[Texgreen] Gov's slush fund

[Roger Baker]

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Perry's program: Business initiative or slush fund?

With private funds, governor entertains, entices companies to Texas

11:18 PM CDT on Sunday, August 12, 2007

By EMILY RAMSHAW / The Dallas Morning News
eramshaw@dallasnews.com

AUSTIN =96 Bringing big business to Texas means spending big bucks.

Skybox seats at the Super Bowl and the NBA All-Star Game. First-class =20=

flights and hotel suites at the Ritz Carlton and the Four Seasons. =20
And $15,000 worth of personalized cowboy boots and belt buckles, =20
according to a Dallas Morning News analysis of top-dollar spending =20
habits at TexasOne, Gov. Rick Perry's nonprofit economic development =20
initiative.

Also Online

For job well done, an $80,000 bonus

Critics call the organization a glorified slush fund that wines and =20
dines wealthy executives to persuade them to bring companies and jobs =20=

to Texas. And while it's funded by private donations and millions in =20
corporate membership fees, some ethics watchdogs fear TexasOne allows =20=

corporations, which can't legally donate campaign funds, to buy face =20
time at such events with the governor, his aides and others who make =20
the state's economic development decisions, while getting a hearty =20
tax write-off.

"What they're getting is extraordinary access to the governor by =20
donating to a nonprofit," said Tom "Smitty" Smith, director of the =20
Texas office of Public Citizen, a consumer advocacy group. "This is =20
one of the new loopholes emerging as a way corporations can wield =20
influence."

State officials argue it's par for the course when you're marketing =20
the state's business climate to some of the nation's biggest or most =20
promising companies. Clinching a deal often means courting executives =20=

with expensive attractions and luxury accommodations, they say, and =20
giving them a chance to talk shop with Texas' best salesman =96 the =20
governor.

"If that money produces hundreds of Texas jobs and millions in =20
capital investment in this state, then that's a heck of a buy," Perry =20=

spokesman Robert Black said.

Phil Wilson, who ran TexasOne until Mr. Perry appointed him secretary =20=

of state in June, said that in meetings with corporate leaders, =20
"there's a trust factor established that's intangible. You can't put =20
a currency valuation on it."

The Legislature turned the state's economic development department =20
over to the governor's office in 2003, and TexasOne, an arm of the =20
Texas Economic Development Corp., was launched then.

Membership packages

The organization has raised more than $4 million by selling =20
membership packages to more than 100 corporations, small businesses =20
and local government groups. The businesses can claim a charitable =20
deduction on their federal taxes, because the donation is to a =20
nonprofit group.

Major companies, including AT&T and ExxonMobil, pay $50,000 a year =20
for top tier memberships, while local governments such as the city of =20=

Farmers Branch and the Greater Irving-Las Colinas Chamber of Commerce =20=

pay $1,000 in entry-level dues. Almost every North Texas city with an =20=

economic development office or a chamber of commerce has a membership =20=

package, often funded with hotel-motel tax revenue.

The contributions fund "signature" events at the Super Bowl and all-=20
star games =96 luxury outings where Mr. Perry can seal lucrative =20
contracts.

TexasOne board president Robert Wingo said it's not all about parties =20=

and sporting events. Those outings are considered the "deal closers" =20
after months of nationwide networking and recruitment meetings, he =20
said, where TexasOne members connect with business executives =20
considering relocating to Texas.

"We go into the marketplace to visit with companies we're =20
aggressively pursuing. We go into communities to find out what it is =20
that's going to make a difference," Mr. Wingo said. "Through no =20
expense to the state, we've developed a system that allows us to =20
entice people to come in."

Officials with TexasOne say the $2 million they've spent on company =20
recruitment and "selling" Texas since 2004 has been directly =20
responsible for attracting nearly 17,000 new jobs and more than $9 =20
billion in capital investment.

