The business establishment has run Texas since before any of us were born. They were the robber barons of the oil industry, and the corporate executives, particularly of the insurance companies. They believed in government so long as it was lean and stayed out of their way. They often opposed President Roosevelt’s “socialist” New Deal, and they coined the anti-union phrase “right to work.” When the Democratic Party started shifting further to the left in the 1960s, the business establishment led the effort, over about thirty years, to turn Texas into a Republican state.

And along the way, the establishment Republicans—once called country club Republicans—formed an alliance with a necessary constituency group: unruly Republican cousins of the evangelical, fundamentalist Christian variety more interested in social issues than in the idea that what is good for business is good for Texas. The alliance has been fraying for years. This session, in the Texas Senate at least, business Republicans found that they have lost control to the social conservatives. Whether it was the so-called bathroom bill to restrict transgender access to restrooms or the sanctuary city crackdowns on illegal immigrants, social conservatives are treating Texas business like an enemy rather than an ally.

  • When the Fort Worth Chamber of Commerce announced opposition to the bathroom bill, Senate co-sponsor Kelly Hancock of North Richland Hills resigned his membership. (Hancock decline repeated requests to comment.)
  • After the Texas Association of Business sent the Senate a letter of opposition to sanctuary city legislation, the leader of the right-wing Empower Texans publicly urged tea party conservatives to boycott the organization’s members. The TAB is the umbrella organization for local chambers of commerce as well as individual business members, including some of the largest corporations in Texas.
  • During a committee hearing on the bathroom bill, Senator Paul Bettencourt of Houston publicly dressed down Texas Association of Business President Chris Wallace over a flawed study on the potential economic impact of the Legislature passing a bill perceived as discriminatory. Even with shortcomings in the study, Wallace said, there is no doubt that the bathroom bill would negatively affect some businesses in the state. Bettencourt exploded at Wallace: “It is absolutely fake news for the president of the Texas Association of Business to be quoting a study that has an absolutely zero credibility rating.”
  • Lieutenant Governor Dan Patrick and bathroom bill author Lois Kolkhorst of Brenham held a press conference with groups such as Vision America and the US Pastor Council to announce a self-proclaimed “Christian” lobby effort to force passage of the bathroom bill in the Texas House.

All this has put the Texas business community in an unusual position. Increasingly Texas businesses have found that social conservative wedge issues have an effect on their bottom line. Unauthorized immigrants are needed in the construction and service industries, while members of the LGBT community often have money to spend and the educated job skills needed in a modern economy. Four years ago, major homebuilders and grocers convinced the Texas House to kill sanctuary city legislation. Two years ago, the city of Plano approved a non-discrimination ordinance as part of attracting Toyota to move its national headquarters there. The Republican Party of Texas is at odds with itself.

“The Republican Party became the majority party in Texas because it was right of center and as George W. Bush described it, ‘compassionate conservatives,’” said Austin lawyer Hector De Leon, co-chairman of the business-oriented Associated Republicans of Texas. “Somewhere between the 1990s and today we lost that notion of compassion, and we became focused on issues that divide rather than unite people.”

As the Texas Senate debated the bathroom bill on Tuesday, senators received a letter opposing the bill on the grounds that it will harm the state’s business climate. The letter came from the TAB. “As the state’s leading conservative business voice, we’ve played a big role in our state’s most challenging and important legislative, regulatory and judicial debates over the years. In all of our legislative work, we have maintained our commitment to the values that ensure Texas’ economy flourishes, read the letter by TAB President Chris Wallace. “Our opposition to SB 6 [the bathroom bill] is grounded in the threat it poses to those very Texas, very pro-business values.”

Professional and amateur sports groups have threatened to cancel events in Texas if SB 6 passes, and some conventions already have cancelled plans. Some of the businesses that have signed a letter in opposition to the bill include Apple, Dow, HP, IBM, Intel, Visit Dallas, SXSW, AMD, American Airlines, LaQuinta Inns & Suites, Marriott International, the Plano Chamber of Commerce, and Richardson Chamber of Commerce.

For more than forty years, groups like the Associated Republicans of Texas, Texans for Lawsuit Reform, and TAB poured millions of dollars into the political campaigns of state House and Senate candidates who were fiscally conservative and business oriented. The TAB was instrumental in turning the Texas House Republican in the 2002 election, with a $1.7 million direct mail campaign on behalf of twenty-four candidates. The joke after that election was that the TAB hadn’t bought the Legislature, it had just rented it for 140 days. The result was passage of major tort-reform legislation. (The price was a criminal investigation of TAB and its president, Bill Hammond, by District Attorney Ronnie Earle for allegedly violating campaign finance laws.) Thanks to TAB’s efforts, the Republicans had a legislative majority for the first time in 130 years

But as the business Republicans were coalescing their power, the social conservative movement was growing. It began when social conservatives essentially took over the state party convention in 1994. In that year, Christian Coalition founder Pat Robertson sent “Dear Christian Friend” letters urging followers to go to precinct caucuses to capture the party. U.S. Senator Kay Bailey Hutchison, seen as too moderate on abortion, was chased out of the Bexar County convention with shouts of “pro-choice! Pro-choice!” The state party secretary angered social conservatives when she alleged it was the first state convention where delegates were asking about trailer hookups instead of hotel rooms. Party Chairman Fred Meyer, chief executive of the Aladdin thermos company, did not seek re-election, and future White House communications director Karen Hughes resigned as the party’s executive director.

Republican politicians like Hutchison and Bush had an uneasy truce with the social conservatives, while former Governor Rick Perry embraced a portion of their agenda and encouraged them because they represent about forty percent of the Republican primary vote. With that support, winning the primary becomes easier, and the general election was no problem. Where Texas once had Yellow Dog Democrats, it now has Red Rock Republicans, general election voters who would vote for a red rock so long as it ran as a Republican. With each election cycle, though, social conservatives were less and less willing to accept anything less than one of their own.

As Texas Monthly’s Paul Burka wrote after the 2012 election, “The result is that, with each successive election cycle, the GOP becomes more and more the party of ideologues, who entered politics in the age of hyper-partisanship, and less and less the party of Main Street business leaders, who cared about fiscal responsibility but also focused on improving public education and building better roads. This puts the party on a dangerous course, because excess is typically followed by backlash.”

Former TAB president Hammond was one of Governor Bill Clements’ business conservatives when he was in the Legislature and later as a Cements appointee to the Texas Workforce Commission. During his tenure as the head of the TAB, the group not only pushed legislation like tort reform, but also tried to protect the state’s program to provide in-state tuition to college for undocumented immigrant students who graduated from Texas high schools. Hammond told me he believes the primaries of both parties have moved so far from the middle that legislating to the vast majority of Texans and the business community has become difficult, with the state’s politics mired in niche issues important only to primary voters. “Those people between the 40 yard lines are ignored,” Hammond said. “The more moderate people who favor getting something done are ignored, and getting something done is not a priority.”

In state government, the last bastion of business Republicanism is the Texas House under Speaker Joe Straus. And groups like the ART and TAB have consistently backed Straus Republicans.

“ART believes that the Legislature ought to be focused on those issues which are mandated by the constitution, such as setting the budget and such as being responsible for issues such as funding for education, issues that affect the lives of Texans ever day of the week,” ART’s De Leon said. “It is about governance, not taking an issue that might be the issue of the day.”