Texas Corporate Interests Financed Bulk of Bush Races

George W. Bush stunned the political world last month by announcing that he had raised a record $36 million in his race for the Republican presidential nomination.

It wasn’t the first time the Texas governor set new standards for campaign cash. In two statewide elections, Bush raised $41 million--more than any candidate for governor in history.

An examination of Bush’s fund-raising in Texas for the 1998 and 1994 gubernatorial campaigns found that much of the money came from contributors with major stakes in state regulation.

The computer-assisted analysis, the most extensive of its kind, provides a detailed look at Bush’s leading donors in Texas, including oil and other large industrial companies trying to avert mandatory pollution controls; businesses seeking relief from expensive civil suits, and conservatives advocating state-paid vouchers for students in private schools.

These longtime alliances with major Texas corporate interests are significant: Many of the large donors continue to back Bush as he pursues the presidency. Indeed, Texans donated more than half of the $7.6 million Bush raised for his presidential campaign during the first quarter of this year.

Moreover, Bush’s ties to donors have prompted other Republican candidates to portray the governor as a candidate beholden to special interests--claims Bush denies. Steve Forbes said last month that Bush’s presidential fund-raising proves that “he is inextricably tied to Washington lobbyists and special interests.”

In Texas, where individuals and corporate political committees may contribute unlimited sums to politicians, big campaign money is a way of life. And for Bush, a pro-business Republican, turning to the economic powers in the Lone Star State was only natural.

“One of the reasons they give to him is that he gives in return,” said Craig McDonald, director of Texans for Public Justice, a nonpartisan group that tracks political money. “His policies are very pro-business.”

Core Principles

A Bush spokeswoman said that large donations in no way influence the governor’s positions on policy issues.

“He has a set of principles from which he does not waver,” said Karen Hughes, communications director for the Bush campaign. These core principles include limited government, local control, strengthening families and individual responsibility, Hughes said.

Bush declined to be interviewed for this article.

The skyrocketing cost of running for public office is not unique to Texas--or to Bush. Republican Pete Wilson raised $27 million in his 1990 and 1994 gubernatorial campaigns in California; his successor, Democratic Gov. Gray Davis, raised a whopping $31.8 million last year, the largest amount for a single gubernatorial race.

Bush’s fund-raising success is due to a number of factors: his political brand name, far-flung family and business contacts, engaging personal style and appeal to longtime Republican donors, including nontraditional sources drawn by his message of moderation. Bush’s White House bid also is seen by many Republicans as the party’s best hope for regaining the presidency.

In the last six months alone, his front-running presidential campaign has amassed at least $36 million from 75,000 donors--more than all 11 of his Republican rivals combined. (Presidential aspirants are limited to individual contributions of up to $1,000.) Bush already has collected more money from individual donors than any primary candidate in history.

On Thursday, all presidential candidates must file reports disclosing donor information for the second quarter, ending June 30.

The analysis of the two gubernatorial races--conducted for The Times and CNN by the Campaign Study Group of Springfield, Va., a nonpartisan consulting firm--researched the backgrounds of more than 14,000 large donors and classified each by occupation and industry. This study is part of a Times effort to examine fund-raising by presidential hopefuls.

The analysis found that Bush had provided some of his most loyal contributors highly coveted appointments to the University of Texas Board of Regents. The university produces many of the state’s leaders, and a regents post brings lifetime season football tickets--a desirable perk in gridiron-crazed Texas.

Among the appointees is Laredo oil executive A. R. “Tony” Sanchez, who gave $101,000, second highest among the regents. Bush officials said large campaign contributions have no influence in the selection of gubernatorial appointees.

The study found that Bush received $4.5 million from business, medical, real estate and other interests that waged a fight, supported by the governor, to make it more difficult to sue Texas firms. He also collected $1.5 million from companies whose aged oil refineries and power plants in Texas have come under pressure to reduce particularly high toxic emissions.

Bush’s alliance with industries battling tougher pollution control standards in Texas could become a major campaign issue if he faces Democratic Vice President Al Gore in next year’s presidential campaign. Gore has made environmental issues a centerpiece of his political career.

Overall, the leading contributors to Bush were financial services interests, which gave at least $4.6 million, followed by energy and mining ($3.7 million), real estate and development ($2.2 million) and manufacturing ($2.1 million), according to the study.

In addition, Texas lawyers and lobbyists--representing clients ranging from tax professionals to telecommunications--gave Bush $2 million. Some helped lay the financial foundation for Bush’s initial presidential blitz.

