Every so often, an experienced reporter from somewhere else will get hired into the Capitol press corps and will proceed to surprise and dominate competitors with stories that should have been obvious to the natives.

Except that watching ethics change is an incremental business, like watching a kid grow up. The aunts and uncles from out of town are always surprised by growth that parents don't stop to notice.

It's not always a reporter, or a new politico. Sometimes it's a state agency, like the State Auditor, which last week raised questions about the fact that comptrollers decide tax cases and that they take political contributions and that nothing in state law requires the sort of disclosure that would reveal any links between favorable rulings and generous support. They took care to say they weren't accusing anyone of anything — Comptroller Carole Keeton Strayhorn seized on that as "clean bill of health" — but just for future protection, they suggested several changes in law that would limit or prevent abuses.

SAO was directed to look for links between campaign giving and the comptroller's official actions. The Legislature ordered that audit at a time when lawmakers were particularly miffed at Strayhorn. The orders didn't include any other agencies, but similar potential conflicts are easy to spot.

Tom Phillips, the former chief justice of the Texas Supreme Court, spent years trying to figure out a politically acceptable way to select judges without having them take contributions directly from the lawyers whose cases they decide. Any number of candidates for the Texas Railroad Commission have promised to unlink energy industry money from the oil and gas cases the commissioners decide, but the questions have dogged that agency since its inception. Few political investors outside of the regulated businesses seem to care about the agency, at least in a financially substantial way. Those two areas, with their mix of judicial functions and elected officials, are directly analogous to the comptroller issue. It's familiar ethical ground for Strayhorn, who was at the RRC before her current gig.

Other agencies have built-in potential conflicts. A Texas attorney general has to decide who to sue, and who not to sue, and which local bond issues ought to move forward — all matters of interest to this potential contributor or that one. It's the AG who takes tax cases to court if the administrative remedies at the comptroller's office leave taxpayers in a litigious mood. And almost every AG has been accused by enemies of dangling legal opinions on open records and state laws in front of potential contributors.

Land and agriculture commissioners have doggie biscuits to hand out, too, in the form of contracts and grants. Land Commissioner Jerry Patterson sees it in the agency's expansion into real estate and development: "El Paso is an example because we have a lot of surface land there... and I had a very successful fundraiser there." Water investors have been trying to get Patterson to open public lands for their use, and the agency makes other decisions that could be lucrative for private investors and business people.

And governors and lieutenant governors, while they don't have any judicial duties, have huge powers in their branches of government. Executive agencies that aren't headed by elected officials are run by people who answer, directly or indirectly, to the governor. Rick Perry sees a difference between what the auditor saw at the comptroller's shop and what goes on elsewhere.

Taxpayer representatives don't register as such with the state, so you can't tell from outside who's doing the giving and the getting. One such firm employs Strayhorn's predecessor — Democrat John Sharp — and is among her biggest contributors. The state auditor listed several firms and their contributions as illustrations of the potential for problems.

Word for Word

You can't tell from outside the comptroller's office whether anybody's playing footsie with taxes and political contributions. But they all have feet and their feet are under the tablecloth, and... Gov. Rick Perry wants to encourage voter suspicions.

Here's his riff on the subject, when asked by reporters about the report and about whether the recommendations ought to apply to other agencies. He apparently took that to mean his office and appointments:

"First and foremost, I think any citizen of this state can look at that audit and come away with the conclusion that there is some great concern about whether or not campaign contributions have been received in exchange for tax decisions.

"Those that would say that that audit was a clear, clean bill of health, I disagree with. As did the auditor. The auditor said that they would certainly make substantial legislative changes. You know what the auditor laid out as those changes. If there's a clean bill of health there, there's no recommendations of that drastic of changes, dealing with tax decisions.

"From the standpoint of other state agencies, those of us in statewide elected office, the campaign contributions that I receive, it's very transparent of the appointments that we make, the campaign contributions. I think that's one of the very powerful issues in the comptroller's office, is you don't know. There is no transparency there. And that's, I think, what the auditor very clearly and I think appropriately exposed, was this clear connection between campaign contributions and tax decisions. Very troubling. Very troubling."

For her part, Strayhorn points to the auditor's disclaimer about pointing no fingers and alleging no wrongdoing, and says that's a clean bill of health for her office. She says, through aides, that the current system is clean but that she'll follow whatever rules or laws the Legislature wants to put in place.

