Power
The old establishment is buried or busted. Here’s who is deciding the fate of Texas now—plus, the runners-up, the comers, the wannabees, and the right man to call in Amarillo.
Last spring General Robert McDermott, chairman of USAA Insurance in San Antonio, decided to get involved in the battle over the state budget. He sent letters to a number of legislators, urging them to raise taxes to pay for education. This intervention by one of the state’s most influential businessmen had an effect, all right, but not the one he intended. An option before the Legislature was a tax on insurance premiums. When insurance industry lobbyists swarmed into a House Ways and Means Committee hearing to protest, chairman Stan Schlueter of Killeen was waiting for them. “You said you wanted higher taxes,” Schlueter said, waving McDermott’s letter in the air. “Fine. You can pay for them.”
About the same time, another leading Texas businessman was engaged in negotiations with state highway officials, who wanted to put a freeway interchange on his property north of Dallas. H. R. “Bum” Bright, whose financial empire includes trucking, oil, and real estate interests, a savings and loan chain, and the Dallas Cowboys, had insisted that the state pay him for taking his land. Highway officials had insisted that he donate it, since the freeway would greatly increase the value of Bright’s remaining land—and when Bright refused, they began looking at alternate routes. The issue remains unsolved.
Meanwhile, Robert Bass’s term on the State Highway Commission had expired. Bass wanted the governor to reappoint him. There was a slight hitch—he had supported Mark White instead of Bill Clements—but it’s understood that job-holders usually go with the incumbent, and besides, he is one of the Bass brothers, and . . . so sorry, better luck next time.
McDermott humiliated, Bright denied, Bass rebuffed: a trilogy that would not, could not, have happened a decade ago. What has happened to power in Texas?
In 1979 a UT-Arlington government professor named George Norris Green wrote a book called The Establishment in Texas Politics. He dated the rise of the establishment—“a loosely knit plutocracy comprised mostly of Anglo businessmen, oilmen, bankers, and lawyers”—from 1938, when “conservative, corporate interests took over the state, once and for all, perhaps permanently.”
Those words seem as alien to our time as Hohenzollern Germany. No one in the business and political leadership of Texas even mentions the establishment anymore. It doesn’t exist. It has been replaced by a small group of movers and shakers who have been able to influence public policy not because of their wealth and position alone, the way the establishment did, but because they have something to say about the future of Texas. In the wreckage of the eighties, ideas are a coin more precious than gold.
To be eligible for the list of most powerful Texans, a person has to meet three criteria. First, he has to exercise his influence in the state. T. Boone Pickens qualifies: Treasury Secretary James A. Baker does not, though both operate on a national scale. Second, he has to focus his influence on public affairs. Dominique de Menil can bend the art world to her will, but that is not the form of power being measured here. Third, he must be an instigator of events, not merely an expediter. Very few politicians are instigators; consequently few of their tribe qualify for the list. One politician who is conspicuously missing is Governor Bill Clements. His leading role in the SMU scandal and his attempt to cut spending for education have destroyed his credibility. The governor does have power, of course, but it is only the politician’s power to promote his friends and punish his enemies, not the greater power to persuade.
What about money? If not a prerequisite for power, it is at least a frequent companion—especially in Texas, where political organizations such as parties, unions, and special-interest groups are much weaker than those in the boss-run Northeast. Because political candidates can’t count on institutions for votes, they have to reach the electorate on their own. That requires money—a lot of money. The people who provide it in effect have purchased an option on influence. As with any option, what happens next depends upon whether, and how, the owner exercises it. Without doubt the reliance on big donors and fundraisers carries the potential for corruption, but then so does the boss system. Like it or not, money is to politicians what gasoline is to the internal combustion engine—you can’t run without it. Money is also the principal reason why the power list is, for now, exclusively the province of men. Some of the nation’s richest and most powerful women live in Texas, but they use their money to exert power over culture, not public policy.
Here are the ten most powerful Texans, ranked in order of their importance.