Bush collected at least $21.3 million--more than half of his gubernatorial fund-raising--from political committees and individuals representing a broad range of 15 interests, the analysis found.

The sums reflect money contributed by political committees established by companies as well as employees and family members. Under Texas law, corporations are prohibited from making direct donations but they may set up political committees to which employees can donate.

Donors, of course, contribute to political campaigns for a variety of reasons, often because their own beliefs are closer to one particular candidate.

Bush received large sums from a small group of wealthy individuals: $2.1 million from 134 members of the Republican National Committee’s roster of $100,000 donors, many of whom supported his father, former President George Bush. All told, 9% of Bush’s 80,000-plus donors gave him $30.8 million--three-quarters of his gubernatorial money.

In addition, Bush had about 60,000 small donors for his gubernatorial campaigns who gave amounts less than $200. They accounted for $5.8 million--or about 14%.

Bush took in $15.7 million when he ousted Democrat Ann Richards in 1994 and garnered $25.3 million as a popular incumbent who coasted to reelection last year.

Not surprisingly, Texas, the nation’s second largest state, has provided the springboard for Bush’s presidential fund-raising. Nearly one third of Bush’s presidential war chest comes from his home state, aides said. And one third of the more than 250 “Pioneers” who have pledged to bring in $100,000 apiece for Bush are from Texas.

The state has a reputation for freewheeling fund-raising. Former President Lyndon B. Johnson, a Texas Democrat, was a legend at rounding up large sums of campaign cash. And former Gov. John B. Connally and Sen. Phil Gramm both raised eye-opening sums in Republican presidential primaries.

For most Texans, politics is accepted “as a natural process where power and money intersect,” said Earl Black, a professor of political science at Rice University.

One of Bush’s most colorful and controversial contributors is Lonnie “Bo” Pilgrim, the founder of a large East Texas chicken-processing company. Pilgrim and his wife donated $125,500, and gave an additional $100,000 as a sponsor of Bush’s two gubernatorial inaugurals.

A decade ago, Pilgrim handed out $10,000 checks to lawmakers on the state Senate floor during debate on a worker’s compensation bill. The practice is now outlawed.

Throughout his two terms, Bush has taken official actions that critics claim catered to some of his strongest financial backers. Bush officials maintain that the governor’s policy decisions are made strictly in the best interests of the people of Texas.

Here are three case studies of how Bush responded to issues affecting some large contributors to his gubernatorial campaigns:

* Lawsuit Limits

A major source of Bush’s contributions came from businesses and individuals seeking relief from civil suits and caps on damage awards. He received $4.5 million from Texans for Lawsuit Reform, its officers and members of its 25 boards of governors statewide and from the Texas Civil Justice League and its officers, records show. This included $98,473 from the Texas Assn. of Realtors; $77,500 from the Texas Assn. of CPAs and $60,500 from the Texas Medical Assn.

Today, at least 75% of Justice League members are contributing to Bush’s presidential campaign, according to the organization’s president, Ralph Wayne, who also serves as a co-chairman of the campaign.

Bush embraced the state’s lawsuit reform movement in his 1994 campaign and made the issue a top priority upon taking office. He declared a state of emergency to fast-track measures to limit punitive damages and make it more difficult to successfully sue businesses, doctors and others.

“Texas must end the frivolous and junk lawsuits which clog our courts, threaten producers and delay justice for the deserving,” Bush said in his first state of the state address.

In 1995, the Legislature imposed limits on damage awards by corporations and other defendants in state courts, restricted the locations where lawsuits could be filed and narrowed the state’s major consumer protection law.

Consumer groups and trial lawyers were sharply critical.

“Once again, Gov. Bush stood up for the large corporations and against the average citizens of Texas,” said Tom Smith, state director of Public Citizen, a consumer watchdog group. “His policies have made it much more difficult for Texans to sue and recover when they’re injured or to use punitive damages to get defective products off the market.”

Bush’s financial supporters say they appreciate the governor’s efforts.

“This would never have happened without George Bush,” Wayne said. “He kept his word far and beyond.”

* Industrial Pollution

Bush received $1.5 million from 55 companies that operate aging oil refineries and industrial plants in Texas, led by Enron Corp. ($348,559) and Sterling Chemicals ($239,000). These facilities have come under fire for producing unusually high amounts of air pollution.

Enron spokesman Gary Foster said the company gives to the campaigns of “candidates and officeholders who share similar philosophies on many different issues.”

Texas, like many large industrial states, faces pressure from the U.S. Environmental Protection Agency to reduce smog levels because urban areas such as Houston and Dallas-Fort Worth fail to meet federal clean air standards. Houston has the second dirtiest air in the country after Los Angeles.

