Greg Abbott’s political contributions: part 11. Border Health, Laurence Hirsch and James Flores
| September 18, 2014 | 9:16 pm | Action, Analysis, Local/State | No comments

by James Thompson

According to Project Vote Smart, Border Health, Laurence Hirsch and James Flores were tied to be Greg Abbott’s 16th highest political contributors at $100,000.

Texas monthly writes about Border Health PAC:

“A well-funded political action committee has augmented the region’s political influence. The Border Health PAC, whose contributors are closely associated with Doctors Hospital, has contributed $940,000 to state and local candidates and now boasts a war chest in excess of $1 million.

The PAC’S initial treasurer was Dr. Carlos Cardenas, a physician on the Doctors Hospital at Renaissance Board of Managers. The hospital was constructed by Alonzo Cantu, a successful Valley real estate developer who was known nationally as a “bundler” for Secretary of State Hillary Clinton during her presidential campaign. Cantu remains a key investor in the hospital. His involvement in blocking federal legislation banning doctor-owned facilities was highlighted in a 2007 Washington Post profile.

The Doctors Hospital group is obviously well connected: Its board hosted Speaker of the House Nancy Pelosi in 2007 for the grand opening of its new Women’s Hospital. (Cantu made her trip worthwhile, as he personally contributed $6,600 to the Democratic Congressional Campaign Committee that month.)

And former Texas comptroller John Sharp, now a Democratic candidate for the U.S. Senate, owns a small stake in the hospital.  He has also contributed $250 per month since November 2005, to the Border Health PAC. That  same month Governor Rick Perry named Sharp chairman and Cantu a member of his tax reform commission. Sharp has also contributed $250 each month to the federal Border Health PAC. There are others who make clockwork-like contributions like Sharp’s–Cantu, for instance has sent a $250 check each month since August, 2004, as has Doctors Hospital CEO Lawrence Gelman. Cardenas said in a phone interview that all owners are encouraged, but not required to give to the PAC. The PAC has received authorization to draw a certain contribution from each owner, but Cardenas says there is no link between those sums and the hospital’s profits.

Sharp, who is an announced candidate for the U.S. Senate seat that Kay Bailey Hutchison will give up this fall, said his contributions to the PAC do not mean he agrees with the positions advocated by the group. As for the proposed federal ban on doctor-owned facilities, Sharp said, “It is not on my radar screen.” He said he signed up to make regular contributions to the PAC at Cantu’s request, and said he believed most investors did as well. “See, they have these deals at banks where you can automatically deduct,” he told me. “It’s no different than any other PAC.”

He also noted that Cantu has not held a fundraiser for him in his current race. According to news reports, Cantu held an event for Sharp’s opponent, Houston mayor Bill White, to meet community leaders.

The largesse of the Border Health PAC is significant. Since 2006, here are some of its beneficiaries: in the Texas Senate, Juan Hinojosa, $125,000; Judith Zaffirini, $50,000; Eddie Lucio, $25,000; in the House of Representatives, Richard Raymond, $20,000; Yvonne Gonzales-Toureilles, $20,000; Veronica Gonzales, $22,500, Flores, $42,500. Perry picked up $75,000 during the same period, and Lieutenant Governor David Dewhurst and former House Speaker Tom Craddick both netted $25,000.

Undoubtedly, political influence has been brought to bear on the federal issue of physician-owned facilities and the state issue of managed care. So should lawmakers revisit the issue of extending managed care for Medicaid in the Valley?

State representative John Zerwas, who oversaw the state health care budget for the House this spring, says he advocated moving to managed care in the Valley to take advantage of the estimated cost savings, but Valley lawmakers “would have none of it.” Zerwas, a physician, says, “There is no doubt that managed care makes costs go down. The question is what will that do to the hospitals and the docs?” The delivery system in the Valley is “fragile,” he said.

Still, given evidence of “overutilization” of medicine dramatized by the New Yorker article, he said “It should be a wake-up call to practitioners in the Valley to recognize that the single biggest driver of the cost of care is the pen in their hand.”

Coleman, who is leading a group of state lawmakers making recommendations for national heath care reform, recently met with representatives of Doctors Hospital. “I was chagrined that Texas was being used as an example of the worst in terms of costs, particularly when we have the most uninsured. A change needs to occur in how health care is delivered in Hidalgo County.”

But he cautioned against a “knee-jerk” reaction, like banning physician-owned facilities or switching to a traditional managed care system that does not take into account the region’s unique mix of poverty and chronic illness.

Cardenas argued that the Valley has needed its current system for Medicaid administration—primary care case management, which allows many medical procedures to be billed as “fee-for-service”—because its population is more spread out, poorer, and more sickly than is characteristic in other areas of the state. Adopting the managed care system of the state’s other metro areas might realize savings, but would also result in poorer care for patients, Cardenas said. It is not immediately clear why managed care would not work in these circumstances.

Senator Steve Ogden, chairman of the Texas Senate Finance Committee, says he’s always believed managed care would trim health care costs in the Valley. But, he acknowledged, “Valley legislators line up uniformly opposed to it. It was not a fight I took on because there wasn’t anything I could do about it.”

This is how the system works: The politicians who get huge contributions from the Border Health PAC protect the status quo, the doctors continue to order expensive medical procedures, and the money rolls in. The question is whether, given the spotlight shone on the Valley by the New Yorker and now by the New York Times (“ Texas Hospital Flexing Muscle in Health Fight ”) the question is whether the status quo can be changed in the face of resistance from the region’s delegation. Says Ogden: “There are some providers using poor people to make a lot of money. And I think South Texas is probably ground zero for that.”