The Reform Bandwagon

Susan Combs, the state agriculture commissioner who's running for Strayhorn's job, endorsed Auditor John Keel's recommendations and added a few suggestions of her own, saying policy changes should be more widely available, that oral concessions should be banned during audits and replaced with written rulings, and saying the comptroller should keep a registry of tax decisions would be "fully disclosed," including "refunds granted and assessments reduced." Taxpayer records are generally closed to the public and it's not clear how much of each taxpayer's case would be disclosed. As for her current agency, Combs said — through a political consultant — that Texas Department of Agriculture decisions and her contributions are "totally transparent." Like Strayhorn, she has no objection to changes lawmakers might want to make.

The auditor — and the unstated promise that this will be a prominent issue in Perry's reelection race against Strayhorn — gave ethics reformers some hope. "It's a great opportunity, and it's an issue that transcends the comptroller's office and has been a problem regardless of who the officeholder is and is the heart and soul of whether you get a fair shake," says Tom "Smitty" Smith of Public Citizen. "If you're in a position as an officeholder to make a ruling and you know there is a donor that is affected, it's going to make a difference in your decision. Any of them who says otherwise is not being honest about it."

"The pattern is clear that large donations come in during periods of time when there is not an election going on, from people who have a lot riding on decisions before a wide variety of elected officials... and that should tell people a great deal about why these investors are making these decisions," he says.

Smith supports the auditor's recommendations and would add to them. One proposal would bar donations timed around regulatory rulings. "The clear solution here is to ban contributions except in the period before the election," Smith says. "And that would do a lot to ease questions about whether contributions are tied to decisions."

Several House members echoed Perry's concerns and said they'd sponsor legislation containing the auditor's recommendations for the comptroller's office.

Democratic gubernatorial candidate Chris Bell said he'd go a step further to make high state office a less lucrative launch pad for lobbyists. Bell said top employees of the governor and other top state officials should be barred from lobbying any state agency, board or commission for a year after they leave state employment. Perry has a rule preventing his aides from lobbying his office, but they can lobby anywhere else in state government. Mike Toomey, a former legislator who gave up lobbying to be Perry's chief of staff, quickly rebuilt a successful lobby practice after leaving Perry's shop; Bell calls his idea the "Mike Toomey Revolving Door Ban."

Luck Be a Lobby

Well over 100 lobbyists assembled in an Austin hotel ballroom this week to hear a pitch from Ricky Knox for a new group called "Texans for Tourism." The idea is to bring gaming interests together for a unified push for expanded gambling in Texas. Knox was in the middle of the fight to get pari-mutuel gambling approved in the 1980s and in the battle for a state lottery in 1991.

The opening pitch is to get video lottery terminals approved. VLTs are essentially electronic slot machines, and crossfire from horse tracks, casino interests and others made it relatively easy for gambling opponents to kill the idea during the last session (and the special sessions on school finance, which started more than a year ago).

At this point, they're just talking. Knox didn't return numerous calls, but in his invitation letter to other lobbyists, he said he's pushing "a united, highly organized and coordinated legislative and public relations effort of all those interested in the legalization of video lottery terminals in Texas."

He pitched the idea for several hours, asked everybody to mull it over and told them he'd call another gathering in about a month. The guest list included lobbyists who represent a wide range of companies, organizations, Indian tribes that are interested, variously, in lotteries, casinos, horse and dog tracks in Texas and in competing states.

Speaking of Horse Races

Separately, a poll commissioned by the AtlanGroup LLC says 85 percent of Texans support putting VLTs on the ballot so voters can decide the issue. The pollsters asked people how they'd like a VLT referendum if the machines were installed at existing horse and dog tracks and if the money went to education, and 58 percent said they would vote in favor of that.

We buried the lead, for the sake of transitions from gambling. The same pollsters asked about the governor's race. In the GOP primary, Gov. Rick Perry would beat Comptroller Carole Keeton Strayhorn 62-26 in a head-to-head contest. They have John Sharp at 32 percent, Felix Alvarado at 13 percent and Chris Bell at 11 percent in a Democratic primary. Alvarado and Bell are the only two who've said they'll run. They have Perry and Sharp in a statistical tie in a general election race.

