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Dueling Houston Donors Take Feud to Presidential Campaign

Photographer: Scott A. Miller/AP Photo

The Texas State Capitol in Austin. Close

The Texas State Capitol in Austin.

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Photographer: Scott A. Miller/AP Photo

The Texas State Capitol in Austin.

Fliers distributed at the Texas Republican convention last month depict Democrat Steve Mostyn in a menacing sketch, asking why he’s trying to “infiltrate” their party. A companion website, largely financed by rival Bob Perry, warns of Mostyn’s “invisible hand” in state politics.

Mostyn associates are returning fire. One of his employees runs a website that features a mugshot-style photo of Perry, with the claim that he’s the one taking over Texas politics.

It sounds like routine, political mudslinging. It isn’t, and here’s the odd part: They aren’t candidates; they’re wealthy donors who have given millions to state lawmakers.

Now, the Lone Star State feud is spilling into the presidential campaign as Mostyn, a Houston trial attorney, is helping Democrats try to match the millions that Perry, a Houston home builder, has given to super-political action committees running attack ads in swing states.

“If they get into a race, they define that race,” says Bill Miller, who has been involved in Texas politics since 1985 and whose lobbying firm represents Perry in Austin. “They’re cut from the same bolt of cloth. They give to whoever they want, when they want and in the amount they want. And they both do it for the same reason -- outcome.”

Super-PAC Donations

Mostyn, 41, an East Texas native with a linebacker’s build and a goatee, gave $1 million in May to Priorities USA Action, a super-PAC backing President Barack Obama. He’d been wooed by Democratic strategists Paul Begala and Bill Burton during a four-hour conversation aboard Mostyn’s yacht in Fort Lauderdale, Florida.

Later this month, Mostyn will introduce the Priorities duo to other wealthy Texas Democrats, he said in an interview. They’ll spend three days in a half-dozen meetings in San Antonio, Dallas, Houston and elsewhere, flitting to each location in Mostyn’s Hawker 750 plane.

“There’s a lot of money here, but nationally, we’ve been forgotten because we haven’t been in play,” Mostyn said. It has been 36 years since Texas went for a Democratic presidential candidate. His wife and fellow attorney Amber Mostyn gave $500,000 to House Majority PAC, which supports Democrats for Congress.

Obama Texas Fundraisers

Obama will attend fundraisers tomorrow in San Antonio and Austin, and Mostyn will be present for the one at the home of San Antonio trial lawyer Mikal Watts.

Perry, 79, has donated to a super-PAC devoted to electing presumptive Republican presidential nominee Mitt Romney, giving $4 million to Restore Our Future. He contributed another $2.5 million to American Crossroads, a super-PAC that works to elect Republicans in Congress in addition to helping Romney. Crossroads was formed with the help of Karl Rove, a former political adviser to President George W. Bush.

Born in a one-room house in central Texas, Perry founded and controls closely held Perry Homes, the largest home builder in the Houston area, according to the Houston Business Journal. The company earned $325 million in local revenue in 2011, the Business Journal reported. Perry declined through a spokesman to be interviewed.

Mostyn also comes from humble means and was the first in his family to finish college, receiving his law degree from the South Texas College of Law in 1996. Three years later he founded the Mostyn Law Firm, which now has 170 employees including 32 attorneys at five offices across the state. The firm has represented 20,000 clients and earned about $30 million in fees from settlements for residents whose homes were damaged by Hurricanes Ike, Rita and Dolly.

Key West Yacht

The Mostyns and their 5-year-old daughter and 11-year-old son primarily live in a modernist house in Houston that has an assessed value of about $6.6 million. They also have a home on Lake Lyndon B. Johnson in the Texas Hill Country and in Key West, where the yacht is normally docked.

Mostyn is as extroverted as Perry is introverted, said Miller and Democratic state Senator John Whitmire, who know both men. Mostyn was head of the Texas Trial Lawyers Association last year -- the youngest to lead the group -- and is a fixture in the state house, the back door to which leads to the trial lawyers’ building.

“They’re two strong-willed people with major resources who are squaring off,” said Whitmire, who has accepted campaign contributions from both men. “That’s what makes the world interesting and elections challenging.”

Legal System

Like many Texas political players, Mostyn and Perry are driven by calls for changes in the legal system, said Craig McDonald of Texans for Public Justice, an Austin-based nonprofit that tracks campaign giving in the state.

