Million-Dollar Man

By Doug Potter

Over the past six months, Gov. George W. Bush's presidential campaign has paid nearly $1 million to two political consulting firms owned, in part, by Ted Delisi, the press spokesman for Attorney General John Cornyn. The payments -- for direct mail services, consulting, and fundraising -- are not illegal. There is nothing in the state's ethics code that prohibits state employees from having outside jobs. But the payments do appear to violate Cornyn's pledge to remove the "political hacks" from the attorney general's office. The standards-of-conduct section of the Texas Government Code states that state officials and employees may not hold outside employment if the job "could be reasonably expected to impair your independence of judgment in performing official duties or create a substantial conflict between the employee's private interest and the public interest."

Last November, less than a week after winning the AG's job, Cornyn promised that the AG's office would lose its political slant when he took office. "My standard for retention at the attorney general's office is pretty simple," Cornyn told The Dallas Morning News. "No. 1, no political hacks, and No. 2, people who are doing their job." In June, Cornyn announced a new ethics policy for employees at the AG's office. One of the main points in the policy states that "Employees shall avoid any action that may result in or give the appearance of using their position as a public servant for private gain."

While Delisi's work for the Bush campaign may not violate state ethics laws or Cornyn's policy, the amount of money involved in his consulting business is substantial enough to raise eyebrows. In July, the campaign reported that it paid the two companies in which Delisi is a partner -- Praxis List Company and Olsen & Delisi -- over $206,000 for direct mail and consulting work between April 1 and June 30. During the most recent reporting period, the Bush campaign reported 62 different expenditures to the companies totaling $766,458 -- $340,326 to Olsen & Delisi and $426,132 to Praxis. The most commonly listed reasons for the expenditures included "consultant expense-fundraising," "list expense," and "direct mail expense."

Delisi, the son of Republican state Rep. Dianne White Delisi from Temple, and Olsen are likely to see even more revenue from the Bush campaign as it gears up for next year's election season. The campaign's spending has increased dramatically over the past three months, and the direct mail services that Olsen and Delisi provide will be in high demand in the months leading into the March primaries.

Political veterans in Austin cannot cite another example from recent years in which a state employee has operated such a high-profile political consulting firm while still collecting a state paycheck. The standard practice for political employees is to stay on the state payroll until the political season begins and then quit the state job to work on the officeholders' campaigns. The most recent example is Bush's press secretary, Karen Hughes. During the legislative session, Hughes worked half time for the state and half time for the Bush presidential campaign. After the session ended, Hughes quit her state job and began working for the campaign full time.

Delisi and Todd Olsen, a registered lobbyist, are fairly new to the political consulting game. In March, the two bought the political consulting portion of Karl Rove & Co., the consulting firm formerly owned by Rove, the chief political strategist in Bush's presidential campaign. Both are former employees of Rove. According to filings at the Texas Ethics Commission, Olsen lobbies for two clients, the Clean Power Campaign and the Texas Association of Paging Services. The combined income from those two clients is less than $60,000.

However, Olsen and Delisi bought what appears to be a profitable business from Rove, who has worked as a political adviser to most of the statewide officials now in office. Mailing list services are used not only by politicians but by for-profit and nonprofit groups who are eager to have the names and addresses of people who are known for charitable giving. And Rove's lists were among the most sought-after in the direct mail business. As a direct mail guru, Rove raised tens of millions of dollars for Republican politicians in Texas and elsewhere. With such clients as U.S. Senators Phil Gramm, Kay Bailey Hutchison, and Kit Bond of Missouri, Rove could easily have continued operating his consulting business, and he apparently planned to do so. But Bush wanted all of Rove's attention. In March, Rove told Michael Holmes of the Associated Press that he was selling his business to Olsen and Delisi because Bush wanted him to do so. Rove said Bush asked him to sell because the candidate didn't "want my focus diluted."

So, is Delisi's focus diluted by working as both a political consultant and a state employee? Public interest representatives believe it may be.

"Even though there may not be a direct conflict of interest, it certainly doesn't look good," said Tom Smith, the Texas director of Public Citizen. "Ted Delisi should choose between his state work and his private enterprise. Cornyn promised to clean the political hacks out of the AG's office and he ought to do it."

Reached at the AG's office last Thursday, Delisi told the Chronicle, "It would not be appropriate for me to comment on this while I'm here. I'll call you back later from my cell phone." He did not call back. And a message left for him on Monday was not returned. The Chronicle submitted a list of questions regarding Delisi's employment, salary, and ethical situation to Stephen Rosales, the assistant AG for administration; AG ethics advisor Elizabeth Rogers responded that Delisi's outside work does "not present a conflict of interest, [nor does it] violate any ethics-related law or policy of the agency..."