Power Company

Who are the most influential people determining the fate of Texas—and what do they want?

February 2011By , and Comments

This list marks the fourth time TEXAS MONTHLY has sought to identify the state’s most powerful players. The first was in 1976, when one of “the secret capitals of Texas” was at Houston’s Lamar Hotel, in Suite 8F, the archetypal smoke-filled room. The power brokers at the time were legendary figures whose era was coming to an end: George R. Brown, the co-founder of Brown & Root; John Connally, the former governor and U.S. Treasury Secretary; Leon Jaworski, the prosecutor of Richard Nixon; Allan Shivers, the former governor and University of Texas regents chairman; Erik Jonsson, the Dallas mayor and Texas Instruments co-founder. These men ran the state by exercising power in all three sectors that count: politics, business, and civic affairs. There is nobody on the 2011 list who even remotely resembles them.

The very thing that made this establishment powerful proved its undoing: oil. Our 1987 story declared that the old power structure was a casualty of the oil bust. “No one in the business and political leadership of Texas even mentions the establishment anymore,” we wrote. Instead, it had been replaced by a small group of wealthy movers and shakers with ideas, people like Ross Perot, who promoted education reform. And oilman George Mitchell, an early proponent of sustainability. And San Antonio mayor Henry Cisneros, who preached the importance of economic development and diversity. These new players differed from the old ones in that they set out to change the arena in which they operated without the expectation of immediate profit.

Our next list came in 2005, two years after Republicans won control of the state House of Representatives for the first time since Reconstruction and elected Tom Craddick, their longtime legislative leader, as Speaker. The 2005 power list was unlike any previous list. Gone were titans of business like Perot and T. Boone Pickens. Lawmakers, lobbyists, consultants, big Republican donors, and key staffers and advisers dominated the list. Power was almost exclusively Republican (and remains so today).

Which brings us to the 2011 list. Why compile another? Because we stand on the cusp of the most important legislative session of our lifetime, when those with power will make decisions that affect Texas for decades to come. This list reflects who will wield influence during this session—and how they’ll use it. But it also demonstrates the incredible pace of change. The past six years have brought an unprecedented transformation in the distribution of power in Texas, none more important than the rise of the grass roots, epitomized by the emergence of the tea party, which, for all its disorganization, is a force to be reckoned with. The tea party groups have benefited from the way the Internet and social media have revolutionized politics, empowering anyone with a BlackBerry and a mailing list to drive issues and influence elections. Yet, for all the ways that power has changed in the past 35 years, in one way it remains the same. Power is still an insider’s game, where the decisions are made behind closed doors. Let’s have a look inside the room.

The Purse Strings—Steve Ogden and Jim Pitts

As lawmakers gird themselves for a session in which the state’s budget crisis is by far the most pressing issue, these two longtime legislators are at the center of the storm. Ogden, a Republican from Bryan, has been chairman of the Senate Finance Committee since 2004; Pitts, a Republican from Waxahachie, will chair the House Appropriations Committee for the third time in the past four sessions. Each will prepare a version of the budget, which, according to tradition, will be numbered Senate Bill 1 and House Bill 1. They will have the biggest say about who gets how much funding.

Their power is not absolute. Both chairmen are dependent on their committee members to provide the votes to send a budget to the floor for debate, and both must heed the priorities of their presiding officers, Lieutenant Governor David Dew­hurst in the Senate and Representative Joe Straus, the front-runner to be reelected Speaker of the House at the time of this writing. But for the most part, the buck—or lack thereof—stops with Ogden and Pitts.

Both have had long careers: Ogden served six years in the House before winning a Senate seat in 1996. Pitts first won election to the House in 1992; he challenged Tom Craddick for Speaker in 2007 but came up short. Ogden contemplated retirement after the 2009 session. It would surprise no one if this were the last session for each (all the more reason for them to wield power). Both regard the budget as a moral document. Ogden almost caused a meltdown in 2009 by insisting on a rider that prohibited the expenditure of state funds on stem cell research (he yielded), and during the same session Pitts took on the governor’s office for its questionable manipulation of funds for a $50 million grant to Texas A&M, Governor Rick Perry’s alma mater.

The problem for these two legislators is that without money, power doesn’t mean much. They must find a way to pay for public schools, universities, health care, roads, and law enforcement in a year when new revenue is next to nonexistent—a 7 percent increase at most, Pitts says. Ogden believes a budget deal can be reached. “Texas will be bruised up but probably won’t be permanently harmed,” he told us. Pitts warned that in the first version of the budget bill, “every number is going to be pretty scary.” Even so, he said, “some people would be ready to vote for it on day one.”

What To Watch For: Ogden wants to spend some of the Rainy Day Fund and pass a constitutional amendment to raise more gasoline tax revenue for highways. Pitts will likely propose delaying some payments—to school districts, for example—until the next budget cycle.

