"The pay-to-play allegations against Perry have become an Austin cliche.".
Jason Cherkis & Paul Blumenthal
The Huffington Post
WASHINGTON -- Texas Governor and Republican presidential candidate Rick Perry has been good for the Austin lobbying business. Forty Perry aides have either left the governor's administration to become registered state lobbyists or gone from the lobby into Perry's inner circle, some of them making multiple trips through the revolving door, according to state lobbying disclosure filings and a review of staff records obtained by The Huffington Post through public records requests.
Among Perry's closest campaign aides, at least five have been registered lobbyists, including his communications director, his spokesperson and his political director. Two other ex-staffers who are current lobbyists head Super PACs organized to elect Perry.
These lobbyists have done good work for their clients, winning lucrative state contracts for everything from private toll roads to a nuclear waste dump to the now infamous HPV vaccine mandate. A review of financial disclosures filed with the Texas Ethics Commission shows that during the past 10 years, former Perry staffers have raked in tens of millions of dollars in lobbying contracts.
Perry, vying for the support of the Tea Party base, has been slammed by rivals Sarah Palin and Rep. Michele Bachmann (R-Minn.) for "crony capitalism." If crony capitalism describes a situation where contracts are won by private companies who've hired close associates of the governor, then Texas records show the charge could stick. The pay-to-play allegations against Perry have become an Austin cliche.
"The revolving door turns at torrential speeds in Texas," explained Andrew Wheat, research director for the non-partisan watchdog group Texans for Public Justice. "It's like it's driven by a hurricane and Perry's office has been part and parcel of it."
Perhaps no one has benefited more from his Perry connection than Mike Toomey. He had been a Perry confidant during their time in the state legislature in the '80s before becoming a successful lobbyist. In 2002, Toomey became Perry's chief of staff, a job he held until 2004 when he returned to the lobby. Texas financial disclosure records show Toomey secured lobbying contracts from government supplicants worth between $9 million and $17.5 million during the Perry years.
Toomey's lobbying success has not been free from controversy. In the race to win the Republican presidential nomination in 2012, it has become a lightening rod.
During Monday's Republican primary debate, Bachmann attacked Perry for issuing an executive order mandating sixth-grade girls receive a vaccination against the sexually-transmitted disease HPV, which, studies show, can lead to cervical cancer. That vaccination is manufactured by pharmaceutical company Merck, which employed Toomey as one of only three lobbyists during the mandate controversy.
Bachmann excoriated Toomey's role in the issuance of the executive order: "What I'm saying is that it's wrong for a drug company -- because the governor's former chief of staff was the chief lobbyist for this drug company. The drug company gave thousands of dollars in political donations to the governor, and this is just flat-out wrong. The question is, is it about life, or was it about millions of dollars, and potentially billions, for a drug company?"
Merck began a state-by-state push to get governments to adopt HPV vaccine mandates after the Food and Drug Administration (FDA) approved the vaccine for use in 2006. The company stood to make hundreds of millions of dollars if its mandate drive succeeded. They hired top lobbyists in a number of states. In Texas, Merck naturally came to Toomey.
"Absolutely Mike [Toomey] convinced [Perry] on that," Bill Miller, a founding partner of the Austin lobbying powerhouse HillCo Partners told HuffPost. The firm has done work on behalf of top-tier conservative donors, such as Houston construction mogul and swift-boat funder Bob Perry (no relation) and Koch Industries. "Maybe he personally believes in that ... Mike played an influential role. It's just the way I read it, the nature of the deal."
Amid widespread outrage over Toomey's lobbying -- and fervent opposition from religious conservatives who opposed the order on the belief that it encouraged promiscuity among young teens -- the Texas legislature repealed Perry's order in a near unanimous vote. Despite the ultimate failure to enact the vaccine mandate, Merck still retains Toomey as a lobbyist and has paid him contracts worth between $250,000 and $560,000 from 2004 through 2011.
