Million Dollar Man

Taking Stock

One member of the Sharp campaign estimated that Leininger, along with other advocates of school vouchers, contributed some $700,000 to Perry's campaign. As an individual, Leininger gave Perry $56,908. In addition, three of Leininger's brothers and his mother all gave money to Perry, with contributions ranging from $1,000 to $25,000. Perry's connections to Leininger also include stock and airplane deals. Perry made $38,000 trading stock in Leininger's hospital bed company, San Antonio-based Kinetic Concepts. And in 1996, Perry's campaign bought a 10% interest in a 1980 Piper Cheyenne I turbo prop airplane, while Leininger and his brother, Peter, bought the other 90%. In 1997, the Houston Chronicle quoted Leininger as saying that Perry convinced him to buy the plane. "Rick's the guy who talked me into getting an airplane," he said. In July of 1997, the Perry campaign bought the Leiningers' 90% interest in the plane for $346,000, a price that Sharp loyalists insist was far below its market value. Perry's campaign manager, Jim Arnold, defended the price to the Houston Chronicle, saying the plane was worth less than planes of similar vintage because of the high number of hours on the engines.

photo of Carole Keeton-Rylander
Carole Keeton-Rylander

photograph by Alan Pogue

The Leiningers not only sold the plane to Perry's campaign, they agreed to finance the purchase as well. According to Perry's latest expense report, on December 1, the campaign paid Convenant Aircraft Investment Inc., a company run by Daniel Leininger, $3,040 for "airplane expenses." Ray Sullivan, Perry's spokesman, said that the Perry campaign has "approximately $300,000 outstanding on the airplane loan" that Covenant made to the campaign, and that the campaign makes payments to Covenant on a regular basis to pay it off.

In spite of Leininger's close ties to Perry, Sullivan said, Perry "owes one group of people in Texas, and that's the citizens who put him in office and entrusted him with that office. He owes nothing to any of our donors and contributors. He owes everything to the citizens of the state."

Perry may owe everything to the citizens. But is it true that he and Rylander owe nothing to Leininger? If nothing else, the two officeholders are making sure that they stay in the good graces of the Texas Public Policy Foundation (TPPF), a conservative, pro-school voucher think tank which gets the bulk of its financial backing from Leininger. Tuesday night, all of the statewide elected officials, including Gov. George W. Bush, attended the TPPF's 10th anniversary dinner, at $250 per plate, at the Four Seasons Hotel. And on Feb. 3, Rylander is scheduled to be the keynote speaker at the foundation's "1999 Legislative Conference" at the Four Seasons Hotel. Topics for discussion at the conference include "government downsizing" and "school choice."

TPPF is working hard to shape this year's legislative agenda. It is also hoping to get conservative operatives into state jobs. TPPF recently formed a "job bank placement service." The agenda, according to TPPF's Web site, is "to help place conservatives with public policy oriented employers." Toward that end, TPPF has posted a long questionnaire on its site (http://www.tppf.org), asking job applicants to indicate how much they agree or disagree with a list of statements including: "Communism has been sent to the trash can of history. There is no chance it will resurface as a serious threat to world peace." And, "Busing of school children to achieve racial balance is wrong." The application also asks prospective employees to rank their feelings toward individuals from a wide political spectrum, including U.S. Rep. Lloyd Doggett, former Democratic Gov. Ann Richards, and Nobel Prize winner Alexander Solzhenitsyn. Other politicos -- presumably the ones who are more politically palatable from the TPPF perspective -- include Gov. George W. Bush, Senator Jesse Helms of North Carolina, conservative radio man Rush Limbaugh and -- surprise! -- Rick Perry and Carole Keeton Rylander.

photo of Rick Perry
Rick Perry

photograph by Alan Pogue

In a January 8 column in the San Antonio Express-News, Rick Casey quoted TPPF president Jeff Judson as saying that Rylander had given the group "strong encouragement" for its job bank effort. And Judson told Casey that the comptroller's office "is the one institution that will probably use this more than anybody. ... Over time, there will be a shift of the focus of that agency. They'll need the people who are consistent with that policy," he said.

Two weeks after Casey's column appeared, Rylander spokesman Keith Elkins wrote a letter to the paper saying that Rylander was "informed in passing of the job bank, but at no time did she support, endorse, or make any commitments about the service."

For his part, Perry made certain that he paid back Leininger's loan. Records show that his campaign paid off the $1.1 million loan on December 17, an amazingly short turnaround. How did he do it? In part, by leaning on lobbyists. After the election, several lobbyists who had supported Sharp were contacted by Perry's campaign and told that they were expected to help retire Perry's campaign debt. In some cases, they were given specific amounts of money to raise and/or contribute, with amounts ranging up to $50,000. Said one lobbyist who asked not to be identified, "There was no direct mention of the Leininger loan, but you don't have to do any high math to put two and two together. Most of the people who were contacted understood where that debt came from."

Sullivan insists no fundraising quotas were given, and dismisses the complaints as "sour grapes from lobbyists whose guy lost the election." Perhaps so. But questions about Leininger's influence on Perry and Rylander will undoubtedly continue, particularly as the issue of school vouchers becomes more prominent.

Sharp, an opponent of vouchers, says he has no choice but to admire Leininger's effectiveness. "I congratulate Leininger," the former comptroller said. "He wanted to buy the reins of state government. And by God, he got them."

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KEYWORDS FOR THIS STORY

James Leininger, Rick Perry, Carol Keeton Rylander, Kathy Miller, Texas Freedom Network, School Vouchers, John Sharp, Paul Hobby, Robert Bryce

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