The Texas Department of Public Safety's Capitol Police have started a criminal investigation of fraudulent use of the state's long-distance phone network by college students who apparently got hold of agency calling card numbers. So far, that investigation involves four state agencies whose phone usage recently took unexpectedly large jumps. The investigators think college students across Texas have been using calling card codes to steal tens of thousands of dollars worth of phone time from the state's Tex-an (pronounced Techs-ANN) phone system.
That system isn't intended for private use. In fact, private use of it is illegal. Tex-an was set up years ago, when the state realized it could get a huge discount over what the rest of the world pays for long distance. It's a big customer. It can guarantee a minimum amount of usage that's still big enough to make a telephone company salivate, and it can handle most or all of its own billing internally. The state's General Services Commission administers the system, which compiles calling records and then sends a bill each month to each state agency.
Agencies often quibble over the monthly statements, officials said, but the bills in question this time were way out of line with normal monthly variations in phone charges.
GSC officials would not say which of the 600 agencies on Tex-an complained of big bills, but did say they are looking over the records of four agencies. Officials with DPS (the Capitol Police Force is a branch of DPS) named three of the four, saying the complaints came from the Texas Senate, the Texas A&M Agricultural Extension Service and the Adjutant General's Department. "We cannot comment on ongoing criminal investigations," said a spokesman for the adjutant general.
Talkative College Students are the First Suspects
GSC wouldn't say exactly how any fraud might have been committed, but did say they have had reports of callers misusing the phone codes that allow people who are away from state phones to call in to state offices. That would allow someone who was at a hotel in Amarillo, for instance, to make a long-distance call to a government office in Austin while enjoying low Tex-an rates. That call, which is only supposed to be made by a state employee or officeholder on official state business, would be billed to the agency that had been assigned that calling card number.
Each agency is issued calling card codes and each agency is responsible for whatever happens after that. But they, like the rest of us, don't generally know they've got a problem until they get a look at the monthly phone bill. GSC started getting calls a week ago, when agencies got their statements. The bills showed minutes of phone usage and were apparently much higher than they had been in the past. The agencies called GSC to ask what was going on, and the investigation was underway.
The codes are generally used to call state phone numbers from out of town. DPS officials say the callers also figured out how to make calls that didn't involve any state phones at all, but that got billed to state numbers. That's where the big charges were rung up, and why the bills were unusually high. They are not giving away much detail, such as whether any of the callers were non-students, how they might have acquired state calling cards, whether any state employees were involved and whether the callers and the people they were calling were concentrated in any particular places.
What they do have, as part of the telephone records, are the originating and terminating numbers for each call. That should at least give them some starting places, and is likely one of the reasons they seem so sure the callers are mostly college students.
Location, Location, Location
The state is on the verge of swapping one block in the overheated downtown Austin real estate market for 20 acres of land at the city's defunct Robert Mueller Airport. If the deal goes through (and a couple of non-related deals follow), the downtown block will be the new site of Austin's art museum.
The land at the closed inner-city airport belonged to the state until recently; they traded it to the city in a deal that ensured the State Aircraft Pooling Board -- and more importantly, the state planes used by officeholders and agency executives -- a home at the newly renovated Bergstrom International Airport. That's the former Air Force base that's now Austin's commercial airport. The state continues to use the old site at Mueller; right now, the Texas Film Commission is using the property. One last hitch is to get a road connecting the property with a nearby road and then they'll be ready to go.
The property downtown is worth $5 million, but needs about $250,000 worth of site work before it can change hands. State officials once talked about erecting an office building on the parcel. On one side is a state office building; on the opposite side is a state parking garage that isn't particularly close to any building in need of all the spaces it offers. But it will be: The City of Austin is building a new City Hall in the area. Several commercial office buildings are being built and, as mentioned above, the city's financial elders would like to drop a museum in the middle to complete the puzzle.
The airport land is worth a little less than the downtown parcel, but roads and other extras should make the deal -- if all goes as planned -- an even swap. The city and the Aircraft Pooling Board are still fiddling with details, but report that they're close to agreement.