The pollsters — Hamilton Beattie & Staff of Washington, D.C. — interviewed 700 "registered likely general election voters," 430 "likely Republican primary voters," and 430 "likely Democratic primary voters." The general election sample included more Republicans than Democrats. The AtlanGroup shows up in Texas Ethics Commission records giving $50,000 to the Texas Democratic Party earlier this year, $50,000 to Lt. Gov. David Dewhurst, and $200,000 to Strayhorn. David and Martha Alameel, who show up as principals of AtlanGroup in some reports, have contributed amounts ranging from $100 to $50,000 to 21 politicians and organizations since 2000. According to TEC filings, those includes totals of $100,000 to Sharp, $75,000 to Dewhurst, $50,000 to Strayhorn, $40,000 to Attorney General Greg Abbott, $30,000 to Democrat Kirk Watson, who ran against Abbott in 2002. They gave $50,000 to the Texas Democratic Party. The couple's contributions — most of them in his name — totaled $479,800 from 2000 to 2004.

New Charges against Colyandro & Ellis

The grand jury looking at campaign finance in the 2002 legislative elections restated and expanded its indictments against John Colyandro and Jim Ellis — two associates of U.S. House Majority Leader Tom DeLay, R-Sugar Land.

A Travis County grand jury restated money-laundering charges against the two men and adds charges they made illegal contributions of corporate money, that they gave money to the Republican Party illegally close (within 60 days) to an election, and that they criminally conspired to break state election laws.

Click here for a copy of the new indictment (Adobe Acrobat format).

Colyandro's lawyer, Joe Turner, couldn't be reached for comment. Ellis' attorney, J.D. Pauerstein, said there's nothing new for prosecutors to say that they couldn't have said a year ago, when his client was first indicted.

"Frankly, I think it borders on prosecutorial misconduct to keep indicting these people over and over on the same charges," he said.

Pauerstein passed up a request to speculate about the prosecutors' motives, but said he thinks the indictments were timed to beat the three-year statute of limitations on the alleged crimes. A check photocopied into the indictment matches — with the exception of the year — the date of the new and restated indictments.

TAB's Plea to Supporters

The Texas Association of Business, in an email sent to supporters and others, asks for PR and financial support for its fight against four indictments on campaign finance charges. A Travis County grand jury reported 128 third-degree allegations against the group this week, saying it illegally raised and spent corporate money on election-related activities and illegally coordinated its efforts with campaigns and other third-party groups.

The email calls county prosecutors "a well-funded opponent who has an unlimited supply of money" and asks for financial assistance. It also includes a plea for others to "speak out" for free speech, and says if groups like TAB are shut down, people will have to depend on the news media for all of their information about how candidates behave once they leave home for Austin.

Here's a copy of the whole missive (the "to" line was deleted by the lobbyist who sent us a copy of this):

Never Mind

Rep. Elliott Naishtat, D-Austin, will seek reelection instead of running for an open Senate seat. After thinking about the retirement of Sen. Gonzalo Barrientos, D-Austin, for a weekend, he's decided to stay in the Texas House. "At a time when effective leadership in the House regarding health, human services and issues that affect vulnerable populations, including children, the elderly and people with disabilities, is more important than ever, I am not willing to enter into a costly, divisive Democratic primary race against my friend Kirk Watson, and risk not being in the Legislature at all," he said in a statement. Watson is the only Democrat who's said he'll be in the hunt. He hasn't said much more than that — just that he's in and he'll talk more later — but he's started running. He sent a letter to potential supporters (a copy of which can be found by clicking here) and has uncorked a website: www.kirkwatson.com. Watson followed with a press release listing several groups that have endorsed his candidacy.

Pent-Up Demand

They're starting to kick up dust in Austin's HD-47, where Republican Rep. Terry Keel is giving up legislative work for an attempt at a judicial post. Alex Castano, a Republican who hasn't run before, is announcing this weekend. Dick Reynolds, a former rep and state official who wants another crack at legislating, plans a funder/announcement in two weeks at the Austin Club where lobsters and elected officials go to commingle. Castano runs a commercial real estate company, home schools (with his wife, like him a Rice alum) a herd of seven children, and says his campaign will be about schools, transportation, ending Robin Hood funding for schools, and toughening laws aimed at child predators. He's announcing from a middle school cafeteria (on a Saturday). His website is www.alexcastano.com.

