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II. Lobby Clients

A. Recession Hits Texas Lobby

This report reveals the clients and industries that spent the most to influence state officials in 2009, as well as Texas’ top hired guns (exact contract values are unknown because Texas lobbyists typically report them in ranges such as “$50,000 to $99,999”). Special interests have spent up to $2.6 billion on more than 65,000 Texas lobby contracts over the past 10 years. Texas lobby spending peaks in odd-numbered years when the biennial legislature convenes its regular sessions. Apart from 2009, lobby spending increased over the past decade, regardless of whether you compare odd-numbered legislative years or the even-numbered years that lack a regular legislative session. Then the global recession pushed 2009 lobby expenditures below what they were during the previous legislative year. From 2007 to 2009, the number of lobbyists and clients inched up, even as the number of lobby contracts and total lobby spending dipped. Nonetheless, Texas’ top lobbyists are making more money than ever.

Recession Hits the Texas Lobby

Year
Min. Value
of Contracts
Max. Value
of Contracts
No. of
Contracts
No. of
Lobbyists
No. of
Clients
2000
$80,250,300
$185,135,319
5,834
1,280
1,658
2001
$104,490,030
$229,715,049
6,391
1,484
2,018
2002
$90,175,079
$188,305,115
4,737
1,256
1,827
2003
$132,485,543
$275,585,578
6,593
1,578
2,283
2004
$113,960,043
$234,210,077
5,321
1,371
1,896
2005
$145,735,247
$304,122,043
7,455
1,525
2,471
2006
$119,315,500
$250,400,439
6,120
1,315
2,125
2007
$175,823,000
$348,263,054
8,166
1,629
2,706
2008
$135,775,000
$278,674,935
6,545
1,463
2,295
2009
$167,459,570
$343,639,570
8,125
1,690
2,866
TOTAL
$1,265,469,312
$2,638,051,179
65,287
*
*

Note: Data cover contracts with minimal values greater than zero
and reflect year-end numbers, when lobby data tend to peak.
*These totals would mislead since many lobbyists and clients reappear each year.


B. Million-Dollar Clients

By the end of 2009, 27 clients spent more than $1 million apiece on 615 lobby contracts (down from 31 whopper clients in 2007). Collectively these 27 mega-clients paid lobbyists up to $47 million, accounting for a remarkable 14 percent of all the money spent on Texas lobbyists. As usual, AT&T flexed Texas’ largest lobby muscle, spending up to $9.3 million on 117 contracts.

Million-Dollar Clients

Client
Max. Value
of Contracts
No. of
Contracts
Interest Group
AT & T Corp.
$9,250,000
117
Communications
Energy Future Holdings Corp.
$3,240,000
59
Energy/Natural Res./Waste
Reliant Energy, Inc.
$2,540,000
29
Energy/Natural Res./Waste
McGinnis, Lochridge & Kilgore
$2,175,000
12
Lawyers & Lobbyists
TX Trial Lawyers Assn.
$1,850,000
18
Lawyers & Lobbyists
American Electric Power
$1,800,000
15
Energy/Natural Res./Waste
TX Assn. of Realtors
$1,770,000
15
Real Estate
TX Medical Assn.
$1,720,000
27
Health
TXU Energy Retail Co.
$1,495,000
27
Energy/Natural Res./Waste
CenterPoint Energy
$1,485,000
18
Energy/Natural Res./Waste
Oncor Electric Delivery Co.
$1,470,000
26
Energy/Natural Res./Waste
Assn. of Electric Co’s of TX
$1,425,000
29
Energy/Natural Res./Waste
City of Houston
$1,315,000
20
Ideological/Single Issue
Wholesale Beer Distributors of TX
$1,305,000
19
Miscellaneous Business
Baker Botts
$1,285,000
7
Lawyers & Lobbyists
ExxonMobil Corp.
$1,260,000
10
Energy/Natural Res./Waste
El Paso County
$1,250,000
5
Ideological/Single Issue
TX Cable & Telecom. Assn.
$1,245,000
19
Communications
Linebarger Heard Goggan Blair…
$1,200,000
21
Lawyers & Lobbyists
Verizon
$1,115,000
43
Communications
Luminant Holding Co.
$1,110,000
22
Energy/Natural Res./Waste
RRI Energy, Inc.
$1,050,000
6
Energy/Natural Res./Waste
City of Austin
$1,045,000
18
Ideological/Single Issue
Atmos Energy Corp.
$1,015,000
15
Energy/Natural Res./Waste
Henderson Global Investors, Inc.
$1,002,000
2
Finance
Locke Lord Bissell & Liddell
$1,000,000
7
Lawyers & Lobbyists
UnitedHealth Group
$1,000,000
9
Health

 

C. Top Clients By Interest Category

This report categorizes Texas’ 2009 lobby contracts by their underlying interests. Energy & Natural Resources clients led the herd. They accounted for 18 percent of all lobby expenditures, spending up to $62 million. Ideological & Single-Interest clients consumed 16 percent of the lobby pie, spending up to $55 million. The Health and Miscellaneous Business sectors were the next-biggest spenders.