Just a few years ago, when the airport was operating and downtown Austin was in the doldrums, the swap would have been an outrageous proposal. Now, the airport has moved to the southeast. Meanwhile, renovations on the warehouse end of the city's downtown, an economic boom that has pushed office rents to $40 per square foot per year, and the city government's ambitious redevelopment plans for a multi-block area have all pushed up the value of the downtown real estate.
Data Soup: Politics, Poverty and Flooding
• Current projections, based on past growth, have Texas gaining two congressional seats next year, and three more by 2020. The Washington, D.C.-based Population Reference Bureau says California, Texas, Florida, Georgia and Arizona will gain seats; the biggest losers are to the North.
• Two polls worth mention: First, a Texas Poll from the Scripps Howard Data Center showed most Texans favor a ban on drivers using cell phones. That's with a majority of the respondents admitting they own cell phones. Second, and you might never see any more numbers on this, the same folks say Sen. Kay Bailey Hutchison has a 35-point lead over Democrat Gene Kelly in her reelection race.
• Texas ranks 44th in a state-by-state tally of children in poverty, according to a "Kids Count" study sponsored by the Annie E. Casey Foundation. The study says 1.5 million of the state's 5.6 million children were living under the federal poverty level in 1997. The study looked at ten measures of how kids are doing. The poverty ranking for Texas was unchanged from 1990, but the state's numbers improved in a few areas: infant mortality, teen birth rates, child and teenager death rates, and percentage of children whose parents don't have full-time, year-round employment.
• Four of every five permits to build in wetlands in Texas were granted to developers, according to the Sierra Club, which is pushing to stop such construction. Texas ranked first in deaths from flooding during the ten years that ended in 1998, and eighth in property damages. The group says floods killed 145 people in Texas during that time, and destroyed almost $2 billion worth of homes and businesses. At the same time, taxpayers were paying $500 million to move families and businesses out of flood plains in the state. They draw a connection, saying that the wetlands would absorb much of that flooding if officials at various levels of government would stop allowing new construction.
Privacy vs. Commerce
If lobby hiring, news headlines, and legislative and officeholder interest are any indication of what's ahead, privacy issues (dealing with databases and information, not with surveillance and other matters) will be one of the bigger commercial issues during the next session of the Legislature.
Lawmakers are studying the ins and outs of corporations and governments that hold large stores of data, how that information is gathered, used, sold and traded. The feds are similarly entranced, and some of the big money players on the national level would like to keep the states out of the program in favor of one nice, warm blanket of federal law. But Texas and other states are moving anyway.
The markets are also beginning to pay attention. A company that recently went into bankruptcy, ToySmart.com, reportedly lists as one of its most valuable assets its list of customers and their buying histories, information it promised never to sell. But its creditors want their money, and other companies are willing to pay for the data, and a sale is under consideration in spite of what customers were told when they handed over the info. That's the kind of thing that has lawmakers and lobbyists and consumer groups thinking about whether there should be regulation and if so, what kind.
Throw in, as one of the potential parties to this, big media companies. They probably won't weigh in as heavily as they did on telecommunications several years ago, but they could. On the news side of print and electronic media, the argument is generally to keep things open, to limit privacy in the interest of disclosure. On the business side of many of those same organizations, there is a deep interest in proprietary information about customers. After all, it's hard to sell an ad if you can't show the advertiser that some of the viewers and readers are potential customers. The more specific, the better.
The customers, on the other hand, might like to know which of their proclivities are recorded in those and other corporate data banks. Pick an industry -- banking, medicine, insurance, retailing, politics, you name it -- and there's an interest in tracking people on the one hand, and protecting their privacy on the other. Add government records into the mix, a sprinkle of George Orwell, and you begin to understand at least why there is a political issue.
Little Brother is Out There, Too
The policy half of the equation is being pushed by the sheer volume and exploitation of data about how people spend money. Large companies have maintained bit databases for years, albeit less sophisticated ones, and could tell you quite a bit about their customers. But things have changed in important ways. Small companies and individuals now have access to computing power and, through things like the Internet, to the data needed to do that kind of research. Now anyone can get into the game. And it's quite easy to do things with information in those databases that freaks people out.