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TEAM PERRY

Eternal Governor of the Spotless Mind—Rick Perry

Four years ago they were writing his epitaph. Perry polled just 39 percent in 2006, good enough to limp across first in a four-person governor’s race but still the lousiest total for a winning candidate since 1861. Senator Kay Bailey Hutchison smelled blood in the water and opted to run for governor in 2010. But Perry, who has never lost a race, is nothing if not a survivor. He took a right turn in the primary—beginning with his now famous secession remark—and never looked back. Now it’s Hutchison’s career that is on life support, while a reinvented Perry rides the anti-Washington wave sweeping the country to . . . where? Not a 2012 presidential campaign, he says, but his recent endeavors speak otherwise: a profile-raising post as the head of the Republican Governors Association; a new book, Fed Up!, that reads like a tea party manifesto; and a national publicity tour, which included a stop on The Daily Show, where he came across as genial, smooth, and, it has to be said, electable.

For years, the knock on Perry was that he was just not very good at being governor: His use of the veto has frequently been ham-handed, while other ideas he threw his weight behind—like mandatory HPV vaccines for teenage girls or new privately owned toll roads—seemed ill-considered, not to mention politically disastrous. Yet after a record-setting ten years in office, he appears to have finally learned what power is and how to use it. His extended network of political appointees in state government and staffers-turned-lobbyists has given his operation a reach and scope not seen since Bob Bullock.

What To Watch For: President? Vice president? Governor for Life? Whatever it is, getting there requires Perry to oppose any tax increase this session.

The Fixer—Jay Kimbrough

If the Texas governor’s office were a law firm, Kimbrough would be the fixer, that one indispensable attorney who has a knack for making problems go away, though you don’t always want to know how he does it. In 2007 Perry named Kimbrough conservator of the Texas Youth Commission, which oversees the state’s youth lockups, after a sex abuse scandal left the agency in disarray. The plainspoken Vietnam veteran rode his Harley to far-flung TYC facilities for personal inspections. He was blunt about which heads had to roll—quite a few—and reporters ate it up. The former judge of Bee County has been fixing broken agencies—and hurting feelings—since 1997, when Governor George W. Bush recruited him to reform the troubled Texas Commission on Private Security. After that, it was rescuing the bankrupt Commission on Alcohol and Drug Abuse, reining in rogue drug task forces as the head of Perry’s criminal justice division, and cleaning up a scandal at the biodefense lab at Texas A&M. “He is essentially a one-man shadow government,” a Democratic senator told us—and, he added, an extremely effective one.

Last July, Perry detailed Kimbrough to his biggest challenge yet: restructuring the hidebound Texas Department of Transportation, which has been battered in recent years by one public relations disaster after another, from the billion-dollar accounting error that left highway projects across the state in limbo to the politically disastrous Trans-Texas Corridor private toll road scheme. State auditors and a private consulting firm recommended sweeping changes. The sheer size of TxDOT—12,000 employees and an $8 billion budget—meant that everybody had a stake in this fight, and Kimbrough, normally a lone wolf, was asked to work with a committee of three, the other two hand-picked by the lieutenant governor and House Speaker. The committee’s recommendation, however, was classic Kimbrough: Fire the head honchos and start over.

What To Watch For: Kimbrough’s biggest task will be convincing fed-up legislators that TxDOT is moving in the right direction—before they file yet another slew of hostile bills.

Rove 2.0—Dave Carney

Why is a New Hampshire–based political consultant on our list? Because he’s the chief political strategist for Perry, the mastermind behind his rise from backbench Democratic legislator to potential presidential contender. A devotee of the brass knuckles school of campaigning, Carney is a bear of man, heavyset and at times temperamental, who prefers to remain in the background. The last major profile of him appeared in Time sixteen years ago, when Carney was the lead consultant for Bob Dole’s 1996 presidential campaign; it contained the nugget that, early in his career, Carney had “lived in an unplugged walk-in refrigerator in a bagel deli and showered at a YMCA across the street.” He responded to an interview request for this article by e-mailing, “I would be glad to give you a list of 25 folks who are influential in Texas politics. I don’t think I would make the list of the top 100.”

Yes, he would. In fact, Carney’s Texas connections go way back. After George H. W. Bush won the presidency, in 1988, Carney served as the White House’s political director. When Bush lost his race for reelection, Carney ran Kay Bailey Hutchison’s successful 1993 special election campaign for the U.S. Senate. Five years later he was on board for Perry’s 1998 battle for lieutenant governor with Democrat John Sharp.

In 2010 he was at the helm when Perry faced his severest political test, a well-funded primary challenge from Hutchison. Carney’s strategy was to attack Hutchison as a politician with Washington values while positioning Perry as a candidate with Texas values. Hutchison had no answer. Perry had the right message at the right time and went on to win a third term.

What To Watch For: Perry in 2012you just know Carney wants it.

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The Business Man—Bill Hammond

No one has a bigger stake in state government than the business community, which is a consumer of the most important product in Texas: public school graduates. But the time when business leaders like Ross Perot came to Austin to demand better public schools is a distant memory. Today the chief business advocate for better schools is Hammond, the president of the Texas Association of Business, referred to around the Capitol as the TAB. Hammond has the traditional concerns of a business lobbyist (opposition to tax increases and mandates that drive up the cost of health insurance), plus a genuine alarm about the quality of public education in the state.

