Earlier this month, George Seay III, the Texas finance chair for the presidential campaign of Gov. Rick Perry, found himself under scrutiny. Politicoreported that Seay (pronounced "see"), the grandson of former Texas Gov. Bill Clements, had been soliciting Perry donations through his Dallas investment firm, Annandale Capital. Corporations are barred by law from donating directly to federal candidates or giving them in-kind gifts such as office space.
It wasn't the first time that Seay's political activities seemed to have run afoul of campaign laws. In July 2009, the George E. Seay III Foundation, a tax-exempt 501(c)3 nonprofit funded and run by Seay, gave $500 to the Legacy Political Fund, a federal PAC for which Seay serves as treasurer, according to the groups' tax filings. The donation may have been peanuts, but federal law prohibits 501(c)3 groups from giving any amount to a candidate or PAC.
E. Philip Bush, an attorney for Seay, told Mother Jones that the donation was erroneously reported on the tax forms. In reality, he explained via email, the money had gone to the Mesa 1238 Educational Foundation, another 501(c)3. (According to its mission statement, the foundation nurtures "leaders who are working on issues related to cultivating compassionate conservative ideals.") This kind of transfer, from one 501(c)3 to another, is perfectly legal. "At no time has either the George E. Seay Foundation or Mesa 1238 Education Foundation interacted with or provided any support to the Legacy PAC," Bush said.
But that's where where things get interesting. The Mesa foundation, which received $500,000 from the George E. Seay Foundation back in 2008, has close ties to the Legacy PAC. Mesa's federal tax filing from that year, the most recent available, lists the Legacy Political Fund's phone number, along with a web address that redirects to the PAC's website.
"The fact that they share that information implies the activities are one in the same, which could raise questions," says Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy (NCRP). For example, a blending of the groups could allow donors to receive tax breaks for spending that is intended to influence the outcome of elections—a big no-no under federal law. "With the limited information available to me," Dorfman says, "I am concerned that there may be wrongdoing in this case."
Come lunchtime at Whispering Lakes Ranch, a "resort style" subdivision rising amid the cow pastures to the south of Houston, the local taco truck gets mobbed. Near the counter, José, a 30-year-old carpenter from San Luis Potosí, Mexico, steels himself against the 100-degree heat with slugs from a mango agua fresca. His grueling job installing doors and windows is a cakewalk compared to sewing bras at a maquiladora, which paid as much in a week as he now earns in a day. Yet José barely makes more than minimum wage. Native-born Americans don't want his job because "they already make a lot of money," he figures. He doesn't reply when I politely wonder if he's in the country illegally.
As Texas Gov. Rick Perry charts a course to the GOP presidential nomination, his stance towards workers like José could become a flash point. On the one hand, the GOP's tea party base demands that undocumented immigrants be arrested and deported. On the other, wealthy Republican donors in Texas rely on the influx of cheap labor to make money. José, whose last name I've withheld for his protection, works for homebuilder Bob Perry (no relation), the governor's largest political donor and a strong proponent of permissive immigration policies.
Torn between both wings of his party, Gov. Perry has occupied the middle ground—a place that he rarely inhabits. According to syndicated columnist Miguel Perez:
Perry led the nation in allowing undocumented immigrant students to pay in-state tuition in Texas state universities. He has been opposed to immigrant-bashing and racial profiling laws such as Arizona's SB 1070, saying they would not be right for Texas. He has questioned the effectiveness and rejected the use of the federal E-Verify system, designed for employers to check the legal status of job applicants. He has described efforts to deny citizenship to the US-born children of illegal immigrants as "divisive," and he has been critical of Republicans who spew hatred of immigrants.
Not surprisingly, the anti-immigrant organization Numbers USA gives Perry a D- grade on immigration. (Michele Bachmann gets a C.) A Maryland bill that would mimic Texas' policy allowing in-state tuition for undocumented immigrants faces major protests from the right. A coalition of tea party groups recently called on Perry to implement E-Verify by executive order. Cognizant of these headwinds from his base, Perry has shifted rightward on immigration, pressing this year for a bill that would have ended "sanctuary cities" by taking away municipalities' ability to keep police from asking about suspects' immigration status.
