Loose Texas election rules give Perry financial edge

Texas governor doles out grants, jobs to donors

August 21, 2011|By Michael Luo and Nicholas Confessore, New York Times

Governor Rick Perrys bid for the Republican presidential nomination has… (Richard Shiro/Associated…)

NEW YORK - Two years ago, John McHale, an entrepreneur from Austin, Texas, who has given millions of dollars to Democratic candidates and causes, did something very unusual for him: He wrote a $50,000 check to a Republican candidate, Rick Perry, then seeking a third full term as governor of Texas. In September 2010, he did it again, catapulting himself into the top ranks of Perry’s donors.

McHale, a Perry spokesman explained after the initial donation, “understands Governor Perry’s leadership has made Texas a good place to do business.’’

Including, it turned out, for McHale’s business interests and partners. In May 2010, an economic development fund administered by the governor’s office handed $3 million to a pharmaceutical start-up called G-Con, a company that McHale helped get off the ground. At least two other business executives with connections to the firm had also given Perry tens of thousands of dollars.

Perry leapt into the Republican presidential primary this month preceded by his reputation as a thoroughbred fund-raiser. But a review of Perry’s years in office reveals that one of his most potent fund-raising tools is the very government he heads.

Over three terms in office, Perry’s administration has doled out grants, tax breaks, contracts, and appointments to hundreds of his most generous supporters and their businesses. And they have helped Perry raise more money than any politician in Texas history - donations that have periodically raised eyebrows in Texas but, thanks to loose campaign finance laws and a business-friendly political culture dominated in recent years by Republicans, have only fueled Perry’s ascent.

“Texas politics does have this amazing pay-to-play culture,’’ said Harold Cook, a Democratic political consultant.

Mark Miner, a spokesman for Perry, said there was no connection between McHale’s contributions and the grant to G-Con. He said that the purpose of the state funds was to create jobs and that it was appropriate for Perry to appoint to state oversight posts people who support his vision and policies.

“These issues have been brought up in previous elections to no avail,’’ Miner said.

Perry is not the first governor to have taken contributions from contractors or appointees to state commissions and boards who oversee many of the agencies that in other states are controlled directly by the governor.

But because he has been in office more than a decade, he has had greater opportunity than any of his predecessors to stock the government with loyalists - he has appointed roughly 4,000 individuals to state posts - while enacting policies that have benefited allies and contributors.