Forbes magazine wrote this about Laurence Hirsch:

Mr. Hirsch is Chairman of Highlander Partners, a private investment company. He has served as Chairman of our Board of Directors from July 1999 to the present and also served in that capacity from January 1994 through December 1997. He was our interim Chief Executive Officer from April 2003 through September 2003. Mr. Hirsch is a member of the Executive Committee of our Board of Directors. Until his retirement on March 31, 2004, Mr. Hirsch served Centex Corporation in various capacities, including as President beginning in 1985, as Chief Executive Officer beginning in July 1988 and as Chairman of its board of directors beginning in July 1991. Mr. Hirsch served as a director of Belo Corp. from August 1999 through January 2008 and continued as a director of A. H. Belo until May 2011. Mr. Hirsch served as a director of the Federal Home Loan Mortgage Corp. (Freddie Mac) from November 2009 until February 2012. Mr. Hirsch is currently Chairman of the Center for European Policy Analysis.

Forbes magazine wrote this about James Flores:

James C. Flores, Vice Chairman of the Board of the company and President and Chief Executive Officer of Freeport-McMoRan Oil & Gas LLC, our wholly owned subsidiary, since June 2013. Former Chairman of the Board and Chief Executive Officer of Plains Exploration & Production Company from its inception in December 2002 and President from 2004 until acquired by the company in 2013. Chairman of the Board of Plains Resources, Inc. (now owned by Vulcan Energy Corporation) from May 2001 to June 2004 and current director of Vulcan Energy Corporation. Chief Executive Officer of Plains Resources, Inc. from May 2001 to December 2002. Co-founder, Chairman, Vice Chairman and Chief Executive Officer at various times from 1992 to January 2001 of Ocean Energy, Inc., an oil and gas company.

Mr. Flores owns a “mega-mansion” located at the corner of River Oaks Blvd. and Inwood in Houston. This is the heart of River Oaks, the most exclusive neighborhood of the wealthiest Houstonians. The mansion boasts 28,000 ft.² and is valued at nearly $19 million.

Texas voters should remember these contributors to Greg Abbott’s political campaign when they cast their ballot in November.

The Right of Nations to Self-Determination
| September 17, 2014 | 9:52 pm | Analysis, International | No comments

Vladimir Ilyich Lenin

Scotland’s referendum: The Communist View
| September 17, 2014 | 9:48 pm | Analysis, International | No comments

A long-awaited referendum on whether Scotland should become an independent country will be held on Sept. 18. The following statement on this issue was adopted in March 2014 by the Scottish Committee of the Communist Party of Britain.
People’s Voice
, Sept. 16, 2014

The Scottish Committee of the CPB defends the right of nations to selfdetermination and condemns the Coalition government for its threats of noncooperation.

If a majority of the Scottish people vote for independence in the 2014 referendum, then their decision should be respected. Our commitment to the right to selfdetermination is one of principle. At the same time, the Communist Party maintains its other principle of judging the exercise of that right in terms of the class interests of the Scottish people and of those of working people in Britain and internationally.

On this basis, Communists do not believe independence on the terms proposed is in the interests of working people today any more than it was in the 1970s. At that time Communists and the Left in the trade union led the way in the fight for a Scottish parliament with powers to intervene in the economy, to develop public ownership and increase labour’s power over capital  powers that would in turn strengthen the bargaining power of working people across Britain.

It is our conviction that independence as proposed in the White Paper would weaken such bargaining power and strengthen that of big business and of its state machine at both British and Scottish level. Membership of the sterling area would subordinate Scotland to current neoliberal policies without any power to change them  at the same time as seriously eroding the opportunity for united working class action across the nations of Britain to do so.

Worse still, membership of the EU would oblige Scotland to incorporate in any written constitution the terms of the 2012 Treaty on Stability, Coordination and Governance. This Treaty requires even tougher controls on government spending than the Stability and Growth Pact  with the same objective: using unemployment as the market regulator to curb the trade union movement.

While it is conceivable that some of the most reactionary aspects of the White Paper, such as NATO membership and reducing Corporation Tax, might be reversed as a result of subsequent political mobilisation by the Left, we judge it to be extremely unlikely that there would be a reversal of positions on Sterling and EU membership.

The transition to independence will take place at a time of diminishing oil revenues and unfavourable economic circumstances  allowing any Scottish government, and the big business controlled media, to call for fiscal “stability” in face of adverse market reactions. Leftwing supporters of independence need to think through the consequences. The socialist Left does not possess anything like mass support in Scotland today.

Election results show this. The inevitably rancorous negotiations over the division of resources will harden nationalist attitudes. Yet these years, 20152017, will be precisely when the terms of the new written Scottish Constitution will be determined and the SNP’s White Paper demonstrates a clear intent to do so on the terms set by big business and Scotland’s own finance capital sector.

This is why Communists oppose this White Paper on Independence. Instead we continue to call for radical federalism as the best way of developing class cohesion across the nations of Britain: national parliaments with powers of economic intervention, ownership and control and a federal parliament with overall powers over economic policy and a constitutional obligation to redistribute in terms of social need.

We believe that this provides the best framework for uniting working people on class terms against the state power of big business. Currently that power is concentrated at British level and represents above all the interests of the City of London.

Under a “White Paper” Scottish Constitution, big business will continue to exercise this power through its disproportionate ownership of the Scottish economy and the binding requirements of its instruments, the Bank of England and the EU Treaties.

A No vote in the referendum has to be made the springboard for remobilising the working class movement at British level to demand real constitutional change.

The fight for radical federalism, as outlined in Red Paper, must begin now. At the same time the fight for the objectives of the People’s Charter and the People’s Assembly, backed by the united trade union movement in England, Scotland and Wales, must be stepped up. Radical Federalism will only be won on the basis of class mobilisation across the nations of Britain.