Rich Phillips, who also wants Keel's spot in the Lege, is holding a "rally and press conference" at that same Austin Club to highlight a report from the Pacific Research Institute that ranks Texas 17th among the states in "economic freedom." Phillips, a management consultant, even sent along a list of six "third-party analysts" who could talk about his proposals and stand ready to talk to reporters about them. His website: www.voterichphillips.com. PRI identifies itself as a "free market think tank," and you can see their stuff at www.pacificresearch.org. You might have seen their studies, too; the thinkers have joined up with Forbes magazine in years past to get the work in front of a big audience.

Finally, Jimmy Evans, who thought about making that race, endorsed Bill Welch in the Republican primary. Welch on the web: www.billwelch.org.

Rumors, at a Discount

You might hear that Sen. Kyle Janek, R-Houston, is hanging it up after the current term. You might be hearing wrong; he's in. Janek says he's down on the job right now after the failed special sessions, and he says he wanted to check with his bride before running again. "I haven't formally asked her — I was afraid to. But I had a fundraiser last night and she showed up. That's a good sign." He says he wouldn't have held the fundraiser if he didn't intend to run. "I am running for reelection," he says.

• It's true that a table full of Democrats talked about getting Chris Bell to drop out of the governor's race and to run instead for Harris County judge, either against Republican Robert Eckels or for an open seat if he leaves. But Bell wasn't one of the people at the table and has no interest in county government. He's in the Guv's race to stay.

• Another bit of bad gossip: Rep. Glenn Hegar Jr., R-Katy, says he's also heard the rumor that he'll run for Senate, and says it ain't so. He's running for reelection to the House. But he thinks Gary Gates, an opponent in Hegar's last two races, will be in the Senate race to challenge Sen. Ken Armbrister, D-Victoria.

Political Notes

They're still banging on federal heads to get the rest, but Texas politicos in Austin and Washington, D.C., got their first win in the battle for reimbursement for costs of Hurricane Katrina. The U.S. Department of Health and Human Services will pay 100 percent of Medicaid costs of the displaced and dispossessed driven to Texas by that storm. For Texas residents, the state pays in about $1 to draw in $2 in federal money. For the Louisianans (and those from other states who came here because of the storm) the feds will cover the whole tab. Still on the list: housing, public education, transportation, food, unemployment, and as Yul Brunner used to say in the musicals: Etc., etc., etc.

• Shane Sklar, the former executive director of the Texas Independent Cattlemen's Association, is putting together a challenge to U.S. Rep. Ron Paul, R-Surfside. He's a Democrat, and told the local paper he'd be the only member of the delegation with an ag job if he wins.

• Todd Staples picked up an endorsement from the Texas Public Employees Association in his bid to be the state's next agriculture commissioner. The Palestine Republican is, so far, the only announced candidate in that contest to replace Susan Combs, who's giving up the post at the end of this term and seeking the comptroller's job.

Political People and Their Moves

Texas Railroad Commissioner Michael Williams will head the state's efforts to assist Hurricane Katrina evacuees who find themselves in Texas. He's keeping his day job at the RRC, but he'll be the point person on relief efforts from now on.

Ray Coffman, a captain with the Texas Rangers, will become the new chief of that unit of the state police. He's replacing Earl Pearson, who retired at the end of August. The Department of Public Safety also named a number two for that unit (replacing Coffman): Captain Jim Miller.

Luke Marchant is making another move in the family business, giving up his job as an aide to U.S. Sen. John Cornyn to return to Texas for a job on Staples' campaign for ag commission. He'll work in Staples' field operations. His dad is U.S. Rep. (and former state representative) Kenny Marchant, R-Carrollton.

Fired: Elizabeth Reyes, an attorney with the Texas Secretary of State's election division, after talking to the Washington Post about whether presidential advisor Karl Rove's property in Kerrville qualifies him to vote there. She told the San Antonio Express-News that she didn't know she was talking to a reporter at the time.

Quotes of the Week

Texas Supreme Court Chief Justice Wallace Jefferson, telling a dinner audience the court has already decided school finance and that the decision will be public soon, quoted in the Midland Reporter-Telegram: "I can't say it will be definitive. There will be a decision from the court and the Legislature will do what it does."

Harris County Judge Robert Eckels, telling the Associated Press that the Astrodome's current function isn't permanent: "This is a shelter, not a home, and it will not become a refugee center."