Angelo Mozilo, the chief executive of Countrywide Mortgage, attended =20
the 2004 Super Bowl as TexasOne's guest, and 10 months later, =20
announced he was bringing 7,000 jobs to North Texas =96 the largest =20
single job creation move in state history.

Ken Gray, the senior vice president of Hewlett-Packard, attended the =20
NBA All-Star with TexasOne in February 2006 and spent more than $2 =20
billion opening data centers in Austin and Houston later that year.

And Home Depot executives went to the Major League Baseball All-Star =20
Game in 2004, then announced an $800 million investment in data-=20
processing and distribution centers in Central Texas. Executives from =20=

the companies could not be reached for comment.

Critics say they don't mind recruitment efforts, but they see "gross =20
excess" in the luxury items provided to executives.

There are the $25,000 skybox suites and $10,000 chartered =20
helicopters, the $3,000 steakhouse dinners and champagne brunches. =20
There are the $600 per night hotel rooms =96 with unlimited room =20
service, valet parking and long distance calls. One party at the 2006 =20=

Rose Bowl, where the University of Texas won the national football =20
championship, set TexasOne back $113,000.

Ethics experts say it's ludicrous to believe that big companies are =20
contributing to TexasOne out of their concern for the state economy =20
and not for undue access to the governor and his staff. By giving =20
money to join, executives are invited to participate in recruiting =20
other businesses.

"It's a place for corporations to write an easy check, an opportunity =20=

to stay in the face of politicians," said Craig McDonald, director of =20=

Texans for Public Justice, which studies the influence of money in =20
politics.

"If this didn't work, the smart businessmen in Texas wouldn't be =20
continuing to invest hundreds of thousands of dollars into this =20
nonprofit," Public Citizen's Mr. Smith said.

Nancy Windham, director of business development for the Frisco =20
Economic Development Corp., said cities and companies are actually =20
joining to get access to each other.

"We could try to do this on our own, but what a greater value it =20
brings when you do it collectively," said Ms. Windham, who credits =20
TexasOne with helping the city land a T-Mobile facility in 2005. "I =20
don't look at this as us buying our way into the governor's office. =20
We believe in the program, and we're putting our money where our =20
mouth is."

Hospitality

Mr. Wilson, who was the governor's deputy chief of staff until being =20
appointed secretary of state, said that while many of the events are =20
top of the line, "Texas hospitality" is key to facilitating deals.

Money is spent conservatively, he said, on the executives most likely =20=

to bring big business to Texas. As states like California, Florida =20
and Pennsylvania continue to expand their own versions of TexasOne, =20
Mr. Wilson said, it would be "unilaterally disarming ourselves" to =20
scale back the program.

"This fat cat mentality, this, 'Gee, you're coming in with cigar-=20
smoking, good-time guys,' that's not what this is," Mr. Wilson said. =20
"You've got people in a decision-making role getting a chance to say, =20=

'I went to Texas, I met the governor, I met business people, I had a =20
good time. But more important, they've got some really unique things =20
going on down there.' "

Staff writer Amy Rosen contributed to this report.

'SIGNATURE EVENTS'

Some major events that TexasOne, Gov. Rick Perry's economic =20
development group, has used to recruit companies to Texas:

2004 SUPER BOWL =96 HOUSTON
Mr. Perry and guests racked up more than $52,000 in hotel rooms, =20
airfare, refreshments and 14 tickets to the Super Bowl.

2005 NASCAR EVENT =96 FORT WORTH
TexasOne spent nearly $35,000 on hotel rooms, a $10,000 chartered =20
helicopter and custom-embroidered sports bags.

2005 ROSE BOWL =96 CALIFORNIA
Hotel rooms, an eight-piece dance band and a swanky pregame event set =20=

TexasOne back $113,000.

2006 NBA ALL-STAR GAME =96 HOUSTON
The game package cost nearly $46,000, including $15,000 in hotel =20
rooms and a $25,000 suite at the Toyota Center.