Clients By Interest Category

Interest Group
Max. Value
of Contracts
Min. Value
of Contracts
No. of
Contracts
Share of
Max. Value
Energy/Natural Res./Waste
$62,315,000
$32,230,000
1,228
18%
Ideological/Single Issue
$55,221,570
$23,516,570
1,768
16%
Health
$41,770,000
$19,910,000
986
12%
Miscellaneous Business
$37,600,000
$18,425,000
830
11%
Communications
$20,380,000
$10,180,000
378
6%
Lawyers & Lobbyists
$19,365,000
$11,490,000
341
6%
Real Estate
$18,735,000
$9,220,000
461
5%
Finance
$16,177,000
$8,012,000
413
5%
Construction
$13,341,000
$6,826,000
293
4%
Insurance
$12,495,000
$6,350,000
260
4%
Computers & Electronics
$12,485,000
$6,035,000
283
4%
Transportation
$12,385,000
$5,475,000
349
4%
Other
$6,640,000
$3,045,000
176
2%
Agriculture
$6,335,000
$3,015,000
142
2%
Labor
$5,760,000
$2,700,000
123
2%
Unknown
$2,635,000
$1,030,000
94
1%
TOTALS:
$343,639,570
$167,459,570
8,125
100%

 

1. Energy & Natural Resources: Up to $62 Million

The up to $62 million spent by Energy & Natural Resources clients accounted for 18 percent of all lobby spending. Energy Future Holdings Corp., formed by the 2007 buyout of TXU Corp., led this industry and ranked No. 2 overall, behind behemoth AT&T. Yet three Energy Future subsidiaries (TXU, Oncor and Luminant) also spent more than $1 million apiece on lobbyists. Taken together, Energy Future and its appendages spent up to $7.3 million on lobbyists in 2009.

Texas accounts for half of the 10 worst coal plants in the nation in terms of preventable mercury emissions, according to a recent report by the Environmental Integrity Project.1 Energy Future owns three of the beasts. The other two are owned by two other big Texas lobby clients: NRG and American Electric Power. Mercury exposure retards the development of children’s brains.

The Texas Public Utility Commission (PUC) awarded $5 billion in contracts in 2009 to build new electric transmission lines to move wind power from West Texas to big cities to the East. It awarded the biggest contract—for $1.3 billion—to Energy Future’s Oncor unit. The PUC gave the No. 2 contract to a joint venture involving American Electric Power. The Lower Colorado River Association landed the No. 3 contract (LCRA’s lobby contracts are classified in the Ideological and Single-Interest category). The PUC awarded smaller contracts to several customer-owned electric co-ops represented by Texas Electric Cooperatives trade association.

Top Energy & Natural Resources Clients

Client
Max. Value
of Contracts
Min. Value
of Contracts
No. of
Contracts
Energy Future Holdings Corp.
$3,240,000
$1,790,000
59
Reliant Energy, Inc.
$2,540,000
$1,475,000
29
American Electric Power
$1,800,000
$1,145,000
15
*TXU Energy Retail Co.
$1,495,000
$805,000
27
CenterPoint Energy
$1,485,000
$730,000
18
*Oncor Electric Delivery Co.
$1,470,000
$770,000
26
Assn. of Electric Companies of TX
$1,425,000
$695,000
29
ExxonMobil Corp.
$1,260,000
$825,000
10
*Luminant Holding Co.
$1,110,000
$520,000
22
RRI Energy, Inc. (formerly Reliant)
$1,050,000
$775,000
6
Atmos Energy Corp.
$1,015,000
$580,000
15
TX Electric Cooperatives
$910,000
$450,000
13
Exelon Power
$845,000
$405,000
15
Entergy Corp.
$765,000
$335,000
18
NRG Energy, Inc.
$750,000
$445,000
13
TX Oil & Gas Assn.
$700,000
$320,000
18
City Public Service of San Antonio
$600,000
$350,000
6
Shell Oil Co.
$600,000
$400,000
8
Direct Energy, LP (unit of Centrica)
$560,000
$245,000
13
Fort Concho Gas Storage, Inc.2
$550,000
$400,000
3
Waste Control Specialists, LLC
$530,000
$265,000
11
Steering Com. of Cities Served by Oncor
$505,000
$285,000
8

*Unit of Energy Future Holdings Corp.