Hammond’s power comes from his willingness to go against the grain. He persistently questions the chorus of politicians who tell us how great the state is doing in the realm of education, scoffing at the state’s accountability system, which seems designed to make politicians look good instead of reflect reality. “It tells us that seventy percent of our schools are rated ‘exemplary’ or ‘recognized,’ ” he said. “Then, can you explain why just twenty-two percent of high school graduates are career- or college-ready?” In recent sessions, Hammond has also proved himself to be a reliable foe of anti-immigration legislation, which could hurt the businesses he represents (homebuilders in particular). As the issue reached a fever pitch this past year, he remained staunchly opposed to anything resembling Arizona’s controversial SB 1070. Of course, it doesn’t hurt that he’s a big, broad-shouldered guy who can be intimidating when he needs to be.

What To Watch For: Expect Hammond to make the case for using the Rainy Day Fund to reduce the impact of budget cuts on education spending.

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The Juggernaut—Dick Trabulsi

In the history of Texas politics, there has never been anything like Texans for Lawsuit Reform. Founded in 1993 by Trabulsi, the wealthy owner of a chain of upscale liquor stores in Houston, along with homebuilder Richard Weekley and a couple of other like-minded business leaders, the organization set out to change the plaintiff-friendly civil justice system in Texas. Other groups have raised more money, but none have been so single-minded in their pursuit of an ideological goal. In 2003 Trabulsi and company reached total victory, when the Legislature passed a slate of reforms that went far beyond limiting excessive jury awards and effectively barred the courtroom door to thousands of injured Texans with legitimate claims. Along the way, TLR’s money helped build a Republican majority in both houses of the Texas Legislature and eviscerated the trial lawyers, long the Democratic party’s biggest source of campaign donations. Eight years later, TLR is still a fund-raising juggernaut—it was once again the PAC that spent the most money on Republican candidates this election cycle—though most of the money comes from just two dozen wealthy donors. The trial lawyers, meanwhile, are sounding very much like car crash victims themselves. “You have to ask,” said Mark Kincaid, of the Texas Trial Lawyers Association, “What else is left for them to do?”

What To Watch For: Perry himself laid out TLR’s agenda on the campaign trail when he accepted its endorsement. At the top of the wish list is “loser pays”—that is, forcing plaintiffs to pay defendants’ legal fees if a suit is found to be frivolous.

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R&D

The Advocate—Brooke L. Rollins

When Rollins took over the leadership of the Texas Public Policy Foundation eight years ago, the fledgling organization had only four employees and was six months in arrears with the rent. Today the conservative think tank has 27 full-time employees, a $4.2 million budget, and the attention of conservative lawmakers and staffers throughout the Capitol. The TPPF is the Texas version of the Heritage Foundation, a source of and an advocate for conservative ideas on public policy.

The TPPF’s positions on issues can make the difference between life and death for major legislation. In the 2009 session, for example, the TPPF effectively killed a local referendum on a regional gasoline tax in the Metroplex, even though it had massive support from local business groups. Conservative lawmakers who had previously backed the idea had to run for cover when the TPPF labeled it a tax increase.

The organization’s most notable success, shared with lawmakers on both sides of the aisle, has been its advocacy for channeling nonviolent offenders into community corrections programs that operate at a fraction of the cost of warehousing inmates.

Rollins first rose to prominence as a student at Texas A&M in the nineties, when she became the first woman to be elected student body president. After getting her law degree at UT, she worked for Perry before landing at the TPPF. Her employees joke with her about when she intends to announce for governor. Apparently not any time soon. “I’d do this for free,” she said. “This is my Junior League. Or PTA.”

What To Watch For: Rollins wants the TPPF to tackle Tenth Amendment issues, clarifying the role of state and federal governments. “This is not just for red states,” she told us. “It’s for all states.”

The Opposition—F. Scott McCown

It’s a lousy time to be a liberal in Texas, but McCown, the executive director of the Center for Public Policy Priorities, an Austin think tank devoted to issues affecting low-income families, is too busy relentlessly challenging the conservative status quo to notice. Here’s a good example of how the CPPP operates: In 2009 rising unemployment prompted unprecedented demand for food stamps from needy Texas families. Chronically understaffed, state food stamp–eligibility workers were processing only 60 percent of the requests within the thirty-day period required by federal law. That meant that a lot of families who were entitled to government assistance were going hungry. The CPPP sounded the alarm, pointedly reminding state officials that they were violating federal law. Additional staff was hired, and within a year, the state was once again in compliance.

Knowledge is power, and the CPPP—McCown and a staff of sixteen policy wonks—is unparalleled in its grasp of the law, policy, and bureaucracy relating to social services. But it’s the organization’s results-oriented approach that really sets it apart, and this is pure McCown. Still as boyish-looking as he was when he was one of the University of Texas School of Law’s youngest professors, McCown can break down a byzantine system like school finance so that even the most clueless (reporters and lawmakers alike) can grasp his points. His debating style is patiently professorial. As a Travis County district judge, he became known as a crusader for forgotten children when he issued an urgent call to arms—in a 1998 statement directed at lawmakers—illuminating a mounting crisis in child abuse and neglect cases. His efforts convinced lawmakers to increase funding for Child Protective Services by $200 million. Under his guidance, the policy papers written by the CPPP have become a must-read for lawmakers of every political persuasion.

What To Watch For: Expect to hear a steady refrain from the CPPP advocating a “balanced” approach to bridging the budget shortfall through a combination of cuts, the Rainy Day Fund, and new revenue.

