High-Powered Help for Hospital District

But can slick, GOP-friendly HillCo defend the public interest?

Clarke Heidrick, chair of the Travis County Hospital 
District Board
Clarke Heidrick, chair of the Travis County Hospital District Board (Photo By John Anderson)

The fledgling Travis Co. Hospital District may not yet have a chief administrator, but it has newfound political clout at the Legislature. At least that was the idea behind hiring the lobby firm of HillCo Partners LLC, whose principals are among the most influential influence peddlers in the state. The Austin shop emerged from a field of six bidders vying to represent the hospital district in the 79th Legislature, where health care issues could rank among the weightier matters to hit the floor.

The district board of managers approved the one-year, $80,000 contract Dec. 16. The fee is about $5,000 more than the district originally budgeted, but the board's unanimous vote shows a willingness to pay to play in the big league. HillCo comes with both health care expertise and political reach that could pay off for the newly created district. "There are going to be a lot of big doings in terms of health care this session," board Chair Clarke Heidrick said after the vote last week. HillCo also represents the Dallas County Hospital District, which local board members view as a plus on several levels. "We're going to need to build alliances with other health care districts and go to bat for health care in the Legislature," Heidrick said.

For better or worse, HillCo also holds access to two of the most powerful Republicans in state government – Gov. Rick Perry and House Speaker Tom Craddick, who two years ago tapped HillCo co-founder Bill Miller to serve on his speaker transition team. HillCo lobbyist Marsha Jones (no relation to another HillCo principal, Buddy Jones) will serve as the district's point person on this assignment. She is a former governmental affairs VP for the Texas Hospital Association. Still, for all of HillCo's slickness, public-interest advocates often look askance at the firm's level of influence at the Capitol, particularly in view of its list of corporate clients past and present, which includes big business operators like Farmers Insurance Group, Alcoa Corp., Koch Industries, and the umbrella group for drug makers, Pharmaceutical Research and Manufacturers of America.

A stipulation in the HillCo agreement with the hospital district is that the firm must subcontract with lame-duck state Rep. Jaime Capelo, D-Corpus Christi, who had competed individually for the hospital-district contract. Capelo's move to full-time lobbying comes after his defeat in the Democratic primary earlier this year. His re-election campaign had been hampered by allegations that he received $100,000 in kickbacks in connection with a medical malpractice case. (The kickback accusation, made by another attorney, turned out to be false, but Capelo may face disciplinary action from the state bar for refusing to return a $100,000 check that was sent to him in error.) In any case, a board subcommittee, made up of Heidrick, vice chair Carl Richie (himself a lobbyist for the Gardere Wynn Sewell law firm, with the city of Austin among his clients), Dr. Donald Patrick, interim administrator Jim Collins, and county purchasing agent Cyd Grimes, was impressed enough by Capelo's presentation to bring him into the HillCo deal, assuming he qualifies as a HUB, or historically underutilized business.

Heidrick said the board is still developing its legislative agenda, but the district's immediate concern is to secure legislation authorizing the district to issue tax anticipation notes, which tax-funded entities use as a form of collateral. Also, the Lege is expected to consider consolidating or closing state mental-health facilities, and, as is often the case when this subject comes up, the historic Austin State Hospital is viewed as a likely target.

The hospital sits on a valuable piece of Central Austin real estate that could fetch the state in excess of its $20 million to $25 million appraised value. But selling off the hospital would place an even greater hardship on local entities, Heidrick said. "Our goal is to expand the number of mental health beds in Central Texas," Heidrick said, "so we'll be watching this very carefully. We'll be in there scrapping like everyone else." Still another, equally touchy, issue will be the push to require neighboring counties to reimburse the district for use of trauma center and emergency care.

With the lobby contract signed, the board is now entering the final stretch of hiring someone to fill the administrator's post. As of late last week, 85 candidates had applied for the position, with more applications expected before the Dec. 31 deadline. Cyd Grimes said that screening and interviewing will take longer than initially anticipated because of the number of impressive candidates. Screening and interviewing will take place in January, with the new administrator to be hired by mid-February, if all goes according to plan.

Among the candidates seeking the position are Trish Young, CEO of the city's community care services department, which runs the city/county health clinics for the district; Pete Duarte, former CEO of the El Paso Co. Hospital District; and John Guest, who served as CEO of hospital districts in Harris Co. and Bexar Co. Some district observers are skeptical that the board will be able to land a stellar candidate by paying a $175,000 salary – a far cry from the $200,000 to $300,000-plus paid in other districts around the state. But the board has two thoughts on that score: One, a big chunk of the workload will actually be borne by the outside contractors (the city and Seton Healthcare Network) that run the county's health care facilities, and two, who wouldn't want to live in Austin, Texas?

HillCo Partners' Clients

Here's a partial list of companies and government entities that rely on HillCo (or individual lobbyists in the firm) to meet their lobbying needs.

Travis Co. Hospital District (as of Dec. 16)

Dallas Co. Hospital District

Dallas Independent School District

Texas Children's Hospital

Tarrant Co. Hospital District

Tenet Healthcare Corp.

Pharmaceutical Research & Mfg. of America


Aluminum Company of America (Alcoa)

Continental Airlines

Farmers Insurance Group

General Motors Corp.

H.E. Butt Grocery Co.

Wal-Mart Stores Inc.

Perry Homes

Koch Industries

Texas Stadium Corp./Dallas Cowboys

Source: Texas Ethics Commission

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Travis Co. Hospital District, Clarke Heidrick, Cyd Grimes, Jaime Capelo, Bill Miller, Neal T. "Buddy" Jones, Texas Hospital Association, Austin State Hospital, HillCo

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