It's not difficult to see the allure of joining the lobbyist ranks for those coming out of the Perry administration. The governor's influence has been vast; he has roughly 4,000 appointments to various boards, commissions and task forces. Real or perceived closeness to the governor -- not to mention being on a first-name basis with his scheduler -- is an asset for any lobbying firm or corporation seeking influence.
"If you are going to be a top-tiered lobbyist, you almost have to have worked for him," explained one veteran Austin-based lobbyist, "because that means you're part of the team."
Perry, the lobbyist added, places a premium on the inner circle -- especially his former chiefs of staff. "I'd say he only listens to those guys," he said.
The 26 ex-Perry staffers currently registered as lobbyists will take in a combined total of between $6.37 and $11.6 million this year, government disclosure records show. (The disclosure forms only list the ranges of the contracts, making a precise calculation impossible.)
Former Perry insiders admit a tour of duty in the administration can be a plus. There are practical advantages: "I understand what the internal office processes are," explained Victoria Ford, a lobbyist who worked as a health care policy director and deputy legislative director under Perry early in his administration. "If I have a problem, I already know how to work through it. It's been helpful."
But, Ford told HuffPost, it's no easy gravy train. "It's been neutral to favorable to me, although I'm not as aggressive about it as some of the other folks who left the office," she said.
Records show Ford has 25 clients on her current roster, including eBay, a car manufacturer alliance, GlaxoSmithKline, Methodist Healthcare Ministries, a transportation authority and Boeing. This year, Ford's contracts pay out between $235,000 and $650,000.
Ford said she doesn't walk into a prospective client's office and play up her Perry cred. But there are other lobbyists that do. "There are others that take a different approach -- that walk in with their resume first," she said.
If there were behind-the-scenes deals made, Ford added, she didn't see them when she worked for Perry. "I never felt like when I worked in his office, I was told by anyone to favor anyone else," she said. "I never experienced the things that they talked about. That's all I know. I was never involved in those kinds of things. To me it seems like it's all overblown speculation."
Miller, the Austin super lobbyist, explained that Perry's close ties to lobbyists are simply a product of the governor's longevity; he has held state-wide office for more than two decades. Staffs turn over. Many former staffers inevitably get into the political consulting business or join a lobbying firm. "He's given birth on both sides of the deal -- on the government side and the political side," Miller said of Perry. "He's fertile. He's very fertile."
"Maybe they did have an advantage," Miller said. "I always felt like we got a fair shake in the deals we worked on."
Reggie Bashur, a Perry campaign adviser and lobbyist, told HuffPost there is no pay-to-play scheme. "It's just utter nonsense," he said. "The advantage is to know a very fine person with a tremendous sense of humor who is dedicated to the public good."
In describing Perry, Bashur was short and sweet. "He likes people," he said. "He likes the grassroots."
When HuffPost called Cliff Johnson, a lobbyist and former senior Perry adviser who is known to be a member of Perry's inner circle, we were told that Johnson wasn't giving interviews. His receptionist said that Johnson was referring press calls to Bashur.
Perry has appointed six secretaries of state during his tenure. Half have gone on to work as lobbyists. The majority of Perry's most trusted cabinet officials have lobbying backgrounds. Five out of eight Perry chiefs of staff have either left and immediately joined the lobby or come into the COS role from the lobby. Along with Toomey, these include Barry McBee, Michael McKinney, Brian Newby and Ray Sullivan. Sullivan is now the communications director for the Perry campaign. The campaign did not return calls for comment.
Robert Black, a former Perry director of communications, also worked as a lobbyist before recently becoming a spokesman for the campaign. When asked about his relationship to Perry and the potential benefit to his own lobbying work, Black hung up on a HuffPost reporter.
Chris Cronn, another former staffer turned lobbyist, also refused to comment. When asked about his lobbying work and whether his Perry ties are an advantage, Cronn replied: "I'd much rather have you talk to the campaign."