Greg Abbott’s political contributors: part 10. Ardon Moore
| September 17, 2014 | 9:02 pm | Action, Local/State | No comments

According to Project Vote Smart, Greg Abbott’s 14th highest political contributor is Ardon Moore, who weighs in with $100,231.

BusinessWeek provides a description of Mr. Moore:

“Mr. Ardon E. Moore serves as the Chief Executive Officer and President of Lee M. Bass, Inc. Mr. Moore serves as Vice Chairman of University of Texas Investment Management Company. He serves as a Trustee of Cook Children’s Hospital. He served as a Director of Siemens Water Technologies since September 1997. He served as a Trustee of Texas Water Foundation. Mr. Moore serves as the President of Fort Worth Zoological Association. He served as President of All Saint’s Episcopal … School of Fort Worth. He serves as the Member of Austin Development Board at The University of Texas, Dean’s Circle, The University of Texas McCombs School of Business, and Stanford Graduate School of Business Alumni Association.

The Star-Telegram writes about Ardon Moore and his wife on 6/25/2013:

“FORT WORTH — Ruth Carter Stevenson, daughter of the Star-Telegram’s founding publisher Amon G. Carter Sr., was herself a civic force, having co-founded the nonprofit Historic Fort Worth Inc., a group dedicated to defending the city’s architectural heritage.

Fervent on such legacy issues, Stevenson also served on the board of the National Trust for Historic Preservation, nominated by investor-philanthropist Robert M. Bass.

Yet on Thursday and Friday, just months after her death in January, Stevenson’s own award-winning house of mid-century modern design was demolished by its new owner.

Only a greenhouse at the front of the property at 1200 Broad Ave. was left standing, and truck after truck hauled off rubble on Friday from what had been a 6,080-square-foot house, valued by the Tarrant County Appraisal District at $641,000. The entire property, overlooking the West Fork of the Trinity River in west Fort Worth near River Crest Country Club, was appraised at $2.3 million. The purchase price has not been made public.

The house, built in 1956, was sold in April to an anonymous Delaware-based entity, 1200 Broad LLC. A Carter family member identified the new owners as Ardon and Iris Moore of Fort Worth.

The demolition occurred immediately after an appeal to spare the home on Thursday by the Texas Society of Architects and after several attempts this week by the Star-Telegram to reach Ardon Moore, 54, CEO of Lee Bass Inc. investment firm, for comment.

Coincidentally, a demolition permit has been issued for Stevenson’s father’s sprawling home next door at 1220 Broad Ave. That house, known as the Bomar-Carter house, is listed on the Tarrant County Historic Resources Survey, but like Stevenson’s is not protected by official historic landmark status.

The Bomar-Carter house was built in 1911 by the Bomar brothers, developers of the Rivercrest addition and country club, and sold in 1919 to Amon Carter Sr.

Researchers believe it was designed by the noted local firm Sanguinet and Staats in the California-influenced “ultimate Craftsman” style. Carter’s third wife and widow, Minnie Meacham Carter, lived in the house until she was moved to a care center in 1995. It stayed in the family until 2011 when it was sold to Range Resources Chairman John Pinkerton. He did not respond to several requests for comment.

Fort Worth architect Mark Gunderson decried the move to raze the Bomar-Carter house, saying it’s “inconceivable that a city would allow the demolition of the 100-plus-year-old home of its foremost civic supporter of the early 20th century while expressing allegiance to the city’s ‘heritage.’ ”

In recent days, architecture and preservation groups tried to rally support to save the Bomar-Carter house, and then added Stevenson’s home when it was learned that a demolition permit had been issued on May 30.

“This home is both a monument to the life and work of Ruth Carter Stevenson, as well as exemplary of the work of renowned architect Harwell Hamilton Harris,” Eva Reed-Warden, a College Station architect, wrote in an open letter to save the structure.

“As a representative of the historic resources committee of the Texas Society of Architects, I am writing to plea for the saving of this icon of 1950’s architecture and Fort Worth cultural history.

“As time passes and Fort Worth continues to grow and evolve, it becomes more and more important to not lose knowledge of the people and culture that came before, that helped make us who we are,” she wrote. “Fort Worth would not be the place it is today without the contributions of Ruth Carter Stevenson, and her dedication to both art and architecture is exhibited in this home.”

Harris, who died in 1990 at age 83, was dean of the University of Texas at Austin School of Architecture when Stevenson hired him. With a practice in Dallas, he became known as a prominent member of a group of progressive architects known as the “Texas Rangers.”

Owners didn’t seek designation

The city of Fort Worth could do nothing to prevent demolition since none of the owners ever applied for historic landmark status, said city spokesman Bill Begley. He noted that Carter’s own grandson, J. Lee Johnson IV, successfully fought an attempt to give the Bomar-Carter house such a designation when he lived there in 1995.

“Respecting the history and the roots of our city and its architecture are very important to me and to the City of Fort Worth,” Mayor Betsy Price said in a statement. “However, we also must respect the rights of property owners. There is a process in place for identifying and designating historic properties, but the property owners did not take any action to begin that process. Therefore, no action has been taken.”

Sheila Johnson, Stevenson’s oldest daughter, said the heirs were unaware that her mother’s house would be demolished shortly after being sold. But she said she doubted if any relatives would have opposed its destruction. Johnson said the house had had mold problems about 10 years ago, but she did not know if there had been a recurrence or if there were other structural problems.

As a child, Johnson said, she went along as boulders were transported from Mineral Wells to construct the impressive garden designed by noted landscape architect Thomas Church. To her, the garden was more significant than the house, she said.

The older Bomar-Carter house had major problems, Johnson said. She said she had been told that it would have cost the Pinkertons more to restore the house than to rebuild from scratch.

