Readers will recall that an earlier version of this saga featured Perry’s claim that White, while mayor of Houston, personally profited from a contract between the Coastal Water Authority and BTEC, a company that provided generators to keep water flowing to major Houston industries during the storm. To refresh readers’ memories, here is what I posted when AP’s Jay Root published his story on the contract: This was the lead of the AP story that has rocked the White campaign today (June 10): Former Houston Mayor Bill White, who was widely praised for guiding his city through Hurricane Rita, acknowledged to The Associated Press on Tuesday that he made money by investing in a company that was hired to help the region recover from the storm. The story goes on to relate the following information. (Quoted material is from the AP story.) 1. “White helped line up private companies to provide goods and services as part of a massive relief effort.” –Is there anything wrong with this? Certainly not. Houston was in an emergency situation. 2. “One of those companies was BTEC Turbines, where White had served on the board of directors before he was mayor.” –Is there anything wrong with this? Hardly. White’s service on the B-TEC board occurred before he was mayor. He had no connection with the company at that time. 3. “White said he called the company to help provide power generators to ensure the Houston-area refineries and the adjoining city of Baytown could maintain their water supply during the power outages.” –Is there anything wrong with this? Of course not. The refineries and the public needed the water during power outages. 4. “The company then got an emergency contract with the regional Coastal Water Authority, White recalled.” –Is there anything wrong with this? Not that I can see. Emergency contracts are used in emergencies. Does anyone doubt that this was an emergency? This was all about arranging for the Authority (a conservation and reclamation district) to provide untreated surface water to Houston, Baytown, and Deer Park as well as around 100 industries during a crisis. The authority is governed by a seven-member board. White has four appointees, Perry three. 5. “A little more than a year later, White invested about $1 million in the privately held BTEC, which has also provided generators to contractors in Iraq. He has reported about a $500,000 profit from the investment.” –Again, I see nothing unethical in this transaction. The investment in B-TEC came ONE YEAR after the storm. Whatever payment BTEC had received from the emergency contract was in the past. You have to credit the Perry people with shrewdly making a mountain out of a molehill, but the dots do not connect. The post concluded with this comment: So, was White at fault in any way? Of course he was. He wouldn’t release his income tax returns for two months. This was stupid. There is no other word for it. How could someone as smart as White not know that he was going to have to make his tax returns public. He allowed the issue to fester, and fester, and fester, and he just let Perry pound on him. Finally, he bowed to the inevitable and made them public. In the meantime, his dilly-dallying allowed the Perry campaign to plant the idea in the public’s mind that White had something to hide…. * * * * Now, let’s move forward to the current dispute, based on Root’s AP story of August 4. Here are some passages from the story. In some cases I have combined paragraphs for convenience and clarity. My comments appear following dashes: At issue are the actions White took as mayor in guiding the massive relief effort that followed the September 2005 storm. White has previously said he called BTEC to suggest they pitch providing power generators to the Coastal Water Authority, an intergovernmental agency that provides water to Houston, surrounding communities and businesses. The company later won an emergency contract with the authority to provide those generators. In June, White described that contact as simply calling a company he knew well — he had once served as a director and as chief executive of BTEC’s parent company — to help with storm recovery. He said he let the company and the Coastal Water Authority, whose seven-member board includes four seats appointed by the mayor of Houston, take it from there. “That was the end of my conversations and involvement in the case,” White said in June. But records obtained by the AP, including board meeting records, memos and e-mails from the Coastal Water Authority, show White was later involved in a dispute over unpaid invoices filed by BTEC to the agency. The records show he discussed the issue with two top city aides and a lawyer for the authority, telling them he wanted to make sure BTEC got paid for its services. One e-mail was provided to the AP by Perry’s campaign. –Did White do anything wrong here? Assuming that the facts of the story are correct, White was later involved in a dispute over unpaid invoices. White discussed the issue with top city aides and a lawyer for the company. White wanted to make sure BTEC got paid for its services. White was mayor of Houston at the time. The earlier story said that White invested $1 million in BTEC “a little over a year later.” The timing is important here. If the the dispute over unpaid invoices occurred BEFORE White made his investment, I don’t think he did anything improper. He had no conflict of interest. But if discussed the issue AFTER he made his investment, then it was a conflict of interest. He should have recused himself. (The exact timing did not appear in the latest AP story.) The Coastal Water Authority hired BTEC for an agreed maximum of $2 million to provide large generators to keep water flowing to the heavy industry that dominates the region while work was under way to restore power to the area. –As I said in the earlier post, there was nothing wrong with the contract. White had no connection with BTEC at the time, although he had had a previous connection with the company as a member of its board of directors. Problems plagued the operation from the outset, according to the agency’s records. Two of the six generators malfunctioned, while the four others “could not keep up with our demand,” the authority told BTEC. At sometimes testy board meetings, authority officials complained they could have bought the devices for about the same price as the temporary lease, CWA records show. –Did White do anything wrong here? It’s not White’s fault that two of the six generators malfunctioned, while the others failed to perform up to expectations. Nor is it’s White’s fault that the CWA could have bought the generators for the same price as the temporary lease. Things go wrong in commercial transactions, especially transactions that are made under extreme duress during a major hurricane. The Authority eventually paid BTEC $1.6 million in January 2006, but the company wanted $424,105 more for fuel storage costs the authority claimed it didn’t owe. In January 2006, the Coastal Water Authority sent a memo to the city’s public works department that said BTEC President Mike Boyce had “contacted the mayor” about the billing dispute. White said he doesn’t remember that, and the company says it had no direct contact with White about the invoice flap. –Again, it is normal business for a contractor to ask for more money. The facts as stated in the story are inconclusive. CWA’s statements are not consistent. The memo says it contacted the mayor. The company now says it had no direct contact with White. But BTEC Vice President Sean Daichman told the AP the company had discussed the disputed invoices with Michael Moore, White’s former chief of staff and now manager of White’s gubernatorial campaign. In an interview, White was unable to recall details of what happened during the dispute five years ago, but said it was similar to other payment problems vendors claimed they were having after the hurricane. He recalls urging a top public works official and a BTEC lawyer to resolve the matter. The dispute eventually was settled in April 2006, with BTEC getting $264,000 of the more than $424,000 it sought. –Perry’s campaign used the first story to reiterate its claim that White profiteered from the BTEC contract and should withdraw from the governor’s race. As I said back in June, White had no connection with BTEC at the time of the contract and the profit he earned was on an investment that occurred long after the hurricane. Now, in the second story, the implication of the Perry campaign is that BTEC turned to White, its former director, and White’s chief of staff, for help in getting paid for the disputed invoices. That puts White in an embarrassing position. He did have several contacts with representatives of the company. The dispute eventually was settled in April 2006, with BTEC getting $264,000 of the more than $424,000 it sought. –It appears that BTEC got a favorable settlement. Did this happen due to White’s involvement? There are a few more dots than were previously apparent, but the story still leaves it to the reader to connect them.
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