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RABBLE-ROUSERS

The Tea King—Dan Patrick

The usual route to power in the Texas Senate is through seniority, which leads to committee chairmanships and legislative achievements. This is not Patrick’s way. A conservative talk radio host from Houston with a knack for publicity, he did not run for the Senate to practice its “go along to get along” comradeship, nor to wait for clout to come his way. From the moment he arrived in the Senate, in 2007, Patrick has been a burr under the saddle of his colleagues—pressing constantly to remove the procedural roadblocks that make it difficult for the majority party to pass its agenda.

“I have asked myself, ‘Who am I?’” Patrick told us. “I’ve learned how to work within the system, but at the heart of it, I’m not a politician. I’m a grassroots activist who happened to get elected. I have made myself a solemn promise to be the voice of the people in Austin. This sometimes puts me in conflict with the inside-the-Capitol crowd.”

Patrick’s base this session will be the newly formed Tea Party Caucus, which he founded and which gives him a platform to demand fealty to conservative initiatives such as voter ID and to position himself as a kingmaker. His number one goal is the elimination of the Senate’s so-called two-thirds rule, a longstanding tradition that requires the approval of two thirds of the Senate before a bill can be debated. The two-thirds rule helps maintain the Senate’s collegial atmosphere, but it also allows a united minority of eleven senators to block the initiatives of the majority. As Patrick sees it, the two-thirds rule is an archaic device that overendows the minority.

“Some legislators still have their heads buried in the sand,” he said. “It’s a new day. The people won. The establishment doesn’t run the show anymore. We have a chance to build a party that can dominate Texas for two decades. The people do not want the Democrats to still have a major say.”

What To Watch For: Patrick will try to use the Tea Party Caucus as a springboard to a future statewide race, most likely for U.S. Senate or lieutenant governor.

The Enforcer—Michael Quinn Sullivan

No one in Texas politics can stir up a fuss quicker than this onetime newspaperman and aide to Congressman Ron Paul. Sullivan’s power is unique. As the president of Empower Texans, he uses his influential website to get conservatives across the state engaged on issues he regards of high importance. With a few keystrokes, Sullivan can rouse the right in greater numbers, and instill in them a greater alarm, than anyone—and in the process he can put enormous pressure on Republican lawmakers to hew to conservative fiscal orthodoxy.

Sullivan is the Luca Brasi of the conservative movement: the enforcer. He developed a fiscal-responsibility index for his website to track legislators’ commitment to fiscal conservatism—and he kindly informs them that he is watching their votes. Although leaders of socially conservative organizations are among his political allies, Sullivan describes himself ideologically as “a fiscal guy, not a social guy.”

Sullivan most recently played the role of enforcer in the 2011 Speaker’s race. After the Republican sweep on election night, he rounded up the leaders of more than forty conservative organizations and had them sign a letter calling for conservative leadership in the Texas House of Representatives. Translation: Incumbent Speaker Joe Straus had to go. The Speaker’s race has always been strictly an insider’s game, but Sullivan unleashed tea parties, homeschoolers, and anti-abortion activists to pressure lawmakers into voting for one of Straus’s two Republican opponents. Nothing like this had ever happened in Texas politics, and it may set a precedent for future Speakers’ races. Sullivan drew considerable flack for the unrestrained rhetoric of some of his political allies’ attacks on Straus, but he was unapologetic. He told the Austin American-Statesman: “This isn’t picking the president of the garden club here.”

What To Watch For: Every time a Republican lawmaker so much as thinks of spending money or raising new revenue, he will hear from Michael Quinn Sullivan.

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The Commish—Tom Suehs

“What happens in the budget is going to be decided by one number,” explained Senate finance chair Steve Ogden. “And that number is Medicaid.” Representative Jim Pitts, his counterpart in the House, agreed: “It controls our budget.” So whose is the strongest voice determining what that number is? Is it the Texas Hospital Association, whose lobbyists work overtime to protect the complex formulas for hospital reimbursements? The Texas Medical Association, whose 43,000 members (mostly doctors) tend to yelp when state payments to doctors are on the chopping block? What about the Texas Academy of Family Physicians, whose CEO, Tom Banning, has mastered the intricacies of federal health care reform?

None of the above. While these groups all have influence, they tend to focus on their own corners of the health care budget. The one person whom lawmakers from both parties rely on to sift through all the arguments made by competing special interests and deliver sound judgments about who needs what is Suehs, the executive commissioner of the Health and Human Services Commission, which oversees one of the state’s most massive bureaucracies. But Suehs is no ordinary bureaucrat. Politically savvy and whip-smart, he’s also a dynamic leader, credited with turning the state’s food-stamp-eligibility crisis around last year. And though he was appointed by Perry (in 2009), he’s proved himself willing to take an independent stand. When Perry and other conservative lawmakers flirted with opting out of the Medicaid program this past year, Suehs’s office issued a credible report that definitively outlined the economic disaster that would befall Texas if the state passed up the federal matching dollars. As a salve to the right, the report suggested that the feds give the state greater flexibility in how the program is run. Perry retreated; the talk of abandoning Medicaid evaporated.

What To Watch For: Suehs recently told the Dallas Morning News that he hopes to educate state leaders on “the balloon effects” of cutting social services: “If you squeeze the community mental health [services], you’re going to end up possibly with more people in prison, and that’ll cost money.

