Giuliani Builds Political Base in Texas

September 21, 2007

By KELLEY SHANNON

AUSTIN, Texas (AP) — Republican Rudy Giuliani — thrice-married, liberal on social issues and a consummate New Yorker — seems an unlikely White House contender to be embraced by a Texas' GOP establishment rooted in the energy industry and dominated by religious conservatives.

But the former New York mayor has built a formidable political base in Texas with the help of well-connected Republican money men. He owes his advantage in part to his role as a name partner with a powerhouse, Houston-based law firm known for its impressive roster of energy-giant clients, Bracewell & Giuliani.

His partnership in the law firm has also brought Giuliani unwelcome criticism in connection with some of the firm's more controverisal clients, including a Spanish contractor involved in planning part of a Texas superhighway toll road known as the Trans-Texas Corridor.

Texas farmers and other landowners are worried their property rights will be trampled to make way for the highway. Conspiracy theorists see Giuliani, because of his highway connections, as allied with a cabal of international monied interests plotting to supplant the United States with a North American Union that includes Mexico and Canada.

Giuliani joined the law firm — then called Bracewell & Patterson — in March 2005. More than 400 lawyers work for the firm, which has offices in New York, Washington, Connecticut, Dubai, Kazakhstan and London.

Giuliani reported in a federal financial disclosure form in May that he received $1.2 million in income from Bracewell & Giuliani during 2006 and the first five months of 2007. He was also entitled to a 7.5 percent share of revenue from the firm's New York office.

The firm's managing partner, Patrick Oxford of Houston, is the national chairman of Giuliani's presidential campaign. A former University of Texas System regent appointed by then-Gov. George W. Bush, Oxford has strong ties to many of Texas' top political leaders. He raised $100,000 for Bush in his 2000 presidential run, served as co-chairman of Sen. Kay Bailey Hutchison's re-election campaign last year and is treasurer for Sen. John Cornyn's current re-election campaign.

The law firm's employees in several Texas cities have also donated to Giuliani's campaign, federal election reports show.

"The relationship with Bracewell has given Giuliani a financial foothold in the state," said Craig McDonald, director of Texans for Public Justice, which tracks money in politics.

While Giuliani isn't "totally in sync with the base on social issues," Texans liked his take-charge approach during the Sept. 11, 2001, terrorist attacks and his mayoral record on crime-fighting and budget control, said Austin-based GOP consultant Reggie Bashur, who is not working with any presidential candidates.

"The grassroots in Texas is ... strongly conservative. ... very much right-to-life, very fiscally conservative, strong on national defense, very strong on the war on terror, not overly sympathetic to the gay rights movement," Bashur said.

Because Texas' primary comes late in the lineup of nomination contests, the state's role in the nomination is primarily that of money generator. Giuliani's campaign finance chairman is Roy Bailey, a former finance chairman of the Texas Republican Party. Dallas billionaire T. Boone Pickens and Texas Rangers owner Tom Hicks are major fundraisers.

Giuliani had raised $3.69 million in Texas as of July 30, the most of any presidential candidate. Democratic front-runner Hillary Rodham Clinton was second with $2 million. Among Giuliani's Republican rivals, Sen. John McCain has raised $1.79 million from Texas donors and Mitt Romney has raised $1.76 million.

"I think there are many issues, principally on the issue of leadership and overall electability, that are causing many voters in Texas to support the mayor," said Giuliani spokesman Elliott Bundy.

Giuliani has also developed a bond with Texas Gov. Rick Perry, whom he helped win re-election last year. That groundwork could make Perry a high-profile ally in Texas, although the governor hasn't yet endorsed a presidential candidate.

Bracewell & Giuliani's political action committee gave $10,000 to Perry a year ago, just a few weeks before his re-election. Perry and Giuliani have talked in person and by telephone several times and have a good relationship, Black said.

Bracewell & Giuliani represents a business consortium involved in the Trans-Texas Corridor, a costly, high-profile toll road pushed by Perry and opposed by farmers and ranchers.

The first phase of Perry's proposed $184 billion toll road, envisioned as part of a superhighway stretching from Oklahoma to the Mexico border, was planned by the Cintra Zachry consortium, composed of Cintra Concesiones de Infraestructuras de Transporte SA of Spain, one of the world's largest developers of toll roads, and Zachry Construction Co. of San Antonio.

Landowners say they worry that fields and farmhouses in Texas families for generations would be bulldozed for the highway. The state acknowledges some private land will be taken, but Perry said new roads are needed to handle Texas' growing population and trade.

The consortium sued Texas Attorney General Greg Abbott last year to keep parts of its development agreement with the state secret, saying the information was proprietary. The Texas Department of Transportation took the unusual step of siding with the consortium in the lawsuit against Abbott, whose office had ruled the agreement should be made public.

The transportation department and the consortium dropped the lawsuit last October and agreed to release the contents of the contract.

But the lawsuit further fueled concerns about foreign ownership of a major Texas highway, and the project continues to be criticized by conservative groups like the Eagle Forum and the John Birch Society, who see it as part of an international conspiracy to create a North American Union. The conspiracy theory has also provided fodder for cable television commentators like CNN's Lou Dobbs.

Earlier this year, Giuliani sold his investment firm, Giuliani Capital, for an undisclosed sum to the Macquarie Group, which is part of Macquarie Bank of Australia. Cintra and Macquarie's infrastructure group formed a consortium that operates a major toll road in Indiana.

Scott Segal, a Washington-based Bracewell & Giuliani partner in charge of its government relations division, said Giuliani was not involved in the Texas toll road legal work and that the law firm doesn't lobby on behalf of Cintra Zachry.

"Mayor Giuliani has had no association or has done no work for the Cintra Zachry venture," Segal said.

Black, Perry's spokesman, said he doubts Perry even knows that Giuliani's firm has represented the transportation companies in connection with the project.

"The governor does not concern himself with who Rudy Giuliani's law firm may or may not represent," Black said.