Friday, October 07, 2011

Rick Perry Finds His Mojo

Rick Perry's address to Values Voters Summit

IndyAmericans Dish 'Poop' on Rick Perry

Perry’s Real Problem - American Independents

Perry's Trans-Texas Corridor is now a story in play, but what's been left out is the independent voter back story.
Perry Poop: "Arming the American Eagle to Defeat Rick Perry"


Linda Curtis
Copyright 2011

Bastrop, TX-It wasn’t just that Rick Perry tried to conduct the largest land grab in Texas history for a massive foreign-owned toll road and utility-trade corridor called the Trans-Texas Corridor. And it wasn’t just that both parties opposed it, as reported in Politico this week. It was the exodus from the Republican Party of a major state official, Carole Strayhorn, then Texas Comptroller, to run as an independent against Perry in 2006. The revolt by the independent electorate resulted in 1.3 million independent votes in 2006.

Independent Texan activist, Linda Curtis, who lives 500 feet from where a wildfire ravaged Bastrop last month, said, "What the press has missed so far is the fact that Perry's Trans-Texas Corridor transgressions sparked a bonafide grassroots trans-partisan movement of ordinary Texans, with legs in both major parties, but led by Texas independents. He barely squeaked by in 2006 with just 39% of the vote."

Curtis of Independent Texans, who helped build the urban anti-toll movement in Austin with marketing wiz, Sal Costello, brought the rural anti-TTC and urban anti-toll coalition together behind Strayhorn. Curtis, a staunch progressive independent, and Marie Day, a Central Texas rancher and staunch conservative, have now launched, a federal citizen’s super PAC for independent voters. The website entitled, “Perry Poop,” has a hilarious picture of Rick Perry on the home page that is bound to attract lots of visitors – hopefully independent-voting visitors. (See the “About” section at for more on Curtis and Day.)

If Perry becomes the nominee of the Republican Party, will this lead to another independent voter revolt across the country? "It will, if this new super PAC for independent voters,, has anything to say about it," said co-founder Marie Day. What’s more, the site is a real pleaser for those political junkies – and ordinary voters – who like to hear from real people engaged in battles launched from the grassroots.

The in-depth story of the trans-partisan independent movement that took the TTC down, and almost took Perry with it, can be viewed on the site,, under “Texas Independent Revolt.” Curtis and Day are available for interviews.

© 2011

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

Wednesday, October 05, 2011

Grassroots? "Rick Perry doesn't know a grass root from a railroad tie."

Rick Perry Says He's Mr. Grassroots, But His Trans-Texas Flop Suggests Otherwise

perry cover.jpg


By Jim Schutze
The Dallas Observer
Copyright 2011

Tea Party people say they hate Washington and its top-down style of governance. They're the political version of eat-local. Everything should be grassroots.

Here in Texas the Tea Party loves Governor Rick Perry, but if you talk to people who've gone up against Perry on local issues, they will tell you that grassroots is one word the man cannot even find in the dictionary.

I ran into this particular Perry disconnect when I was doing the reporting for a story on Perry in this week's newspaper. One of the little sagas we had to trim back for space had to do with his attempt to build the Trans-Texas Corridor, a proposed but now defunct 4,000-mile-long high-tech transportation right-of-way, four football fields wide, from Mexico to Oklahoma.

Talk about top-down. Perry got beat badly on the TTC because he acted like he didn't even know local communities existed. The local communities that probably had more to do with beating him were our own town, Dallas, and Fort Worth.

For that part of my Perry story, I hardly talked to any progressive anti-highway Democrats at all. The people who fought Perry on it and beat him were mostly conservative-leaning pro-road-building Republicans. They all told me they liked Perry's basic idea but just couldn't reason with the man because of his autocratic style.

The TTC was the brainchild of an oil and gas millionaire pal of Perry's from back in the day, the late Ric Williamson, whom Perry had appointed chair of the state's Transportation Commission. The idea is dead now, shot many times over in the head by the Legislature. In fact, even though it had already been dead four years, the most recent Legislature dragged out the corpse and shot it again just to make sure, passing new legislation to curb the state's use of eminent domain.

One of the first people I interviewed for my piece was Republican State Senator Florence Shapiro of Plano. She said rural dwellers in the proposed path of the TTC learned the details from local newspapers and blogs, not Perry.

"Think if you're living in one of these communities. You've had farm land for three generations, and one day you read in the paper that this mammoth, behemoth, much larger than necessary thing is going to condemn most of your property. They were livid and rightfully so."