A major source of toxic emissions in Texas is 822 refineries and power plants that do not meet strict pollution control standards because they were built before passage of the state Clean Air Act in 1971. These facilities received exemptions from the state air quality permit process with the expectation that they would be updated or replaced. The facilities currently produce 904,000 tons of annual industrial air pollution--more than one third of the state’s total.

Bush has advocated an industry-sponsored voluntary approach to reducing pollutants, with the companies receiving permits if they agree to upgrade their facilities. His top environmental aide met with industry representatives as they developed the voluntary program. Recently, the governor signed two bills passed by the state Legislature that go beyond a strictly voluntary approach.

Bush says he deserves credit for working out a solution to the pollution problem.

“You finally had a governor who stood up and got Texas industry to respond,” Bush said last year. “They didn’t have to respond, and I led; and I said, ‘Respond,’ and they did.”

But Bush has declined to take a tougher stand by requiring all companies to modernize their facilities. Environmentalists also criticize Bush’s approach for not setting specific levels or timetables to reduce emissions.

“The governor apparently decided that his commitment to polluters was more important than his responsibility to do what was in the public interest,” said Ken Kramer, director of the Sierra Club’s Lone Star Chapter.

Industry representatives are pleased with Bush’s handling of this issue.

“I’d give him really high marks,” said Cindy Morphew, vice president for environmental affairs for the Texas Oil & Gas Assn.

* School Vouchers

Advocates of a controversial proposal to provide tax dollars to students for parochial or private schools also have donated large amounts to Bush.

James R. Leininger, a conservative San Antonio physician who became wealthy selling high-tech hospital beds, is the driving force behind this movement in Texas. Bush’s campaign has received $693,600 from Leininger, his relatives, the directors of a pro-voucher group he founded called Putting Children First and members of another pro-voucher group. Some of the leading voucher proponents also support the tort reform movement.

For Bush’s presidential run, voucher proponents “are not only giving money but they are raising money for him with good confidence,” said James Mansour, chairman of Putting Children First.

Bush has supported school vouchers since his 1994 gubernatorial campaign. He has urged the Legislature to pass a pilot program that would set aside public funds for students enrolled in public schools that are deemed to be “failing” in the state’s five largest cities. The money could then be used to pay for the students to attend their choice of public, private or parochial schools.

The proposal engendered strong opposition, with critics contending that vouchers would leave most poor children behind in troubled schools with fewer funds.

The voucher bill stalled in the Legislature this spring. Nevertheless, Bush made “a real concerted effort” to pass the voucher program, Mansour said, and has vowed that “his commitment to the issue will translate to his presidential aspirations.”

Prestigious Positions

Bush has given some of his most loyal financial supporters prestigious state positions.

The governor makes hundreds of appointments to myriad boards and commissions, including the highly prized University of Texas Board of Regents.

Records show that all but one of Bush’s nine appointees to the Regents contributed to the governor’s campaigns, for a total of $419,406.

Bush’s first appointees in 1995 were Donald L. Evans, the head of a Midland, Tex. oil-exploration company and the governor’s close friend; Rita Clements, the wife of former Texas Gov. William P. Clements Jr., and Thomas G. Loeffler, a lobbyist and ex-Republican congressman whom Bush reappointed.

Evans was a key gubernatorial fund-raiser and is now finance chairman of Bush’s presidential campaign; he also contributed $26,500 to Bush’s gubernatorial coffers. Clements and her husband gave Bush $56,106, and Loeffler donated $116,000.

Subsequent appointments to the board by Bush include Charles Miller, a Houston investment manager and education activist who gave $60,000, and Woody L. Hunt, an El Paso home-building executive, $39,800.

Bush aides say that contributions played no role in the governor’s selections for the university board or any other position. “The governor looks at qualifications, experience, integrity and people who share his conservative philosophy of governing,” Hughes said.

Explaining why all but one of the regents gave money to Bush, Hughes said: “It is difficult to find someone who is conservative and successful in Texas and has not contributed to Gov. Bush.”

*

Researcher Janet Lundblad in Los Angeles contributed to this story.

A companion CNN video report on The Times’ investigation into George W. Bush’s campaign finances as Texas governor is on The Times’ Web site: https://www.latimes.com/bush

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Bush Fund-Raising

Texas Gov. George W. Bush has raised at least $77 million since his 1994 gubernatorial campaign, including significant sums from a wide range of interests in Texas. Texas donors continue to play a key role in the early stages of Bush’s presidential campaign.