More on the Texas Enterprise Fund

The Dallas Morning News has a story (“Audit: Perry’s business fund gave millions to firms, universities that never sent an application“) that suggests that funds from the Texas Enterprise Fund (TEF) was being distributed by the Office of the Governor much less cautiously than the State Auditor considered prudent. The report from the Texas State Auditor identifies a number of way in which the funds were distributed without adequate documentation.

One of the most significant findings (from page 7 of the full report) was that early in the program’s development TEF funds were distributed without an application.

During the 2004- 2005 biennium, the Office [of the Governor] did not require recipients to submit an application and/or did not require recipients to create direct jobs for award agreements associated with 11 projects. The awards associated with those 11 projects totaled $222,281,000, or 44 percent of the $505,838,696 in Texas Enterprise Fund awards the Office made between September 2003 and August 2013.

That’s a lot of money going out the door with very little systematic analysis or documentation. On one hand, many Texas state employees will feel some sympathy with the Office of the Governor because we’ve grappled with the elaborate process behind spending state dollars. On the other hand, you can not help but question why the governor’s office felt it could dish out over $222 million without meticulously detailing and documenting the process. As someone who has been tormented for forgetting to get the sales tax removed from the bill for feeding a job candidate I’m amazed that the people dispensing the TEF were not more systematic in their oversight of much larger sums.

The TEF’s future was already in doubt. Some Texans are questioning the wisdom of getting the government involved in subsidizing some businesses. Others support the idea in theory but question the way in which the funds have been distributed. It’s a good bet that the TEF will be abandoned or transformed when the legislature meets next year. The questions about the fund are closely identified with Rick Perry and the next governor will want a fresh start.


I don’t know

Let me say what no journalist/pundit writing about the Rick Perry indictment is brave enough to say: I don’t know.

Rick Perry Mug ShotI don’t know what’s going to happen. Why? Because I haven’t seen the evidence that was presented to the grand jury. Perry and others have not even testified. There’s so much we do not know about this story. Reporters, pundits, and their like feel a constant need to fill space. They write whether they know something or not. Why? Because they want to get ahead of the competition.

Some people are saying that Perry is guilty and will be convicted and/or should resign. Ironically, Perry might really like to resign to focus on running for president. He’s already on the road a lot.

I get suspicious when they call your indictment an “asset” or even a “blessing” for Perry. It has been portrayed in the media as some partisan witch hunt. It may well have started that way. However, Judge Bert Richardson, a Republican, named Michael McCrum as independent prosecutor for the case. Michael McCrum has an excellent reputation and enjoyed the support of the state’s two Republican senators when he was being considered for U.S. attorney for the District of Texas. Efforts to portray this as a partisan battle between Perry and a drunken Democratic District Attorney will not hold up when people see where these questions are coming from. Even if you doubt the leanings of the prosecutor, the grand jury that indicted Perry found something in that case. Some people have looked at this evidence and seen something. I’m not convinced it’s because of partisan politics.

Will it be enough there to convict Perry? Probably not

Can Rick Perry afford any more distractions and baggage? No.

At this point in his career Perry is hoping for more out of life than a lack of jail time and Republicans are not going to be interested in nominating a candidate whose flaws have been thoroughly investigated, documented, and reported. As I noted in an earlier post, Perry has already finished poorly in the Texas GOP straw poll. His candidacy does not need more problems.

Perry might still be able to pull it out. Nixon certainly did. However, citing Nixon as a model of redemption is not the most comforting image since the nation just commemorated the 40th anniversary of his resignation. Clinton (either one–maybe both) survived scandals. But again, we’re not talking about the name Republicans will enjoy referencing.

Fredo Corleone from the Godfather

Perry should be worried when Democratic strategist Robert Axelrod and Republican rivals offer up their support. Their embrace of Perry may have a very different meaning than he thinks.

The phrasing coming out of the spin machine is that this is an attempt to “criminalize” politics. That argument may resonate within the beltway in Washington or the political circles of Austin. Perry would be well served to remember that some Americans use the words “criminal” and political” interchangeably and probably wouldn’t mind putting Congress in prison. Perry (and everyone else in politics) would be wise not to embrace this argument because it equate embraces everything Americans hate about “politics as usual.”

This indictment is a serious problem for Perry. Strategists and pundits who dismiss it do so at their peril. There is a lot of this story left to play out. I don’t mind admitting that I don’t know what is going to happen. And, I’m in no rush. Perry is not on the ballot in 2014. Texans have other decisions to ponder.