But so were the cities. Dallas and Fort Worth at the time were pouring hundreds of millions in infrastructure dollars into our two competing "logistics centers" -- rail and freeway hubs with gargantuan automated warehouses to handle Pacific Rim trade coming up from deep-water ports in Houston, Mexico and Southern California. The TTC would have stepped around both centers, carrying all of that lucrative trade instead out into hinterlands where people didn't want it.

Bill Blaydes, then the Dallas City Council member in charge of our "inland port" project, says he, like Shapiro, thought the TTC idea had merit. He says it could have been married to Dallas' project, as well as to Fort Worth's Alliance Logistics Center, had Perry merely been willing to deal.

"It was a magnificent idea, had he been willing to work with the metropolitan areas and not try to bypass something that we had been working very hard to promote," Blaydes says. "We probably would not have fought it as hard as we did, but we fought it all the way to Washington."

In several years of trying, Blaydes said he was never able to find an inch of common ground with Perry or his friend Williamson. "They were headstrong and hard-headed. They could not and would not revise their vision," he says.

Sandy Greyson was the Dallas City Council member responsible for long-range transportation planning policy. She says when Dallas realized Perry wouldn't negotiate, the city mobilized quickly, hiring David Dean, a transportation lobbyist with strong ties to the Legislature.

Before Dean ever approached the capital, Greyson says, he ventured into the boondocks and did the grassroots work Perry and Williamson had failed to do, knitting together a coalition of every town council, aggrieved rancher and outlet mall he could find along the proposed route. By the time Dean took his "River of Trade" coalition to Austin, the TTC was a dead letter.

Greyson calls Williamson "a brilliant man" and mourns for the better parts of his concept. But, she says, "The fatal flaw in the whole thing was that it seemed to be a very top-down plan that would be imposed on people and cities and counties."

Shapiro says of the plan now, "It's gone." She says Perry could have pulled it off, had he been willing or able to work the grassroots.

"The idea should have been from the bottom up rather than from the top down. You would talk about it," Shapiro says. "You would have discussions about why we need this kind of infrastructure, so it comes from the grass roots, from the community leaders, from the people who own the land, not the government here telling you what to do."

Toss in Perry's decision to order HPV vaccinations for Texas girls and the way he handled the education budget in this recent legislative session: You have a man here who doesn't know a grass root from a railroad tie.

Given his campaign ads and his promises on the stump to put power back in the hands of states and local communities, there is enormous irony in how he really governs. But if something happened to Romney, Perry got the GOP nod and beat Obama ... well, that situation would go way beyond irony.

© 2011 The Dallas Observer:

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

Tuesday, October 04, 2011

"If corporations are people — like the Supreme Court seems to think — then HNTB and Perry are BFFs."

Perry's Homegrown Disaster Capitalism

Perry's not a racist; he's a crony capitalist who rarely passes up an opportunity to help his friends.

Related Link: HNTB is lead consultant for Trans-Texas Corridor


by Forrest Wilder
The Texas Observer
Copyright 2011

This story certainly doesn't have the panache of, say, a racist hunting camp name but it probably says a lot more about the governor's raison d'etre. Perry's not a racist; he's a crony capitalist who rarely passes up an opportunity to help his friends.

Case in point: The Austin American-Statesman reported yesterday that an engineering firm connected to Perry has botched a portion of the state's $3.1 billion disaster recovery program meant to help people and communities hammered by hurricanes Ike and Dolly over three years ago.

The upshot of the story is that the company, HNTB, has barely made a dent in rebuilding infrastructure in storm-battered areas, instead squandering 92 percent of the first round of money on administrative costs. Worse, it's unclear how the company, which has numerous ties to Perry, got the contract in the first place. The feds are pissed and the General Land Office, which recently took over from the woefully unequipped and now-defunct Texas Department of Rural Affairs, has yanked HNTB's contract.

If corporations are people — like the Supreme Court seems to think — then HNTB and Perry are BFFs.

Almost all of the firm's business is with public agencies, said Wendorf, and during Perry's administration its presence in Austin has grown.

[HNTB] was the principal consultant for Perry's first — and largest — pet project as governor, the proposed $184 billion Trans-Texas Corridor, which succumbed to widespread public opposition in 2010. Since 2008, the Texas Department of Transportation has paid HNTB $109 million for engineering consulting services, according to records with the state comptroller. Ray Sullivan, communications director for Perry's presidential campaign, has been a lobbyist for HNTB.