‘Significant structure’

In a biography of Harris, author Lisa Germany wrote that Ruth Carter Stevenson chose the California-born architect because, unlike her West Side neighbors who built versions of French chateaux and English country manors, she wanted a modern and unpretentious home for her family “where her art collection seemed natural and personal, not monumental and aloof.”

Harris, who was influenced by Frank Lloyd Wright, used warm coral brick made by a company in which the Stevenson family owned stock, according to Germany’s 1991 book, Harwell Hamilton Harris. When Harris died in 1990, the biographer told The New York Times that Wright told Harris on their first meeting in the 1940s: “Of course I know Harwell Hamilton Harris. You’re a great artist, and when your hair is as gray as mine, you’ll be a great architect.”

Eleventh-hour appeals to save the Stevenson house — some issued to “whom it may concern” because the ownership could not be learned — fell on deaf ears.

Stevenson, aside from her historic preservation work, built the Amon G. Carter Museum of American Art based on her father’s collection and was the first woman appointed to the board of Washington’s National Gallery of Art.

“When showing the most important architectural work in the city to visiting dignitaries — noted architects, artists, writers and others — Ruth’s house is easily one of the six or so most significant structures in Fort Worth,” Gunderson said.

“Even in a city as conservative as Fort Worth, with its seeming ‘anti-modern’ bias, her house and garden remains a quiet, unostentatious, understated oasis and its loss would be a travesty,” the architect said before learning it was demolished. “It is sad commentary on the lack of appreciation for architecture and landscape in a place containing a handful of the best examples in the world.”

Staff writer Sandra Baker contributed to this report, which includes material from Star-Telegram archives.

Barry Shlachter, 817-390-7718

Read more here:


Texas voters should consider this powerful political contributor to Greg Abbott before casting their ballot in November.

Texas AG under fire (reprinted from 9/24/2006)
| September 15, 2014 | 10:15 pm | Action, Analysis, Local/State | No comments

(Originally written on 9/24/2006)

By Paul Hill

HOUSTON – Texas Attorney General Greg Abbott is under pressure for his “voter fraud” crusade and for improperly seizing records that were part of a pending federal court case involving possible fraudulent diagnoses of silicosis, a lung disease.


The San Antonio Express-News reported that Abbott, a Republican, is enforcing a controversial 2003 Texas law that makes it a crime to put other voters’ absentee ballots in the mail or deliver them to election officials. Democrats reportedly plan to file a lawsuit in federal court to challenge the law, arguing it violates the Voting Rights Act and the U.S. Constitution’s guarantees of free speech, free association and equal protection. Democrats will allege that Abbott is “selectively enforcing the law against Hispanics and blacks to intimidate minority voters and dilute their strength at the polls.” Democrats complain that of the 13 individuals indicted for voter fraud, 12 are minority women, 1 is an Anglo male and 0 are Republicans. The suit will also allege that Abbott’s educational campaign launched before last year’s primary used racial cues and linked African Americans to voter fraud.


Texas Democratic Party spokeswoman Amber Moon stated, “I think it’s evident that Abbott’s practice of singling out minorities and seniors is a shallow political effort to suppress the votes…It’s being done disingenuously. The majority of these cases are well-meaning folks who are simply trying to help their neighbors to vote.”


The Texas NAACP and the Mexican American Legal Defense and Educational Fund testified against the voter fraud law because it targets Latino and African American patterns of voting. Elderly African Americans and Latinos frequently prefer to vote absentee because they fear intimidation at the polls. If they are homebound, younger members of the community often assist them.


Meanwhile, it has been reported on David Van Os’ website that Abbott’s office “dispatched a squad of armed agents with subpoenas to forcibly seize, without permission, thousands of records from the federal court’s storage facility. These records were part of pending federal court cases involving possible fraudulent diagnoses of silicosis, a lung disease.”


U.S. District Judge Janis Graham Jack demanded that Abbott’s office return the documents immediately and suggested their removal could become a criminal matter. Abbot returned all the records except for 152, which his spokesperson said could not be found.


Abbott’s opponent in the November election, Democrat David Van Os, issued the following statement: “I’m not surprised by this arrogant conduct. Greg Abbott is part of the silk-stocking social clique that runs Texas government as if it were their private club…This is the same Gregg Abbott who lets the Texas Department of Transportation hide its contracts with foreign companies. This is the same Greg Abbott who uses the taxpayers’ money to file legal briefs and maps on behalf of the Republican Party, who employs Tom DeLay’s cronies, and who refuses to challenge the oil companies on behalf of the people of Texas. Seizing and then losing working people’s personal medical records from a court file is par for his course.”


Abbott apologized in a letter to Judge Jack for ‘the confusion and misunderstandings’ his actions caused. He also maintained that his agents were only joking when they threatened to arrest the storage supervisor if he didn’t hand over the documents.


Van Os commented: “Attorney General Abbott admitted to the federal court in Corpus Christi that he should not have seized court files without getting permission from the court. He apologizes, but then offers the incredulous excuses that his office thought permission had been obtained from the judge and that his armed agents were just joking when they threatened the supervisor of the court’s records with arrest. How did top officials in the Attorney General’s office come to think permission had been obtained from the judge when nobody had even contacted the judge? What kind of law enforcement organization allows its agents to threaten arrest as a joke when in the course of official duties?”

Greg Abbott’s political contributors: part nine. Kelcy Warren
| September 14, 2014 | 9:46 pm | Action, Analysis, Local/State | No comments

By James Thompson

According to Project Vote Smart, Kelcy Warren is the 12th highest political contributor to Greg Abbott at $101,303.