Democratic consultant Kelly Fero, in the Fort Worth Star-Telegram: "If these people decide they want to stay in Texas permanently, they deserve to be represented. And once that happens, I don't think they'll be satisfied with the social-service safety net that Texas provides, compared with that of Louisiana. So I think they'll be receptive to the Democratic message."

Gov. Rick Perry, in a letter to U.S. Health and Human Services Secretary Mike Leavitt: "Without the guarantee of total federal funding for Medicaid services for evacuees in Texas, Texas taxpayers will be forced to bear a financial burden that, in effect, punishes them for opening their hearts and homes to fellow Americans in need."

Bill Petty of Kerrville, telling the San Antonio Express-News about his sometimes neighbor, presidential advisor Karl Rove: "We see him out walking around getting a signal on the cell phone more than anything."

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Texas Weekly: Volume 22, Issue 14, 19 September 2005. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2005 by Printing Production Systems, Inc. All Rights Reserved. Reproduction in whole or in part without written permission from the publisher is prohibited. One-year online subscription: $250. For information about your subscription, call (800) 611-4980 or email info@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.

School officials decide to stay home, awaiting word on two major storms -- a hurricane and a court ruling. Hurricane Rita (and maybe some lingering effects of Hurricane Katrina) convinced two of the state's large education groups not to go to Houston this weekend for a convention. The Texas Association of School Boards and the Texas Association of School Administrators were set to meet at the George R. Brown Convention Center but decided to reschedule that for later. That could have been interesting timing in more ways than one: The Texas Supreme Court (according to its chief justice) has decided the school finance case and is readying its decision for public consumption. They usually announce rulings on Fridays. The court is deciding an appeal of a lower court ruling that set an October 1 deadline for a remedy to the state's school finance system. State District Judge John Dietz said in that ruling that the current system is unconstitutional. 

Kinky Friedman's first advertising is up, but not on TV or radio -- he's relying on its entertainment value to get people to drive viewers to his website. You can view it at www.kinkyfriedman.com/kinkytoon. Campaign folk say the ad won't go up on regular media -- and that the campaign probably won't mess with that until "maybe this time next year" according to Dean Barkley, who's running the show. Their model is a "JibJab" commercial spoof that ran during the 2004 presidential race, becoming an Internet phenomenon and a model for "viral advertising." It depends more on people passing it around than on people sitting in front of their TV sets and happening to see it. Friedman's two-minute spot includes a fair amount of campaign messaging -- some biographical material and swipes at issues like teacher pay, leadership, candidates who run by saying they love babies and Jesus (yup, he puts it pretty much that way) and speaking Spanish and tax cuts to sway voters. And it mixes it with the one-liners and visual jokes and cartoons to keep viewers interested enough to pass it on. It's got crosses and menorahs and a shot at Mississippi. "I don't think Kinky is the type of person who weighs the risk of who he offends," Barkley said. "... He doesn't like the politicization of Jesus." Barkley said they're working on more of the same sort of commercials and said they might come in with another one in about a month.  

Reboot the old Texas Association of Manufacturers. Lobbyists for companies in the manufacturing industries like oil, high tech, chemical, airplane, and timber are talking about reviving that trade group. The gripe of those big manufacturers -- sometimes called the heavy metal lobby -- is that their influence in other groups, like the Texas Association of Business and the Texas Taxpayers and Research Association, is diluted. Their particular problem is with TAB, which doesn't lobby on some issues of interest to them because their interests don't parallel those of other businesses in the group. Their two pet peeves are in energy matters -- they spend large chunks of their money powering their manufacturing plants -- and on state taxation. Electric companies have different rates for different types of consumers, and what's good for a big manufacturer might not coincide with what's good for a retailer. That's true in tax policy, too, where relief for homeowners and small businesses from property taxes, for instance, might be financed with increases on bigger businesses. Lobbyists who've been talking about this say the tax bills considered by legislators this year pushed the industries to seriously talk about re-forming the association. They hope to have a "council" in place for the next special session, if there is one, on school finance. If that works, they'll probably formalize it and hang up shingles and hire full-time staff. The timing looks bad for TAB, which has been indicted by a Travis County grand jury on campaign finance and ethics charges related to the 2002 legislative elections. Temple-Inland's Tony Bennett and Rob Looney with the Texas Oil and Gas Association both said that wasn't the trigger -- that they've been talking about the new association for some time. And Bennett said TTARA is more focused on research and doesn't lobby, so the conflicts between diverse members there don't cause the same kinds of problems. Both said Texas is one of the biggest states without such a group and that the companies involved want a unified voice on just a couple of issues. 