The firm is one of 139 major "crossover donors" identified by Texans for Public Justice who have contributed substantial sums to Perry and the Republican Governors Association, which Perry has twice chaired. According to, HNTB and its executives have given more than $500,000 to the association, which has sent $4 million to Perry's political campaigns.


Exactly how HNTB was chosen is not clear; because its contract was for professional services, it was not subject to a bid process. State records show the firm was paid $45 million under the contract before it was canceled.

Counting a $3 million contract with the land office for post-Ike debris removal and an earlier $8 million contract with the Department of Rural Affairs for assessment of hurricane damage, HNTB has earned $56 million for its hurricane-related services to the state in the past three years.

The Statesman story actually just grazes the surface of how dysfunctional and politicized hurricane recovery has been during the Perry administration. I've been following the story since Hurricane Rita ravaged southeast Texas in 2005. For some of the victims, the endless delays, red tape, misallocation of funds and Rube Goldberg-like recovery process has been a bigger disaster than the destruction wreaked by the storms.

The cardinal sin of Perry's approach to hurricanes Ike and Dolly recovery was putting the tiny, now-defunct Texas Department of Rural Affairs and HNTB in charge of the process, critics have said for years. But there was of course a political upside for Perry. As I wrote for an Observer cover story in February:

Though Ike hit coastal urban and semi-urban areas the hardest, Perry put the relatively obscure Texas Department of Rural Affairs in charge of the $3.1 billion in federal aid, an amount more than 25 times its annual budget. Created in 2001 by the Texas Legislature, the agency’s primary function is directing federal grants to rural communities. Just five years after its creation, the Sunset Advisory Commission recommended abolishing the agency and transferring its duties to the state Department of Agriculture. The rural affairs agency had failed to “meet many of the Legislature’s expectations to help strengthen and coordinate services to rural Texas,” the commission said. Now it was being given a huge, expensive and complicated task.

Rural Affairs initially proposed to base the distribution of funds not on actual, on-the-ground damage assessments performed by FEMA inspectors, but rather on weather data—wind speeds, for instance, and high-water maps. No other state had ever done this. And for good reason: Weather data can’t accurately tell you where the most damage occurred. “You’re essentially weighing damage to an empty field in the same way as damage to a block and a neighborhood,” says Madison Sloan, an attorney with Texas Appleseed, an Austin-based advocacy group.

The result was a massive shift of money away from the densely populated Houston-Galveston area to rural East Texas, which suffered much less damage from Ike.

This system had a political upside for Perry. The program “insulates the governor from making any politically sensitive decisions,” Henneberger told the Observer in an interview last year. “He can simply point to the locals and say we gave them the money, blame them. ... This is all about dodging responsibility.”

Critics also accuse Rural Affairs of shortchanging low- and moderate-income folks in favor of expensive infrastructure projects desired by local politicians. “It’s hard to get away from the fact that the weather model spread the wealth considerably more than if you looked at where the actual damage occurred,” says Joe Higgs, an organizer with Gulf Coast Interfaith. “Nothing wrong with that if it’s a stimulus program or it’s a general renewal Texas program, but the money wasn’t given to Texas for that. It was given to help people recover from the devastating events of hurricanes Dolly and Ike.”

The last time I checked, in July, just 300 homes had been rebuilt or fixed up since Ike — a measly 9 percent of the goal for Round 1 of the program. And, remember, three years have passed since Ike and Dolly made landfall.

The problem with disaster capitalism, other than the general rankness of profiting from people's suffering, is that it simply doesn't work well. Earlier this year, I spent 3-4 days in Galveston and Bolivar Peninsula talking to people about the painfully slow pace of recovery. For some, hope for community survival was slipping away as government and corporate bureaucracies failed. One woman, a proud Bolivarian, described it this way:

“What will be eliminated is those of us at the bottom who were barely able to be property owners, who worked our whole lives for that dream of living on the coast—that’s who’s going to be eliminated.”

© 2011 The Texas Observer:

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

"Rick Perry’s 'small-government' record has yet another blot.... It’s called the Trans-Texas Corridor."

Rick Perry's campaign may be sidetracked by the Trans-Texas Corridor
Perry's Red State


Copyright 2011

Rick Perry’s small-government record has yet another blot.

It’s called the Trans-Texas Corridor.