Texas Monthly wrote that Kelcy Warren is the 18th richest person in Texas with a net worth of $3.4 billion. The magazine also wrote about Mr. Warren: “Kelcy Warren knows pipe. He grew up welding with his dad for a modest pipeline company in East Texas and later found he had a knack for buying up undervalued pipeline outfits and squeezing money out of them. Along with Ray Davis (future co-owner of the Texas Rangers), he built Energy Transfer Partners into one of the nation’s largest pipeline companies, making himself a billionaire along the way. He recently caused a splash in Dallas by giving a reported $10 million to downtown’s new Klyde Warren Park—named after his ten-year-old son—but what he really wants to do is sing. He owns a recording studio in Austin, and in his $29 million, 27,200-square-foot castle in Preston Hollow, there is a hidden door in a walk-in closet that leads to a secret room filled with guitars.”

Forbes Magazine indicates Mr. Warren is the 235th richest man in the world and they estimate his wealth at $6.1 billion.

Forbes Magazine also had this to say about Mr. Warren: “The money just keeps flowing at Kelcy Warren’s Energy Transfer Equity. Shares of the oil and gas pipeline master limited partnership are up 80% this year, crushing the returns at rival energy billionaire’s Richard Kinder’s Kinder Morgan Energy Partners (shares are down 10%). Natural gas prices are at their highest price in four years as a frigid U.S. winter sent demand soaring. Warren co-founded natural-gas pipeline firm Energy Transfer Partners with Ray C. Davis in 1995; he bought struggling gas assets and linked them into an efficient system. Today its parent, Energy Transfer Equity, owns more than 17,000 miles of natural gas and crude oil pipelines. ETE bought Southern Union pipeline company for more than $5 billion, and bought Sunoco and its gas stations for $5.3 billion, both in 2012. Warren, a music fan, produces albums for singer-songwriters at his Austin-based studio, Music Road Records.”

Texas voters should consider this major contributor to Greg Abbott’s political campaign before casting their ballot in November.

Greg Abbott’s political contributors: part eight. Charles W. Tate
| September 14, 2014 | 9:25 pm | Action, Analysis, Local/State | No comments

By James Thompson


According to Project Vote Smart, Charles Tate is the 12th highest contributor to Greg Abbott’s political campaign at $105,000.


In 2010, the Dallas Morning News wrote about a scandal in Gov. Perry’s office which involved Mr. Tate. The Dallas Morning News wrote: “When Gov. Rick Perry announces that a company will get money from the Texas Emerging Technology Fund, he often describes it as an important investment in the state’s future.

Behind the scenes, some of the governor’s biggest political supporters have been making investments of their own – in Perry and in companies getting money from the tech fund.

An investigation by The Dallas Morning News found that more than $16 million from the Emerging Technology Fund has been awarded to companies with investors or officers who are large campaign donors to Perry.

The governor denied that politics influence his decisions on tech fund awards.

The fund gives taxpayers’ dollars to promising high-tech startups. It is a key part of Perry’s economic development program, which he has touted in his re-election campaign against Democrat Bill White.

The governor’s office administers the tech fund, and the governor must approve each award – a system that most other states with tech funds avoid to guard against political influence.

The News found that tech fund money has been awarded to companies with which at least eight significant Perry donors are affiliated.” In this regard, the Dallas morning news wrote that “$1.5 million (was awarded) to ThromboVision Inc., a Houston company. One of its investors was Charles W. Tate, who has donated more than $424,000 to Perry.

The Dallas morning news also had this to say about Tate: “Charles W. Tate, a noted Houston financier, is the head of one of those boards.

Tate was a partner in the investment firm led by Dallas businessman Tom Hicks, former owner of the Texas Rangers baseball team.

In 2006, Tate started the Texas Life Science Center for Innovation and Commercialization. It functions like a regional board, but it has statewide responsibilities for tech fund applicants involved in biotechnology, pharmaceuticals and medical devices.

ThromboVision brought its tech fund application before the board. The firm was developing technology to measure the effectiveness of anti-clotting drugs.

In November 2006, the life science board recommended that ThromboVision get money from the tech fund. Tate said he voted for it. The endorsement was forwarded to the advisory committee in Austin.

Four months later, ThromboVision’s CEO, Edward Teitel, approached Tate with an “investment opportunity,” Tate wrote in a letter to The News.

“At the time,” he wrote, “the [state advisory committee] had already approved the ThromboVision application contingent upon the company’s ability to raise matching funds from the private sector.”

Tate made two investments in the company, he wrote, in May and August of 2007.

Perry announced in October 2007 that ThromboVision would get $1.5 million in tech fund money.

Tate said his vote to recommend funding was proper. “There was no need to recuse myself from [life science board] discussions on ThromboVision as I was not an investor on the date of that meeting,” Tate wrote.

Nothing in the rules of the tech fund’s state advisory committee, he said, barred him from investing in companies receiving tech fund awards.

“Furthermore,” he wrote, “the [life science] board received oral advice from legal counsel at Vinson & Elkins at its first board meeting that there was nothing to prohibit … directors from investing in ETF-funded companies.”

That soon changed, Tate said. “However,” he wrote, “in the fall of 2007, Vinson & Elkins reversed its prior opinion and orally advised the … Board that under federal IRS tax guidelines, [life science] directors should avoid investing in ETF-funded companies.”

An attorney who advises the Internal Revenue Service on tax-exempt matters told The News he would counsel board members not to make investments in companies they review.

“You’re benefiting from confidential information,” said James P. Joseph, who heads the tax-exempt practice at Arnold & Porter LLP in Washington, D.C. “It’s just a classic conflict of interest.”

The ThromboVision investment was Tate’s second in a company that received a tech fund award. In January 2007, Tate bought shares in OrthoAccel Technologies Inc., another Houston-based firm.

Five months later, the life science board recommended that OrthoAccel get money. This time, Tate said he did not vote.

Perry’s office announced in early 2008 that OrthoAccel would receive $750,000 from the tech fund.