Current officeholders and appointed officials have more slack than they might think when it comes to running for state office. The constitution says you have to resign one office to run for another, and also prevents some officials from running for another office during the term of their current office, even if they've quit with time left in the term. But the Secretary of State's election wizards say the best current set of rules can be found in a Texas Supreme Court decision and an opinion from then Attorney General Dan Morales. They read those two documents to mean that candidates who resign from their current elected or appointed jobs before they file for office will be eligible. Note the word "file" in that last sentence; the folks at SOS say announcing for office and raising money and that sort of thing don't count: It's the filing for office that trips the wire. The AG's office has a long version of this online, with the sorts of nuances you'd expect. It's an announcement for office, for instance, if you say you're gonna run in some sort of public forum or in a press release. If you're "seriously considering" it, you're not announcing. Here's a dinger: An announcement by, say, a county official automatically loses her the county job -- even if it turns out she is ineligible for the office she planned to seek.
  We were prompted to ask by the number of people in official jobs who feel the need to legislate (it doesn't apply to current legislators or other elected state officeholders). Examples: Robert Nichols, who quit the Texas Transportation Commission to run for Senate; Frank Denton, an appointee to the Texas Department of Licensing and Regulation who's in that same contest; Bob Reeves, a member of the Sabine Compact Commission and yes, a candidate for that same SD-3 seat; Mark Ellis, a Houston city councilman running for state Senate in SD-7; a number of school trustees around the state. You get the idea. 

Somebody who wants the constitutional ban on gay marriage to pass has been putting unsigned flyers on car windows in downtown Austin. The one-page missives contend "homosexual activists plan to bus in hundreds of people from other states a month early, in order to vote against the traditional marriage amendment." It tells readers not to "blow this off and not bother to vote." • Gov. Rick Perry got endorsements from the Texas Association of Realtors, the International Brotherhood of Teamsters, and adds U.S. Rep. Henry Bonilla, R-San Antonio, to the list of fellow politicos who are supporting him. Add to that list the Independent Insurance Agents of Texas • John Courage, a San Antonio Democrat who has been on the ballot several times over the last decade, says he'll run for Congress against U.S. Rep. Lamar Smith, R-San Antonio. CD-21 runs from San Antonio into Austin. Courage's website: www.courageforcongress.org. • San Antonio lawyer Rene Barrientos, formerly of Eagle Pass, has been telling interested parties there that he's planning to run for state Senate against Frank Madla, D-San Antonio, in SD-19. • Hans Dersch, who won a gold medal in swimming at the 1992 Olympic Games in Barcelona, will run for the Lege in HD-54. Rep. Suzanna Gratia Hupp, R-Lampasas, is giving up that spot after this term. Dersch is now a small businessman in Marble Falls, and he's running on lower property taxes, better schools and limited government. No website yet. • Andy Smith, a communications manager at Texas Instruments, will run as a Democrat in HD-107 against Rep. Bill Keffer, R-Dallas. Smith's platform includes lowering local property taxes and reforming legislative and lobby ethics laws. If elected, Smith would be the only openly gay member of the Texas House. His website: www.electandysmith.com. • Austin attorney Hugh Brady thought about running for the House (in HD-48, now held by Rep. Todd Baxter, R-Austin) but has decided against it. It would have been crowded: Three other Democrats have already said they'll run, including Andy Brown, Donna Howard, and Kathy Rider. • The Texas Farm Bureau is holding a campaign seminar for "candidates, their spouses, and others involved or interested in campaigns" in Austin on October 25-26. They try to cover the basics and don't care which party you're in. There's more info on their website, at www.txfb.org. • The Texas Lyceum has put together a statewide conference on education. That's in Fort Worth on October 7 (convenient for people going to a football game in Dallas that weekend) and it's titled "The Texas High School Diploma: What is it worth?" More on that one on their website: www.texaslyceum.org. • Department of Corrections: In a recent item on Alex Castano, a Republican in the HD-47 contest, we had him home-schooling his kids. That was true until this year, when he and his wife enrolled the five oldest (of seven total) in an elementary school in Austin... An item on TRMPAC indictments said the group had routed money to the Texas Republican Party; it should have said to an arm of the national GOP. Sorry, sorry, sorry. 