Homebuilder Bob Perry (no relation) is the governor's largest political donor and a strong proponent of permissive immigration policies. Photo: Josh HarkinsonIn a general election, it's conceivable that Perry could turn his record on immigration into a strength. Texas is not a national outlier on immigration policies so much as a brutal testing ground. Here, exit polls in 2010 showed a higher tea party affiliation than anywhere in the country, and yet the low-wage economy—the bedrock of the so-called "Texas Miracle"—depends on a steady influx of workers from south of the border. Perry's approach has been a shrewd blend of satisfying the tea party base by trumpeting the need to secure the border (which is a federal responsibility, not to mention pretty much impossible) while protecting his corporate donors from liability stemming from hiring undocumented workers. Even if he alienates some voters, that stance may have an upside in locking in donors such as Perry, chicken magnate Lonnie "Bo" Pilgrim, and H-E-B grocery chain CEO Charles Butt, all of whom have previously supported him.
Make no mistake: Perry won't follow in the footsteps George W. Bush, who earned a staggering 40 percent of the Hispanic vote in his 1998 gubernatorial election and stuck his neck out in 2006 to call for immigration reforms that would give the undocumented a path to citizenship. (Perry, by contrast, recently bombed before the National Association of Latino Elected and Appointed Officials conference in San Antonio with a joke about how José Cuevas, the head of his Alcoholic Beverage Commission, reminded him of José Cuervo tequila.) "Hispanics are not going to get suckered into this guy," says Texas political consultant Dan McClung. "I don't think he's any different on immigration than he is on any other issue; he's an extremely conservative guy. It's just that immigration affects a hell of a lot of big businesses in the state."
Two Americans who've been imprisoned in Iran for more than two years after being snatched while hiking on the Iran-Iraq border have been convicted of espionage and sentenced to eight years in prison, CNN reports. One is Shane Bauer, an investigative reporter who has contributed pieces from the Middle East for the Christian Science Monitor, the Nation, New America Media, and Mother Jones.
Espionage can carry the death penalty in Iran, but the judgment against Bauer was nonetheless unexpectedly harsh, coming not long after senior Iranian officials had suggested the men might be released as a humanitarian gesture during the current holy month of Ramadan. The New York Times reports that Ali Akbar Salehi, the foreign minister, was quoted by local media as saying he hoped the end of the trial would lead to their freedom.
Bauer, his fiancée Sarah Shourd, and his friend Joshua Fattal, all young graduates of the University of California-Berkeley, were arrested in July 2009 while hiking the scenic border region between Iraqi Kurdistan and Iran. Theories differ on how exactly the arrest took place: The three may have accidentally crossed the border, or they may have been snatched while inside Iraq. Shourd, who suffered health problems in prison, was released on $500,000 bail in September 2010.
Iran has not presented any evidence that the hikers were spies. "I want to be perfectly clear: Sarah, Shane, and Josh have never worked for the US Government," President Barack Obama said in a July 2010 statement urging their release. The detention has drawn broad condemnation from the international community, including Ban Ki-moon, the secretary general of the United Nations.
There have been reports that Iran has been seeking to swap the hikers for some of the 10 Iranians that it says are jailed in the United States, and some have suggested that the harsh sentence could be a move to up the pressure. The sentence also comes after a recent letter to President Obama from 92 US senators urging sanctions against Iran's central bank to thwart the country's nuclear weapons program.
Judging from Iran's conflicting statements about the hikers, its leaders seem uncertain how to manage the standoff. In May 2010, the government in Tehran permitted the hikers' mothers to visit, though photos of the teary reunion served only to ratchet up international opposition to the detention. The families of Bauer and Fattal, who haven't yet commented on the sentence, advocate for their release through the website freethehikers.org, and you can follow the story on Twitter via the hashtag #ssj.
The producers of Wall Street: Money Never Sleeps couldn't have staged better coda: During the meet-and-greet following Texas Governor Rick Perry's appearance at the New Hampshire Politics and Eggs breakfast this week, a mysterious man approached Perry and apropos of nothing said, "Bank of America. We will help you out." Then he silently moved on.
Politico's Ben Smith identified the exec as James Mahoney, Bank of America's director of public policy. A bank spokesperson told Smith that the only "help" Mahoney was offering was nonpartisan policy expertise. But Mahoney is also chairman of the bank's New Hampshire PAC, which doles out political cash.
