Gov. Perry may have a new look, yuppie glasses and all, but it is still business as usual in Austin. Last year, we showed numerous examples of cronyism, specifically the Texas Enterprise Fund (TEF), where hundreds of millions of Texans’ tax dollars were being given to multi-billion companies and in turn were giving millions in campaign contributions to Gov. Perry, Lt. Gov. Dewhurst, and House Speaker Straus (the three control the TEF). Despite a law being passed in 2013 to audit the fund, our report on the issue, and numerous media outlets covering the controversy, the fund still remains in full swing.
Since our report in 2013, 14 new companies have been added to TEF’s award rolls, and one company, Dow Chemical, was given a second award. From 2013 to date, over $48 million of Texans’ tax dollars have been passed on to companies whose combined annual revenues surpass $400 billion. With these new additions, the TEF has reached over $519 million in awards since the fund began in 2003. To put this in perspective, that total amount the TEF has given would very nearly fund our entire Department of Agriculture for a year. But, the Big Three hasn’t come close to emptying the TEF’s budget, as there is over $106 million still available on the balance sheet until 2015.
Unfortunately and once again, the companies receiving these awards appear to have very close ties with the power players in Austin. As you can see in the attached list above, nine out of the 15 companies that were awarded from 2013 to date have employed Austin lobbyists and/or donated, either through the company, the employees, or the lobbyists, to the campaign war chests of Perry, Dewhurst, and Straus. Overall, Perry, Dewhurst, and Straus have received a combined $1.063 million in contributions from those 15 recipients, reaching a total of $11 million from every TEF award recipient.
One company, Athenahealth, happens to owned and run by Jonathan S. Bush, the cousin of Texas political newcomer, family dynasty member, and most likely our next Land Commissioner, George P. Bush. Whether that connection played a role in Athenahealth receiving such a large award while only promising to invest $13 million in Texas is unknown; however, the timing, just two months before the primary election, and obvious relationship makes the whole situation highly suspect. Jonathan Bush, after all, was not isolated from George P. as he donated $4,000 to his campaign.
Another award recipient, Ascend Performance Materials, has a record of using bully tactics to receive government assistance. Just one month after receiving their $1 million TEF award, Ascend threatened to move a $1.2 billion project to Louisiana if the Alvin Community College Board of Regents didn’t provide them with a 10-year, $18.39 million tax abatement. This was on top of a 10-year, $41 million abatement it had already received from Brazoria County.
Also of note is the deviation away from the TEF’s stated main goal, “to attract businesses to Texas.” Five of those 15 companies, having received over $13 million in awards, are already located in Texas. It would appear the lobbying/contributing efforts by four out of those five Texas-based companies have encouraged the Big Three to set aside their mission.
To be clear, there is nothing wrong with large, profitable corporations, but there is a problem when they become large and profitable on the backs of the tax payer and reward politicians for opening the door. That is the very definition of corporatism, cronyism, crony capitalism, or corporate welfare. It’s clear that they really don’t need our tax dollars, as the millions given to them wouldn’t make a dent into the hundreds of billions they earn every year. Wouldn’t those tax dollars be better used to pay off our debt, fix our roads, or increase our water supply?
Perry, Dewhurst, and Straus all label themselves as conservatives, yet conservatism embraces limited government and free markets. The TEF is the epitome of increased government influence and distorted markets. Just because they say they want Texas to be “business-friendly” does not necessarily mean they are market-friendly. Remember, these are the same leaders who blocked Tesla Automotive last year from competing in the state. The evidence indicates that their version of business-friendly simply means being friendly to the highest bidding business.