GOP presidential hopeful Rick Perry,
who is running an ad this week in Iowa promising he would stop
Washington politicians from cashing in on their jobs, has mixed personal
and official business on occasion as Texas governor.
Shortly after he entered the
governor’s office in 2001, for instance, Perry reportedly bought land
from a state senator at a below-market price and then turned an $850,000
profit just six years later. Along the way, at least two people—a
lawyer and real estate broker—involved in the deal landed state
appointments from Perry. Likewise, the Texas governor named two partners
in a natural gas venture he co-owned to plum state jobs, The Daily
Beast has confirmed.
Such transactions during his tenure
lead some ethics observers to question whether Perry’s current attack
on Washington ethics smacks a bit of hypocrisy.
“Perry’s not known for his
consistency,” says Melanie Sloan, the director of the nonpartisan ethics
watchdog group Citizens for Responsibility and Ethics in Washington.
“The fact that he’s being hypocritical on this issue is not surprising.
It’s convenient.”
Perry’s campaign takes umbrage at
any suggestion that the Texas governor did anything wrong, noting his
Texas appointments required independent state Senate confirmation, and
that the governor placed all his financial investments in a blind trust
in 1998, leaving control of investment decisions to a broker outside his
control. The governor keeps his personal matters and official business
distinctly separate, campaign spokesman Ray Sullivan told The Daily
Beast on Wednesday.
Whatever the case, Perry’s
struggling campaign has pivoted this week to the question of Washington
ethics, taking advantage of stories earlier this week in Newsweek and on
CBS’s 60 Minutes highlighting members of Congress whose personal stock transactions created the appearance they were cashing in on their jobs.
Perry’s ad promises he would support a law as president that would lock
up any lawmaker who tried to profit from insider trading.
In his state, though, Perry might have difficulty facing his own questions about insiders connected to his businesses.
A 2010 investigation by the Dallas Morning News detailed
how Perry in 2001 bought a half-acre plot next to Lyndon B. Johnson
Lake in a resort known as Horseshoe Bay in Texas Hill Country. Through a
series of transactions, Perry bought the land from a state senator,
Troy Fraser, for $300,000, about $150,000 less than an independent
analysis had said it was worth. Six years later, Perry sold the land for
$1.15 million, netting more than $800,000 in just six years, as the
resort was built up around the property and the entire region grew in
value, according to details published by the newspaper and verified by
The Daily Beast.
At least two players involved along
the way in the land transaction ended up with state appointments.
Colleen McHugh was an attorney Perry hired to fight his property tax
bill related to the deal. He didn’t pay her money, according to the
investigation, but while she litigated the deal that ended up saving
Perry about $14,000, she also was serving as chairwoman of the Texas
Public Safety Commission, a position Perry had appointed her to. A year
later, she was nominated for a seat on the University of Texas Board of
Regents, also by Perry.
Ron Mitchell, the man who
reportedly brokered Perry’s 2007 sale, was appointed by Perry two years
later to a seat on the Texas State University System’s Board of Regents.
McHugh declined to speak about the matter. Mitchell did not respond to requests seeking comment.
Earlier this fall, The Daily Beast’s Steve McVicker reported on another Perry deal
whose partners landed state jobs. Perry’s investments in MKS Energy, a
Texas firm that controls nearly $3.4 million in gas rights in a
prominent Texas shale field, earned him $25,000 last year.
The company was founded by one of
Perry’s friends, Ric Williamson, who is now deceased, and was a former
colleague and mentor of Perry’s in the Texas state legislature. In 2001,
after taking over as governor, Perry appointed Williamson to a seat on
the Texas Transportation Commission. Williamson advocated for Perry’s
ultimately doomed plan to build a 4,000-mile toll-road system called the
Trans-Texas Corridor that would have run through property owned by MKS.
Williamson died in 2007. One year
later, Perry appointed Williamson’s widow, Mary Ann Williamson, to the
Texas Lottery Commission. Two years later, he elevated her to become the
commission’s chairperson. Williamson didn’t respond to The Daily
Beast’s calls last month.
“The fact that he’s being hypocritical on this issue is not surprising. It’s convenient.”
Sullivan, the campaign spokesman,
said there was no connection between the governor’s business dealings
and his appointments. “Perry appointees are all subject to Senate review
and confirmation,” Sullivan said.
A liberal-leaning watchdog group,
Texans for Public Justice, has questioned Perry’s blind trust. The
governor knew his partners in the company, the group has said, and
appointed them to state offices while his stake in the company was
generating him personal income.
Perry’s blind trust “does not appear to be totally blind—except to the extent that love is blind,” the group said last month.
Daniel Stone is Newsweek's White House correspondent. He also covers national energy and environmental policy.
For inquiries, please contact The Daily Beast at editorial@thedailybeast.com
Rick Perry proposed this week locking up lawmakers who use their position for personal gain. But as Texas governor he mixed state and personal business on occasion, Daniel Stone reports.
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