2. Ideological & Single-Issue: Up to $55 Million

Ideological & Single-Issue clients spent up to $55 million, accounting for 16 percent of all lobby spending. Local government interests dominated this category in their competitive quest for scarce state and federal funds. Just 8 percent of city-related bills passed the 2009 session, according to the Texas Municipal League. The league celebrated this body count, since most bills that would affect its members “would have harmed municipal authority.” The Texas Association of Counties similarly celebrated failed legislative efforts to “further restrict property tax revenue or lower appraisal caps.”

The largest private entity in this category, Texans for Lawsuit Reform (TLR), dubbed 2009 its “hardest” session, as trial lawyers “made a broad attack against lawsuit reforms.” Not to worry: TLR and its business buddies parried every thrust. TLR targeted a bill that would have reversed an activist 2007 Texas Supreme Court ruling that shields owners of large industrial plants from accountability for injuries to contract workers.3 TLR also helped kill a bill to define a standard for what asbestos victims must prove to recover mesothelioma claims.4

The American Cancer Society pressed lawmakers to fully fund the $3 billion Cancer Prevention and Research Institute of Texas, which Texas voters approved in 2007. It also helped restrict the use of tanning parlors by minors5 but struck out on efforts to ban smoking in public spaces and workplaces.6 Tobacco companies (classified in Agriculture) spent up to $3 million on 50 Texas lobbyists in 2009. Texas’ top tobacco lobbyist was David Sibley, who is running for his old seat in the Texas Senate. Lorillard and Swedish Match paid Sibley up to $250,000.7

Top Ideological & Single-Issue Clients

Client
Max. Value
of Contracts
Min. Value
of Contracts
No. of
Contracts
City of Houston
$1,315,000
$685,000
20
El Paso County
$1,250,000
$1,000,000
5
City of Austin
$1,045,000
$485,000
18
Port of Houston Authority
$885,000
$435,000
11
TX Municipal League
$850,000
$490,000
11
Texans for Lawsuit Reform
$840,000
$395,000
15
American Cancer Society
$750,000
$350,000
14
National Rifle Assn.
$700,000
$550,000
3
City of San Antonio
$640,000
$300,000
10
TX Assn. of Counties
$635,000
$310,000
17
Cities Aggregation Power Project
$620,000
$345,000
9
City of Dallas
$550,000
$245,000
13
TX Charter Schools Assn.
$540,520
$270,520
12
Raise Your Hand for Public Schools
$540,000
$225,000
16
Harris County
$520,000
$325,000
6
TX Business for Clean Air
$520,000
$325,000
6
Lower Colorado River Authority
$510,000
$220,000
14
Tarrant Regional Water District
$505,000
$225,000
13
TX Assn. of School Boards
$500,000
$240,000
8

 

Although this is not one of its battleground states, the National Rifle Association’s agenda expired in the Texas Legislature’s cold, dead hands in 2009, as four NRA priority bills got jammed in legislative chambers. The NRA’s “top legislative priority,” which could be called the “Going Postal Bill,” would’ve given employees the right to store guns and ammo in their cars while at work.8 Other pistol-whipped Second Amendment bills would’ve allowed concealed handguns on campuses9 and repealed an onerous requirement that requires concealed-weapon licensees to present their gun licenses if stopped by cops.10 (For more on the NRA, see the section on the “Fattest Lobby Contracts.”)

Texas Lobby Spending By the NRA


AK-47 courtesy of the late Soviet Union.

3. Health: Up to $42 Million

Health industry clients spent up to $42 million, accounting for 12 percent of all lobby spending. The Texas Medical Association (TMA) and UnitedHealth Group topped the charts, as doctors and health insurers increasingly clash in the lobby. Represented by the Texas Association of Health Plans, insurers killed a TMA-backed “Health Insurance Code of Conduct,” which would have prohibited insurers from denying benefits based on misrepresentations or preexisting conditions.11  TMA and the American Cancer Society (see previous section) both helped pass bills that require insurers to: 1. Pay for some participants in experimental clinical trials; and 2. Cover oral chemotherapy at the same rate as intravenous chemo.12

Manufacturers of drugs and medical devices helped bottle up a legislative prescription to require them to publicly disclose the gifts that they give to health care providers to stimulate sales of their products.13 Opponents of the bill included drug companies, implant maker Medtronic and the Texas Association of Manufacturers.

