Baker
The Hays County Roundup
Copyright 2010

Everyone knows that TxDOT loves to build roads. And so do the contractors that TxDOT hires. And not only do these contractors love to build the roads, but they are generously willing to help elect the politicians who decide to build these roads.

But at some point, somebody really needs to ask if we need more roads in Texas than we already have. The answer is that we probably don't.

How do we know that?

The most recent Federal Highway Administration data shows that from Nov. 2008 to Nov. 2009, the actual use of roads in Texas only increased by .1%, as we see here:

In other words, taking the best data for travel on all the roads in Texas combined over the last year, we see that it would take about 100 years for the level of traffic to go up by even 10%.

Consider the implications. The legislature is not willing to raise the gas tax, so this necessarily causes the gas tax revenue, both the state and federal portions, to be about flat. Which situation then makes it really really hard for TxDOT to borrow against this revenue stream, which is falling short of even keeping up with inflation.Even though the travel demand on their current roads is flat, they still want to build more roads, which would obviously cause TxDOT's maintenance funding shortfall to get even bigger.

If TxDOT is as broke as they claim, and demand is flat, then why would they worry so much about anything beyond maintaining the Texas roads we already have? At least not until someday when the economy recovers and/or we discover a new supply of cheap oil, causing people to start driving more and needing lots of new road capacity, right?

TxDOT likes to complain that they can barely afford to maintain their current Texas roads. But the way they chose to deal with the problem is in a way that may be nice for their contractors, but is practically guaranteed to make TxDOT's maintenance problem worse.

Like they say, when things can't go on any longer, they won't.

© 2010 The Hays County Roundup:

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Sunday, February 07, 2010

"We just think people could use a break and a laugh at the Perry hypocrisy every once and a while."

Ads Infinitum:

Kay Calls an Audible


by Reeve Hamilton
Texas Tribune
Copytight 2010

U.S. Sen. Kay Bailey Hutchison's campaign took a new approach in its latest ad, which aired during Super Bowl XLIV: Humor.

"We just think people could use a break and a laugh at the Perry hypocrisy every once and a while," said Hutchison spokesman Joe Pounder.

The ad, titled "Out Much," is set in the attack ad headquarters of Gov. Rick Perry. It mocks Perry's ads and knocks him for his "hypocrisy" on a number of issues, including his stances on the Trans Texas Corridor, HPV vaccines, and federal bailouts.

Some may have seen the spot already, and those who haven't will get the chance to see it again. It has been running in select markets for about a week, and the campaign says it will continue to run.

© 2010 Texas Tribune:

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