Push Back

Rick Perry and George W. Bush are the only recent governors to stay in office long enough to name every member of every board and commission — every appointed official. It takes six straight years in office to go all the way through the batting order, and when a governor is done, it all belongs, for better or for worse, to that governor.

Perry, with longer experience in state government, has a better grip on the strings in the executive branch than Bush — or just about anyone since John Connally was the chief executive. State agencies that aren't headed by elected officials don't do much without making a call to the governor's office, either to ask permission or give a heads-up to this Perry aide or that one. The inward flow of information and outward flow of instruction is stronger with this executive than it's been in a generation.

Rewind 15 or 20 years. The most feared callers at state agencies were legislators, either the budgeteers or the subject matter committee for a particular agency. Agency folk can still get hauled in by a ranking lawmaker, but chances are, they'll call the governor's office on the way in.

What's interesting about the current environment is that the Legislature is reasserting itself. It could be a short-term or a long-term thing — ask us in five years — but much of the noise you're hearing lately is about the powers and scope of the executive branch. Lookit:

• Perry's call for a mandated vaccine against HPV resulted in a public uproar and open legislative challenges. Lawmakers have asked Attorney General Greg Abbott whether Perry has the power to direct policy — particularly one with a price tag. And they've reacted to the substance of it by moving legislation that would make an HPV vaccine mandate illegal.

• The closest thing to a cabinet position in Texas government — the Commissioner of Health and Human Services — is held by one of the most experienced people in state government, Albert Hawkins. But between the HPV mess and the state's rough record on everything from the Children's Health Insurance Program to welfare call centers, Hawkins' appointment has been held up in the Senate. You can say that's about Hawkins, but you'd only be half-right. He's a hostage in the struggle between the governor and the Legislature.

• The unfolding Texas Youth Commission scandal is another example. Perry wants to change some board members and some managers in the agency. The House and Senate aren't on the same page with Perry or each other yet, but the Senate already voted to put the agency in conservatorship, and House leaders are talking about aggressive legislative oversight of TYC.

• And the growing legislative challenges to Perry's biggest endeavor — a road system you'd be able to see with a good telescope if you made camp on Mars. Lawmakers gave the governor and his Texas Department of Transportation carte blanche to build new highways, and the agency has run with it. They ran with it so effectively and expansively, in fact, that lawmakers are trying to rein them in. Thus the comments from the Senate's lead money man, Finance Chairman Steve Ogden, R-Bryan. He told Texas Monthly and the Austin American-Statesman he'd like to put two agencies – TYC and Texas Southern University — into receivership. And he said TxDOT is out of control and should be leashed.

So here's the question for the day, or for five years from now. Will lawmakers leave this much power in the middle office, or will they reassert themselves? If it's the latter, Perry and his successors could be cornered into the three main powers of chief executives in Texas: Vetoes, appointments, and what's known as "the bully pulpit" — a surpassing ability to command and use the attention of reporters with and without video cameras. If it's the former, future governors could turn their increasing influence into something more like a cabinet form of government.

Lock Down

The Texas Senate wants a conservator to take over the Texas Youth Commission — the prison system for youths — after reports that top management buried an investigation of sexual abuse there.

In an unusual session that followed a closed-door caucus of the entire Senate, senators discussed and then passed a resolution declaring "gross fiscal mismanagement" at TYC. The debate, if there was any, happened in the private session. When they got to the floor, the resolution had the signatures of each senator.

The last agency put into conservatorship — and the first — was the Texas Commission on Alcohol & Drug Abuse, which was revamped when Gov. George W. Bush was in office.

Here's how it works: The board and top management are replaced by a conservator who runs the agency and tries to straighten things out. Once that's done, the agency gets new management and oversight.

The Senate resolution calls on the Legislative Audit Committee to ask Gov. Rick Perry to appoint a conservator, and includes a "finding" that there is gross fiscal mismanagement. That's the condition for a conservatorship; senators said the agency's continuing use of state funds while some employees are involved in illegal activities. If the committee makes that finding official, Perry would have the official basis to appoint a conservator.

