December 17, 2004

BY ANDREW WHEAT

Future historians may single out the ongoing criminal probe of Tom DeLay’s Texans for a Republican Majority (TRMPAC) as the catalyst that pushed the modern Texas lobby into postmodernism. Heretofore the time-honored way to join Texas’ lobby elite was to amass political connections by pressing a shoulder to the Capitol’s massive revolving door. Up-and-coming lobbyists were dogged by just one question: Do I have enough stroke? Within that system it was unthinkable that a lobbyist could have too much heft. The TRMPAC probe imperils this naïve age of innocence by raising the postmodern possibility that lobbyists can amass excessive clout and connections. Taken to the extreme, a lobbyist and government become indivisible. By these measures, Mike Toomey appears to be Austin’s first postmodern lobbyist.

After Governor Rick Perry—who was Toomey’s roommate when both men served in the Texas House—picked Toomey to be his chief of staff two years ago, the Observer noted that GOP leaders were eliminating the middlemen between special interests and government by letting corporate lobbyists run the government [“The Lobby Reinvents Government,” December 6, 2002]. At that time Toomey had 42 clients (including Philip Morris, Enron, the American Insurance Association, Aetna, CIGNA, USA Managed Care, Merck, and Texans for Lawsuit Reform) paying him up to $1.9 million.

On retainer

Although the details have never been made public, Toomey apparently did not leave this gravy train completely behind. In the last weeks of 2002, fellow revolving-door lobbyist Bill Messer formed a new firm, the Texas Lobby Group, which scooped up Toomey lobby partner Ellen Williams along with many of Toomey’s old clients. It was an open secret that the governor’s new chief of staff had consecrated this new firm. The lobby business of firm President Bill Messer almost doubled from 24 clients who paid him up to $1.2 million in 2001 to 45 clients who paid him up to $2.1 million in 2003. An unnamed lobbyist told the Dallas Morning News in 2002 that this new firm allowed Toomey to “park his clients while he is on the governor’s payroll.”

Sure enough. Toomey did not skip a beat when he resigned from the governor’s office this September—amid rumors that he might surface in the next wave of TRMPAC indictments. On October 1 he filed corporate records with the Secretary of State that identified himself as the registered agent of the Texas Lobby Group (which now also would do business as the Texas Lobby Alliance). Meanwhile, Toomey began reporting lobby clients. Half of these initial clients had retained Toomey in 2002 and had been represented in the interim by partners Messer and Williams. Reached for comment on this story, Toomey confined himself to a brief statement. Noting that his state lobby registration data “is up to date and accurate,” Toomey added, “That’s all I’d like to say.”

Manchurian candidate?

While Toomey kicked up a storm of conflicting interests by barreling from lobbying to government and back again like a Tasmanian devil, this alone does not put him in a class of his own. Two factors separate Toomey from the rest. First, as a top lobbyist in 2002 he orchestrated legally questionable plans to spend millions of dollars in corporate money to elect a Republican Texas House majority. Second, as the governor’s right hand immediately thereafter, he leveraged these chits to promote aggressively the agenda of corporations that were his once and future employers. Some lawmakers privately say that Toomey aggressively worked them over during the 2003 session to promote a gubernatorial agenda that often eerily mirrored the agenda of Toomey’s old clients. If Toomey’s old clients had placed a Manchurian candidate in the Governor’s Mansion, it is hard to imagine how his or her policies would have differed from those of Governor Perry. Toomey’s top client this year—repeat customer Texans for Lawsuit Reform (TLR)—exemplifies both of Toomey’s distinguishing characteristics. TLR, which saw its agenda championed by Governor Perry, also had a heavy hand in the GOP House takeover.

As Observer readers know, a Travis County grand jury is investigating allegations that the Texas Association of Business (TAB) and Tom DeLay’s Texans for a Republican Majority PAC (TRMPAC) illegally spent $2.5 million in corporate funds to elect a Republican House Majority in 2002. Among other witnesses, the grand jury already has subpoenaed the testimony of Toomey partner Ellen Williams, as well as Matt Welch, director of TLR’s PAC (which bankrolled essentially the same slate of GOP House candidates in 2002). The grand jury appears to be weighing evidence to determine if any of this coordination amounted to a criminal conspiracy to break Texas’ prohibition on corporate electioneering. If such a conspiratorial web is uncovered, it is hard to imagine how Toomey could be far from its epicenter.

Calling shots

Indicted TRMPAC Director John Colyandro has said that he repeatedly met with Toomey and the head of the TAB to discuss 2002 political races (the calendar that Toomey kept on the governor’s staff reveals that these men continued conferring regularly thereafter). A TAB board member, Toomey supervised that group’s controversial political ad blitz, the Austin American-Statesman reported, even soliciting some of the $1.9 million in corporate funds that paid for it from such Toomey clients as AT&T, Aetna, and Cigna. Defending such coordination, TAB attorney Andy Taylor said that the political expenditures of TAB and TRMPAC were “legally independent.” Begging to differ, Travis County District Attorney Ronnie Earle told the Statesman that “coordination is just a fancy word for conspiracy.”

