Monday, August 08, 2005

Perry's Donors Get Some Pork

I saw this article first thing this morning, Beneficiary of state grant has links to Perry
Gov. Rick Perry recently made one of his largest taxpayer-financed economic development grants ever to a biotech venture. The deal was orchestrated by a congressman who owned stock in the firm, Lexicon Genetics Inc., a company in The Woodlands whose major investors include some of Perry's top campaign contributors.

The $50 million grant is for a joint project between Lexicon and Texas A&M University to expand the genetic research being done by the company. The money will establish the Texas Institute for Genomic Medicine, with $15 million going to A&M and $35 million to Lexicon
Hmmm...His alma mater and his donors get his biggest taxpayer-financed economic development give away ever. No conflict of interest there, right?
Perry spokeswoman Kathy Walt said political contributions had nothing to do with the grant to Lexicon. She said it was about expanding the biotechnology industry in Texas, increasing gene research and finding possible cures for diseases.
It's all about the research. So who are the donors we are talking about?
Some of the major Lexicon investors who have held a controlling interest in the company are Houston businessmen who have been top financiers of Perry's political career.

They are Houston Texans owner Robert C. McNair, businessman William A. McMinn and the estate of businessman Gordon Cain and his family. They own 16.5 percent of the company, according to Securities and Exchange Commission records, making them the largest group of stockholders.

McNair has donated $175,301 to Perry's political fund since he has been governor, and McMinn has given $100,000. The contributions include $25,000 each McNair and McMinn gave Perry in June. Cain contributed $50,000 before he died in 2002.

McMinn also was one of three businessmen who guaranteed a $1.1 million loan for Perry's campaign when he was elected lieutenant governor in 1998. McMinn and Cain were business partners in Sterling Chemicals.

McMinn is a past chairman of the Lexicon board of directors and served on the board from 1997-2003. McMinn, Cain's widow, Mary, and stepson, James Weaver, earlier this year held joint control of 7.2 percent of the company's stock, according to SEC records. In a filing Friday, Mary Cain reported selling almost half her Lexicon stock on July 26.

Gordon Cain was the company's founding investor, according to SEC records
Is this a slam-dunk deal?
But Rep. Garnet Coleman, D-Houston, a frequent critic of the Texas Enterprise Fund, said the deal shows Perry is using "the treasury as a private bank account."

"These are folks who are very supportive of him," Coleman said. "It's a pretty good trade: I give you hundreds of thousands of dollars and you give me back millions, millions of the taxpayers' dollars."

Applications for Texas Enterprise Fund grants are reviewed by the governor's office and are subject to approval by House Speaker Tom Craddick and Lt. Gov. David Dewhurst. But Perry promotes the fund and usually announces the grants.
Let's not forget the Congressman that put it all together.
Lexicon chief executive Arthur Sands said the idea for the institute was hatched about 18 months ago as he and other company officials were "forming a strategy as to how could the entire human genome be used for medical breakthroughs."

Sands and his colleagues took their idea to their congressman, Brady. At the time, Brady also was a shareholder in the company, but his chief of staff, Doug Cintelli, headed the effort to secure funding.

Statements filed by Brady show the congressman and his wife in 2000 bought Lexicon stock he valued at $1,000 to $15,000. In the report Brady filed in May, he valued his Lexicon stock at the end of 2004 at a maximum of $5,000.

Cintelli said Brady donated his stock to charity earlier this year as the deal with the governor's office came together to avoid the appearance of a conflict of interest.

Cintelli said he suggested that Lexicon seek Texas Enterprise Fund dollars last year but said the project would have a higher chance of approval if it included an academic institution.
This all seems pretty cozy. Who knows what is going on here but 10 years ago with a Democratic governor in office in Texas this probably would have been a major scandal. We'll see, maybe this will have some legs, but whatever the case it just doesn't look right. The governor gives a $50 million grant to a company - whose major investors are all the governors major contributors, for his career - and is the brainchild of a Congressman whose chief of staff "headed the effort to secure funding" for the deal. This just looks bad.


Post a Comment

<< Home

free web counters
Circuit City Coupon