The governor’s 2012 rivals have latched onto his executive order mandating the HPV vaccine and his advocacy for in-state tuition for illegal immigrants, while little has been said about his unrealized 1,200-foot-wide toll road project that would have swallowed more than 500,000 acres of Texas farmland and wildlife habitats. But as the focus of debates increasingly turn toward President Barack Obama’s jobs agenda — a plan calling for a heavy dose of infrastructure investment — that may change.
“Pay to play, cronyism — all those charges can be found right here in the Trans-Texas Corridor,” said Terri Hall, founder and director of Texans United for Reform and Freedom, a group that fought the project. “We had a Texas-sized uprising.”

In 2002, Perry unveiled his $175 billion blueprint for Texas transportation, calling for 4,000 miles of new toll roads, high-speed rail lines and pipelines “as big as Texas and as ambitious as our people.” Not unlike Obama, Perry envisioned a government role in cultivating private-sector investment in infrastructure.

But awarding new toll development to a Spanish company stoked nativist fears — and questions about a revolving door to the governor’s office. His massive land grab through eminent domain, the practice of government seizing private property for public use, incurred the wrath of farmers, environmentalists and members of his own party.

Nearly 10 years later, Perry signed the death certificate for his brainchild, scrubbing all references of the corridor project from state statutes during the most recent Texas legislative session.

“I supported the ban of ever making a taxpayer-paid road a toll road. You cannot do that in the state of Texas,” he said in an August interview with Des Moines-based WHO Radio, stressing that tolling alternatives are raising taxes, asking Washington for money or waiting for the “asphalt fairy.”

Perry spokesman Ray Sullivan said the failed initiative ultimately fostered conversations about how to fund road projects without increased taxes or relying on the Federal Highway Trust Fund.

“We would describe it as one starting a very important, robust public debate and discussion of financing and developing transportation infrastructure,” he said. “While the corridor concept is dead, the debate has resulted in more transportation funding options and high-priority projects going forward with some private financing and strong state and local cooperation.”

Tolling and public-private partnerships have helped the state’s infrastructure keep up with the big influx of people moving to the state, Sullivan said, adding that the debate had evolved in such a “positive way,” the governor “could agree with the legislature that the corridor was no longer the right approach for the state.”

It’s clear that Texas needs to do something about its crumbling and aging transportation network. The state added 4 million people over the past decade, and its population explosion isn’t expected to slow down. Nearly half of the state’s major highways are congested, and one-third of its major roads are in poor or mediocre condition, according to the American Society of Civil Engineers.
At the same time, the state has borrowed heavily to fund its road projects since 2003 and will owe $17.3 billion by the end of next year.

Perry’s Trans-Texas Corridor proposal — launched during his first gubernatorial campaign — would have run from the Mexico border to Oklahoma. It was the answer to the challenges of a growing state that was expecting increased international traffic under the North American Free Trade Agreement. Perry envisioned separate lanes for cars and trucks, as well as a rail system. The project was also slated to carry water pipes and utility lines. It was the “largest engineering project ever proposed for Texas,” according to one transportation department report, promising to reduce congestion, cut pollution, improve safety and speed up trade routes.
Given the state’s budget difficulties, Perry’s financing schemes included public and private money, including some toll roads. Republicans took control of the state Legislature in 2003, pushing the Trans-Texas Corridor project through both chambers as part of an omnibus transportation bill. But evidently, few lawmakers knew what the bill contained. When the state Transportation Department began holding public meetings about the project in early 2004, voters were fuming at the possibility that private corporations — particularly foreign ones — might exercise eminent domain to build massive amounts of infrastructure for profit.

“His plan was meant to be bold, get one’s imagination working, and it turned out to look scary to people,” said Matt Dellinger, author of “Interstate 69,” which details the fight over the Trans-Texas Corridor. County toll authorities in Dallas and Houston complained the state was forcing them into contracts with private companies, while voters began calling their legislators to repeal the law. David and Linda Stall, a Republican couple from Fayetteville, Texas, formed a group called, which held meetings across the state about the details of the plan and whipped up outrage.
Environmental groups objected to the wildlife being lost, and farmers turned on the former state agriculture commissioner, calling it an abuse of eminent domain.
“It would have claimed a lot of farm and ranch ground — some of the best in farm and ranch country in the entire state,” said Jim Sartwelle, director of public policy for the Texas Farm Bureau.
Perry’s decision to award development rights to a Spanish company, Cintra, only tapped into anxieties about immigration, free trade and border security. Conspiracy theorists dubbed it the “NAFTA Superhighway” and protested the alleged plot to dissolve the nation’s borders.
And voters cried foul when it came out that one of Perry’s top aides, Dan Shelley, worked for Cintra until three months before the company was selected for the state road project. When Shelley left the governor’s office, he signed a lucrative lobbying contract with Cintra. But the Perry administration held its ground. Texas Transportation Commissioner Ric Williamson, one of Perry’s closest advisers and friends, frequently intoned, “There is no road fairy.” “We either build toll roads, slow roads or no roads,” Perry said in 2007.