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THE MONEY MEN

Daddy Warbucks—Bob Perry

Few Texans find themselves in the position of having to deny that a state agency was created for their personal benefit. But such is the life of this media-shy Houston homebuilder who has given more money to political causes and candidates in Texas than any other person. His donations to Rick Perry—more than $2.5 million since 2000—led reasonable observers to conclude that the 2003 creation of the Texas Residential Construction Commission, which functioned chiefly as a roadblock to homeowners trying to sue their builders, was a political favor. The two Perrys are not related, except in the sense that a string is related to a yo-yo or a leash to a poodle. The recent history of the Republican party in Texas can be read in Bob Perry’s canceled checks. His donations fueled the takeover of the Texas House that made Tom Craddick the first Republican Speaker since Reconstruction. He also helped underwrite George W. Bush’s two presidential campaigns, along with the Swift-boating of John Kerry, in 2004. In 2010 he was the second-biggest donor to Texas candidates, while spending at least $13 million in nationwide races, including $7 million for Karl Rove’s American Crossroads PAC. There have been a lot of changes in Texas politics since Perry appeared on the last version of our power list, in 2005, but one thing remains the same according to Craig McDonald, of Texans for Public Justice, the campaign-spending watchdog: “Bob Perry is still the Republicans’ golden goose.”

What To Watch For: Perry’s homes (and his wealth) are built with immigrant labor, which means his men at the Capitol—superlobbyists Buddy Jones and Bill Miller—will have their hands full fighting off punitive immigration measures after the Republican landslide last November.

The Left’s Bob Perry—Steve Mostyn

If political donors were classified in hurricane terms, this Houston trial attorney would definitely merit a category 5. Mostyn, who made his fortune representing home-owners devastated by Hurricanes Rita (2005) and Ike (2008), contributed nearly $10 million to Democratic causes in the 2010 election cycle, making him the state’s single largest political donor this past year (sorry, Bob Perry). It was Mostyn’s deep pockets that produced the most controversial ad of the gubernatorial election, the full-pager in 24 newspapers featuring a grainy photo of Perry with the damning headline “Coward.” Mostyn was first inspired to get involved in politics after the Legislature, in 2003, adopted tort reform legislation that he believed went too far and denied injured parties the opportunity to sue for damages. As president of the Texas Trial Lawyers Association, Mostyn’s natural nemesis is Texans for Lawsuit Reform: He locked horns with the group this past fall over a court petition to review the millions in fees Mostyn had earned on cases involving the Texas Windstorm Insurance Association, the quasi-governmental entity that provides insurance for some coastal residents. But Mostyn, an imposing former football player with a goatee and bald pate, seems to relish the fight and vows to stick with it for the long haul. When Bill White’s gubernatorial campaign looked like a lost cause, he told reporters that he believed his millions would not be wasted but would build an infrastructure for Democratic races of the future.

What To Watch For: Mostyn has a personal stake in the Legislature’s attempts to reform TWIA. And as president of the TTLA, Mostyn will be opposing broader attempts to limit the ability of injured parties to file lawsuits.

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The Green Giant—Al Armendariz

He’s the only environmentalist who gives Rick Perry fits. The Dallas-based regional administrator for the U.S. Environmental Protection Agency has been on the job only since November 2009, but Armendariz has already thrust himself into the ongoing war over the way air pollution is regulated in Texas and, in the process, made himself a lightning rod in Perry’s self-declared war on Washington. The fight had been brewing long before the forty-year-old former Southern Methodist University engineering professor came on board; the EPA had hinted for years that the Texas Commission on Environmental Quality’s lenient approach to regulating industry—especially the cluster of dirty chemical and oil refineries in southeast Texas—did not comply with federal law. Finally, industry groups sued to force the agency to clarify its position, gambling that the federal government would never be so audacious as to take over the permitting of 60 percent of the nation’s oil-refining capacity. They were wrong.

Last June, Armendariz called their bluff, declaring 122 plants, including most of the state’s biggest chemical and oil refineries, out of compliance with the Clean Air Act. It was a day that watchdogs like Public Citizens’ Tom “Smitty” Smith thought they’d never see. “He’s a hero,” he told us. Perry called the move “irresponsible and heavy-handed.” Attorney General Greg Abbott and a coalition of industry groups sued. But Armendariz, who grew up in El Paso in the shadow of the Asarco lead smelter—long a symbol of the state’s unwillingness to protect public health at the expense of industry—was only getting started. Just as the air pollution fight was coming to a head, Armendariz warned the TCEQ that eighty facilities in Texas were also operating without valid water pollution permits. Sitting across the table from a unified front of the most powerful politicians and industry executives in the state might seem like a losing proposition for a bureaucrat, but Armendariz told us he wasn’t alone. “I’ve got the law on my side,” he said.

What To Watch For: Texas is the only state that has flatly refused to comply with the EPA’s new nationwide regulations on greenhouse gases, which means that Armendariz will once again be at ground zero when the carbon dioxide hits the fan.