The main concern among the public about the revolving door, as evidenced by the HPV vaccine mandate outcry, is that companies can afford well-connected lobbyists to set policy, to the detriment of the public interest.
These polices were often privatization efforts, brought to the governor's attention by connected companies, that became controversial when those lobbying connections became public. "When you look at the privatization schemes that come along, I don't think Perry and his office are sitting around and dreaming up these schemes," Texans for Public Justice's Wheat explained. "It tends to work the other way around: The lobbyists come to Perry with these schemes."
In 2002, Perry announced a plan to build a 4,000-mile stretch of toll roads, rail lines and utility lines. The Trans-Texas Corridor, as it came to be known, was an attempt by Perry to raise revenue through fees the toll roads would collect. The Spanish company Cintra, then seeking to run the toll roads, employed Dan Shelley, a Perry insider, as a consultant. Shelley did not register to lobby at the time. "Here was Dan Shelley, he was working for Cintra, the major Trans-Texas Corridor contractor, but he didn't bother to register as a lobbyist. What kind of consulting was Shelley doing for a Spanish highway company?" Wheat said. "Was he consulting on the proper asphalt and concrete to lay in Texas?"
In 2004, the Texas Transportation Commission awarded Cintra the contract to run the toll roads and Perry hired Shelley as his new legislative director. By 2006, Shelley was back out the revolving door and raking in money with a lobbying contract from Cintra that totaled between $275,000 and $470,000 from 2006 through 2011.
Shelley denied that there was any undue influence in his work for Cintra. "I lobbied for them. They were from Spain. They had no contracts. No business in the United States," Shelley told HuffPost. "Texas seemed to be further advanced before they arrived on trying to promote public-private partnerships. I introduced them to the policymakers to explain what it is you're trying to do in Texas."
Shelley said he set up meetings for Cintra with various Perry officials -- including Ric Williamson, an old college buddy of Perry's who headed the state transportation department at the time. Shelley said he knew Williamson. "I know people in Austin," he said.
By 2006, the Trans-Texas Corridor had attracted serious opposition from all corners of Texas politics. The Texas Farm Bureau was calling the project a disaster and residents in areas that could have faced eminent domain seizure were packing forums held by the Transportation Commission.
Cintra did win contracts for three toll roads -- one in Forth Worth, one in Dallas and one currently being built in central Texas, Shelley explained. After the first contract was awarded, Shelley said the company was introduced to Perry for the first time. "He might have come by to say 'thank you,'" he recalled.
Shelley currently operates two Super PACs -- Veterans for Perry and Jobs for Vets -- to support Perry's bid for the Republican presidential nomination.
In early 2011, after years of criticism, the toll road proposal was officially shelved, but other parts of the highway building plan are moving forward.
The Trans-Texas Corridor lobbying was not limited to Shelley and Cintra. HTNB Corporation, an engineering company, was the general consultant for the Department of Transportation's work on the corridor and employed Ray Sullivan as its lead lobbyist from 2003 to 2009. Sullivan, Perry's current communications director, has worked for the governor in multiple capacities over the years, including as his chief of staff. When Sullivan joined the Perry administration in 2009, the HNTB contract transferred to Bashur. Sullivan reported the HNTB contract to be worth between $450,000 and $750,000 over seven years.
During the same period, Sullivan worked as the chief lobbyist for UBS Securities, the Swiss financial services company that counts Perry's political mentor, former Texas Sen. Phil Gramm, as a vice chairman. With Sullivan as its lobbyist, UBS made several plays at setting administration policy.
Beginning in 2003, the Perry administration pursued a policy presented by UBS to profit off life insurance polices for dead teachers. HuffPost previously reported on this scheme in August.
UBS, with Sullivan as its lobbyist, also sought to privatize the state lottery. This effort began in 2006, when then-Perry adviser Phil Wilson, who is also a former Gramm staffer and would later become a lobbyist in his own right, discussed the possibility of a sale or lease of the state lottery with Gramm. In September of that year, UBS submitted the first proposal to sell or lease the lottery to the governor's office and hired Sullivan as its chief lobbyist in the state.