A popular example is found at Amazon.com. That retailer's book and music sites make uncanny recommendations to frequent visitors about what they might like to read or hear. Another: Political consultants make their way by cross-indexing voting records and addresses and candidate information to get the right people to the polls without alerting their contrarian neighbors.
Those tricks crept up on people, but consumers are now aware of previously arcane notions like data mining and cross-tabulating and the fact that their lives as buyers and decision-makers have been laid open for strangers to ponder. They don't like it, and that feeds the urge to regulate.
Put a couple of seminars on the burner on that subject, in addition to the interim studies already underway. The Freedom of Information Foundation's fall gathering in Austin will focus on privacy issues; that group's particular interest is in keeping government records open to the public. And in December, Attorney General John Cornyn says he'll add a day or half-day on the subject to his annual conference on public information and public meetings; that gathering is typically aimed at public officials who need to know what they're supposed to share with the public.
Cornyn says privacy was a major topic at a recent meeting of the National Association of Attorneys General. He probably won't make a detailed recommendation, but wants to throw some of the combatants in the same room to listen to their concerns and arguments.
Databases Aren't Always Omniscient
Candidates and consultants complain that the voter files at the state Republican Party have been in disarray since Fred Meyer left as chairman in the mid-90s, but there appears to be an effort to right that situation. The files are used to locate and contact voters who support the party and who can be turned out to vote when elections roll around. But the database, compiled from past voting results in each of the state's counties, is incomplete (most such files are) and expensive to fix. Party officials whistle right past that and say they'll have a great file in place for the elections in four months. Data from the last presidential race is still missing and there were some wrong phone numbers in the database, but they say they're on track and will be ready.
Separately, the GOP is talking to Aristotle International, a company that sells campaign finance software and that maintains a national file of about 145 million donors. Those voter lists are available for sale, in total or in demographically sliced chunks. Until we called about it, the company's web site would take potential customers to the Texas file, then offer to sell them lists from files used in more than two dozen political contests, from the Rick Perry -- John Sharp lieutenant governor's race in 1998 to Sen. Kay Bailey Hutchison's reelection bid in 1994. While that was in Aristotle's web site, the final page of the Texas section had the state GOP's logo on it. A spokesman says we saw a demo that wasn't meant for the public. The party never provided data for the lists. The party and the company are talking, though, so a real version of what was being demonstrated could be available soon. Aristotle would not provide data, but would be the place where the current file is housed. They have bigger computers and can do a better job of manipulating the data in a hurry.
A Different Sort of School Finance; Electronic Filing Begins
The Texas Home School Coalition PAC is mailing supporters a plea to switch long-distance carriers to a company that will give ten percent of each month's billings to the PAC. The letter is signed by Tim Lambert of Lubbock, who chairs the PAC and who is also a GOP National Committeeman. He asks recipients to "prayerfully consider" switching to Lifeline for "the lowest long-distance rates in the industry" and a ten percent cut for home schools.
That's creative, but it's also tricky under the state's campaign finance laws. The Texas Ethics Commission considered a similar arrangement a few years ago, but didn't register an opinion. They were trying to decide whether the final contributions to the PAC were coming illegally from a corporation or legally from individuals. They let the matter drop and it's still unresolved. If the PAC reports the money as coming from Lifeline, it would raise the (unanswered) question about corporate contributions. Run it the other way and you have to report each long-distance customer as a donor.
The PAC plans to try it the first way, reporting the contributions as coming from Lifeline. They'll be able to argue that the money is not really from the phone company and, in the mind of customers, was never intended for the phone company. That might or might not work. As we say, the ethics folks have never issued an opinion on the subject. If the phone company passes the money along one caller at a time, it might not have to report anyway: Contributions under $50 don't have to be reported, so a customer would have to make $500 worth of phone calls in a month to trigger the reporting requirement. If the company writes one check per month, well, we'll let you know what happens.
