Cronyism Runs Deep in Perry’s Texas

Last week the Wall Street Journal introduced us to Rick Perry’s Crony Capitalism – tax payer funds benefiting Perry’s financial contributors – and this week the New York Times acquaints us a little better:

Mr. Perry has also drawn scrutiny for two of his signature economic development efforts, the Texas Enterprise Fund and the Texas Emerging Technology Fund [tax-payer funded -ed.]. The enterprise fund, which is intended to be a deal-closing tool for the state as it competes for jobs, has dispensed $435 million in grants to businesses since 2003. The technology fund, which has doled out nearly $200 million to companies since 2005, has a similar job creation mandate.

More than a quarter of the companies that have received grants from the enterprise fund in the most recent fiscal year, or their chief executives, made contributions to either Mr. Perry’s campaign dating back to 2001 or to the Republican Governors Association since 2008, when Mr. Perry became its chairman, according to an analysis by The New York Times.

Some examples:

The award to G-Con is just one example of state money paying dividends for Perry benefactors. The company is working with the Texas A&M university system on a pharmaceutical manufacturing effort toward influenza vaccines.

Among G-Con’s officers, according to records filed with the Texas secretary of state, is David M. Shanahan, who also has a significant ownership stake in the company. He is also the founder and president of Gradalis, a biotech firm based in Dallas that received a separate $1.75 million grant from the state’s technology fund in February 2009.

Campaign finance records show that Mr. Shanahan contributed $10,000 to the governor in November 2009. The following month, G-Con filed its application for an enterprise fund grant, said Lucy Nashed, a spokeswoman in the governor’s office. (Mr. Shanahan also donated $5,000 in 2007.)

State records from a network of firms associated with G-Con also list Mr. McHale, the longtime Democratic donor, as an officer.

Patricia Haigwood, a spokeswoman for G-Con, said Friday that Mr. McHale, who did not return messages asking for comment, was one of the original board members of G-Con. But she said he left the company in late April 2010 and had not made an investment in G-Con.

Gradalis, however, controls 10 percent of G-Con, corporate records show. And Mr. McHale and James R. Leininger, a San Antonio businessman who has given more than $230,000 to Mr. Perry, have minority interests in Gradalis, Ms. Haigwood said.

Gradalis’s technology fund grant came under scrutiny last year when The Dallas Morning News revealed that Mr. McHale and Mr. Leininger, both major Perry donors, had significant financial interests in the company.

And another:

In 2003, after a rash of mold-related lawsuits against home construction companies, Mr. Perry championed the creation of a state board, the Texas Residential Construction Commission. The new commission was a priority of Mr. Perry’s most generous contributor: Bob Perry, a homebuilder who has contributed more than $2 million to the governor over his career. (The two men are not related.)

The legislation creating the board also sharply limited the rights of homeowners to sue contractors for faulty construction, shunting most disputes to the commission. After its passage, Bob Perry and his wife sent two $50,000 checks to the governor’s campaign. Three weeks later, the governor appointed an executive of Perry Homes, Bob Perry’s company, to the commission, which was abolished in 2009.

Now, perhaps it’s just me, but I don’t think financial favors for the politically connected is the best use of tax payer money. Frankly, this is the sort of business-as-usual behavior the American people are tired of seeing in politics and, for the life of me, I can’t see how or why this would appeal to Tea Party Republicans. So be sure to read the whole thing.

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