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Minister of Wealth—Alonzo Cantu

When Hillary Clinton and Nancy Pelosi needed to collect big campaign bucks quickly, they called on a former migrant worker and son of a construction worker from McAllen. They knew that Cantu—now the owner of a massive real estate development corporation with significant investments in banking and health care—could turn on the spigot to a reliable and loyal network of contributors with a single phone call. Cantu was a prominent “bundler” of campaign cash for Clinton, helping her raise more than $640,000 in the McAllen area; he once hosted Pelosi at a fundraiser for the Democratic Congressional Campaign Committee that raked in $800,000. How does he do it? Everyone who works in the Cantu empire is encouraged to participate, from doctors to the exterminator who sprays his office buildings for pests. As his brother-in-law told the Washington Post in 2007, “When Alonzo comes through the door, you want to give to him. You don’t want to be on his bad side.” Ambitious and driven, Cantu is a one-man chamber of commerce for the Rio Grande Valley. He has invested in a basketball franchise (the Rio Grande Valley Vipers, a farm team for the Houston Rockets) and an arts center, and he has a luxury hotel on the drawing board. He’s also the force behind VAMOS (Valley Alliance of Mentors for Opportunities and Scholarships), which has given away $3.3 million for low-income college-bound Hispanics since 1996. But his biggest impact comes through his affiliation with the Border Health PAC, the nineteenth-largest political action committee in Texas, with $940,000 in donations in 2008. (By comparison, the statewide Texas Medical Association PAC gave $1.4 million that year.) No longer just friendly to Democrats, the PAC gave generously to Perry in 2010 to ensure that the Valley would have a seat at the table with Dallas and Houston when important decisions are made concerning health care spending.

What To Watch For: The state is intent on expanding Medicaid managed care to the Rio Grande Valley, which may be a struggle; the Border Health PAC has opposed this in the past .

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THE EDUCATIONISTS

The Dean—William C. Powers

Time Magazine recently wrote that today’s universities are “what mines and factories were a century ago: America’s regional economic powerhouses, one of the few certain engines of growth in good and bad economic times.” At the University of Texas at Austin, for example, every dollar spent generates an estimated $18 for the Texas economy, by spinning off ideas and research that turn into new businesses and new employment. Which means that UT-Austin president Powers commands one of the state’s most powerful portfolios.

Luckily he knows how to use it. Powers’s academic credentials are sterling (a stint as the dean of UT Law and degrees from the University of California at Berkeley and Harvard Law School command easy respect from his faculty), but he’s also a natural politician, admired by almost everyone at the Capitol. Tall, with just enough gray hair and lines around the eyes to give him gravitas, Powers knows how to make a conversation partner feel important—and not BS-ed. Many lawmakers relied on Powers for legal expertise during the tort reform debates, and they now see him as an honest broker. (In contrast, many lawmakers view Perry’s appointees to university boards of regents as shills for the governor.) Consider the recent reform of the top 10 percent law, the policy guaranteeing top-ranking high school seniors admission to state universities. Designed to increase minority enrollment, the policy came under fire for gross unfairness to thousands of aspiring Longhorns. The university wanted flexibility; minority lawmakers didn’t want to lose ground. Enter Powers, who gave his word that UT would continue to improve its diversity. That broke the political gridlock, and the deal was done.

What To Watch For: Powers’s agenda is simple: At all costs, protect funding for higher education, which faces its most serious threat in history.

The Man From El Paso—Woody Hunt

As CEO of Hunt Companies, a real estate and construction conglomerate, Hunt devours a lot of research data. But it was a startling fact about his hometown of El Paso that motivated his political involvement: Between 1950 and 2000, El Paso’s median family income declined dramatically, from 12 percent higher than the rest of Texas (and on par with the nation) to an alarming 27 percent below the Texas median (and 33 percent below the national level). How, Hunt wondered, could his city reverse such a severe economic slide? Joining forces with other local leaders, he became a key player in convincing the Legislature to invest in a new four-year medical school in El Paso. In 2009 the Paul L. Foster School of Medicine, part of the Texas Tech University Health Sciences Center, began educating new doctors. And this October, Hunt’s family foundation announced a gift of $10 million to expand Tech’s nursing school in El Paso. (That’s on top of a $5 million gift two months earlier to the University of Texas at El Paso.)

Hunt’s role in shaping higher education policy has grown far beyond the El Paso region. He was appointed in 1999 by Governor Bush to the University of Texas Board of Regents and served on UT’s investment arm, UTIMCO. He now chairs the Governor’s Business Council and the Texas Higher Education Coordinating Board’s advisory committee on “cost efficiency,” a phrase that nervous academics are sure to see as code for “budget cuts.” Plus there’s new data worrying him: For the Texas workforce to be globally competitive, Texas colleges and universities will have to see a 4 percent annual growth rate in the number of degrees awarded over the next twenty years. “It’s doable,” he said in a recent speech, “but only if we significantly improve our productivity.”

What To Watch For: Expect Hunt to be Perry’s point man in advocating some radical education reforms—such as linking funding to graduation rates.