Perry wants to curb the ability of people to sue companies -- including his own, while Mostyn, who earns his income as a plaintiff’s attorney, wants to make it easier to go to court.

“Tort reform has really defined Texas politics for the better part of two decades,” McDonald said.

In the national arena, Mostyn said he’s trying to prevent federal politics from following Texas’s move to the right, a model called “frightening.” He also said he supports Obama’s health care and education policies and doesn’t want to see more Republican-nominated justices on the U.S. Supreme Court.

Perry supports Romney because “he is a proven business leader with a history of job creation who recognizes the federal government does not have unlimited power,” said Anthony Holm, a Perry spokesman.

Feud Begins

The feud began in 2008, when Mostyn emerged as a major Democratic contributor. Within two years, he’d surpassed Perry as the top political giver in Texas -- a state that has no donation limits.

Mostyn, his wife and law firm in 2010 gave $9.7 million; ranked right behind them were Perry and his wife, Doylene, who gave $8.3 million, according to Texans for Public Justice.

Perry backed the re-election of Governor Rick Perry, who is not related. Mostyn supported former Democratic Houston Mayor Bill White in the gubernatorial race.

Their giving isn’t limited to candidates; they’ve each funded a network of political action committees.

Some Mostyn-funded groups are Back to Basics, Texas Values in Action Coalition and Texans for Insurance Reform. Perry’s preferred groups include the Texans for Lawsuit Reform, the Associated Republicans of Texas Campaign Fund and Hispanic Republicans of Texas.

‘The Invisible Hand’

Perry is the single largest donor to Texans for Lawsuit Reform, having given $2.3 million to the group between 2001 and 2010, according to Texans for Public Justice.

In 2010, Texans for Lawsuit Reform posted a website called “The Invisible Hand of Steve Mostyn,” which shows a spider web-like chart of Mostyn groups and the candidates they support.

The group also handed out fliers at the state Republican convention in June questioning why Mostyn is supporting Republican primary candidates.

“As he became more prominent in opposing pro-tort reform candidates, we believed the best message in countering his challenge was to say this man is the largest funder of Democrats in Texas and is a personal injury trial lawyer who has a self- interested agenda,” said Sherry Sylvester, the group’s spokeswoman.

Like-Minded

Mostyn shrugs off what he calls the campaign to “reveal” him, noting that he is backing Republicans who agree with his position on preserving the right to bring lawsuits.

“When you control the whole damned state, you’ve got to make somebody the boogeyman in order to keep raising money,” he said. He doesn’t dispute the Republicans’ characterization of him as the donor-in-chief of the state Democratic Party. He questions its importance in a state where Republicans control the state legislature and have held the governor’s office since 1995.

“Being captain of the JV team is really not that powerful of a position,” he said.

Mark McCaig is a lawyer in Mostyn’s Houston office. He also calls himself “a lifelong conservative Republican” and maintains a group called Texans for Individual Rights, which bills itself as a Republican group devoted to “exposing” the agenda of Perry-funded Texans for Lawsuit Reform.

Anti-Perry Website

Texans for Individual Rights’ website “Stop TLR,” lists Perry among the “men who control Austin politics.”

McCraig said he started the campaign against his fellow partisan because “I think Bob Perry is interested in protecting Bob Perry’s pocketbook.”

That’s the same accusation Mostyn’s adversaries lodge against him. Their prime bit of evidence is a May 5, 2010 donation of $25,000 that Mostyn made to Republican state Representative Todd Hunter.

Hunter has voted against Mostyn’s interests when it comes to tort reform and has received money from the Perry-funded Texans for Lawsuit Reform. What raised eyebrows was the timing of Mostyn’s check.

Days after accepting the Democratic contribution, Hunter was selected as mediator in a lawsuit against the state’s insurance fund filed by thousands of Gulf Coast Hurricane Ike victims. Under his supervision, the parties arrived at a settlement in which the Texas Windstorm Insurance Association paid $189 million to Galveston County residents whose homes were wiped out by Hurricane Ike. Mostyn led negotiations for the residents.

Mostyn said the campaign money was “totally unconnected to” Hunter’s work as a mediator. They’ve known each other for years, and Mostyn asked Hunter if he’d take trial attorney money since he was taking campaign contributions from insurers, both Mostyn and Hunter said in interviews.

“Anybody who wants to give, great,” Hunter said.

To contact the reporter on this story: Julie Bykowicz in Washington at jbykowicz@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net

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