The Texas Observer

Several months ago Justice Nathan Hecht, the longest-serving member of the Texas Supreme Court, racked up some $450,000 in legal bills fighting a ruling by the State Commission on Judicial Conduct, which he paid through the kindness of campaign donors. Details are of that tawdry tale are here.

Now, as Texas Watch documented in a complaint filed today in Travis County, the problem is that Hecht didn’t actually pay that entire legal bill. Turns out he received a discount from his lawyers at the firm Jackson Walker worth about $100,000. While judges are allowed to collect contributions for legal defense funds, they are limited to $5,000 for individuals and $30,000 for PACs, including law firms. If considered the same as a campaign contribution, Hecht’s big discount could constitute one of several violations. Texas watch explains where the complaints were filed and why:

• Public Integrity Unit: The Texas Penal Code prohibits judges from accepting a gift from a party who the judge knows is likely to appear before him. As Jackson Walker is a prominent law firm with numerous clients with interests that are likely to come before the Texas Supreme Court, the discount the firm gave Justice Hecht was possibly an illegal gift. A violation of this statute is a Class A misdemeanor punishable by up to one year in jail and a fine of $4,000.

• State Commission on Judicial Conduct: The discount on his legal expenses is a gift that reflects adversely on his impartiality and is a possible exploitation of his position in apparent violation of the Canons of Judicial Ethics.

• Texas Ethics Commission: The $100,000 discount that Hecht received on his legal bills is an in-kind contribution in excess of the statutory $30,000 contribution limit that law firms are permitted to donate to judges and judicial candidates. A violation of this statute is punishable by a fine of three times the amount of the illegal contribution.

Alex Winslow, the watchdog’s executive director, is asking for a full investigation into the discount.

Hecht, for his part, has denied that any of the contributions to his defense fund would influence proceedings before his court.

Hecht’s lawyer, Chip Babcock, a high-profile First Amendment lawyer in Dallas, told Fort Worth Star-Telegram in April that any rules violations were unintentional. “I’ve said all along that I want to do the right thing, and if the right thing is that I’ve got to be paid more money, then so be it,” he told the paper. “I wouldn’t have done it that way if I thought it was going to cause a problem, especially not to Justice Hecht.”

by Matthew C. Wright

Our dear president tried last week to explain why more kids from working families shouldn’t have health insurance. It’s a tough sell, even to his own party. Bush tried to rationalize his threatened veto of an expansion of the ultra-popular and successful Children’s Health Insurance Program. “I believe government cannot provide affordable health care,” said Bush, according to the Washington Post. “I believe it would cause the quality of care to diminish. I believe there would be lines and rationing over time.”

(Or as fellow Texas Republican — and former state rep. — Arlene Wohlgemuth put it more succinctly several years ago, CHIP is a “socialized medical program.”)

Bush’s arguments that more health care for poor kids is actually a bad thing apparently didn’t go over too well even with the business set, as the Post reports.

The U.S. Senate Finance committee passed a CHIP bill last week on a 17-4 vote. The legislation would reauthorize the program, which Congress must re-up by Sept. 30, and hikes CHIP funding by $35 billion over five years. Bush thinks that’s way too much money to spend on those pesky kids. (of course $35 billion would barely cover three months worth of spending on Iraq and Afghanistan.)

The full Senate is expected to vote on the CHIP bill this week. The roll call may foretell if the Senate has the votes to override a potential presidential veto (an override requires a two-thirds vote). Then the question becomes will a veto-proof majority coalesce in the U.S. House. At this point, that appears unlikely.

by Dave Mann

Heather Burcham, the woman who made multiple impassioned appearances at the Capitol to argue for the importance of the HPV vaccine, lost her battle with cervical cancer Saturday. She died in Houston at age 31.

Because of an initial misdiagnosis when she was 26, Burcham and her doctors didn’t discover the cancer until it was too late. She lived the final months of her life devoted to telling people about the dangers of HPV and cervical cancer, a devotion that landed her at the center of a political firestorm last legislative session.

“I don’t want to have lived in vain. I don’t want my life to have no purpose whatsoever,” she told ABC News in February, when she was named their Person of the Week. “And if I can help spread the word about cervical cancer, and the HPV vaccine, then I haven’t lived in vain.”