• On the first deadline for electronic filing at the Ethics Commission, the agency's phone lines went down. Not a great omen, but officials there say that their system worked without a hitch, once people got through the dial tone problems. The first reports, from political action committees and the like, should be online for browsing by the time you read this (at www.ethics.state.tx.us). The biggest test for the new filing scheme is a week away, when candidates file their mid-year campaign finance reports, which are due on July 15. The online stuff is interesting and could be useful, but remember that little trick in the law that created this: A candidate's report won't be put online until the opponent's report is also available. Until then, you have to do things the old-fashioned way, by schlepping to the Sam Houston Building next to the Capitol and flipping through the paper report.
Political Notes, Briefs, Oddments, Rumors
The tom-toms on the Republican side of the jungle indicate renewed interest in Dr. Bob Deuell, the drummer-turned-general practitioner from Greenville who is running against Sen. David Cain, D-Dallas. After weeks of quiet grumbling (mostly by consultants and Austin lobbyists) about whether they had a strong candidate, some Republicans were buoyed by Deuell's short but solid performance at the state party convention in Houston. The upshot, if he remains in their good graces and can show some support in the form of fundraising from people in the district, is that he'll have money enough to be on television during the last three or four weeks of the campaign. Don't sniffle over that: The Dallas market, where he would have to buy, is one of the most expensive around. A serious media campaign in that district would cost well over $1 million. Republicans expect their end of that race to cost around $1.5 million. Deuell said at the convention that he would be happier if money was coming in more quickly, but also said previously that he has commitments from some of the party's financial heavies, like Bob Perry, William McMinn, Louis Beecherl Jr., and Dr. James Leininger. Don't expect this to be a sleeper just because the race to the South is getting all of the attention.
• Austin's booming economy makes it one of the most expensive places around to start a labor-intensive business, but a group of Republican politicos are starting a "phone room" anyway. That operation, called E-Communications Advantage, will have up to 72 phone operators ready to make outbound calls or take inbound calls for political and business clients. Consultant Todd Smith and Richard Tractenberg are among the principals in the startup. Tractenberg worked at another call center that handled GOP business before folding up at the end of 1998. Smith won't reveal who most of the owners are, but one, he says, is Norman Newton, who heads Associated Republicans of Texas. Newton says he's in, but says he doesn't plan to use the new company for ART's business; it's purely an investment for him, he says.
• The Federal Election Commission slapped Texas Democrats with a $55,000 fine for campaign finance violations. The feds got after them for transfers of federal campaign money between the state party and several county parties. To hear the Texas Democrats tell it, the feds were operating on the dubious theory that the state party controls county parties. On that basis, the feds said transfers of federal money from one to the other were illegal, because it meant some campaign donors had, in effect, given more than the $5,000 they're allowed to give to the party in any one calendar year. The FEC's logic was that the money could only have been changing hands in such volume if the state party controlled the local folks. The Democrats still contend they were right, but say they paid up because $55,000 was cheaper than a court fight would have been. The question of what transfers are legal remains, so the party says it just doesn't transfer federal funds anymore. The state party paid the fines; that let the six counties involved off the hook.
• A third of U.S. voters haven't made up their minds about whose lever they'll pull in November's presidential election, according to the Vanishing Voter project that's been doing weekly polls at Harvard University. Not only do 34 percent of voters say they haven't chosen, they say they're not even leaning one way or the other. The pollsters say their results differ from other polls because respondents aren't asked whether they support Bush or Gore. They're asked "Which presidential candidate do you support at this time, or haven't you picked a candidate yet?"
When they reduced the sample from adult Americans to likely voters, the pollsters still came up with 30 percent saying they are uncommitted and not leaning. Democrats were more likely to be undecided (35 percent) than Republicans (22 percent) were. Of voters who identified themselves as Independents, 41 percent remain undecided. That might explain Gov. Bush's recent "different kind of Republican" pitch, which aims to make him more attractive to Democrats and Independents.
The researchers predict the conventions will have a lot to do with the decisions of those uncommitted voters and point out that no candidate who came out of the conventions in second place has become president, at least not in the last 40 years.