Investing in a top-heavy bureaucracy

The Austin American Statesman has run several stories (“Management positions, salary increase at DPS while state trooper pay languish” and “State agencies defend executive pay“) that reveals how quickly administrative salaries have grown in the Department of Public Safety while the salaries of state troopers have lagged behind. A relatively few administrators receive high salaries while most of the people who do the day-to-day work of the government receive much less. Earlier this year the Dallas Morning New reported (“Audit: Texas governor, AG, land commissioner boosted staffs as state workers’ overall numbers shrank“) that while the state lost 3,200 employees, the governor, attorney general, and land commissioner’s offices grew. Texas also saw the Governor approve a big salary for his choice for education commissioner (“Texas Schools Chief Michael Williams Will Make $215K“), granting his political appointee a salary 15 percent above the amount appropriated for the position the year. Of course, that year also so large budget cuts to the Texas Education Agency and school budgets across the state. Meanwhile, we learned that the Governor’s Chief of Staff earned $325,000 a year–that after earning a $162,000 bonus as she left the Employee Retirement System (ERS) even as state employees were told that reductions had to be made to their benefits because of budget shortfalls.

We’re told that these salaries and bonuses are needed to compete with the private sector. However, they only seem to be worried about staying competitive on top executive salaries and I see much less interest in providing competitive salaries for everyone else.

The fact that our state’s leaders and their appointees have made giving pay raises to high level bureaucrats a priority while street-level bureaucrats like state troopers and teachers went neglected tells us that either this is what they want or that they are incompetent. I suspect most Texans are not going to like either answer.

Perry Security Costs Go Up

Apparently, Rick Perry’s campaign is the gift that keeps on giving (“Perry Security Costs Go Up“) and they’ve found another $900,000 in security expenses the state picked up. Perry had about $675,000 left over from his presidential campaign and it’s hard to understand why he used those excess funds to launch a Super-PAC rather than pay the state for the costs his campaign left on the shoulders of taxpayers.

More Tax Breaks for Sporting Events

The Texas Tribune has a story (“Tax Breaks for Sporting Events Raise Questions — Comptroller of Public Accounts“) on how Texas continues to subsidize major sporting events. We have already written about the state’s ongoing stimulus program for movies, major sporting events, and “emerging technology.” However, it seemed especially ironic to see another story on more subsidies on profitable events on the same day that the Austin-American Statesman ran a story (“Retired Teacher face health plan changes“) outlining how the state might hike premiums on the retired teachers who haven’t seen an increase in their pension checks in over a decade.

Perry keeping door open to another run for governor

The Austin American Statesman is reporting that Rick Perry is keeping door open to another run for governor. That’s actually smart politics. As I’ve pointed out before, Perry does not want to go into lame duck status any sooner than he has to. Perry has to lead the Texas Legislature through the next session and effective leadership will be much more difficult if he has announced his departure from Texas politics.

Rick Perry might have a tough time getting reelected and new Texas Tribune poll shows that 39% of respondents said they were unlikely to vote for Rick Perry in 2014 while 51% said they were unlikely to vote for Perry (with 42% of respondents saying they were very unlikely).

51% of Texans say they are unlikely to vote for Rick Perry in 2014.The poll also found that 45% of respondents disapprove (15% somewhat and 30% strongly) of the job Perry has done as governor and 49% have an unfavorable view (14% somewhat and 35% strongly) of him.

The most surprising result from the questions on Perry was that 55% of respondents believed that Perry’s candidacy had hurt the state’s image and only 6% said he had helped our image. I’m surprised that so many Texans think that one person could do much to the state’s image in a few months time and that some Texans would vote for him even when they thought he had done our image harm.

The bottom line is that it doesn’t matter how hard the road ahead is for Perry. Announcing his departure from Texas politics will only insure that his leadership will be undermined and he needs to appear interested if he wants to remain effective.

More fun with the Texas Constitution

The San Antonio Express-News is reporting (“Senate candidate Jones defends residency in two places“). Elizabeth Ames Jones’ candidacy for Texas Senate is being challenged her current job (Texas Railroad Commissioner) carries a constitutional mandate that she live in the “Capital of the State.”

Article 4, Section 23: of the Texas Constitution says:

The Comptroller of Public Accounts, the Commissioner of the General Land Office, the Attorney General, and any statutory State officer who is elected by the electorate of Texas at large, unless a term of office is otherwise specifically provided in this Constitution, shall each hold office for the term of four years.  Each shall receive an annual salary in an amount to be fixed by the Legislature; reside at the Capital of the State during his continuance in office, and perform such duties as are or may be required by law.

The problem? The term “Capital of the State” is not defined anywhere in the document. In fact, “capital” is used mainly in reference to expenses and punishment.

The Texas Constitution may effectively create a ban on a certain state officers running for the Texas Legislature (unless they want to represent Austin). Was that anyone’s intention? What does living in the Capital of the State include Round Rock? The Texas Attorney General gets to try to sort this out.