This happened quickly, once it was in the papers. The head of the Texas Youth Commission resigned a week ago, after news reports of a cover-up of sexual abuse by top officials at one of TYC's facilities. Dwight Harris, the executive director of the agency since 2004 and an employee there since 1981, said he planned to leave after the session, but has become an impediment to the agency's goals. "I love too much this agency, the fine men and women who serve here, and the troubled children who come to us as a last hope to let myself be a distraction to the greater mission," Harris said in a press release posted on the agency's website. "I wanted to stay through this session to promote our requests, but it's clear to me now that my presence might actually get in the way of those things we gravely need."

That happened on the eve of legislative hearings on TYC, and those sped things up considerably. Perry removed the chairman of the agency, Pete Alfaro, but couldn't take him off the board. Governors get to pick board members, and can designate which ones serve as chairmen, but don't have the power to fire people. Alfaro decided to resign after the demotion. The governor also suggested a new executive director for the agency, but again, doesn't have the power to put someone in place. That's up to the board. In a conservatorship, on the other hand, a special master would be appointed to run the agency and would have the power to hire and fire staff. The board would be undone by the conservatorship as well.

As it turns out, the new chairman of the board, Donald Bethel of Lamesa, pulled together a meeting via telephone conference call and the board decided to hire Perry's choice for the job. Ed Owens, the number two guy at the Texas Department of Criminal Justice, will be interim executive director at TYC. He's on loan from the adult prison system.

The day after the Senate vote, Perry met with Lt. Gov. David Dewhurst and House Speaker Tom Craddick — twice — to talk about the situation. The Legislative Audit Committee was set to meet Friday to "give the governor a list of options" in the words of one legislative staffer. They could back off the Senate's call for conservatorship, too.

A spokeswoman for Craddick said the House is considering action against TYC, but wouldn't say whether that would match the Senate's action. One option under discussion is a joint House-Senate oversight committee that would watch TYC while the agency's managers try to fix their own mess. That's apparently more to the governor's liking.

The Texas State Employee's Union weighed in, too, saying the agency needs revamping and asking the Guv and the Lege to make note of the agency's budget requests. The union says some of those would address high recidivism rates of inmates, high turnover and injury rates among the staff and other "systemic" problems.

According to that outfit, the recidivism rate is 50 percent, turnover at TYC is 38 percent, and the ratio of guards to inmates, which should be around 1-to-15, is as high as 1-to-24 in some facilities. And they joined Sen. Juan "Chuy" Hinojosa, D-McAllen, in calling for an office of inspector general to investigate trouble at the agency.

Lost sight of what this is all about? You can get a good rundown of what's wrong at the agency from this linked story in the Texas Observer.

More Light for a Dark Road

The State Auditor's Office found some reporting problems at the Texas Department of Transportation and the Trans Texas Corridor — a massive undertaking that could have a final price tag of $105.6 billion.

Generally, the auditors think the agency should do better project and financial reporting and ought to make that information available to everyone. Their list includes:

• "weaknesses in the Department's accounting for project costs create risks that the public will not know how much the State pays for TTC-35 or whether those costs are appropriate;"

• "a lack of reliable information regarding projected toll road construction costs, operating expenses, revenue, and developer income... he Department stated that this financial information was not correct because it is not possible to accurately estimate profits due to many unforeseen variables."

• The state could be on the hook for $3 billion in road costs if concessions from the TTC project don't bear fruit.

The SAO wants TXDOT to tighten up its financial oversight of the project. And they said the agency should stay out of the secret documents business: "Given the scope and public nature of the Trans-Texas Corridor project, it is important that the Department makes all documents, plans, and contracts related to the project public in a timely manner."

The auditors made some legislative recommendations, too, saying lawmakers ought to increase public access to information about the project. They think lawmakers should move the toll road accounts and administration to the state comptroller's office and should require revenue estimates on those roads — from the comptroller — before TXDOT signs operating, lease, or financing contracts with road developers. And SAO thinks lawmakers should order regular audits of TXDOT.

Finally, they recommend that the agency do financial forecasts on the project before contracts are signed for each segment of the TTC and that project accounting is both clear and available to the public, posted on the Internet where everyone can get to it.

Static Electricity

A group of House members laid into the proposed sale of TXU, calling it a good deal for the buyers and sellers and a bad deal for the company's customers.

Led by Rep. Sylvester Turner, a Houston Democrat and a longtime foil of the state's electric companies, the group questioned the durability of promises to lower prices and make the company greener than it is now, and whether the deal has any real benefits for consumers.

