Bill White and BTEC: an exhaustive account
The AP story that started it all:
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.
Rick Perry's campaign sent out a statement under the governor's name calling for Bill White to drop out of the race for "profiteering".
"By his own admission, Bill White intervened regarding a contract given to BTEC, a company he had personal financial ties with, to provide generators for the Houston Coastal Water Authority following Hurricane Rita's landfall in 2005. If this is true, and Bill White did unethically steer taxpayer dollars to a company he had a personal financial stake in, I am calling on him to immediately resign from the race for governor.
Sending out a statement under the governor's own name is a signal to the press corps that they think this story has major legs. Usually the campaign spokesman issues the statement, thus allowing the candidate or officeholder to stay above the fray. Especially in the case of an officeholder, who can act statesman-like instead of "pissing it away by getting down in the mud," to borrow the words of Lyndon Johnson. Perhaps my memory is faulty, but I cannot recall a press release attack sent out under Perry's name until now.
Today Bill White called a press conference to defend himself and Rick Perry:
Here's a timeline:
* Before he was mayor, Bill White served on the board of BTEC in his capacity as an executive for the Wedge Group.
* He served on the board because The Wedge Group owned BTEC.
* When Bill White stepped down from Wedge to become mayor, he negotiated that they would continue to pay him deferred compensation.
* During Hurricane Rita in September 2005, Bill White suggested to the Coastal Water Authority that they consider using BTEC.
* At this time Bill White had no direct compensation from BTEC, only his scheduled payments from Wedge.
* Bill White appoints a majority of the Coastal Water Authority's board.
* The Coastal Water Authority gave BTEC a $1.8 million emergency contract.
* A year later, Bill White invested $1,000,000 in BTEC.
* In 2007, BTEC produced $524,000 in income, an immediate 1 year return of 50%.
Can you imagine if Rick Perry had done any of this? I can't imagine reading a headline from the Dallas Morning News op-ed board that reads "Perry's investment deserves scrutiny but isn't crucial" as they have opined in this case.
Let's start with the worst: it is possible that this is outright Jersey-style corruption. Bill White, with a wink and a nod, told his majority on the Coastal Water Authority that they should consider BTEC. It is possible he did so because the Wedge Group had told him that they would provide him an opportunity to personally invest at favorable terms later that would virtually guarantee him a profit. We can't prove that this is true, we can't prove that it isn't. One thing we can say for sure: it definitely does not avoid the apperance of a conflict of interest.
I tend to want to believe the best in public servants. Most people run for office because they want to improve society. I would tend to want to give the benefit of the doubt to Bill White here, but reaping a 50% return in one year certainly looks like a sweetheart deal. That looks and smells bad. White should've known better.
Things that even Democratic partisans probably can't argue with:
* Bill White recommended that the CWA (a board where 4 of 7 members are appointed by Bill White) invest in BTEC, a company owned by his former employers, from whom he was currently receiving millions in compensation.* Bill White showed shockingly bad judgment in investing in BTEC after the fact. It's not exactly an arms-length transaction to buy part of a company from a former employer after you have helped steer public money to that company, in any way. The fact that the investment provided a 50% return in one year indicates that Wedge Group probably gave him a sweetheart deal.
For me the best-case scenario for Bill White is what Kevin Whited said at BlogHouston:
It also means that even while serving as an elected public official, Mayor Bill White was actively building his personal wealth in part from knowledge gained as a public official and in part by taking advantage of an apparently fantastic investment opportunity that most members of the public could not.
One of the things Bill White's supporters always say is that he's so brilliant. If he were so brilliant, perhaps he should have showed better judgment.
Posted by Evan @ 06/10/10 11:37 PM
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Curiously, the KHOU/Texas Tribune video omits a very interesting comment by White, as did most accounts of the presser.
In response to a question from KTRK-13's Tom Abrahams: “I liked their business plan,” White said. “I made an investment in the company. I didn’t stop investing because I was mayor.”
That's from the AP account. The comment also appeared on KTRK-13's report on the 6pm news. I emailed Abrahams, who confirmed the comment was in response to his question. He said he'd ask the web guys to put THAT video up. But I can only find the 4pm and 5pm versions right now, which don't have that important clip.
I guess my question in response to White's comment is, why not? Shouldn't an elected official put those private financial concerns on hold while in office, or at least in a private trust? It doesn't look good at all, something Bill White doesn't seem to see.
Of course, if you're going to spend large amounts of your own money on your political campaigns, maybe that sort of *ahem* "fundraising" is necessary. :|
Posted by kevin @ 06/11/10 06:25 AM
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