Political People and Their Moves
U.S. Rep. Henry Bonilla, R-San Antonio, gets a high-profile job as one of the three "deputy permanent co-chairmen" of the GOP national convention. Bonilla will get some TV time at the rostrum, where he'll share emcee duties with U.S. Reps. Jennifer Dunn of Washington and J.C. Watts of Oklahoma... David Schmidly, dean of the graduate school and vice president for research at Texas Tech University, won the top job. He's the school's 13th president... Kathy Grant is leaving the Austin law firm of Casey, Gentz and Sifuentes to become director of government affairs for the Texas Cable Television and Telecommunications Association... Allen Horne, a former legislative aide who has toiled for the last six years at the Texas Hospital Association, is moving to Dallas to direct government affairs for Tenet Healthcare Corp. Starting in a couple of weeks, he'll oversee lobbyists and legislative affairs in Texas and seven other states... Amy Mizcles has been named public policy director for the National Alliance for the Mentally Ill in Texas. She worked in the Legislature, then at the University of Texas before taking this post... The University of Texas at Arlington named Kate Kettles to head governmental relations. Kettles worked at the Comptroller's Office (when she was known as Kate Walters) and with the group trying to bring the Olympics to Dallas... Marjorie Adams, a former aide to U.S. Sen. Lloyd Bentsen who has been running a consulting firm for ten years, signs on with Burson-Marsteller's Dallas office... Dean and Andrea McWilliams both lobby but work separately. Now they're going in halfsies on office space in the new Trial Lawyers' building. They'll each keep their own client lists, but will join up on some accounts... Appointments: Gov. Bush named Rachel Gomez of Harlingen and Beverly Jean Nutall of Bryan to the Board of Vocational Nurse Examiners. That panel controls nursing licenses in the state. Gomez works at the Valley Regional Medical Center in Brownsville; Nutall at the University Pediatrics Association in Bryan... The Texas Health Care Information Council is putting together the data collection system that will track medical costs, utilization rates and quality of providers. Bush named Dr. Karl Swann of San Antonio to that panel... Bush tapped Laurie Lozano of Edinburg to be on the Texas Commission on the Arts, and named Dr. Larry Herrera of Temple and Patricia Castiglia of El Paso to the Texas Cancer Council. Lozano owns and operates some Dairy Queens. Castiglia is dean of the College of Nursing and Health Sciences at UT El Paso, and Herrera is a doctor at Scott & White Hospital and an assistant professor at Texas A&M University... Dallas ISD Superintendent Bill Rojas, who began fighting with members of the school board just weeks after coming to work last August, was fired after offering to resign. The board cited language in his contract that allowed them to dump him if he didn't maintain "good rapport with the board." School trustees hope to hire a replacement before the end of the calendar year.
Quotes of the Week
Mexico City shop owner Sergio Garcia, telling The New York Times how he feels about the election of Vicente Fox, the first Mexican president in 70 years who's not from the PRI party: "For me, it is as if I had a new child. One hopes with great anxiety that he will be a good child."
James Gaston, executive director of the Texas Democratic Party, responding to a crack from a GOP official who said Democrats who posted the Republican platform online have been stealing GOP ideas for years: "Co-opt their ideas? Here's a novel economic vision for the future: 'Return to the gold standard.' Next, they'll push horses and buggies for our transportation needs."
New York elementary school student Nora Farley, on pressure to succeed: "There's too much going on in sixth grade. It's all being crammed in your brain. It's too much to take."
Kathleen Schmidt of Wisconsin, telling the Dallas Morning News about her older brother, Gerald Lueck, who was elected Mayor of a North Texas city last May: "My best wish to the people of Wichita Falls is good luck and hold onto your hat."
Mayor Lueck himself, telling the paper about some of the rumors about his past, which included a stint as an Army private: "I've heard that I was a colonel and that I was dishonorably discharged. I was a colonel, all right. A colonel of the latrines, and all my bowls were clean."
Texas Weekly: Volume 17, Issue 4, 10 July 2000. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2000 by Printing Production Systems, Inc. All Rights Reserved. Reproduction in whole or in part without written permission from the publisher is prohibited. One-year online subscription: $250. For information about your subscription, call (800) 611-4980 or email firstname.lastname@example.org. For news, email email@example.com, or call (512) 288-6598.
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