"We have created a deregulated market that benefits the industry and bankers and private equity firms and not benefiting the people themselves who are struggling to keep their lights on," Turner said. "This sale is a bad deal."

The company has a tentative deal to sell to a group of private firms for $45 billion. It includes plans to cut back on the number of coal-burning plants TXU wants to build in Texas, to cut rates by 10 percent for the next 18 months, and to split the company into three different businesses that would focus on generation, transmission and retail sales of electricity.

This group of lawmakers remains unhappy with the company's plans to build three new coal-fired generating plants in central and north central Texas. Donna Howard, D-Austin, said new plants near Austin could push the area into non-attainment under the federal Clean Air Act, a designation that comes with lower highway funding and more emissions testing on cars. Several questioned whether promises to cut rates and to run an environment-conscious company would hold if TXU is bought and then, at some point, sold for a profit.

Turner said some of the promises were easy for the company. He said he doubts they really thought they'd be building 11 new plants, for example. "It sounds good when you give something up that you weren't going to get in the first place," he said.

And several said the proposed acquisition should force state officials — including Turner and some who stood with him — to rethink their decision to deregulate the electric industry in Texas.

"It was sold as a benefit to ratepayers... it's been a disaster for ratepayers," said Rep. Kevin Bailey, D-Houston.

Will the State Play?

TXU's new suitors don't think they need state approval to buy the Dallas-based utility, but keep your eye on the Texas Legislature. Sen. Troy Fraser, R-Horseshoe Bay, and the chairman of the committee that deals with utility companies, says state lawyers are looking to see if they agree.

And he left open the possibility of chasing the deal with legislation what would give the state's Public Utility Commission more authority to look at the deal. His committee already passed that proposal, but it hasn't gone to the full Senate.

The buyers include Kohlberg Kravis Roberts & Co., Texas Pacific Group, and Goldman Sachs & Co. and the price, according to TXU, is $45 billion, which would set a record for leveraged buyouts. It's early, and the terms of the TXU buyout haven't been fully revealed or digested. But the state — according to Fraser and to Lt. Gov. David Dewhurst — will look at several areas:

• If TXU is bought by a non-public company or group, how much of the utility's financials will legislators and regulators be able to see.

• If TXU has more market share at the retail or wholesale level than state regulations allow, will the buyers have to divest or close some plants?

• The company has been trying to win approval for 11 power plants (saying they'll use the cleanest proven technology) and now says it'll only need three of those. Environmentalists who've been resisting those plants (contending that there are cleaner ways to generate power) say that's three too many.

• The company's plan to lower rates by 10 percent might include a rebate that was already on the table. And lawmakers want to know whether all of the rate cut is in the form of a promise, or just a goal.

Treading Water

Nearly unanimous support from the public Thursday greeted Sen. Kip Averitt's bill (SB 12) reducing vehicle emissions and promoting energy efficiency, but don't expect the same level of adulation for the Waco Republican's omnibus water bill (SB 3), when Averitt's Committee on Natural Resources reconvenes next week.

Individuals representing automakers, auto dealers, environmental groups, businesses and county coalitions testified in favor of SB 12, which expands the Texas Commission on Environmental Quality's (TCEQ) AirCheckTexas Repair and Replacement Assistance Program (LIRAP) and Texas Emissions Reduction Program (TERP). The bill (with SB 489, authored by Sen. Rodney Ellis, D-Houston) also would affect state standards for appliances and would affect building energy codes and efficiency standards for state agencies.

LIRAP and TERP — administered by the Texas Commission on Environmental Quality — both provide incentives for cleaner air initiatives and for people and businesses to repair or replace older vehicles.

Suggestions included expanding LIRAP grants to embrace newer model used vehicles, in addition to brand new vehicles, raising a proposed 10 percent cap on administrative costs associated with LIRAP, as well as eliminating the requirement that counties put up 50 percent of what the state gives them through LIRAP.

Comments about TERP centered on providing more money to near non-attainment areas, in addition to those areas already in non-attainment status.

"I lived in southern California for 17 years, and I don't want the city that I grew up in to be like that," said Rose Ryan, interim director of San Antonio's environmental services.

