Has 'crony capitalism' tainted Perry's campaign for president?

McClatchy NewspapersSeptember 25, 2011 

AUSTIN, Tex. — In 2008, Larry Soward, one of three commissioners on Texas' environmental regulatory agency, cast the lone dissenting vote against licensing a controversial low-level nuclear disposal site in far West Texas.

Looking back now, Soward says, "it didn't take too much of a rocket-scientist" to conclude that the project — pushed by one of Gov. Rick Perry's biggest political donors — would ultimately be approved.

Dallas multibillionaire Harold Simmons' successful quest to build the Andrews County facility is encountering renewed scrutiny now that his political beneficiary is a candidate for the Republican presidential nomination.

Simmons has donated $1.2 million to Perry's gubernatorial campaigns since 2001 to become Perry's second-largest individual contributor, according to Texans for Public Justice, a state watchdog organization. He also has donated $100,000 to an independent political action committee that sought to wage a write-in candidacy for Perry in the Iowa straw poll this year.

Perry's connections with powerful Texas business interests during his nearly 11 years as governor have emerged as an issue in his presidential race, drawing charges from opponents that Perry's time as Texas governor has been marked by a pattern of "crony capitalism."

The release of Perry's financial statement last week continued that storyline after Texans for Public Justice reported that three of the 37 companies in which Perry has stock holdings received taxpayer money from the governor's job-creating Texas Enterprise Fund.

Rep. Lon Burnam, D-Fort Worth, a leading opponent of Simmons' nuclear waste application, also uses the term "crony capitalism" to describe the years-long regulatory and legislative effort that ultimately gave Simmons a monopoly over low-level nuclear waste disposal in Texas. Legislation passed this year allows up to 36 states, including Texas, to dump their nuclear refuse in a red-clay landfill at the 1,388-acre site just inside the Texas-New Mexico state line.

The successful outcome of the licensing effort — the nation's first nuclear waste site to be approved in three decades — marks another stunning business coup for Simmons, an 80-year-old investor whose net worth was $9.3 billion as of September. He is one of Dallas' leading philanthropists and, according to Forbes magazine, is an avid Dallas Cowboys fan who is a close friend of team owner Jerry Jones. He rarely gives interviews and was not available for this story.

Like Houston homebuilder Bob Perry, the governor's largest individual contributor, Simmons is also a big-money donor in races outside of Texas, contributing more than $4 million over the past decade, according to press accounts. He and his wife, Annette, were jointly ranked as the 76th biggest donors in the country in the 2010 election cycle with $224,000 in donations, according to the Center for Responsive Politics. Simmons also donated $2,500 to Perry's rival Mitt Romney, the former governor of Massachusetts, before Perry entered the race in mid-August.

But Simmons' political influence is most apparent in his home state. Since the mid-1990s, Simmons' Waste Control Specialists has successfully lobbied the legislature to privatize nuclear waste disposal — once a function of state government — and ultimately prevailed in the long regulatory battle to license the West Texas facility. In the 150-member state House of Representatives, 77 of those who voted in May to allow additional states to use the facility received Simmons' donations totaling $138,350, according to Texans for Public Justice.

The watchdog group also reported that five political committees and executives affiliated with Simmons' two main holding companies also donated $379,000 to state politicians in 21 other states that possibly could ship nuclear refuse to Texas. Texans for Public Justice based its findings on a review by the Montana-based National Institute on Money in State Politics.

Waste Control Specialists is a subsidiary of Valhi, a publicly traded Simmons holding company whose shares are up 250 percent since last summer, according to Forbes.

Representatives of Waste Control Specialists say that the company has taken extensive measures to address safety and environmental concerns during a five-year review process and deny that the nuclear waste application was put on a political fast-track because of Simmons' ties to Perry.

"These allegations ignore the fact that this was a very thorough and rigorous process," said Chuck McDonald, a WCS spokesman. "The only thing that's...new is the Texas governor is now the front-runner for the nomination. All of this has been hurled out there and refuted time and time again."

Perry appointees served on two entities that were heavily involved in the process — the Texas Commission on Environmental Quality and the Texas Low-Level Radioactive Waste Disposal Compact Commission — but the governor's office said Perry made no attempt to influence the outcome.

"The legislature and the commission (TCEQ) conduct their own business and make their own decisions," said Josh Havens, a spokesman for the governor. "This project was supported at the local level, was thoroughly reviewed and vetted by the commission and overwhelmingly passed by the legislature. The governor supported the will of the legislature."