Top Health Clients

Client
Max. Value
of Contracts
Min. Value
of Contracts
No. of
Contracts
TX Medical Assn.
$1,720,000
$830,000
27
UnitedHealth Group
$1,000,000
$600,000
9
Blue Cross & Blue Shield
$740,000
$295,000
27
TX Hospital Assn.
$655,000
$310,000
15
Medtronic, Inc.
$620,000
$400,000
6
TX Assn. for Home Care
$610,000
$320,000
13
TX Assn. of Health Plans
$565,000
$285,000
10
AMERIGROUP Corp.
$535,000
$230,000
14
TX Pharmacy Business Council
$495,000
$255,000
9
Merck Sharp & Dohme Corp.
$450,000
$250,000
5
East TX Medical Center
$440,000
$200,000
8
Teaching Hospitals of TX
$425,000
$210,000
9
Superior HealthPlan, Inc.
$410,000
$205,000
11
TX Children's Hospital
$385,000
$260,000
4
Pharm. Research & Manfrs. of America
$380,000
$195,000
8
TX Dental Assn.
$375,000
$210,000
5
Eli Lilly & Co.
$360,000
$250,000
3

 

4. Miscellaneous Business: Up to $38 Million

The diverse clients falling into the Miscellaneous Business sector spent up to $38 million, accounting for 11 percent of all lobby spending. Some of the biggest spenders in this category were alcohol and gambling interests.

Alcohol interests have been brawling over whether or not Texas should scuttle its archaic regulatory system which generally requires retailers to buy alcoholic beverages from local wholesalers. Critics want to overthrow these restrictions—recently upheld by the U.S. 5th Court of Appeals—to promote competition and consumer choice.14

Racetrack interests have argued for years that they will not survive without authorization to install slot machines. In fact, the parent company of MEC Lone Star went bankrupt in 2009, selling its interest in Grand Prairie’s Lone Star Park to the Chickasaw Nation.15 One reason why gambling-expansion proposals failed again in 2009 is that racetracks continue to fight over the projected spoils with casino interests such as the Texas Gaming Association and Landry’s Restaurants (which owns casino interests in Nevada). 16

Miscellaneous Business

Client
Max. Value
of Contracts
Min. Value
of Contracts
No. of
Contracts
Wholesale Beer Distributors of TX
$1,305,000
$750,000
19
TX Package Stores Assn.
$860,000
$420,000
13
TX Assn. of Manufacturers
$770,000
$425,000
11
Gtech Corp.
$600,000
$400,000
4
HE Butt Grocery Co.
$570,000
$220,000
19
Silver Eagle Distributors [beer]
$560,000
$300,000
9
TX Retailers Assn.
$550,000
$310,000
9
Pearson Education
$550,000
$415,000
6
Landry's Restaurants
$535,000
$285,000
9
Anheuser-Busch InBev Worldwide
$510,000
$275,000
6
Assn. of FundRaising Distributors of Suppliers
$500,000
$250,000
5
Gulf Greyhound Partners
$450,000
$350,000
2
Henderson Controls, Inc.
$450,000
$300,000
3
Mary Kay Cosmetics, Inc.
$400,000
$300,000
2
Licensed Beverage Distributors
$395,000
$185,000
8
Rent-A-Center
$375,000
$180,000
6
GEO Group, Inc.
$370,000
$245,000
6
Diageo
$360,000
$250,000
3
College Network
$360,000
$200,000
4
MEC Lone Star
$350,000
$200,000
5
TX Gaming Assn.
$345,000
$185,000
6

 

Gtech Corp. has had the contract to operate the Texas Lottery since its inception. In 2008 the Texas Lottery Commission hired another firm, Gartner, Inc., to help design the procedures to rebid Gtech’s lucrative contract. The Lottery Commission later learned that Gartner violated this contract by working for Gtech while it worked on the bidding procedures. Lottery Commission officials concluded in March that there was “no evidence of any actual conflict of interest” as a result of Gartner’s dual roles.17

Henderson Controls began hiring lobbyists—including former lawmaker Ray Allen—in 2008. Henderson’s air-conditioner components are assembled by inmates at a Lockhart prison run by the Geo Group (another major lobby client listed above). As vice chair of the House Corrections Committee, then-Rep. Allen wrote the 1997 bill that created the Private Sector Prison Industries Oversight Authority to oversee companies using prison labor.18 Doubts about the authority’s oversight prowess arose after a 2007 raid of a Farmers Branch company that employed Texas prisoners to build custom cars. Police reported that the company’s prison workers illegally stripped Vehicle Identification Numbers from cars, prompting one prisoner to dub the operation a taxpayer-subsidized “illegal chop shop.”19 Concerned that the Oversight Authority may not prevent prisoners from taking the jobs of law-abiding Texans, lawmakers abolished the oversight authority last year, transferring its responsibilities to the Texas Board of Criminal Justice (HB 1914). One witness who opposed this bill was Henderson Controls President Randall Henderson, whom Governor Perry appointed to the oversight authority in 2008.20 Several ex-cons testified at the hearing that their prison jobs with Henderson Controls turned their lives around.

 

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©Copyright Texans for Public Justice, May 2010