The Electronic Consumers Association submitted written testimony opposing the legislation, but could not be contacted for comment Thursday.

Averitt said he hopes to get SB 12 out of committee by the end of next week. He said he supports changes that involve adding newer used vehicles to LIRAP, but he does not think the grant for buying a used vehicle should be as great as for buying a new one.

About the only individual expressing a major concern in person Thursday represented the Aquatics Professionals Education Council, an association of Texas swimming pool professionals. Kevin Tucker said proposed restrictions on pool pumps could have a major effect on pool owners. Tucker said that, while electricity could be saved by using less powerful, "two-speed" pumps, owners may then have to use more chemicals to maintain their pools. He also said that these pumps may not provide any pool water circulation if the pump is located higher in elevation than the pool, as is the case oftentimes in hilly areas like Austin.

The pool professionals' objections may provide a watery foreboding for the committee's Tuesday meeting, when members will discuss SB 3, Averitt's "omnibus water bill." The new SB 3 eliminates an unpopular fee that doomed former Sen. Ken Armbrister's water bill, also SB 3, in 2005.

But that might not be enough, and Averitt cannot depend on proponents of his air quality bill to also support the water bill. The Sierra Club, for example, supported SB 12 on Thursday but has already spoken out against his water bill.

— Patrick Brendel

Political People and Their Moves

Agriculture Commissioner Todd Staples named Dolores Alvarado Hibbs his general counsel and Rick Rhodes the agency's new assistant commissioner for Rural Economic Development. Hibbs, currently the deputy general counsel, has been at the agency since 1983. Rhodes, former mayor of Sweetwater, worked for Gov. Rick Perry and is a former banker and church leader.

Randy Fritz, chief operating officer at the Texas Department of State Health Services, is leaving that agency and plans to hang out a consulting shingle.

Mark Bell, a longtime Capitol staffer and aide to former House Speaker Pete Laney, has opened an event planning business and a gift shop called Lone Star Legacies. He's picking up where the old Gem Jewelers left off, with Texas and specialty gifts.

Appointments: Gov. Rick Perry named Jesus de la Teja of Austin to be the first State Historian. He's a professor and chairman of the history department at Texas State University-San Marcos and used to be director of archives at the General Land Office.

The governor named Richard Rahr of Texas City to the Texas Physician Assistant Board, which licenses and regulates P.A.s. Rahr is a professor at UT-Medical Branch in Galveston and chairs the department of physician assistant studies.

Perry named Jill Harrison Druesedow and Homer Dean Trevino to the State Board for Educator Certification. Druesedow teaches high school in Haskell, the town Perry represented when he was a legislator; Trevino is with United Way of Waco.

Perry appointed Edward Escudero of El Paso to the State Securities Board. Escudero is CFO of Petro Stopping Centers, a chain of truck stops.

Deaths: Former state Rep. Dick Waterfield, a rancher and cattleman from Canadian who also served as a deputy commissioner of agriculture and started the Texas Agricultural Finance Authority. He was 68.

Quotes of the Week

Greg Davidson, an aide to Gov. Rick Perry, in an email the day after Perry announced his executive order that preteen girls get a vaccination against human papillomavirus, quoted by the Austin American-Statesman: "I got hammered in church this morning on the Merck thing — and it was just Saturday. Do we have any talking points or stats or anything that can help me fight through Sunday. This is brutal."

Bob Haenel, managing editor of the Fort Bend Herald, on a state law that makes it illegal for county clerks to release documents with readable social security numbers, in the Austin American-Statesman: "Go out and buy some Magic Markers, for God's sake. This is somebody's life you're putting out there on the Internet."

Former House Speaker Pete Laney, at a benefit luncheon held in his honor and to raise money for the Center for Public Policy Priorities: "For those of you in the press corps, I had one press conference the whole time I was in the Legislature, and that cured me."

Former Lt. Gov. Ben Barnes, quoted in a Los Angeles Times story about the records of former madam Jody "Babydol" Gibsonthat have become public and that included a cell phone number that Barnes answered when the paper called: "I have never met or talked to this broad in my entire life."

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Texas Weekly: Volume 23, Issue 35, 5 March 2007. Ross Ramsey, Editor. Copyright 2007 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 (512) 302-5703 or email biz@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.