Former state Comptroller John Sharp, who'd been informally exploring a run for governor, won't run. Instead, he'll head a blue ribbon committee for Gov. Rick Perry, looking for a better tax system for the state. The two men were college pals. Sharp won a House seat in 1978, moved to the Senate in 1982, and then won a spot on the Texas Railroad Commission in 1986. He won races for comptroller in 1990 and 1994, then lost in his 1998 and 2002 efforts at lieutenant governor. Perry started later and went higher, winning a House seat in 1984, agriculture commissioner in 1990 (beating incumbent Democrat Jim Hightower in an upset) in his first race as a Republican, and reelection in 1994. He and Sharp collided in that 1998 race for Lite Guv, and Perry won the 2002 governor's race after succeeding George W. Bush in 2001. Sharp joined a tax consulting firm -- Dallas-based Ryan & Co. -- and made another run for Lite Guv in 2002, when Perry was running for a full term as governor. Sharp lost to another Republican, David Dewhurst, and by a bigger margin than his first run.
For all the shock waves it sent across the political, lobby and government bubble in Austin, Perry's Sharp announcement fell in the middle of the news run-up to Hurricane Rita, and if you'd been out of town for a couple of days, you could've missed it. Perry didn't announce the deal in a press release, either from the governor's office or from his political office. None of the groups that ordinarily follow his announcements with faxed and emailed "atta-boys" to the press did anything, either. And there weren't any welcoming words from House Speaker Tom Craddick or Lt. Gov. David Dewhurst, who've been tinkering unsuccessfully with school finance for well over a year. But the quiet probably won't last. Sharp is already lining up speaking engagements to talk about state tax reform and lower property taxes, and said in his appearance with Perry that he expects the committee to travel around the state holding hearings. Both men all but killed talk of an income tax as a solution to state finances. "I would check the weather in the lower extremities before we would look at that," Sharp said. Both men ducked other specifics about what the panel might produce. Sharp let his clients and others know about the assignment in an email shortly after it was announced to the press: * * * * *As you know, my entire public service career has been built on solving problems few thought possible to solve. Whether it was the performance reviews, Lone Star card, Lottery start-up, welfare reform or whatever, I get no greater satisfaction than from solving problems in government.

Suddenly, a new opportunity has arisen. The single biggest problem facing our State in the last two decades is school finance. Governor Perry has asked me to chair a select commission to present the solution to that problem to the Legislature. It is not a challenge I can refuse. I realize it is a tough issue, but it is one I believe has a solution. Had I chose to run for office again, it would have been to solve this problem.

The tax system and school funding is too important a problem for me to say no, and I hope you understand and will give me your blessings. I will forever appreciate your words of encouragement and your friendship. I view this as possibly my last chance to do something historic for my state and I ask for your continued friendship and support in this endeavor and your blessing.

Thank you for everything and I'll talk to you soon.

Your friend, John Sharp * * * * *The top execs at Ryan & Co. are among the biggest financial backers to the current comptroller, Carole Keeton Strayhorn, who is challenging Perry for the Republican nomination for governor next year. Many of those execs have contributed individually to Strayhorn's campaign, but they've also given through the Ryan & Company Texas PAC, a political action committee that has spent most of its money over the last couple of years supporting Strayhorn, giving $308,500 between September 2003 and this past summer. Sharp hasn't given directly to Strayhorn, but contributed $14,423 to the company PAC during that same period. And the firm is almost certain to be a subject of argument during the coming gubernatorial primary campaign. A recent State Auditor's report detailed campaign contributions to Strayhorn from tax consulting firms that also do business with the comptroller's office. They didn't accuse anyone of any wrongdoing, but laid out the information in a way that makes it easy for Perry and other political opponents of Strayhorn to draw conclusions for the benefit of voters. Ryan & Co. led the list of contributors. 