Ultimately, the uproar forced state officials to scale back the proposal. In 2007, the Legislature dealt a blow to the main tenant of the corridor by placing a moratorium on public-private toll partnerships. In 2009, Perry’s Transportation Department officially killed it off with a “no build” recommendation on the corridor’s first segment, which was being handled by Cintra.
It was one of the most controversial issues of Perry’s gubernatorial career — yet he emerged from the fight relatively unscathed.
During his 2006 reelection, there wasn’t a strong Republican challenger to bring up the Trans-Texas Corridor. Perry, who continued to support the corridor, won the four-way general election with 39 percent of the vote.

During his 2010 gubernatorial fight, Republican Sen. Kay Bailey Hutchison aired a biting attack ad accusing Perry of tolling roads for the benefit of foreign companies. Hutchison lost, and while the Democratic nominee, then-Houston Mayor Bill White, also ran an attack ad on the project, Perry won easily.
By the recent midterm election, the issue was too old to cause much damage. Yet tea party activists were still vocally hesitant at what they viewed as the government’s big private-land grab.

Will it damage Perry’s national ambitions?
“Rick Perry talks a good game about getting government out of your life, but if there’s any utility at all for him to put government in your life, you’ve got government in your life,” said Leland Beatty, who worked for Perry’s agriculture predecessor Jim Hightower. Hall fumes that some public-private partnerships are still alive and well in Texas — even if the corridor project is dead. “There are all these sweetheart deals for all his corporate cronies,” she said.

Meanwhile, others have forgiven.

“Were there disagreements in the middle of the process? Certainly,” said Sartwelle. “But it never happened. The bottom line is it never happened.”

Kirby Brown of the Texas Wildlife Association insisted that “the governor got bad advice.” But he admitted, “There’s no question, we have members who are still mad about it, and they didn’t like the way it played out.”

Dellinger offered this defense: “I could see Perry’s eventual answer being like his HPV response: ‘My heart was in right place, but I went about it all wrong.’”

© 2011 Politico:

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE

More tax dollars wasted by HNTB, courtesy of Rick Perry's political patronage machine

State outsourced allocation of federal disaster recovery funds to firm with ties to Perry

Related Link: HNTB is lead consultant for Trans-Texas Corridor


By Brenda Bell
Austin American-Statesman
Copyright 2011

The state of Texas has quietly outsourced the management of more than $1 billion in federal disaster recovery funds to an engineering firm with close ties to Gov. Rick Perry's administration, paying the Kansas City, Mo. -based firm HNTB $45 million so far to process infrastructure grants for communities damaged by Hurricanes Dolly and Ike.

The company's billings threaten to exhaust the amount budgeted for administrative and planning costs, while only 20 percent of the first round of money released to Texas to aid disaster recovery grants has been spent three years after the storms. Based on the state's original timeline, at least half those projects should have been completed by now, federal officials say.

The problems have caused officials with the U.S. Department of Housing and Urban Development to voice alarm and begin quarterly reviews in an attempt to get the program back on track.

Hiring a private firm to handle what has been termed the largest public works project in the state's history is unusual, federal officials say.

Weeks ago, the Texas General Land Office cancelled HNTB's contract, which had ballooned from $69 million to $144 million as the firm assumed more responsibility for disaster grants during a downsizing of state government. But HNTB continues to run the infrastructure program on a temporary basis at its downtown Austin offices, where about a dozen state employees also working on the program have been relocated.

Congress appropriated $3.1 billion to help Texans recover from the hurricanes that struck the Gulf coast in 2008. Fifty-five percent of the money ($1.7 billion) is for housing, and 45 percent ($1.4 billion) for nonhousing projects — everything from emergency generators to new water and sewage treatment facilities. Of the total $3.1 billion, $1.3 billion was released in the first round of funding.

Most media attention has focused on problems with post-hurricane housing assistance, which has been managed by the Texas Department of Housing and Community Affairs.

In Houston, the first new homes to replace those destroyed by Hurricane Ike were only recently completed. In Galveston, where 75 percent of the island's structures were damaged in the 2008 storm, the initial $259 million phase of rebuilding has been plagued with local delays, dissent and complaints about padded costs and inadequate inspections of rebuilt homes.