Records used by the state to monitor the award show that the governor’s office was informed that Tate was an investor in OrthoAccel.

Tate said that ThromboVision and OrthoAccel were treated the same as other tech fund applicants.

“My campaign contributions [to Perry] had absolutely no effect on OrthoAccel or ThromboVision receiving funds,” he wrote. “Both of these companies were subjected to the same rigorous review and approval process” as other applicants.

Tate’s more than $424,000 in donations to Perry’s campaigns since 2000 includes travel on Tate’s private airplane, he said.

In May, he wrote a $100,000 check to Perry, and is a member of the governor’s statewide re-election committee.

Despite support from the state, Tate and other investors, ThromboVision filed for bankruptcy on Sept. 2. Court filings show that Tate owned 200,000 shares of the company’s preferred stock.”

BusinessWeek describes Mr. Tate’s background as: “Mr. Charles W. Tate is a Founding Partner, since 2003 and Chairman of Capital Royalty L.P. Mr. Tate was Co-Founder an Partner at HM Capital Partners LLC. He was an Investment Professional at Bank of America Corporation. He holds 35 years of experience in investment banking and private equity. Before founding Capital Royalty in 2003, from 1991 to 2002, Mr. Tate was a Partner at Hicks, Muse, Tate & Furst and was at Morgan Stanley & Co. for 19 years including 11 years as … a Managing Director in both its merger and acquisition and merchant banking divisions. Before joining Morgan Stanley, he was employed by the Bank of America from 1968 to 1971. Mr. Tate also served as Managing Director at Metalmark Capital LLC. Since 2001, he has been a Board of Visitors of M.D. Anderson Cancer Center. He is on the Advisory Cabinet of The University of Texas System Chancellor’s Technology Commercialization. He has been a Director of University of Texas Investment Management Company since 2004. He serves as a Director of The University of Texas M. D. Anderson Cancer Center. Mr. Tate has been a Director of The Welch Foundation since 2008. He has been a Director of Capital Royalty L.P. since 2001. Mr. Tate has been the Chairman of Texas Life Science Center of Innovation and Commercialization from 2005 to 2010. He has been on the Board of Directors of Cancer Prevention and Research Institute of Texas from 2008 to 2013. He served as a Director of Grupo Minsa SA de CV. He serves as a Member of Board of Overseers at Columbia Business School. In addition, Mr. Tate serves on the Board of the Institute for Sports Medicine. He also served on the board of World Health & Golf Association. He served as the Chairman of the Board at International Wire Group Holdings, Inc. since February 2002 and served as its Director since April 1995. He was Chairman of the Board at International Wire Holding Company since February 2002 and served as its Director since April 1995. He served as a Director of Berg Electronics Corporation since April 1993 and Morningstar Group, Inc. since August 1991. He served during 2002 on Governor Mr. Rick Perry’s Council for Science and Biotechnology Development. Mr. Tate received an M.B.A. from Columbia University Graduate School of Business in 1972 and has been a member of its Board of Overseers since 2001. He also received a Bachelor of Business Administration in 1968 from The University of Texas at Austin, where he is a distinguished alumnus, member of the McCombs School of Business Hall of Fame, and recipient of the 2012 Presidential Citation.”

In March 21, 2013, Texas Mostly wrote this about Tate: “A Note on Corruption in Texas

The legislative session is well underway but the biggest political deal was actually cut before the opening gavel. Nothing was said explicitly—nothing agreed to openly—certainly nothing was written down but the agreement, such as it is, potentially affects state leadership including the governor, lieutenant governor and attorney general. It’s more about what won’t be done than what will, which at the Capitol is just as freight-filled and heavyweight as any legislative initiative.

The issue involves the Austin district attorney’s office and the biannual effort by the state’s Republican leadership to strip the Democratic prosecutor of authority to investigate corruption in state government. Republicans were making the usual noises late last year about reducing the D.A.’s authority—and then went silent. What happened in the meantime was the revelation of bad practices in the awarding of grants at the newly-created Cancer Prevention Research Institute of Texas, CPRIT—a scandal that guarantees at least two more years of life to the Austin prosecutor’s Public Integrity Unit and assures no inconvenient questions for state leadership. What’s not to like?

A major investigation that targets powerful politicians sucks a lot of goodwill from the investigator, as prosecutors learned when they went after House Majority Leader Tom DeLay. The process leading to conviction of an elected official is as much political as criminal yet the D.A. must repeatedly reassure the public the motives for going to court are not partisan. With a prosecutor now in office who is known for professional caution, after a predecessor who shot from the hip, the chances of high-level indictments in the CPRIT case have never been great. But dynamics are shifting with an attorney general who wants to be governor—a lieutenant governor who just lost a disastrous run for Senate and suddenly seems vulnerable—and a governor who wants to be president. For all of these men any hint of scandal could be fatal, whether aired in a courtroom or in the press. If the district attorney merely allows speculation regarding her intentions to continue, declining to refute her interest in following the case wherever it leads, that will be enough to make her opponents reluctant to stir the pot or question her authority. All they want is a little consideration in return which they are almost certain to get. That’s how things work during the legislative session.

Outside the Third World few places have a political dynamic that lends itself to corruption like Texas today: a mostly one-party state where money plays an outsized role and with a governor who has been in office a long long time and has a history of “initiatives” that somehow always seem to lead to more money in his campaign coffers. These ingredients are tempered by a system that supports transparency, at least more so than in many other states. None of which has led to legal action previously. Suppose it were different, however. Suppose prosecutors really wanted to get to the bottom of the grant review process at CPRIT and check any ties to high state officialdom—ties that are much rumored. They could do worse than issue a single subpoena to one man—the so-called “missing man” in the investigation although he seems easy enough to find—with ties to the state’s leadership and who is a founding father of the Texas culture of crony capitalism, as evidenced, even before the cancer fund, by the much-abused Emerging Technology Fund.

