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Abbott Rulings Become an Issue in Controversy Over Enterprise Fund

Attorney General Greg Abbott ruled years ago that a newspaper couldn't see applications from entities seeking grants from the Texas Enterprise Fund. But now an audit says five of those applications never existed.

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While critics were hounding Gov. Rick Perry a decade ago about his job-luring Texas Enterprise Fund, his lawyers went to Attorney General Greg Abbott to block the release of applications that supposedly had been filled out by the entities requesting taxpayer subsidies. 

Abbott’s office, tasked with deciding which government records have to be made public, told Perry's lawyers they must keep the applications secret under exemptions to state transparency laws, according to attorney general rulings and news reports.

Now, though, information contained in a blistering state audit shows that at least five of the recipients that were named in Abbott’s 2004 rulings — and which got tens of millions of dollars from the fund — never actually submitted formal applications. And if no applications ever existed, it’s not clear what Abbott was telling Perry he had to keep secret or why the public is just now learning that millions were awarded without them.

At issue are at least five recipients of Texas Enterprise Fund money: Vought Aircraft, the University of Texas Health Science Center, Maxim Integrated Products, Citgo Petroleum and Cabela’s. According to rulings posted on Abbott’s government website, his office blocked release of “applications” from those recipients after requests from The Dallas Morning News in 2004.

The TEF gave a combined $42 million to the four companies mentioned in the rulings, according to the audit. The UT System Board of Regents got another $25 million for "for the benefit of the University of Texas Health Science Center and the University of Texas M.D. Anderson Cancer Center," the audit said.

Jerry Strickland, a spokesman for the attorney general's office, was only able to address the Vought case. He said in an emailed statement that the company "met its burden to withhold confidential, proprietary information" under state transparency laws. Strickland was not able to answer specific questions pertaining to the lack of an application from Vought and had no information on any applications — or lack thereof — from the other four entities.

Abbott’s order to keep Texas Enterprise Fund records secret came at a time when legislators had overseen big state budget cuts and Democrats were pounding Perry for doling out millions to companies without tough agreements in place to create jobs.

“The state attorney general has ruled that companies’ applications for millions of dollars of job creation grant money cannot be released to the public,” the newspaper reported in January 2005. The article said Abbott ruled the records had to remain secret in order to protect “confidential corporate information.”

The paper quoted Perry’s then-deputy chief of staff, Phil Wilson, as saying the office would have provided the Vought application if the company hadn’t objected, thereby prompting the governor's office to seek a ruling from Abbott.

“But given the attorney general’s ruling, ‘we would be in violation of law if we released the document to you,’" Wilson told the paper at the time.

The governor's office declined to answer specific questions about the applications, but spokeswoman Lucy Nashed released a written statement saying the fund "is a critical deal-closing tool that has helped attract businesses to Texas that have in turn created thousands of jobs and billions of dollars in capital investment." She also noted that the Legislature has kept the fund in place since its creation.

"This audit confirms that funds awarded through the program have been allocated in accordance with state law," Nashed added. 

Abbott's old transparency rulings, suddently relevant again thanks to the TEF audit, are sure to become an issue in his race for governor. In 2013, Abbott’s Democratic opponent, state Sen. Wendy Davis of Fort Worth, authored the bill requiring the state to conduct the audit. And Davis’ campaign on Saturday provided a breakdown, based on data from the Texas Ethics Commission, showing that Abbott had received more than $1 million in campaign money from people with financial interests in companies or entities that got TEF grants.

Davis spokesman Zac Petkanas said in an emailed statement that Abbott bears responsibility for the oversight failures highlighted in the audit.

"As attorney general, Greg Abbott was tasked with acting as a watchdog for the Texas Enterprise Fund. Instead, he accepted more than $1 million in campaign contributions from grant recipients while looking the other way as more than $200 million of taxpayer money was handed out to Austin insiders without any oversight," Petkanas said. "What's worse: Greg Abbott used his authority as Attorney General to cover up the fact that millions of taxpayer dollars were being distributed to organizations improperly."

The Abbott campaign declined to answer any specific questions about the rulings and would not say whether he would wipe out the fund if he's elected governor, as some in his party have been urging.

"From the beginning of his campaign for governor, Greg Abbott has raised questions about the Texas Enterprise Fund," Abbott spokeswoman Amelia Chasse said in a written statement Saturday. "As he's stated repeatedly, he believes that government should not be in the business of picking economic winners and losers and will evaluate the efficiencies of all programs."

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Greg Abbott Rick Perry Wendy Davis