Perry’s Texas Friends Find Donations Dovetail With Contracts

When Texas billionaire Harold Simmons wanted to build a radioactive waste dump, one data point that would loom large in the permitting process wasn’t required on the application: He is a major donor to Governor Rick Perry.

“Everybody was aware that this was an important item for the people that were seeking the license as well as for the governor’s office,” said Larry Soward, a Perry-appointed, Republican member of the Texas Commission on Environmental Quality at the time of Simmons’s permit application.

Simmons, who has donated more than $1.2 million to Perry’s campaigns, was granted the permit over the objections of some TCEQ staffers concerned the site threatened the Ogallala Aquifer, a water source for much of the plains.

At least three commission employees resigned in protest and Soward voted against the permit. Meanwhile, a state employee who advanced the permit became a lobbyist for the company a month after it was approved.

The permit process for the site, run by Simmons’s company Waste Control Specialists LLC, a subsidiary of the publicly traded Valhi Inc. (VHI), is one example of how Perry’s donors’ close ties to the governor can influence government grants, appointments and permits.

Perry’s Aug. 13 entry into the 2012 Republican presidential primary is casting new light on his record and adversaries are using it to challenge his candidacy.

Political Attacks

“As Americans look past his swagger, they’ll see he represents more of the same lobbyist-run politics as usual that they despise,” said Rodell Mollineau, president of American Bridge 21st Century, a Washington-based Democratic opposition research group. Perry spokesman Mark Miner didn’t respond to requests for comment.

Jim Henson, project director at the Texas Politics Project at the University of Texas at Austin, said it isn’t unusual in the Lone Star State for governors to favor business allies.

“Perry’s accumulated a long list of these stories,” said Henson. “It’s always discomforting to look at these things, when somebody is on one spreadsheet for campaign donations and then shows up again on another spreadsheet for government contracts or political appointments,” he said.

Waste Control Specialists spokesman Chuck McDonald said no favoritism was shown and the review was more rigorous to avoid any appearance of impropriety.

“Since the owner of the company is a well-known, longtime, multi-decade contributor to all conservative office holders, that made everybody want to make sure that the process was thorough and complete,” McDonald said.

Perry Record

Perry has a public record of rewarding his political donors with jobs and state contracts. He has appointed about 4,000 people -- including many donors -- to commissions, boards and other posts, according to Texans for Public Justice, an Austin- based, nonpartisan group that tracks state political donations.

Last week, Perry named James Lee, president of JHL Capital Holdings, to the Texas Higher Education Coordinating Board. Lee, who served on Perry’s 2011 inaugural committee, has donated more than $190,000 to Perry’s campaigns during the last decade, according to Texans for Public Justice.

The governor also appointed Dan Friedkin, chief executive officer of The Friedkin Group, chairman of the Texas Parks and Wildlife Commission. Friedkin is the third most generous individual donor to Perry, contributing more than $750,000 during the last decade.

Business Grants

In addition to appointments, the governor controls two business development funds to lure companies to Texas, help them grow, and develop new industries. The funds are administered by the governor’s office and Perry has final approval of all awards.

The Texas Enterprise Fund has distributed more than $400 million in grants to 71 companies since 2004, according to a state auditor report. Perry donors have been recipients, including an April 2006 $500,000 grant to Sanderson Farms, whose Chief Executive Officer Joe Sanderson has given Perry $165,000 in campaign contributions.

Simmons, chairman of Contran Corp., a holding company that owns Waste Control Specialists, is the governor’s second largest individual donor.

In addition to giving more than a million dollars to the governor’s campaigns, Simmons, 80, donated at total of $600,000 to the Republican Governors Association when Perry served in its leadership in 2007, 2008 and 2011, according to data compiled for Bloomberg by the Center for Responsive Politics, a Washington-based group that tracks political money. As Perry faced both a primary and general election challenge last year, Simmons gave the RGA $1.1 million, funds the organization used to help re-elect its members.

Swift Boat Group

Simmons has been a Republican political benefactor for years. He donated $4 million to the Swift Boat Veterans for Truth that questioned Democratic nominee John Kerry’s Vietnam war service in the 2004 presidential election. Last year, he gave $1 million to American Crossroads, a group founded with help from former Bush adviser Karl Rove, according to the center.

Simmons’ expansion into radioactive waste storage began in Texas in 2003, when his company urged state lawmakers to pass legislation allowing a private company to build and run a low- level disposal site that would be owned by the state, according to McDonald. Perry signed it into law on June 20, 2003.

Three Applications

A year later, Waste Control Specialists, which ran an existing hazardous waste site in Andrews County in West Texas, applied for three permits to dispose of radioactive waste.

The plan was to build three facilities on the 1,300-acre site in Andrews County. One facility would take waste from federal government national labs and military bases; another would take waste from nuclear plants, hospitals and other sites in Texas and Vermont, as part of a joint disposal agreement; and a third site would dispose of radioactive “by-products” from anywhere.

The permits had to be approved by the Texas Commission on Environmental Quality, whose three commissioners were all appointed by Perry.

Environmentalists raised concerns because the site was near the Ogallala Aquifer, which provides water for drinking and agriculture from Texas to Nebraska. The engineers and geologists reviewing the application for the commission said it didn’t address those water contamination concerns. Glenn Lewis, part of the TCEQ team that reviewed the permit, called the initial application “laughably deficient.”

Texas Water Board

According to Lewis, the initial maps from the Texas Water Board -- where five of the six members were appointed by Perry - - showed the proposed disposal site was on top of the aquifer. Waste Control Specialists drilled 560 borings and 450 monitoring wells mapping the water and shared the data with the water board. In 2006, the water board changed the maps, moving the Oglalla’s boundaries away from the Waste Control Specialists’ site.

The new maps didn’t resolve the issue for the commission’s engineers and geologists, who were still unsure the facility could prevent radiation contamination of groundwater.

On Aug. 14, 2007, the review team wrote a memo explaining their concerns that concluded, “Issuance of a license for the proposed facility cannot be recommended.”

Two months later, the executive director of the agency, Glenn Shankle, drafted the first permit and recommended commission approval. Two agreed, and Soward voted no.

Permit Opposition

In an interview, Soward said he hadn’t concluded the facility shouldn’t be located in Andrews County. He was opposed because of outstanding questions about the geology and the process.

“There was an overriding issue out there that the agency had somehow improperly handled the applications,” Soward said. “I thought this whole matter should be subject to a very open and involved contested case hearing to shine the brightest possible light on these issues.”

Three members of the technical review team, including Lewis, resigned or took early retirement to protest the permit approval. Soward, who had served as a deputy to Perry when the governor was agriculture commissioner, didn’t seek another appointment to the commission and said he is no longer close to Perry.

Shankle said he never saw the staff memo that recommended against permit approval, and he said he was wasn’t pressured by the governor to advance the permit. He began talks with Waste Control Specialists about a job during the permitting process. The commission approved the permits six months after he left, he said. A month later, he became a lobbyist for the company.

“We agreed that we would not come to an agreement about whether I was going to work with them until after the commission decided on the permit. There was no influence whatsoever in this matter,” Shankle said in an interview.

To contact the reporter on this story: Alison Fitzgerald in Washington at afitzgerald2@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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