That man’s name:

Charles W. Tate.

Healthcare is one of the top industries in Texas, as in the nation, and Charles Tate has his fingers in many pies.

He is the Tate of Hicks, Tate and Muse, the legendary Dallas buyout firm. He is a member of CPRIT’s Oversight Committee which of course prompts the current interest. Chairman of the Texas Life Science Center of Innovation and Commercialization, as well. Chairman of the external advisory committee of the Department of Biomedical Engineering, “a single University of Texas academic department spanning U.T. Austin’s Cockrell School of Engineering, M.D. Anderson Cancer Center, and the Health Science Center at Houston,” according to his bio on the site of the Columbia University School of Business where he did his graduate work and serves on the Board of Overseers.             In another biography he is quoted as saying, speaking of his younger days, as a kid in Texas, “I had grown up with very modest financial means. I knew how that felt and didn’t ever want to feel it again. So I was very ambitious in terms of my aspirations relative to a business career.”            Tate can certainly check that box off on his life’s list. He’s loaded. The guy is a walking corporation—the industries being Big Pharma and biotech, apparently with corporate ethics to match. An official of the Texas Ethics Commission, where Tate files his personal disclosure form listing his assets, said jokingly that Tate’s file is second only to Governor Rick Perry’s in number of pages. The similarity to Perry is striking. Both Charles Tate and the governor are conservatives who come from modest backgrounds who decry big government and yet manage to put away a few dollars by leveraging the State of Texas. They’ve done some of that work together, scratching each other’s backs.

Ignore Tate’s stock ownership for a moment. Look at his real property accumulation listed with the Ethics Commission instead. There’s the $6 million digs in River Oaks, a cabin and one-sixth interest in a condo in Colorado, two co-ops on New York’s Upper West Side, a lot in Germantown, N.Y., and another in Carmel, Ca.; two in Galveston, and one in the so-called “next Santa Fe,” Chama, New Mexico. Ignore his stocks and bonds on file with the Ethics Commission because although considerable what would be most revealing are actually the holdings of his investment company, Capital Royalty, headquartered in Houston, whose interests are secret. Tate describes Capital Royalty as “a market pioneer and innovator in healthcare investing that focuses on intellectual property investment in FDA-approved biopharmaceutical assets through royalty bonds, structured debt, revenue interests and traditional royalty monetizations.” In other words it’s a private equity firm that works “directly with leading healthcare companies, research institutions, and investors to provide customized financing structures.” The missing partner, the unseen hand, is the State of Texas itself especially the University of Texas in its various incarnations.

Capital Royalty’s “strategic investment committee” includes Dr. Mark McClellan, son of former Texas Comptroller Carole Strayhorn—McClellan was director of the U.S. Food and Drug Administration in the Bush Administration—and John Mendelsohn, former president of UT M.D. Anderson Cancer Center. There’s also a Boston biotech investor, Henri Termeer, who has had business relationships with the present M.D. Anderson president, Ronald DePinho.              As the details of the grant-awarding process at CPRIT became public late last year, the Houston Chronicle quoted internal CPRIT email showing that Tate had pushed for weakening controls on awards and had personally pushed for a grant to DePinho’s wife, herself a cancer researcher. A few years before, Tate was exposed by the Dallas Morning News for having bought stock in Thrombo Vision, a biotech company that he voted to award a grant as a leader of Governor Perry’s Emerging Technology Fund.

It’s worth revisiting what Rick Perry did with the ETF. It was quite clever, a new twist on an old game, selling influence: He gave grants, through men like Charles Tate, to companies whose directors and owners then gave the governor campaign contributions. No system of campaign finance is much different really. There’s always quid pro quo on some level, to be fair to the governor and Mr. Tate. The Austin district attorney for example relies on money and endorsements from the Austin Police Association whose officers present her with cases for prosecution and whose long history of shooting minorities the D.A. has coincidentally never found fault with. Men like Perry and Tate, in a way, are just more honest about the politics of the process. More direct (see you might say. It should be little surprise that CPRIT got in trouble. If you look at the first dozen or so companies that received funds for research, many of them are re-treads, some with political connections, from the Emerging Technology Fund. The present scrutiny is focused on a company called Peloton (whose major investor was a Dallas-based millionaire Republican donor) for which the CPRIT grant approval process was completely ignored. That’s where the D.A. entered the picture. Lucky for her, it’s a target rich environment.

Tate is suspect because he was the third or fourth largest contributor to both Rick Perry and Lieutenant Governor David Dewhurst last year. Dewhurst actually appointed Tate to CPRIT. Charles Tate was also the single largest individual donor to the CPRIT Foundation which increasingly has the smell of a slush fund. The only surprise here is how quickly the rot at CPRIT set in. Most state-affiliated organizations take decades to reach the level of impropriety that CPRIT achieved in only a couple of years. A diagnostician would say corruption was imported, that CPRIT was “infected.” To use the terminology of healthcare, Charles Tate is a good bet as the disease vector.

Most interesting is the role of Attorney General Greg Abbott.

A year before the CPRIT storm broke, Abbott ruled that Lieutenant Governor Dewhurst could withhold email between the lieutenant governor’s office and Tate. Abbott’s office also withheld all substantive communications between Charles Tate and the state’s other favorite pot of public money that politicians like to take advantage of, the huge Teachers Retirement System. At the same time Gov. Perry’s office said that it had no documentation on Mr. Tate at all—except a bio provided in 2002 when the biotech businessman asked to be appointed by the governor to a board or commission.