2007 NHL ALL-STAR GAME =96 DALLAS
The nearly $30,000 tab included $525-a-night hotel rooms at the =20
Mansion on Turtle Creek and "Texas: Wide Open for Business" custom =20
hockey jerseys.

Other purchases:

=95 71 pairs of Justin custom cowboy boots: nearly $10,000

=95 A custom belt buckle and box from Max Lang in Houston: nearly $5,000



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For job well done, an $80,000 bonus

Board voted to reward manager as he became secretary of state

11:14 PM CDT on Sunday, August 12, 2007

By EMILY RAMSHAW / The Dallas Morning News
eramshaw@dallasnews.com

AUSTIN =96 On the same June day Gov. Rick Perry named him Texas =20
secretary of state, Phil Wilson received an $80,000 check from =20
TexasOne =96 the nonprofit economic development organization that he =20
managed as the governor's deputy chief of staff.

That's in addition to the tens of thousands of dollars Mr. Wilson has =20=

accepted in monthly salary supplements from the group, Mr. Perry's =20
key business recruitment initiative, since 2004.

Also Online

Perry's program: Business initiative or slush fund?

Mr. Wilson, 39, who is credited with closing deals on some of the =20
state's biggest economic development projects, as well as shepherding =20=

the TexasOne program through its first few years, said the voting =20
members of the organization's board wrote him the $80,000 check to =20
"recognize the work I've done" for the organization.

"It was an opportunity to say, 'Phil Wilson, job well done,' " said =20
Robert Wingo, president of TexasOne's board. "We felt like, 'What's =20
wrong with rewarding people for doing a great job?' "

The group's funding comes from memberships purchased by businesses =20
and local governments and does not include taxpayer money.

Mr. Wingo said the supplemental salary payments are used to =20
compensate Perry staffers who put in many extra hours operating =20
TexasOne. Before June's $80,000 payment =96 about $58,000 after taxes =96 =
=20
Mr. Wilson and three other Perry economic development aides had made =20
a combined $65,000 in TexasOne salary supplements since 2004. =20
"They're working above and beyond," Mr. Wingo said

There's no prohibition on padding salaries with supplements, and the =20
practice is common during campaign season, when state officials' =20
staffers often get bonuses for their work outside the office. But =20
critics of the economic development organization's spending, which =20
also include recruiting trips at luxury resorts and hot-ticket =20
sporting events, say it's another sign that TexasOne is being used as =20=

petty cash for the governor's office.

"It looks like this fund is functioning as a slush fund to reward =20
staff," said Craig McDonald, director of Texans for Public Justice, =20
which tracks the influence of money in state politics. "It's just =20
another pot for the governor to play with."

Mr. Perry's office announced Mr. Wilson was being tapped to replace =20
outgoing Secretary of State Roger Williams on June 14. A press =20
release touted Mr. Wilson's achievements in bringing big business to =20
Texas, and preserved his position as the governor's "designee" on Mr. =20=

Perry's key economic development initiatives.

That same day, the Texas comptroller's office, which serves as the =20
clearinghouse for TexasOne's funds, cut an $80,000 check to Mr. =20
Wilson on behalf of the organization. The original check order, =20
signed on June 13 by Mr. Wingo and TexasOne board vice president =20
Nicholas Serafy Jr., indicated the money was for "professional =20
services" rendered during the past year.

Perry press secretary Robert Black said the governor was not involved =20=

in the decision to award the bonus.

Board members alone decide whether to reward staffers financially, =20
Mr. Wilson said, and they sign off on all of the organization's major =20=

monetary transactions.

Part of the secretary of state's duties is to act as an economic =20
cheerleader for the state, and Mr. Williams had a role in TexasOne's =20
work, as Mr. Wilson will continue to do.

Mr. Wilson said he'll no longer be getting salary supplements from =20
the organization, though.

"That is over," he said. "None of that will continue."

Staff writer Amy Rosen contributed to this report.


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