TOP 10
1. H. Ross Perot, 57, investor, Dallas.
Did he bring down Wall Street? In the weeks before the crash, news of Perot’s decision to get entirely out of the market swept through political circles, and . . . well, if you knew that Perot had lost faith in the stock market, what would you do? Sets the standard for the new Texas power figure: influence arises from his ideas, from willingness to put his money ($2.9 billion, according to the Forbes list of the four hundred richest Americans) behind them, and from shrewd knowledge of politics, which enables him to spend his money wisely. Education reforms that he conceived in 1984 rank as Texas’ most important public policy accomplishment in a generation, yet they would not have become law had Perot simply proposed them and left the execution to politicians. Entrusted education fight to his key operative, Dallas lawyer Tom Luce, and a top team of top Austin lobbyists, following his long-established habit of picking top-notch people and delegating authority. Proved last summer his clout hadn’t diminished by getting referendum for appointed (rather than elected) state education board on November ballot, despite opposition from education groups and powerful legislators. (Alas, the appointed board lost.) Unlike many rich types, doesn’t socialize or hunt with politicos. Also disdains Dallas politics: stayed away from breakfast club designed to increase influence of business community. Operates on a higher level: Is rumored to have been approached by Washington Post publisher Katharine Graham about seeking Democratic presidential nomination.
2. T. Boone Pickens, 59, oilman and corporate raider, Amarillo.
Takeover attempts of Cities Service, Gulf, Phillips, and Unocal reshaped oil industry and, with it, all of American business. Successfully opposed anti-takeover legislation in Austin and Washington. A major contributor to Republican candidates, sometimes to point of foolhardiness; one of few oilmen to back GOP’s Milton Fox in doomed Railroad Commission race against Democrats’ John Sharp. Good ties to Clements, who appointed Pickens’ wife, Bea, to Parks and Wildlife commission. Big player in the Panhandle as regents chairman at West Texas State; unyielding defender of university’s controversial president. Became an issue in recent Amarillo city council race, which was seen as Pickens slate versus anti-Pickens slate; his side won three of five seats. Also has strong presence in Midland through Cy Wagner and Jack Brown, financial backers of his takeovers, and in Austin through prestigious Texas Research League, for which he served as chairman from 1984 to 1985. Sometimes mentioned as future GOP governor candidate, but would have to overcome antagonism of Houston and Dallas CEOs.
3. Henry Cisneros, 40, mayor, San Antonio.
The only politician on the list, his power derives from stature as symbol of postmillennium Texas. A bridge builder who spans the chasm between boardroom and barrio, he was the first to preach the need for economic development and diversity—and built two loyal statewide constituencies as a result. Transformed Hispanic politics throughout South Texas by his example, driving anti-Anglo militants and corrupt coyote ward heelers underground. Premature rejection of 1990 governor’s race damaged standing with other pols but not with public; continues to overwhelm possible Dem or GOP rivals in polls.
4. Ray Hunt, 44, oilman, developer, and publisher, Dallas.
Prototype of the Dallas civic leader whose influence reaches into every institution in town. While half brothers Herbert and Bunker Hunt were cornering silver market in the seventies, Ray cornered talent market—with better results. Operates by hiring up-and-coming leaders and giving them lots of rein: John Scovell (fighting white flight from Dallas schools), Walt Humann (urging expansion of Central Expressway), Jim Oberwetter (running the George Bush campaign in Texas), and Hunt himself (rescuing SMU from the wreckage of Clements’ chairmanship, wooing and winning new SMU president Kenneth Pye from Duke). Hunt network includes attorney John Johnson, former Dallas Chamber of Commerce chairman. Not involved in bankruptcy of half brothers (Forbes estimates his fortune at $1.3 billion) or ideological causes of late father, H. L. Hunt. His pragmatic do-what’s-right approach is welcome departure from arrogance of old Dallas power structure, but in one crucial way he is squarely within the Dallas tradition: He chooses to restrict his influence to the city limits.
5. Walter Mischer, 65, developer, Houston.
The last of the old-time kingmakers but never posed as one: low-key, unassuming, used to go to meetings in khaki pants and open shirt. Survived transition to modern era by accepting rather than fighting political changes of sixties and seventies. Understands importance of developing black leadership friendly to business, with result that politicians like state legislator Ron Wilson, county commissioner El Franco Lee, and city councilman Rodney Ellis have good relations with Houston power structure—and Mischer. Only person on the Most Powerful list who plays at every level, from the White House down to city hall. Loves game of politics: tried but failed to get along with Mayor Kathy Whitmire, who doesn’t. After backing two unsuccessful challenges to Whitmire, has called truce and is on her finance team. Basis of strength is ability to raise money, particularly among developers and contractors, and shrewd judgment unclouded by emotion: Though he has little in common with attorney general Jim Mattox politically, he maintains good relations. Inability to beat Whitmire has led to whispers that he’s slipping, but the best measure of his status is that the next comment is invariably, “Who is going to be the next Walter Mischer?”
