Perry: A blast from the past?
Can Democrat Bill White convince Texans that Republican Gov. Rick Perry’s use of Texas Enterprise Fund grants is an echo of Sharpstown?
Folks younger than 40 probably know Sharpstown is a southwestern suburb of Houston. But around the Texas capitol, the Sharpstown is shorthand for a pay-to-play scandal that caused a total re-arrangement of Texas government in the 1970s.
The deal, revealed after a federal investigation, was that Houston developer Frank Sharp (who named the suburb, and a bank, after himself) was at the heart of what became known as the Sharpstown Stock Fraud and Banking Scandal.
Basically, Sharp, a real estate developer, banker and insurance company owner, wanted his bank to be able to loan him more money.
So he arranged some deals on stock in his insurance company, National Bankers Life, designed for quick profits for politicians, including Gov. Preston Smith and House Speaker Gus Mutscher
In return, the allegations went, Gov. Smith put before the Legislature in a 1969 special session banking bills to set up a more lenient state deposit insurance corporation that Sharp wanted. The bills breezed through.
But then Smith vetoed them, at the behest of former Gov. Allan Shivers, a banker who said they’d be bad for banking.
That didn’t stop a federal investigation. In 1971, it revealed some of it, on the eve of the inauguration to a second term for Smith and Lt. Gov. Ben Barnes.
Mutscher was eventually indicted and convicted of bribery conspiracy. Smith, who made $62,500 in the stock deal -- in today’s dollars a little north of $370,000 -- was described as an “unindicted coconspirator.”
And Texans threw lots of rascals – and also non-rascals – out of office in the 1972 elections, including Smith, who finished a distant fourth in the Democratic primary that year.
Sharpstown produced a heavy turnover among statewide officials and legislators. In 1973 came the Reform Session of the Texas Legislature, when most of the laws were passed calling for open meetings, open records, lobby registration, and campaign finance disclosure.
Fast-forward to 2000. Rick Perry moves from lieutenant governor to governor when George W. Bush’s Florida hanging-chad election as president is finally blessed by the U.S. Supreme Court.
Perry gets the Legislature to set up a Texas Enterprise Fund, controlled largely by him, to give grants to companies deemed needing some state tax money to locate or stay in Texas, and create jobs and help the Texas economy.
Perry subsequently doles out several such grants to several companies – also approved by the lieutenant governor and House speaker.
Some grants have been the subject of investigation by the likes of the Dallas Morning News, and now charges from White, the former Houston mayor.
The News’ investigative package, and White, raised the questions whether there was skullduggery because Perry:
• bought a lot in Horseshoe Bay in 2001, that had belonged to Doug Jaffe, a member of the power-brokering San Antonio Jaffe family;
• helped a jet-engine company co-owned by Doug Jaffe qualify for a grant from the Enterprise Fund, and then held a press conference in 2006 in San Antonio to say it would bring 850 jobs to Texas;
• nine months later sold the lot to a Jaffe business partner for a profit of more than half a million dollars.
Perry and his spokespersons said a) the governor hadn’t known Jaffe co-owned the jet-engine company; b) the company never even got the grant, because it began cutting jobs rather than adding them; and c) there was no connection between the land dealing and the Enterprise Fund grant process.
White obviously disagrees. As aides distributed a press packet headlined, “RICK PERRY’S CASH FOR FAVORS LAND DEAL SCANDAL & THE TEXAS ENTERPRISE FUND,” at a wellattended Austin press conference Friday (July 30), White outlined for reporters the sequence of events, and his conclusion.
“He has helped his friends and his friends have helped Rick Perry,” White charged. “This is a pattern we have seen throughout the governorship.”
White began in May calling for an independent audit of the Enterprise Fund’s activities.
The questions now are:
• Will that audit be conducted, especially before the Nov. 2 election?
• Whether it is or not, will Texans think Perry had his hand in the Texas till to help his political and personal needs?
• Does the Sharpstown comparison have any political legs almost four decades later?
Stay tuned. Contact McNeely at davemcneely111@gmail. com or (512) 458-2963.