I remember seeing Burcham in the Capitol on several occasions. The first time I happened to sit behind her at a committee hearing, after she had just endured her first day in the media spotlight, doing photo ops with the governor and interviews with state outlets. The committee hearing started very late, and then the initial “expert” testimony ran for several hours. You could see the struggle Burcham was having with her body — exhaustion pressing heavier and heavier on her slender frame.

In the end, that night Burcham was outlasted by habitual sophists like Dennis Bonnen, whose bill led the charge against Perry’s vaccine mandate. Sometime around midnight, Burcham turned to the Perry staffers who had been accompanying and supporting her and indicated she just couldn’t hold out any longer.

(Whatever disagreements one can have with Perry over his handling of the vaccine or the cruelty of his beloved tort reform to limit the access patients like Burcham have to the judicial system, we respect the sincerity in his relationship with her.)

Hours later, hearing chairwoman Dianne White Delisi called out Burcham’s name to testify. It was early in the session at that point, but looking back I can remember no moment simply so sad as the silence when no response came. Delisi instructed the clerk to record Heather Burcham — against the bill, not testifying.

Near the end of the session, the governor played a personal message from Burcham at the press conference announcing he would not veto the bill blocking his vaccine mandate. The video is available on YouTube and embedded below. Observer coverage of the HPV saga is here: part 1, part 2, part 3, part 4, part 5, part 6.

by Matthew C. Wright

As for as advocacy campaigns go, the one by several Texas environmental groups to get rid of Kathleen Hartnett White, chairwoman of the Texas Commission on Environmental Quality, couldn’t have worked much quicker. The campaign that began recently at GetWhiteOut.com was actually successful before it even started. White’s decision not to seek reelection to a second term at TCEQ was made months ago, a spokesman confirmed.

“I guess we could applaud this group for getting out in front of something that was going to happen anyway,” snarked Robert Black, a spokesman for the governor. Not that there was any official announcement of White’s leaving TCEQ, so I guess environmental types were just supposed to smell it in the wind — just wait for that sweet coal stench.

A little sampling from the Observer of White’s record last session, when she helped approve the permits for the nasty Oak Grove power plants:

At the hearing, a long line of elected officials warned commissioners that ozone-forming emissions from Oak Grove would further complicate plans for the Dallas-Fort Worth area to attain federal ozone standards, and would erase virtually all the Austin area’s expensive efforts to avoid a similar federal crackdown. The judges concluded in August, after hearing months of expert testimony and reviewing oceans of evidence, that TXU had failed to prove its technology could meet pollution goals specified in the permit application.

The 1,600-megawatt power plant will burn lignite, the dirtiest form of coal. …

“I think this is actually—and I know full well the intensity of the differing opinions—this is good news for Texas,” said commission Chair Kathleen Hartnett White. …

Commissioner Larry Soward, who cast the dissenting vote, repeatedly expressed exasperation at White during the hearing. “I’d like the record to reflect that I respectfully disagree with everything you just read,” Soward said after White, a West Texas rancher, read her pre-written legal justification for approving the Oak Grove permit.

The folks behind Get White Out have shifted their focus to influencing Perry’s appointment of White’s replacement. They’re calling for someone who, basically, takes this stuff seriously, not like it’s just some bureaucratic charade. Optimistically, they’re asking for Perry to appoint someone who won’t reflexively side with industry. Too bad that’s about as unlikely to happen as a CEO taking a pay cut.

by Matthew C. Wright

Drug czar John Walters, star of our previous post, has also been making national headlines with some campaign-trail hijinks, including … well, the fact that he was on the campaign trail at all.

Democratic Representative and muckraker Henry Waxman has been back at it this week, revealing that “White House officials arranged for top officials at the Office of National Drug Control Policy to help as many as 18 vulnerable Republican congressmen by making appearances and sometimes announcing new federal grants in the lawmakers’ districts in the months leading up to the November 2006 elections,” as the Washington Post put it. The California Congressman said he fears the Bush Administration’s politicization of the federal bureaucracy was more widespread than thought.

Waxman unearthed a couple memos — those things are really biting this administration in the ass — that suggest Walters and others gallivanted around the country at taxpayer expense in the service of Republican reelection efforts.

