Curtis
Seidlits was an up and comer, a potential Speaker or even Lieutenant Governor — admired for
his intelligence and command of the issues. John Hall was praised for his
integrity while he was chairman of the Texas Natural Resource Conservation
Commission. Dan Shelley’s legislative acumen was tapped extensively by Governor
George W. Bush during the last session of the Texas Legislature.
All three are still admired for their abilities, but none are working for the
voters any more. Over the past 13 months, all three have left government jobs
and begun selling their knowledge of the process to the highest bidder.
Seidlits, now a registered lobbyist, works for the Association of Electric
Companies of Texas (AECT), whose members are the state’s biggest utilities.
Hall’s new company, The John Hall Group, serves clients like trash-hauling
giant Waste Management Inc. Shelley, a registered lobbyist, has six clients,
two of whom are bidding on a lucrative state contract.
The trio are just a few of the dozens of former government officials who have
used their taxpayer-funded positions as way stations on their way to lucrative
jobs in the private sector. The revolving door between government and the
corporate world now spins at the speed of light.
Call it the bureau-industrial complex. Our politicians aspire to be
consultants. Our democracy has been replaced by a consultocracy, where
lobbyists and political consultants hold keys to the Legislature and the
Governor’s Mansion. Public office has become a stepping stone to the private
sector where, says one prominent local consultant, “You can make substantial
money and you can make it in a hurry.”
A list of all the people who
have followed the well-worn path to lucrative positions as consultants and/or
lobbyists would fill this entire page. Seidlits, Hall, and Shelley are only a
few of the most recent examples of government officials who have gone into the
“government business.”
Last fall, Seidlits quit his law practice in Sherman, and his seat in the
House, and became president and CEO of AECT. Last session, Seidlits, who
chaired the State Affairs Committee, worked extensively on the bill which
allowed limited deregulation of the Texas electric utility industry. He also
authored the bill which re-wrote Texas’ telephone laws. Today he represents
companies that want to retain control of the electric market by preventing
independent power producers from selling electricity at the retail level.
Seidlits wouldn’t say how much he is earning in his new job. But sources say
Seidlits asked for — and got — a five-year no-cut contract with a salary of
$250,000 per year, certainly more than the $7,200 per year paid to Texas
legislators.
Seidlits clearly understands his value to AECT. “The reason I’m in the
position I’m in is my exposure to this industry and the legislative process,”
he says. “I am sure my experience in the Legislature will help me.” Billions of
dollars are riding on Seidlits’ know-how. The combined assets of the seven
members of AECT are valued at over $70 billion, and their combined sales last
year exceeded $20 billion.
Rep. Sherri Greenberg, the Austin Democrat who shared a desk with Seidlits in
the House chamber, would not question Seidlits’ reasons for quitting before his
term was finished. But she says, “All sides would have wanted to have him. He
is a tremendous intellect, but has a great manner with people and with
speaking. Anybody would see him as an asset, quite frankly.”
Like Seidlits, John Hall decided last year that he’d spent enough time in
government. “I’d worked in public service all my life, since 1974,” he said
during a phone interview last month. “I was concerned that the whole political
process was becoming too political, and that it was time for me to do something
different, and chose to leave on that basis.” Hall says his firm, which
includes himself and one other employee, a geologist named Chris Macomb, works
on water, energy, environmental, and governmental affairs. They don’t do
lobbying, nor does Hall expect to do any in the near future. Hall refused to
provide names of his clients. “I work for heavy industrial clients who have
significant environmental challenges.”
As for his relationship with Waste Management, he says, “I provide high-level
strategic assistance,” and he adds that he is not “providing assistance on
permitting matters.”
Hall says he would support laws restricting the activities of former
government officials, but he does not apologize for his decision to sell his
knowledge of the process. “The opportunities that I have relate to the
expertise that I have developed over the years,” he explains. “And that
expertise is largely in the public sector.”
A former state representative from Crosby and later a state senator, Shelley
served as Gov. Bush’s legislative liaison — making $95,000 per year — until
January of 1996. However, he may have taken a pay cut when he became a
lobbyist. According to his filing with the Texas Ethics Commission, he now has
six clients who pay him between $1 and $10,000 apiece. Two of those clients,
Lockheed and IBM, want a contract to administer benefits under the Texas
Workforce Commission. The contract could be worth
$2 billion over five
years.
Shelley’s dealings have been front page news in the local daily over the past
several weeks. But he doesn’t mind. When the Chronicle called him about
this story, he sounded happy. “I love the publicity,” he said.
Shelley will butt heads with Seidlits when it comes to electric issues. Among
his clients are Southern Electric International, an independent power producer
that wants to sell electricity directly to Texas customers, and the Texas
Coalition for Competitive Electricity, which will push for deregulation of the
retail power business.
Although their numbers
have declined –1,356 lobbyists registered this year, compared to 1,618 in 1992
— the importance and the profile of lobbyists has risen. “The trend is
accelerating, and there are several reasons for it,” says Tom “Smitty” Smith,
the Texas Director of Public Citizen. Smith says lobbying is “much more
lucrative than it has been in years past.” He points out that many programs
formerly managed at the federal level are being shifted to the states.
That shift puts a premium on working knowledge of the Texas Legislature, where
there’s always a fresh installment of “As the Revolving Door Turns.” In April
of last year, Dave McNeely, state reporter for the Austin
American-Statesman, wrote that the Texas House has simply become a “school
for lobbyists.” In 1992, Mike Ward, the local daily’s ace reporter on the Vita
Pro scandal at the Texas Department of Criminal Justice, reported that, “At
least 55 of the nearly 1,600 registered lobbyists are former legislators…
another 70 are former legislative aides.” There is no comparative analysis of
1996 records, but Smith of Public Citizen says his group has a study underway
and will publish the results soon. Last year’s Chronicle list of the ten
most influential lobbyists in Texas included four former legislators, two
former assistants to the Speaker of the House, and one chief deputy
comptroller.