Sorting out the Perry-Sharp handshake Chris Bell of Houston, who's been actively campaigning and trying to raise money for a run for the Democratic nomination for governor, is now relieved of the biggest obstacle: John Sharp isn't running. Felix Alvarado, a Fort Worth teacher who says he'll run, hasn't been pushing as hard as Bell, but gets the same sort of boost in not having to share votes with a rival who has already run statewide. Carole Keeton Strayhorn, who's hoping Democrats and moderates vote in the Republican primary, ought to be happy as well. Sharp won't be on the opposite side of the ballot trying to get some of those same people to vote in the Democratic primary. That's one less experienced candidate who's competing to be the alternative to the incumbent. On the other hand, Sharp works for a tax firm that is one of Strayhorn's biggest supporters, and she might see him as joining with her enemy. Writer and musician Kinky Friedman, running as an independent, has one less big name on the list of competitors. Independents get on the ballot by collecting signatures from registered voters who don't vote in primaries. This situation could certainly change, but there's a chance right now that Democrats won't be treated to much excitement on the statewide ballot in the March primaries. Bigger races increase turnout; quiet ones don't. Sharp's exit might lower the number of Democrats voting in March, increasing the number available to sign Friedman's petitions. After that, Friedman's chances improve if he's seen by voters as the best alternative to Perry, assuming they're looking for alternatives at that point in this election drill. But that depends on the primary results, and on whether a Democratic candidate can seriously challenge Perry in next year's general election. Gov. Rick Perry gets rid of the only remaining candidate whose poll numbers seriously rivaled his own. Most handicappers would say at this point that the Democrats are at a serious disadvantage in a statewide race in Texas. But Perry has been wobbly -- particularly before his widely praised efforts to help Hurricane Katrina evacuees -- and it doesn't do him any good to have a relatively well-known Democrat available as an alternative. Sharp didn't endorse Perry for reelection, but conservative Democrats will take his assistance as a cue, another bonus for the Guv. Lt. Gov. David Dewhurst, who beat Sharp in the 2002 election, didn't say anything publicly. But he and Sharp never patched things up after fighting for the state job, and Dewhurst has to be wondering whether he and his rival can work together on school finance. For House Speaker Tom Craddick, it's a wash. He and Sharp haven't been direct rivals though they're from different parties. They served together when Sharp was in the House. And it's possible that the tax committee will actually produce something lawmakers can stomach. That's something Craddick and Dewhurst and Perry haven't been able to do. What about the man in the middle? Sharp has lost his last two statewide races, and it's very difficult for a Democrat to raise enough money for a serious campaign; just look at Bell's campaign finance reports. Sharp's numbers in some polls were better than other Democrats, and in some surveys even rival Perry's numbers. Losing a third big race would probably put the last nail in Sharp's political coffin, and the absence of solid financing increases that risk. Since leaving office eight years ago, he's been financially successful. The firm that employs him, Ryan & Co., has chosen to oppose Perry in the governor's race against Comptroller Carole Keeton Strayhorn. This new deal puts Sharp on Perry's side, effectively covering the other side of the bet. He's probably giving up his political future, but the business move seems to make sense. 

Gov. Rick Perry appointed Rolando Olvera Jr. to wear the robes in the 138th Judicial District Court in Cameron and Willacy Counties. Olvera, a member of the Texas Lottery Commission, is a name partner in a Brownsville law firm. He'll replace Robert Garza, who's leaving the court to return to private practice. Olvera's a Republican and a previous Perry appointee to the bench. He was appointed to a court spot in 2001 but lost it in the 2002 elections. He'll be defending the new spot next year, and the Democrats already have a candidate putting a campaign together. John Hildreth, who has chaired the board of the Center for Public Policy Priorities since 1992, is stepping aside; Joe Rubio, a Catholic deacon and vice president of Catholic Charities in Houston, will take that spot. And CPPP is adding a new board member: Catherine Mosbacher of Houston, who served on the board of the Texas Department of Family and Protective Services as an appointee of Govs. George W. Bush and Rick Perry. John Pitts Sr. is leaving the Akin Gump law firm to hang out his own shingle doing law and lobbying. He's also signed on as a consultant to Washington, D.C.-based Arnold & Porter. His twin -- Jim Pitts, R-Waxahachie -- is the chairman of the House Appropriations Committee. Brett Findley is the new chief of staff to Sen. Florence Shapiro, R-Plano. He's worked on policy issues there for almost three years and gets the spot opened when Luke Bellsnyder left state employment for the lobby. Marisa Martin leaves the offices of Sen. Kyle Janek, R-Houston, to become associate director of the Scott & White Center of Health Policy.