The Post provides the context: “The drug control office has had a history of being nonpartisan, and a 1994 law bars the agency’s officials from engaging in political activities even on their own time.”

During a press briefing at an Austin treatment center today, Walters was asked about attending Waxman’s hearings. He had not received an invitation, he said, but not before adding, “This is the part of Washington that I think people don’t like.” Walters then characterized the appearances as his office simply traveling around the country to announce grants, accompanied by “lawmakers who supported those efforts.”

“Every administration does this,” he continued, “and the effort to suggest that there’s something wrong with this … doesn’t affect the good work people are doing in our communities.” That sentence, in strictly logical terms, is true — the community work is not affected by any of this.

But his characterization of the trips doesn’t mesh with a memo (reproduced in full at the Mother Jones blog) written by his office’s White House liason, Doug Simon:

Presidential Personnel pulled together a meeting of all of the Administration’s White House Liaison’s and the WH Political Affairs office. Karl Rove opened the meeting with a thank you for all of the work that went into the surrogate appearances by Cabinet members and for the 72 Hour deployment. He specifically thanked, for going above and beyond the call of duty, the Dept. of Commerce, Transportation, Agriculture, AND the WH Drug Policy Office. This recognition is not something we hear everyday and we should feel confident that our hard work is noticed. All of this is due to our efforts preparing the Director and the Deputies for their trips and events. Director Walters and the Deputies covered thousands of miles to attend numerous official events all across the country. The Director and the Deputies deserve the most recognition because they actually had to give up time with their families for the god awful places we sent them.

I’ll go out on a limb and venture that Simon really wishes he could take back that “god awful” bit — ah, but then we wouldn’t have such a nice glimpse of the contempt for the public we’ve come to expect from the public servants in the White House these days.

by Matthew C. Wright

U.S “drug czar” John Walters was in Austin today, getting the Administration’s product out on local media’s corners. Walters, whose official title is Director of the White House Office of National Drug Control Policy, held a closed-door meeting with a variety of local officials (including new Austin PD chief Art Acevedo, left) as part of Bush’s community-based prevention program. The topic of his media briefing afterwards was increased teen abuse of prescription drugs. Really, though, what he was stumping for was every Draconian’s favorite prevention method: random, suspicion-less drug testing.

Walters called the Supreme Court decision allowing random testing a “watershed moment” in his office’s fight against drugs. The Supreme Court, employing some twisted logic, allowed testing of students involved in voluntary extracurriculars, but only so long as the testing was not used to punish students. Since then the Administration has been shilling for testing programs, throwing out grants to any takers. Texas, for one, just passed random steroid testing for high school athletes. Proponents’ main argument is that testing gives students an escape hatch from peer pressure — e.g., “Nah, man, I can’t. They test at my school.”

In support of the policy, the drug czar noted that teen drug use continued its downward trend last year. Although he never said so directly, his emphasis on random testing sure seemed designed to make it sound like testing helped drive these decreases. In fact, the downward trend in drug use began almost a decade ago after hitting a peak in the mid-1990s. (See page 2 of this PDF for an example.) Walters inherited the trend when he took over ONDCP in 2001, so he gets points for not messing up a good thing. But it’s disingenuous to imply that a policy that wasn’t even allowed until 2002 — and now, five years later, is in place in only 1,000 schools nationwide — is somehow critical.

There is, of course, a bigger problem with the claim: the data doesn’t back him up. The feds use the mammoth Monitoring the Future survey for their drug use data. An article in Slate reported that researchers from the same school that produces the survey, the University of Michigan, found that random drug testing did nothing to decrease teen drug use.

More information on arguments surrounding drug testing is available from the Drug Policy Alliance. The ONDCP’s faux-grassroots effort — “the first Cabinet-level agency with its own Weblog” — pushingback.com has the flip side.

by Matthew C. Wright

Texans for Public Justice recently launched a promising series of articles on the “misuse and abuse” of public funds called Watch Your Assets. Yesterday, episode 2 hit the web, focusing on the failures of privatization schemes so popular with the Texas Republican Party.

But we wanted to step back to the first offering in the series, which hasn’t gotten the attention it deserves. The exhaustive document is called “Gimme Shelter: Tax Shelter-Funded Affordable Housing.” It is a detailed, point-by-point rundown of how politically connected developers are milking the system that was intended to help low-income families find a decent place to live. The result is an astoundingly inefficient use of both state and federal resources.