Lt. Gov. Bob Bullock is a former lobbyist. Now the most feared curmudgeon in
Texas government, Bullock himself has become something of a farm club for the
lobby. Jack Roberts, the aforementioned chief deputy comptroller, is
acknowledged as one of the most effective lobbyists (tobacco, beer and the
Texas Rangers baseball team) at the Capitol. Lobbyists Robert Spellings and
Ralph Wayne also worked as chief deputy comptrollers under Bullock.
Leaving the politics arena under an ethical cloud does not prevent a career in
the lobby. Stan Schlueter, a former representative from Killeen who quit the
House in 1989 — 11 days after the Internal Revenue Service began investigating
the contributions lobbyists were making to legislators — has found a lucrative
career in the lobby. According to the August 31, 1990 Statesman,
Schlueter was “spending more than $9,000 a month in donations from lobbyists
and other supporters” on a home and other items. According to his filing with
the Texas Ethics Commission, Schlueter currently has 22 clients (including
Philip Morris and FM Properties) who will pay him a minimum of $460,000 this
year.
Former speaker Gib Lewis pleaded no contest while in office to two ethics
charges and paid an $800 fine for failing to disclose holdings in dozens of
firms that could have been affected by his job with the state. Lewis, who
served a record five terms as Speaker of the House, gave up the gavel in
January, 1993. By the end of that same year, Lewis was representing the
National Rifle Association, Dell Computer, and the Tandy Corporation. According
to his filing with the Texas Ethics Commission, Lewis currently has 28 clients
who will pay him a minimum of $230,000 this year.
Two other former Speakers of the House, Ben Barnes (high speed rail, sewage
sludge and the lottery contractor, earning a minimum $225,000) and Billy
Clayton (long distance services and paint makers, at a minimum of $550,000),
are among the best paid lobbyists in the state.
The City of Austin understands the importance of good lobbyists, and has at
least three firms under contract. During the last session of the Lege, the city
had the Austin firm of Adams & Zotarelli on retainer; last February, the
firm billed the city $43,333.33 for one month’s work. Last May, the city
council agreed to hire two more Washington, D.C. lobbying firms at a total cost
of $290,000 this year. That amount will be split between Spiegel &
McDiarmid, and Verner, Liipfert, Bernhard, McPherson & Hand. Last year,
Verner Liipfert hired two familiar players, former Gov. Ann Richards and her
former aide Jane Hickie. According to documents obtained by the
Chronicle under the Open Records Act, the firm has billed the city a
total of $68,284.99 since January 1 of this year for lobbying and expenses.
Documents also show that Hickie is charging the city at a rate of $295 per
hour. Richards’ rates were not disclosed, and the firm did not return calls.
Charles Gates, the head of the city’s Aviation Department, defended the city’s
lobby contract with Verner Liipfert. Gates said that while the city is building
an expensive new airport, it needs people in Washington to “look out for our
interests.” Gates said that Richards, in particular, was “very influential in
getting a commitment from the FAA for the $30 million grant to buy the Del
Valle school system.” The city needs the federal money to buy the schools which
will be affected by noise from the new airport. Gates said the firm “more than
earned their fee for helping secure that $30 million grant, because we didn’t
think it was going to happen.”
While lobbyists/consultants are often credited or faulted when an issue
succeeds or fails, few seem to believe they wield power. In an interview four
years ago, Barnes told the Chronicle, “I don’t think I have any power. I
have some friends.” Hall said, “I don’t feel I have any power. The only thing I
am able to do is offer suggestions on how best to articulate a position
consistent with the laws that exist.”
A few legislators have tried
to slow the revolving door. In 1991, a provision was placed in the ethics
reform bill that would have prevented legislators from becoming lobbyists for
two years after they leave office, but that section was later cut from the
bill. Last session, Rep. Mike Krusee, a Republican from Round Rock, introduced
two bills that would have limited lobbying activities by former legislators,
but neither got far. His proposal for a two-year ban on lobbying by former
legislators was never heard by the State Affairs Committee. Krusee said he
asked the chairman of that committee — Seidlits — for a hearing on the bill,
but it was never brought up. “I talked to him [Seidlits] about it on the
floor,” recalls Krusee. “But he said he didn’t remember me requesting a
hearing.”
Krusee says that when citizens vote for someone, they “need to be confident
that that person is not just making contacts so they can enrich themselves
after they leave.” But as more and more former elected officials and their
aides jump back and forth between business and government, Krusee said, he is
“worried about the integrity of the process.”
The recent stories printed by the local daily on the activities of lobbyists
like Shelley may give the Legislature the momentum needed to pass more
stringent revolving-door rules. Any new rule, however, must walk a fine line
between protecting the process and preserving the rights of individuals to gain
employment.
Gene Watkins (see sidebar), who quit his job as head of the city’s
Neighborhood Housing and Conservation office in October 1993, has been
criticized for his role as a consultant in a publicly-funded East Austin
housing project known as Scattered Cooperative Infill Program (SCIP) III. But
Watkins asks, “When do I ever shed the burden of having worked for the city? At
some point in time, I think you have to graduate.”
Seidlits, Hall, Shelley, Watkins and hundreds of others have certainly
graduated from government service. But our system would be healthier if fewer
graduates depended on their alma mater to make a living. n
Lobbyists on the Web: The Texas Ethics Commission has a nifty new web page
which lists registered lobbyists for 1996: www.ethics.state.tx.us. Past
listings should be available on the web later this year; for now, they are on
the agency BBS. Dial 478-9424.
This article appears in August 9 • 1996 and August 9 • 1996 (Cover).