6. Jess Hay, 56, financier, Dallas.
The premier Democratic fundraiser in Texas, he is on the must-see list for presidential hopefuls and statewide candidates. Network includes MBank, Vantage Development, Democratic party honchos, and anyone who does business with Lomas and Nettleton, nation’s number one mortgage banker: as L&N’s CEO, he is reputed to raise money from firm’s accounts payable list. One of state’s most ardent supporters of higher education; used platform as UT regents chairman and influence in State Senate to block budget cuts aimed at universities last spring. Power may be suffering brownout. Ousted as regents chairman in Clements-engineered coup; lost bid to establish Dallas beachhead in ’86, when Kathy Cain barely failed to wrest county judge’s post from GOP; embarrassed by revelations of L&N loans to land commissioner Garry Mauro after Mauro-chaired panel awarded state contract to L&N. Fundraising ability and closeness to Lieutenant Governor Bill Hobby should keep light shining.
7. George Mitchell, 68, oilman and developer, Houston.
Emerging as leading spokesman for shattered oil and gas industry. His message: next energy boom depends on oil import fee. Backs his ideas with money (his Mitchell Energy stock before crash was valued at $470 million). Underwrites study of new exploration techniques at Houston Area Research Center (a Mitchell-founded project run jointly by UT, Texas A&M, Rice, and University of Houston), located in the Woodlands (another Mitchell project). Also helps fund Harvard oil and gas research, which, along with Greek heritage, brought him role as unofficial energy adviser to Michael Dukakis’ presidential campaign. Solidified leadership of industry when Mitchell Energy executive John Watson became president of the Texas Independent Producers and Royalty Owners (TIPRO) this year. Equally well known for favorite hobby, historical restoration in Galveston, where he breakfasts with local characters on weekends.
8. H. R. “Bum” Bright, 67, banker and oilman, Dallas.
As A&M regents chairman, inspired Aggie renaissance in both academics and football; as biggest shareholder of Republic Bancshares, pushed surprising merger with InterFirst. Antithesis of Ray Hunt—seldom involved in politics at local level (considered tight with personal money in Dallas races) but very involved at state level (and a generous contributor). Operates strictly on Republican side. Major backer of Phil Gramm and Kent Hance; Bright operative Jim Francis was Clements’ 1982 campaign chairman. Feuded publicly with Mark White; lost regents chairmanship and resigned from board as result. Forbes estimates fortune at $600 million minimum. You’d think he could afford to buy the cowboys a decent quarterback.
9. Bob Lanier, 62, attorney and developer, Houston.
Ranked higher during Mark White years when he pushed for rebuilding state transportation system as chairman of Highway Commission. Won votes for gasoline-tax increases (75 percent dedicated to highway construction) in 1984 and 1986 with hardball tactics linking local highway projects to legislators’ support for tax bill. Great political instincts: called by one House veteran “the best outsider at counting votes I’ve ever seen.” Warned White against excessive reliance on political polls (White didn’t listen). Once helped run Louie Welch’s mayoral campaigns; still potent in Houston. When local transit authority tried to adopt an all-rail plan earlier this year, Walter Mischer and other big shots lined up behind it. But Lanier fought for using a portion of Houston’s transit money on roads—and won.
10. Jack Evans, 65, businessman, Dallas.
Cullum Companies’ CEO is heir to Erik Jonsson’s reputation as the person to call in Dallas if you have only one phone call to make. Trying to breathe political life into once all-powerful (but more recently dispirited and disorganized) business community. CPR ministrations have resuscitated Dallas Citizens Council, political arm of old business establishment. Took lead in forming breakfast club to assure “responsible” candidates for city council; membership (at reported $5,000 a year) includes all the usual suspects. An ex-mayor who some think will run again (he quit after one term to tend to business), Evans wisely stayed neutral in heated Annette Strauss-Fred Meyer race last spring. The unanswered question: Is he on the cutting edge of the new Dallas or the blunt edge of the old?
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