The Grocer—Charles Butt

The motto of the grocery chain H-E-B may be “Here everything’s better,” but the company’s 72-year-old billionaire CEO seems to be a believer in the notion that “Here everything should be better.” For years now, Butt has been telling lawmakers that he is deeply concerned with the quality of Texas’s workforce. And he should know. He has three hundred grocery stores throughout the Southwest and 75,000 employees in Texas. Like a lot of large businesses, H-E-B is a consumer of the products of our educational system. So Butt went to work on the schools. His interest in education dates back to the nineties, when he visited some low-income San Antonio and Houston public schools and saw a profound disconnect with their school boards. He first created buzz in Austin when he began countering the significant campaign contributions made by fellow San Antonian James Leininger, a wealthy backer of school voucher programs. Butt was an early underwriter of Texas Parent PAC, a group devoted to electing legislators who oppose vouchers. But in the following years, Butt disproved any notion that he was simply a single-issue activist by creating a well-funded education policy and advocacy organization: Raise Your Hand Texas. A four-member policy team (including Mike Moses, the former Texas commissioner of education under Governor Bush, and attorney David Thompson, the leading guru on school finance) provides the brainpower, and seven lobbyists, including most of Austin’s heaviest hitters, advance the organization’s public policy positions. H-E-B’s charitable contributions to education programs extend well beyond Raise Your Hand Texas, totaling nearly $8 million in 2009.

Has it worked? Well, Raise Your Hand Texas has influenced legislative decisions on issues ranging from testing to charter schools. This summer, 125 Texas public school principals will attend the Harvard Graduate School of Education Summer Institutes—at no cost to themselves or the state. For the third year in a row, the million-dollar price tag will be covered by Butt, who became convinced—by examining research and data—that school principals are the linchpins of successful public schools. And the linchpins of the Legislature? Donors like Butt, who was the third-largest individual contributor to Texas political races in 2008, with $2.1 million.

What To Watch For: As the number and influence of charter schools have risen, so has the need for better oversight; expect Butt to nudge the Legislature to take action.

The Grandmother—Pat Robbins

When Robbins began raising money to fund Republican campaigns in 1976, she was a lonely voice in the wilderness. There were three Republicans in the state Senate and just fourteen in the House. “We had to start with county-level races, just to develop some talent to field for higher office,” she recalled. The fledgling organization she joined, Associated Republicans of Texas, did just that. It took 21 years to reach ART’s goal of a Republican majority in the Senate and another 6 to take over the House. Now come the salad days: In 2010 ART raised and spent more money than ever before. Through the years, Robbins, now the group’s executive director, has always been the constant. “It’s hard to tell where ART ends and Pat Robbins begins,” said board member and former San Antonio state senator Cyndi Taylor Krier. She’s earned respect by staying above the infighting that goes on within the party. “Every now and then I want to get up on my soapbox and scream, but I don’t do that,” she told us. “It’s counterproductive.”

Think of Robbins as the grandmother of the Texas Republican party. During the Speaker’s race, freshmen members called to ask her advice about the pressure they were receiving from outside groups to dump Joe Straus. “You don’t allow yourself to be threatened,” Robbins said she told them. “You make up your own mind and you be the best legislator that you know how to be and do your constituent work, and you won’t have to worry about anything else.” And eat your vegetables.

What To Watch For: What good are majorities if you can’t keep them? Robbins will be knee-deep in redistricting this session, working diligently to cement ART’s hard-won gains.

•••••

THE LOBBY

The Dark Knight—Mike Toomey

When Karl Rove left Austin for Washington, D.C., with the Bush administration, he vacated the role of Prince of Darkness in Texas politics. Not to worry. Toomey, an Austin lobbyist and a former chief of staff to Perry, quickly stepped into the breach. Whenever secretive deals swirl in the Capitol, Toomey is always the first suspect to come to mind among insiders, usually with good reason. The Green party gets mysterious funding to collect signatures that secure a spot on the November ballot, which could only hurt Perry’s Democratic challenger, Bill White? Toomey played a part in that. Perry issues an executive order that prepubescent girls get a vaccine produced by the drugmaker Merck? Guess who the company’s lobbyist was. Perry surprises doctors by vetoing a bill opposed by insurance companies? Yep, Toomey was their lobbyist too. Perry makes a $330,000 profit in a land deal with Michael Dell, which is brokered by . . . well, you get the idea. Since his days as a Houston state representative, Toomey has hewed to an unwavering conservative ideology that has endeared him to the Republican party’s most prolific donors and right-leaning officeholders. Now a lobbyist for tort reform, insurance, pharmaceutical, and other business interests, his connections are obviously paying off: With Perry political strategist Dave Carney, Toomey co-owns a 2.7-acre private island in New Hampshire. As befits a dark knight, the island is remote and accessible from the mainland only by boat.

What To Watch For: You’ll never see it coming.

The Veteran—Rusty Kelley

Today Kelley is one of the most established lobbyists in the business, but he was a shabbily dressed UT student when he first saw the inside of the Texas Capitol. The year was 1967, and only minutes before he had heard that jobs were available during the legislative session. But he almost gave up when he saw a line of applicants standing on a staircase descending from the second floor, most of them impeccably dressed. Kelley had not had time to spiff up for the occasion, so he was just about to leave when a woman came out of the sergeant-at-arms’s office. “All these fancy-pants rich kids want to do is sit in offices all day,” she said. “I need somebody to oversee the pages right now. Are you ready to go to work?” He was.

After tours in the Senate sergeant-at-arms’s office and the House Speaker’s office, Kelley became one of the Capitol’s first hired-gun lobbyists—a specialist in passing major, often controversial legislation for big corporate clients. His signature achievement, accomplished with fellow hired gun Jack Gullahorn, was House Bill 72, the 1984 education reform proposals championed by Ross Perot, which included limits on class size and a no-pass, no-play eligibility rule for extracurricular activities. Later he oversaw the campaigns to pass home-equity lending and seat belt laws. Kelley and Gullahorn, who now specializes in advising other lobbyists on ethics issues, understood what the so-called Big Four lobbyists of that era (representing oil, chemicals, railroads, and manufacturers) did not: that the backslapping days when a few influential legislators called the shots were over. Every member was important.