The role played by HNTB in managing grants for nonhousing infrastructure — originally the responsibility of the now-defunct Texas Department of Rural Affairs — has largely escaped public attention, but not the federal government's.

In a May letter to state officials obtained by the American-Statesman, Stanley Gimont , director of block grant assistance for the U.S. Housing and Urban Development, said that using HNTB "to administer virtually all aspects" of the state agency's work on the community development block grants "presents significant cause for concern." Gimont said that as an engineering firm, HNTB lacked experience with community development block grant programs — the funding vehicle for Ike and Dolly disaster relief.

"There are fundamental responsibilities that must not be ceded by the state to a third-party contractor," he wrote. Those responsibilities include "proper monitoring" of local grants and policy and program guidance on the proper use of community development funds, he wrote.

The letter, which also cited a half-dozen deficiencies in the housing portion of the disaster program, raised questions about the state's oversight of HNTB, including:

• The department of rural affairs was in disarray, its disaster recovery staff had been reduced from 42 employees to 10, and it had "no procedures or policies in place to oversee" HNTB's work.

• The state's contract with HNTB lacked performance measures and carried the potential for "considerable cost increases."

In June, HUD warned that the rate of spending on administrative expenses, which as of Aug. 31 totaled 92 percent of what's been budgeted, could jeopardize the processing of construction projects in the second round of funding.

On July 1, Perry moved oversight of disaster recovery to an elected official, General Land Commissioner Jerry Patterson, "to provide more accountability." About a dozen employees of the department of rural affairs, which the Legislature abolished at Perry's request, and 51 from the department of housing and community affairs — all working on disaster recovery projects for those agencies — were transferred to the land office's payroll.

"I'm taking a hard look at the whole program," said Gary Hagood , deputy commissioner of financial management at the land office. "I look at every dollar that goes out of here."

His priority, he said, "is to get stuff done in a timely manner. Every contract will have timelines. They had no timelines before — they just set it on the back burner."

Hagood canceled HNTB's contract as of Aug. 31, four years before it was to expire, and split the disaster recovery work into two parts, engineering services and grant management. The land office posted a request for companies to submit their qualifications to finish the job. Hagood said 10 to 12 firms have responded, including HNTB, and that future work might be contracted out to several vendors in coming weeks.

For now, HNTB continues to run the program. Tom Wendorf , HNTB vice president in San Antonio, said that with some adjustments to the scope of work and the new oversight under the land office, "we fully expect to continue to work toward completion of the infrastructure projects" in 2015. State officials originally expected to have the entire $3.1 billion in federal funds spent by 2013.

Long ties to Perry

According to its website, HNTB was founded in 1914 as a railroad bridge design firm and has designed "a significant portion" of the interstate highway system. Its headquarters are in Kansas City, Mo.

Almost all of the firm's business is with public agencies, said Wendorf, and during Perry's administration its presence in Austin has grown.

It was the principal consultant for Perry's first — and largest — pet project as governor, the proposed $184 billion Trans-Texas Corridor, which succumbed to widespread public opposition in 2010. Since 2008, the Texas Department of Transportation has paid HNTB $109 million for engineering consulting services, according to records with the state comptroller. Ray Sullivan, communications director for Perry's presidential campaign, has been a lobbyist for HNTB.

The firm is one of 139 major "crossover donors" identified by Texans for Public Justice who have contributed substantial sums to Perry and the Republican Governors Association, which Perry has twice chaired. According to, HNTB and its executives have given more than $500,000 to the association, which has sent $4 million to Perry's political campaigns.

By most accounts, the Department of Rural Affairs — a 70-employee agency that normally dispensed less than $100 million in grants to rural communities each year — was overwhelmed in 2009 when it got the job of managing $1.4 billion in disaster-related public works projects. The department hired 40 new employees, expanded its offices and turned to HNTB to manage the anticipated deluge of 6,000 community development block grants.

Exactly how HNTB was chosen is not clear; because its contract was for professional services, it was not subject to a bid process. State records show the firm was paid $45 million under the contract before it was canceled.

Counting a $3 million contract with the land office for post-Ike debris removal and an earlier $8 million contract with the Department of Rural Affairs for assessment of hurricane damage, HNTB has earned $56 million for its hurricane-related services to the state in the past three years.

In 2010, the Obama administration began looking closely at overhead expenses for community development block grants nationwide and found that Texas was rapidly spending down the money budgeted for administrative and planning costs for disaster-related infrastructure grants. Federal guidelines set a limit on such expenditures.