Opponents of the application say they believe Simmons' political clout prompted the TCEQ to give favorable treatment to the project, despite environmental questions, and later led the 2011 legislature to permit limited amounts of waste from other states that were not part on the original Texas-Vermont disposal compact.

Three staff members of the Texas Commission on Environmental Quality quit in protest in 2007, saying that higher ups in the agency ignored their concerns about possible groundwater contamination. TCEQ executive director Glenn Shankle, who recommended approval of one of the licenses, later became a contract lobbyist for the firm.

"We were just swimming upstream the entire time," said Glenn Lewis, who was part of an eight-member review team that raised the groundwater concerns in a 2007 memo recommending that the license request be rejected.

The TCEQ has granted two major licenses allowing the disposal of low-level nuclear waste at the West Texas site. In May 2008, the agency approved Waste Control Specialists' application to dispose of nuclear byproducts. That facility is now operating and has accepted 3,677 barrels filled with clean-up waste from a Cold-War era weapons facility in Fernald, Ohio.

A second license was granted in September 2009 authorizing the low-level disposal facility that will be used by the states. That facility is in the final stages of construction and is expected to be operational by the end of the year.

Soward, a former TCEQ commissioner who was appointed by Perry, said he felt the WCS applications needed a closer look because of the environmental questions as well as assertions that political influence was pushing the project forward. He cast the opposing vote in the commission's 3-1 decision on the byproducts license, which also rejected the Sierra Club's request for a contest case hearing, and refused to vote on the second application.

"I felt we ought to make sure that we reasonably answered every question associated with the technical issues before we went forward with issuing a license," said Soward, who left the commission in 2009 after his term expired. "Equally important to me was the claim-slash-public perception that the process had been tainted and the staff had been told what to do." Soward said he wanted the hearing to resolve the questions "out in the sunlight."

Soward and Lewis said that they were never approached by Simmons or a representative of the governor's office on behalf of the application, but both said they had little doubt that the project carried heavy political overtones. "I knew it was a political decision from the first day I got there," said Lewis, a technical writer who became a spokesman for the staff's position.

Environmental groups said they were worried about possible contamination of the eight-state Ogallala aquifer. They also warned against transportation dangers as trucks laden with nuclear waste cross through Texas en route to the facility. The Dallas-Fort Worth Metroplex would presumably be major crossroads for the shipment routes.

Opponents, including Burnam, the Texas Office of Public Citizen and the Lone Star Chapter of the Sierra Club, requested an investigation by the U.S. Nuclear Regulatory Commission and the Environmental Protection Agency, saying that TCEQ "blatantly disregarded" staff warnings about environmental and health hazards.

The August 2010 request also asserted that "the integrity of TCEQ's entire program has been thrown into question by the favoritism shown by TCEQ to WCS." Tom "Smitty" Smith, Public Citizen's Texas director, said the federal agencies declined to investigate.

"TCEQ commissioners make decisions based on the law and science," TCEQ spokesman Terry Clawson said in an email last week. "The license issued by TCEQ is protective of public health and safety and the environment and is in compliance with Texas laws and regulations."

Rod Baltzer, president of Waste Control Specialists, said the company has vigorously responded to TCEQ's concerns throughout the licensing process, outlining its plans in a 25,000-page application that fills 34 three-ring binders. "We've done the testing that needs to be done to prove this is a safe site," said Baltzer.

The company addressed environmental concerns by drilling more than 640 wells to determine geological characteristics and confirm that the site is not over an aquifer, said Baltzer. The storage facility is not above or adjacent to any underground drinking water supply, Baltzer said.

Company officials also say the transportation dangers are minimal, pointing out that there have only been 15 accidents involving low-nuclear waste nationwide over the past three years, with the amount of damages averaging about $30,000. Nuclear transportation is also tightly monitored by the U.S. Department of Transportation and the Nuclear Regulatory Commission, say WCS officials.

Nuclear material will be buried in steel and concrete liner systems in 100-foot deep landfills inside a natural clay formation. Low-level waste includes a large assortment of junk from the nuclear age, such as rags, discarded research materials and pieces of scrapped nuclear reactors. High-level nuclear waste, such as spent fuel rods, will not be stored at the facility.

(Dave Montgomery is the Ft. Worth Star-Telegram's Austin bureau chief.)

McClatchy Newspapers 2011

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