Legal or not, the $2.5 million in corporate money that the TAB and TRMPAC poured into the 2002 race greatly advanced the GOP’s goal of controlling the Texas House. The choicest fruit of this takeover was the redrawing of Texas’ congressional districts to Tom DeLay’s satisfaction. As the Observer reported, however, the 2003 Legislature also repeatedly came to the aid of top Toomey clients. Members of the American Insurance Association, which Toomey represented in 2002, benefited from new caps on medical malpractice liabilities (a key objective of TLR) and the defeat of proposals to mandate rate cuts on homeowners insurance. The legislature also strangled a proposal that would have unplugged Toomey client AT&T (a corporate donor to TRMPAC and TAB) from Texas’ high-speed Internet market. Tobacco lobby insiders report that Toomey is being hired again to lobby for Philip Morris, which benefited from the extinguishing of proposed cigarette tax hikes in 2003. Toomey clients Associated Builders and Contractors and American Home Shield, a home-warranty company, benefit from the new Texas Residential Construction Commission, an industry-dominated agency to oversee disputes between homeowners and builders.

A key piece of unfinished Perry-Toomey business is to convince the legislature to generate educational revenue by legalizing slot machines at race tracks and Indian reservations. Seeking to harvest this plum—should it come to fruition—is the Austin Jockey Club (AJC), which has applied to gubernatorial appointees on the Texas Racing Commission to build a horse track outside of Austin. In June, AJC recruited two new partners with close ties to Governor Perry.

One is Austin realtor Tim Timmerman, who now owns 10 percent of AJC. The Dallas Morning News reported that Timmerman told Perry in 1993 about land that strategically stood between municipal sewage lines and the hilltop that Michael Dell was buying up for Travis County’s largest homestead. Perry brought the tract for $122,000, making a $343,000 profit when Dell bought it just two years later. Through power-of-attorney, Mike Toomey was the man who actually signed the papers to buy that land in 1993.

AJC’s next-largest new owner is Holt Hickman, the owner of Fort Worth’s Stockyards and Billy Bob’s Texas—the world’s largest honky tonk. Hickman bought that Western club from eponymous founder Billy Bob Barnett. Both men have long wanted to break into the gambling industry. In late 2002, as Toomey joined Governor Perry’s staff, Barnett registered a new company in Nevada: Big City, LLC., Back in Billy Bob’s Texas, Big City is one of the first lobby clients Toomey signed this year. Toomey is just one of eight Texas lobbyists that will bill Big City up to $1 million this year. This is far more than Big City needs to promote its plans to stage huge concerts on public beaches in Galveston. Significantly, Big City lobbyists report that they have been hired to lobby on “gambling” issues. At press time it was unclear if Toomey, Billy Bob, and Big City were working behind the scenes to promotes the AJC—or if they have other gambling plans.

Corporate backlash

In late 2002, Mike Toomey went directly from being a major corporate lobbyist to being the governor’s chief of staff. Two years later, he has come full circle in starting to sign up some of the same clients again. The sole restriction that Governor Perry’s ethics policy imposes during this spectacular round trip is that Toomey cannot directly lobby the governor’s office for the 12 months following his departure. During that time, Toomey can lobby any other state agency or official and his business partners can continue to lobby the governor’s office on behalf of clients that they co-represent with Toomey. Such weak ethics policies underscore the importance of the TRMPAC probe, which represents a rare check on the power of the corporate lobby.

By participating in political strategy meetings with groups and individuals that stand accused of breaking Texas’ restrictions on corporate electioneering, Mike Toomey introduced the Texas lobby to the postmodern notion that lobbyists can have excessive clout and connections. Whether or not Texas’ first postmodern lobbyist is also its last depends on two pending events. One is the outcome of the TRMPAC probe itself. If it fails to prove that electioneering by corporations and their agents is a crime with serious consequences, the corporate lobby will take over the Capitol with utter impunity. Even if the TRMPAC probe imposes some constraints on the corporate lobby, however, the impact could be fleeting. The Statesman reported after Thanksgiving that Andy Taylor plans to lobby lawmakers next year to eliminate Texas’ prohibition on corporate electioneering altogether. If the TRMPAC probe collapses Taylor will find it much easier to introduce Texas to a new era of unbridled—and decriminalized—corporate power.

Andrew Wheat is research director of Austin-based Texans for Public Justice. Jake Bernstein provided additional reporting for this column.