In February, rural affairs Director Charlie Stone laid off a number of upper-echelon employees and assigned more responsibilities to HNTB. That raised concerns on the part of federal officials that the result was "a significant gap in the agency's ability to interpret, understand and comply with" federal grant requirements.

Critics have questioned whether some projects approved in the first round of funding met the federal criteria of serving areas with the greatest unmet need and replacing infrastructure that was damaged or functioned inadequately as a result of the storms.

Many infrastructure grants were made to buy emergency generators. Lufkin, unharmed by the storms, is doubling the size of its civic center, which served as a temporary shelter for Ike and Rita evacuees.

And in other East Texas counties far from the coast, new roads, water lines and community centers are planned.; 445-3634

© 2011 Austin American-Statesman:

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE


Sunday, October 02, 2011

"Governor Perry's office tried to 'strong-arm' TRS staff members to support risky deals involving Trans-Texas Corridor infrastructure projects."

Critics question Perry's handling of pension, healthcare funds in Texas

Pirates of Pensions


By Yamil Berard
Fort Worth Star-Telegram
Copyright 2011

Gov. Rick Perry is making headlines with his attacks on Social Security and Medicare, blasting their fiscal stability, likening them to Ponzi schemes and calling them a "monstrous lie to our kids."

But the tables are being turned on the Republican presidential contender as scrutiny increases of his handling of Texas' public pension funds and the $1 billion healthcare fund for Texas teachers.

Those public pensions have a combined unfunded liability of $41 billion, and a half-dozen funds, including the state's two largest, have promised benefits that they will never be able to pay under current financing models, according to records compiled by the Texas Pension Review Board.

What's more, the $1 billion supplemental healthcare fund for Texas teachers is predicted to go bankrupt by 2014.

Critics say Perry has not made a priority of improving the solvency of the funds. Instead, he removed a state official who was alerting the public to the growing obligations and appointed to the board of the state's largest pension his campaign donors and other political allies. The governor also pushed controversial investments.

"You shouldn't play politics with other people's retirement," former Texas Pension Review Board Chairman Shad Rowe said in a recent interview.

Perry says Texas pension funds are in better shape than most public pensions nationwide. State law sets operational standards for such systems as the Teacher Retirement System of Texas, said Lucy Nashed, a Perry spokeswoman.

The governor did not answer a question from the Star-Telegram about recommendations to improve state pensions' financial outlooks.

Texas is better off because the state clamped down on cost-of-living adjustments and unsustainable benefit structures for pensions of state workers and teachers, said Craig Hester, vice chairman of the board of the Employees Retirement System of Texas, the state's second-largest public pension fund.

"The governor's absolutely correct in that," Hester said. "The Legislature has been good, and I think these [pension] boards have been good about doing what we can to protect the liability side of the balance sheet."

Political meddling?

Accusations of political meddling have centered on the board of the $111 billion Teacher Retirement System, the state's largest public pension system, with more than 1 million active and retired members.

At the TRS, the governor appoints three board members who are investment professionals and chooses the other six members from among slates submitted by groups including the State Board of Education, active TRS members, retirees and public higher education officials.

Nashed said the governor selects members based on qualifications and desire to serve. Keith Brainard, director of research for the National Association of State Retirement Administrators, said Perry's appointments have been solid.

Critics say the governor's appointments reflected his political agenda.

"The governor tried several times to get control of the board," said Linus Wright, an undersecretary of education in the Reagan administration and former Dallas schools superintendent.

Wright, who served on the board for 12 years, remembers when the governor pushed to have the TRS invest in state toll roads. The word was that an official from the governor's office tried to "strong-arm" TRS staff members to support risky deals involving Trans-Texas Corridor infrastructure projects.

"I had a real problem with that," said Bill Barnes, Fort Worth chairman of the 20-member legislative committee for the Texas Retired Teachers Association. "I don't think toll roads make the best investments."

Wright said the 2008 effort was defeated, although others say deals related to toll roads were later done in the guise of real estate investments.

A year later, a TRS employee said, millions of dollars in investments favored by Perry appointees had been approved. The whistle-blower said "political influences" had marred the decisions. A second TRS employee independently raised concerns.

An outside legal firm was chosen to examine the allegations. Its investigation uncovered no definitive evidence that any trustee improperly influenced investment decisions. But the credibility of the investigation was called into question: It was conducted by a former SEC commissioner whose law firm, some legislators said, could have had conflicts of interest because the firm may have had the same clients that were seeking TRS business.