The basic scheme goes down like this: The federal government hands down tens of millions in tax credits to the state, intended to finance the development of affordable housing projects (usually apartments). The Texas Department of Housing and Community Affairs, an agency headed by political appointees, decides which projects receive the credits.

Shocker Number 1:

TDHCA awarded $133 million in federal tax credits to private developers from 2004 through 2006. Because these credits can be used every year for a decade, their face value is a whopping $1.3 billion over their 10-year lifespan. While other federal taxpayers must cover the full cost of these tax breaks, the actual amount of money spent on affordable housing is considerably less.

The developers in turn sell the credits to private investors in order to generate the up-front cash they need to do the development.

Shocker Number 2:

As a result, the actual amount of money spent on low-income housing dwindles considerably as each person in the chain takes a bite out of this taxpayer asset. A recent study of Missouri’s tax credit system, for example, found that just 35 cents of every tax-credit dollar is used to develop affordable housing.

In addition to their expected cut, developers can also increase profits by hiring themselves or partner companies as contractors, taking that cut along the way, too.

To top all this off, studies have shown that the resulting developments, even when they work as intended, only provide a benefit to families making around 60 percent of their area’s median family income — in other words, the poorest of the population are not being served. Families that make 50 percent of the median or less, TPJ found, receive no benefit from these taxpayer-backed projects and are still forced to use more than half their income on housing costs.

And this is the cleaned-up system after the Lege reformed the agency in 2001 and 2003 — and after the FBI had been called in because of corruption in the ranks, documented in TPJ’s report.

Even after all that, we get Shocker Number 3:

Creating another appearance problem for Texas’ affordable-housing system, some TDHCA staff and board members who left the agency at the height of the 1990’s scandals have gone on to receive TDHCA tax credits of their own. After resigning under fire in 2001, former TDHCA tax-credit manager Cherno Njie received $11.2 million in tax credits in 2006 for the Langwick Senior Residences in Houston.

It’s all pretty complex to track, which is probably the point, making it easier for the politically connected to get the most from the system. The second half (yep, only halfway through) of the TPJ report goes through the litany of well-connected developers who have received the bulk of the tax credits, and who happen to make nice contributions to the campaigns of Mssrs Rick Perry, David Dewhurst, and Robert Talton.

My personal favorite example is R.L. Bobby Bowling of El Paso, who “helped craft the controversial Texas Residential Construction Commission in 2003.” That would be the state agency billed as a way for homebuyers to quickly resolve grievances with homebuilders — except it actually ended up helping builders simply ignore the aggrieved, as detailed in the Observer.

But wait, there’s more. An article last March in the Fort Worth Star-Telegram looked into the dealings of Texas State Affordable Housing Corp., another state affordable housing program, and found a similar pattern. The TSAHC offers state backing for bonds that non-profit developers use to renovate properties for low-income housing. But because the state is not financially liable for the bonds — it just helps developers get a low interest rate and more delicious tax breaks — it has no enforcement power to make developers follow through. On top of that, roughly 90 percent of the developers at the time of the paper’s investigation had defaulted on their bonds, leaving behind largely unfinished projects.

Reported Yamil Berard:

In addition, the apartment complexes created financial burdens for local governments and school districts because they were exempted from property taxes when nonprofit agencies bought them.

Not everyone suffered financially. A number of the complexes in the multifamily program were purchased at two to three times their appraised value, totaling tens of millions of additional dollars. In many of those cases, the seller was a company affiliated with Dallas’ Hicks, Muse, Tate & Furst.

Many of the companies involved in defaults blame poor market conditions for the failures, but one constituency saw a bull market: the bondsmen. “In 2002, the financial advisers, rating agencies and experts who put together the bond packages for the state housing program racked up the highest fees for municipal bonds issued in the state that year. The state average was $9 per $1,000 of bonds issued; Texas State Affordable Housing Corp. bonds, on average, were $35.54 per $1,000 of bonds issued.”

Chalk it all up, and a good chunk of affordable housing money sure seems to be going toward making it easier for the well connected to afford better housing.

by Matthew C. Wright