In his 2007 State of the State address, Perry called for selling the state lottery -- an idea he would later say came from Wilson -- in an effort to raise $14 billion in revenue to invest in education and cancer research. What Perry didn't mention was that the UBS proposal noted Texas would have to legalize a number of other gambling activities, including interactive television and Internet gambling, in order to increase the sales and profitability of the lottery for a private company.
Other financial companies submitted proposals to the governor's office, including Goldman Sachs, Merrill Lynch and the now-defunct Lehman Brothers. These companies also hired ex-Perry staffers to push their efforts in Austin. Merrill Lynch retained former Perry general counsel Bill Jones, and Lehman Brothers hired former Perry campaign manager and staffer Luis Saenz.
Gaming companies that had long sought to legalize slot machines and other electronic games got into the act as well. Aces Wired, an electronic gaming company, employed Shelley as a lobbyist. It submitted multiple proposals to the governor's office, seeking to purchase the lottery with a hypothetical consortium of gaming interests.
The lottery privatization plan, like the Trans-Texas Corridor, ran into significant opposition in the legislature and in communities opposed to legalizing gambling and selling state assets. So far, the plan has stalled, but the lobbying continues.
Another policy adopted by the Perry administration found more success than the Trans-Texas Corridor and the lottery privatization plan, but it, too, came from a major Perry donor employing members of Perry's inner circle as lobbyists.
Beginning in 2003, Dallas billionaire Harold Simmons sought to expand his fortune through the company Waste Control Specialists. Simmons' plan was to obtain permits from the government to operate a nuclear waste disposal site. Simmons was aided by Perry insiders Bashur and Johnson, both hired to lobby for Waste Control Specialists, and massive campaign contributions. Simmons is one of Perry's biggest financial backers, having donated $1.12 million to Perry's gubernatorial campaigns and another $700,000 to the Republican Governors Association during Perry's two stints as chairman of the group. After the legislature approved Simmons' bill, the permits required approval from the Texas Commission on Environmental Quality, a three-member board appointed by Perry. Despite a review by Texas Water Board geologists and engineers determining that the permit should not be approved, the commission voted 2-1 to support it.
Another permit sought by Simmons moved forward earlier this year. The Texas House approved a bill that would subsidize the importation of out-of-state nuclear waste to a new dump site by waiving regulatory fees for importation for Simmons' company.
Simmons' nuclear waste dump was the only successful mega-project pushed by Perry's lobbyist pals. Yet no one has reaped more financial benefit from his Perry ties than Toomey -- the lobbyist at the center of the HPV vaccine scandal.
Toomey's most successful lobbying effort centered on tort reform on behalf of Texans for Lawsuit Reform, a business group funded by major Perry donors Bob Perry and James Leininger.
The group was a client of Toomey's before he joined Perry's administration. In 2003, with Toomey in the Perry administration, the legislature passed, and Perry signed, a major tort reform bill. After Toomey left the administration in 2004, he re-signed Texans for Lawsuit Reform as a client. In 2011, Perry signed another major tort reform bill.
Toomey also held Texans for School Choice as a client while Perry pushed, unsuccessfully, for school vouchers, another favorite issue of Leininger's. He also lobbied for Corrections Corporation of America, the biggest private prison operator in the state of Texas, as they sought to privatize prison health care. Toomey also works with AT&T, the third highest-grossing company in the state, holding a contract that has at times been worth between $150,000 and $200,000 per year.
Toomey is currently operating the Make Us Great Again super PAC that is solely dedicated to getting Perry elected as the next president of the United States. His plans for the PAC include raising $55 million by next spring.
Robert Howden, a former senior Perry advisor turned lobbyist, knows the relationship between the power broker and the governor well. "Nobody cares more about Rick Perry than Mike Toomey," he said.
© 2011 The Huffington Post: www.huffingtonpost.com
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