Then, the TRS lost millions on derivatives investments, and a teachers group said Perry's fingerprints were all over the deals. The group sued the TRS, but a judge dismissed the suit in July 2009.

Perry's influence

Moves into alternative investments such as hedge funds and private equity were among teachers' concerns. In 2004, the TRS had committed more than $3.3 billion to such investments. Today, almost one-fourth of its portfolio is dedicated to alternatives.

Among those pushing early moves into the investments was Perry appointee and Houston investor Jim Lee, then chairman of the TRS board.

Teachers groups again were distrustful and felt Lee was too heavily influenced by the governor, Wright said.

Lee resigned in January 2009 after questions were raised about $100,000 in gambling debts at a Las Vegas hotel casino. He said publicly at the time that he was leaving to start a business.

Lee did not respond to repeated requests for comment.

Perry immediately appointed Wright chairman. His appointment calmed choppy waters, and some teachers said they felt they had an advocate.

But less than a year later, Perry replaced Wright with R. David Kelly, a Dallas real estate investor.

"I was disappointed," Barnes said of Wright's removal. "He represented us well."

Both Kelly and Lee have been on finance teams for Perry's re-election campaigns; Lee is one of Perry's statewide campaign finance chairmen. The governor recently appointed Lee to the Texas Higher Education Coordinating Board.

Kelly could not be reached for comment.

Wright said he felt the governor had yanked him as chairman because of his longtime support of TRS Executive Director Ronnie Jung.

"He has been wanting to eliminate Ronnie Jung as executive director five or six years now," Wright said. "He felt Ronnie was in the way of blocking his recommendations."

But Wright said Perry's influence seldom held sway. "The rest of the board has always been able to vote [Perry appointees] down," he said.

Also in 2009, retired teachers, fed up with the political board battles and a decade without cost-of-living adjustments, pushed for legislation to add another retiree to the TRS board. But the governor vetoed House Bill 2656, saying it would "dilute" the board's financial expertise.

The governor disappointed retired educators again during the 2011 legislative session. Some blame him for not doing enough to keep their supplemental healthcare fund in the black.

More than 250,000 retired teachers participate in TRS-Care, a $1.3 billion, pay-as-you-go trust fund managed by the TRS. It is expected to use up its $900 million cash reserve this coming year. TRS-Care could be in the red by more than $580 million by 2014, "worst-case" projections show.

"It would have been best if we could have maintained full funding for this plan if we would have had gubernatorial support on that issue," Retired Teachers Association Executive Director Tim Lee said.This year, the TRS board replaced Jung. The new leader, Brian Guthrie, was a Perry budget aide.

'Ticking time bomb'

The governor also appoints seven of the nine members to the state's pension overseer, the Texas Pension Review Board, which keeps data for 188 defined-benefit pension systems with about $200 billion in assets. The board is authorized only to alert pensions to problems and has no enforcement authority.

Rowe, a Dallas money manager first appointed to the board in 1997, worked to create greater accountability and transparency in public pensions.

He was first appointed chairman by Gov. George W. Bush in 1999. Perry reappointed him in 2004.

As chairman, Rowe criticized pensions that were late in filing financial reports and scolded those that used what he called "overly aggressive" assumed rates of return that gave a false impression of their finances.

Concerned about unfunded liabilities, Rowe told the public that pension systems were "a ticking time bomb." He pushed the board to create an "alarm system" that could pinpoint when systems were veering into trouble.

Rowe also criticized the TRS' foray into hedge funds and alternative investments, saying that they lacked transparency and that most boards would be ill-equipped to unravel their complexity.

"I just don't think you should be making wild bets with other people's money," he said.

With lobbying from Rowe and the help of state Sen. Steve Ogden, R-Bryan, the review board got more money to hire staff members, including an actuary to analyze pensions' underfunding status, said Chris Hanson, the agency's executive director.

In 2007, Rowe called on the attorney general's office to help examine the Employees' Retirement Fund of Fort Worth after a city auditor's report showed several problems, including excessive fees and employees spiking their pensions by loading up on overtime in their final years of work.

Perry removed Rowe as chairman in June 2008, a year before his term was to expire. Rowe left the board in 2009 and was not reappointed.

Perry spokeswoman Allison Castle said the governor thinks board leaders should pursue the best interests of the state "and not pursue their own personal agenda." Castle did not elaborate.

In a Sept. 26 e-mail to the Star-Telegram, Nashed wrote that Rowe was replaced because his term had expired, "as is routine."

This report includes material from the Star-Telegram archives.

© 2011 Fort Worth Star-Telegram:

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