It is no easy feat to spend 44 years in the high-pressure world of lobbying. Kelley credits his mentors for his staying power: Gullahorn; Jack Martin, of Public Strategies, who, Kelley says, “could see around corners”; and a high school football coach who gave him the best advice he’s ever received. Just before Kelley’s first game as quarterback, the coach brought the sideline chains over to Kelley. “In life,” he said, “don’t always try to score touchdowns. Just keep moving the chains.”

What To Watch For: Kelley will be pushing for smoke-free workplaces and public spaces (on behalf of Lance Armstrong’s foundation, which is a client); also watch for him to play a role in doing damage control on Medicaid funding.

The Wheel Greasers—Neal T. “Buddy” Jones and Bill Miller

No politician likes to lose a race, but a defeat made Jones’s career. After serving one session in the House, in 1981, Jones decided to run for the state Senate the next year. His opponent was Chet Edwards, who had lost a close three-way race for the congressional seat held by Phil Gramm. The well-funded Jones campaign loaded up on prime-time-TV advertising and joked about Edwards’ spots that ran during the low-cost soap opera time slots. This did not seem so funny when Jones lost the election. “Chet looked great on television,” Jones recalled ruefully some years later. “I think he got the vote of every woman in the district.”

Jones returned to the Capitol to become the executive assistant to Speaker Gib Lewis and learned the inside game as played by lobbyists. After two sessions with Lewis, he left the Speaker’s office to lobby; his breakthrough client was the Bass brothers. In 1998 Jones and Bill Miller formed HillCo Partners, which has been at the top of the lobby pyramid ever since. Jones is the rare lobbyist whose influence extends beyond politics into the real world. As a regent on the board of Baylor University, he helped rescue Baylor from turmoil by recruiting former special prosecutor Kenneth Starr to become president of the university.

Jones puts in long hours at the Capitol and oversees the firm’s phalanx of lobbyists. Miller takes care of the politics; he knows everybody (which is not that unusual for a lobbyist) and is liked by everybody (which is). The best lunch date ever, Miller has the greatest collection of stories, the sharpest political barometer, and the loudest laugh in the Capitol (and you can’t get through a meal without hearing it erupt at least three times). He helped shepherd Tom Craddick through his Speakers’ races and—vintage Bill Miller—even arranged an audience for Craddick with the Pope.

What To Watch For: Legislators punted last session on long overdue reforms to the insurance industry; look for Jones and Miller—representing industry heavyweights Farmers and Blue Cross—to fend off considerable consumer anger over high rates and poor service when the bill comes due this session.

The Shadow Comptroller—G. Brint Ryan

The motto for the Eighty-Second Legislature might as well be “Money makes the world go round,” which must mean that a great deal of power will rest with the comptroller, “the chief steward of the state’s finances, acting as tax collector, chief accountant, chief revenue estimator and chief treasurer for all of state government.” But that statement needs an asterisk: The comptroller accomplishes all those things only after her actions have been thoroughly audited by Ryan’s nine-hundred-employee Dallas-based tax consulting firm—called, simply, Ryan—which sucks about $1.5 billion a year out of the State’s treasury for its corporate clients.

Brint Ryan has essentially become the state’s shadow comptroller. His “reverse audits” have cost the State of Texas dearly: In one celebrated case, Texas Instruments was repaid approximately $128 million after Ryan challenged the state’s tax assessment. In short, Ryan has made a fortune exploiting the gray areas of tax policy. Along the way, he has forced the state to clarify what its tax laws mean. For example, a tax exemption exists for everything “used in manufacturing,” but what exactly does that cover? As Bill Allaway, of the Texas Taxpayers and Research Association, noted, “The moment you set foot on the premises of a refinery or a semiconductor plant, the questions start. What Ryan & Company has done is increase the precision of the rules.”

The firm is politically well connected (one of the principals is former comptroller John Sharp, the chief architect of the state’s margins tax) and generous with campaign contributions, which means that even opponents of Ryan have a way of finding common ground with the deep-pocketed CEO. In 2006 Perry criticized challenger Carole Strayhorn, the former comptroller, for accepting campaign contributions from Ryan while authorizing refunds on his clients’ behalf. But, hey, three years later, Perry appointed Ryan to the University of North Texas Board of Regents (and, what do you know, Ryan donated more than $450,000 to Perry’s 2010 campaign). Like they say, money makes the world go round.

What To Watch For: Apparently Ryan has the political bug. Will a recent embarrassing loss in a bid for Dallas City Council cure him of it?

Who’s not on the list?

Representative Joe Straus: At press time, the Speaker’s race was still undecided, but even if Straus wins, his leadership has never been of the iron-fisted Tom Craddick variety. He’s a delegator, not a dictator.

Lieutenant Governor David Dewhurst: Some very powerful men have held this position, but Dewhurst, for all his brains, is not one of them. “I don’t think he knows what power is,” one senator told us. Enough said.

Comptroller Susan Combs: Though she’s held the office since 2007, only recently has Combs used it as a bully pulpit.

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