In that c.v., Charles Tate described himself as member of a group that tries to introduce Houston’s inner-city troubled youth to the joys of golf and, more importantly for Perry’s purposes, mentioned his role as “Chairman of the Technology Transfer Ad Hoc Committee for the University Cancer Foundation Board of Visitors’ Institutional Initiatives Committee.” Tate’s MD Anderson title is what this should really be all about. The district attorney may find her way through the grant application process but the real rip-off, the greatest potential loss to the taxpayers of the state, will be technology transfers in which research done at state universities paid for by public dollars is leeched away by institutional arrangements with for-profit companies. “The biopharma industry today,” Tate wrote in a recent op-ed piece for the Chronicle, “readily acknowledges its old business practices are outdated, and there is a search for improved commercialization models that bridge the cultural chasm between academic/medical research institutions and commercial biopharma companies.” This is the academic version of the privatization wave that state government went through previously, with even more ethical pitfalls because of the difficulty in knowing the value of the state’s intellectual property. That is not part of the D.A.’s brief in this case but it represents big losses for Texas government. On this front General Abbott’s record has been better. He recently ruled that public universities must release contracts executed with Big Pharma involving joint research. The drug companies, prompted by UT M.D. Anderson, sued Abbott and the case has yet to be resolved. The attorney general also ruled more than a year ago against the CPRIT general counsel’s wishes, forcing public release of applications for grants. Any communication between Charles W. Tate and high officials is still off-limits, according to General Abbott.

Which leads us to the University of Texas Investment Management Company where Tate is also on the board. UTIMCO serves as a kind of stand-in or case study for how business may be conducted at CPRIT. General Abbott also declined to release the majority of Tate’s email to UTIMCO CEO Bruce Zimmerman but from the context of what was disclosed and the redactions done by UTIMCO it seems clear Tate was asking the university investment fund to provide data for his private company.

In fact he’s done more than that. In an exchange of email in late 2011 Tate asked UTIMCO CEO Zimmerman to make calls to pension and investment groups across the country to promote Tate’s private business. Which Zimmerman agreed to do. “I would be happy to reach out to institutional investors to tell them about Capital Royalty,” Zimmerman wrote. “As you know, we very much like the investments, but, alas, are barred from participating due to our Code of Ethics.” Zimmerman’s “code of ethics” did allow him to provide a long list of whom he would be willing to contact for Tate: “Calpers, Calsters, CPP, Notre Dame, Michigan, Stanford, Harvard, U Penn, Emory, DUMAC, U of Calif, Chicago, Texas A&M Foundation, NYU, U of Wash, Brown, CommonFund.” What’s most disturbing about this back-scratching is that it came shortly after Zimmerman asked Tate to speak to reporters about the good work UTIMCO does and at about the same time that Tate helped defend Zimmerman and UTIMCO staff’s multi-million dollar bonuses (“Attached is the final Talking Points,” Zimmerman wrote to Tate, “to help support the phone calls you have graciously agreed to make on Monday regarding Tuesday’s incentive compensation decisions.”) Tate did not even try to be that subtle:             “Congratulations to you and your staff for another great comparative performance relative to your peers for the 12 months ending June 30, 2011. Regarding Capital Royalty, I look forward to the list of institutional investors you have been working on. The attached is a list of state pension funds and endowments that are prohibited by law from dealing with private equity placement agents and, therefore, must be contacted directly by the manager [Zimmerman.] Please consider these as you compile your list.” In effect Tate asked a state employee to recruit investors for him. If that’s what he did at UTIMCO—in return for a little support on staff bonuses—imagine what he could have asked of the governor and lieutenant governor in return for hundreds of thousands of dollars in campaign contributions. Charles Tate is a quid pro quo kind of guy. That gets results but can be problematic when the grand jury meets.

“It is common practice for us to have one-on-one conversations with Board members about prospective investments in which they may have some expertise/special interest,” Zimmerman wrote in another email. That’s how the state system of boards and commissions is supposed to work, not just UTIMCO but also CPRIT and many others in which men and women like Charles Tate offer private expertise on public investments or grant applications.             Some commissions and governmental bodies are, frankly, particularly susceptible to corruption. One of the bigger self-dealing scandals in UTIMCO history involved another marquee name from Hicks, Tate and Muse—Tom Hicks—appointed by then-Governor Bush and who was caught doing private business on public turf. (Hick’s younger brother, also an investor, is now a UT regent and a UTIMCO board member but there’s no indication he’s following in his big brother’s shadier footsteps.) For Charles Tate, the problem is he fits so well the part of the heavy in this motion picture. At board meetings he is often called upon by his peers as an expert, yet his demeanor in these meetings never portrays any hint of private interest. If there is a bad apple at UTIMCO, let’s propose a simple mechanism not unlike what happened at the Emerging Technology Fund that would make Charles Tate the perfect bagman. First he improves Capital Royalty’s bottom line by hijacking UTIMCO’s data or getting staff to promote him and his business. Then he turns around and gives big contributions to the governor’s officeholder account (both of which he’s already doing, by the way.) There’s no connection to the governor because Tate was not appointed to UTIMCO by the governor. He was chosen by the regents themselves, which establishes a cutout between Charles Tate and Rick Perry. Pretty neat, huh? The key to any possibly more direct entanglements means getting a look at Capital Royalty’s portfolio.              For the state’s system of boards and commissions to work, it presupposes a level of integrity that Charles Tate does not appear to possess. At least three times now he has been caught mistaking his private interest for the public good. If he’s still in a position of public trust it is only because the powers-that-be want him there and not because of any public-spirited self sacrifice on his part.

Which leads us back to the grant review process at the Cancer Prevention Research Institute of Texas.

Who better to talk to than Charles W. Tate?”


Charles W. Tate is a shining star among the people who have made large contributions to Greg Abbott’s political campaign. Texans should consider the relationship between Tate and Abbott before casting their ballots in November.