Conservative Criticism of Rick Perry’s Corporate Cronyism

Conservative Criticism of Rick Perry’s Corporate Cronyism

Conservative Criticism of Rick Perry’s Corporate Cronyism

Some conservatives have disapprovingly noted Rick Perry’s penchant for sharing government funds with campaign contributors. 


We recently reported on how Texas Governor Rick Perry has raked in remarkably large donations from business executives in exchange for governmental appointments and policy favors. Now even conservatives are criticizing Perry for putting the interests of corporations ahead of the public interest.

The conservative Washington Examiner lambasted Perry on Wednesday as a “cowboy corporatist.” Timothy Carney, who covers the intersection of corporate and political power for the Examiner, detailed how Perry created and ran the Texas Enterprise Fund and the Texas Emerging Technology Fund to hand over taxpayer money to private businesses. The nominal purpose is helping businesses expand in Texas or relocate there. Being a Perry donor is the surest route to winning a grant from one of these slush funds. Half of Perry’s “mega-donors” have gotten money. Examples include a $4.5 million grant to $80,000 Perry donor David Nance and poultry mogul Joe Sanderson, who gave Perry’s campaign $165,000, receiving $500,000 from the state government.

Carney concludes that “Perry made government a venture capital fund.” The truth is much worse. Venture capital funds can make a profit for their investors. In this case, government was, in the words of Craig McDonald of Texans for Public Justice (TPJ), “providing direct grants to profitable corporations.” Perry turned Texas into a corporate welfare agency.

What did Texas get in return? Not much, according to a “Phantom Jobs,” a 2009 study by TPJ, which found that 66 percent of Texas Enterprise Fund (TEF) grant recipients failed to deliver on their job creation promises. Looking at the compliance reports of fifty TEF grants that cost a total $368 million, TPJ found that thirty-three recipients failed to meet or amended their job creation or maintenance projections. Collectively they delivered 30,381 jobs instead of the promised 49,581. At more than $10,000 per job created, Perry would certainly deride any federal program with similar results as wasteful socialism.

“He’s an exuberant corporate Republican,” says former Texas Agriculture Commissioner Jim Hightower. “He’s fully embraced the corporate plutocracy.”

Another boondoggle for contributors was Perry’s dream of creating a “Trans-Texas Corridor” (TTC). The mega-highway would have taken land through eminent domain to build a privately owned toll road. Eager to grab their share of the impending road-paving bonanza, construction companies stepped up their donation and lobbying expenditures. As TPJ reported in 2009, “Since the state solicited its first bids for a leg of the TTC project in 2003, private companies that have landed lucrative TTC contracts have contributed $3.4 million to Texas candidates and political committees—a significant increase in their political activity. TTC contractors also have spent up to $6.1 million on Texas lobbyists since the state solicited their respective bids.”

The construction industry is a major source of Perry’s campaign cash. According to TPJ, “From mid-1997 to mid-2001, TxDOT [Texas Department of Transportation] contractors contributed $239,750 to Perry. During Perry’s first nine months in the Governor’s Mansion his administration awarded almost $1 billion in contracts to these same TxDOT contributors.” Between July 2003 and July 2008 Perry received $354,450 from contractors for the Trans-Texas Corridor.

The project has caused headaches for Perry among many different conservative constituencies. Concerns about eminent domain abuse cost Perry the endorsement of the Texas Farm Bureau in his 2006 re-election campaign. Conspiracy-minded paranoids think the Trans-Texas Corridor was part of a planned “NAFTA superhighway.” The right-wing website Townhall ran an article last week called “Rick Perry’s NAFTA Superhighway Problem.” And the plan to lease the highway to a foreign corporation raised hackles on the nativist right.

Perry’s favors for other foreign corporations could pose problems for him with hawkish conservatives. Neoconservative Eli Lake reports in The New Republic that Perry enticed Citgo, owned by the Venezualan government, to move its headquarters to Houston and expand a refinery in Texas with a grant and low-interest loan package worth $35 million. Perry also has cozy relations with Chinese telecommunications firm Huawei.

The most notorious misstep Perry made among conservatives was signing legislation that would require vaccination among Texas schoolgirls for HPV. HPV vaccination happens to be a good idea. But given Perry’s opposition to most other good ideas, it’s just as likely that he was swayed by the $6,000 dollars that Merck, the maker of the vaccine, gave to Perry’s re-election campaign, as by the merits of the issue. Perry has recently reversed himself on the subject, but his right-wing critics, such as blogger Michele Malkin, remain unmollified. After eight years of crony capitalism under another recent Governor of Texas, it’s not only conservatives that Perry will have to worry about.

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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