The interaction takes place at precisely 40 minutes:
If presidential candidates were elected based on how well they rewarded their political donors, then Texas Governor Rick Perry would lead the pack. Since 2001, more than a fifth of the $83 million in campaign donations received by Perry have come from his past and present political appointees. In 2009, the group Citizens for Responsibility and Ethics in Washigton cited his administration's rampant cronyism in naming him to its "Worst Governors" list. A recent analysis of Perry's 150 largest political donors by the LA Timesfound that more than half of them received hefty business contracts, tax breaks, or appointments from the governor. Here are ten Perry supporters who've been handsomely repaid for their patronage:
Bob Perry: America's largest individual political donor, the Houston-based homebuilder has given $2.3 million to Rick Perry, making him the governor's leading money man (the two Perrys aren't related). In June, 2003, Rick Perry helped push through a bill creating the Texas Residential Construction Commission, ostensibly a watchdog for unethical homebuilders. In reality, the agency was created with the help of Bob Perry's lobbyist, John Krugh. Shortly after receiving a $100,000 check from Bob Perry, the governor appointed Krugh to the TRCC's board of directors. Consumer groups fought back and got the agency abolished in 2009.
Harrold Simmons: The reclusive buyout king has amassed $5.7 billion from garbage collection, drug stores, metals, and chemicals, making him the 55th richest American. In 1995, he set about converting an isolated patch of land in West Texas into a nuclear waste dump. In part, that's meant dumping $1.2 million in campaign cash on Perry. Though three staffers with Perry's Texas Commission on Environmental Quality resigned rather than approve the waste dump, it was ultimately green-lighted by TCEQ executive director Glen Shankle, who left the agency a few months later to work as the dump's lobbyist. In January, a commission stacked with Perry appointees gave the dump permission to accept nuclear waste from around the country.
David Nance: In 2009, the founder and chairman of Convergen LifeSciences Inc, a tiny biotechnology firm, applied for a $4.5 million grant from Texas' Emerging Technology Fund, a sort of public-sector venture capital fund. When the grant was denied, Nance appealed the decision to a Perry-appointed statewide advisory committee (of which Nance had once been a member), the Wall Street Journalreports. The committee ruled in favor of Nance, who has given more than $100,000 to Perry's campaigns since 2001. But that's not all. Perry also appropriated $2 million in state funds to a business-services nonprofit, Innovate Texas, which pays Nance a six-figure salary but does not have a working phone number, the Journal reports.
Lonnie "Bo" Pilgrim: In March 2008, the owner of the Pilgrim's Pride poultry company met with Perry and soon after gave him a $100,000 donation for the Republican Governor's Association, which Perry chaired at the time. Less than a month later, Perry asked the Environental Protection Agency to waive ethanol standards that Pligrim believed would drive up chicken feed costs. Pilgrim later donated $25,000 to Perry's political action committee and footed the bill for him and three aides to fly to Washington, DC, to speak out against ethanol.
Kenneth Lay: In 2001, Rick Perry appointed an Enron exec to chair the Texas Public Utilities Commission, and the next day, Perry got a $25,000 check from Lay. As Molly Ivins mockingly pointed out, Perry "explained this, to everyone's satisfaction, as being 'totally coincidental.'"
B.J. "Red" McCombs: The San Antonio Clear Channel billionaire, who contributed nearly $400,000 to the governor, is the primary financial backer for a Formula One racetrack to be built near Austin. The state has pledged $25 million a year in subsidies to support the project, the LA Timesreports.
Mike Toomey: Perry's former chief of staff earned up to $2.2 million last year as a Texas-based lobbyist. He owns a private island in New Hampshire with Dave Carney, Perry's campaign manager. In 2007, Perry signed an executive order requiring all teenage girls in Texas to take a vaccine manufactured by Merck, one of Toomey's lobbying clients (the legislature eventually repealed the order). Toomey is now creating a Perry-focussed super-PAC, Make Us Great Again.
Phil Adams: A college friend of Perry's who gave his campaigns at least $314,000, Adams was a backer of Terrabon Inc, a Houston company that received a $2.75 million grant from Perry's Emerging Technology Fund. Perry also appointed Adams to a coveted post on Texas A&M University's Board of Regents (other regents who aren't Perry supporters say they've been pressured to resign). Adams has returned the favor by giving the Perry family free tickets and transportation to basketball and football games.
James Leininger: The state's largest political donor during much of the 1990s, Leininger gifted Perry's campaigns at least $264,000, in addition to a $1.1 million loan that's credited with putting him over the top in a 1998 race for lieutenant governor. Leininger is an investor in Gradalis Inc, a Dallas biotechnology firm that received $1.75 million from Perry's Emerging Technology Fund, the Dallas Morning News reports.
James Dannenbaum: Donated more than $320,000 to Perry's campaigns and received multiple transportation contracts from the state. His company, Dannenbaum Engineering, was implicated last year in an FBI investigation of El Paso officials who'd swapped political donations for county contracts, according to the El Paso Times. In 2007, Perry appointed Dannenbaum to the University of Texas Board of Regents.