Special session's winners: lobbyists
Schools, gambling, alcohol, tobacco groups pay millions in Austin
By DAVE MICHAELS / The Dallas Morning News/ May 8, 2004

AUSTIN – While Texas lawmakers have yet to identify any new funding for public schools, the special session has meant millions of dollars in business for the state's top lobbyists, an analysis of state disclosure reports shows.

Several issues – including gambling, alcohol and tobacco – attracted a fleet of lobbyists trying to kill higher-tax proposals or influence legislation that would open the door to new business opportunities. The activity netted between and $3.2 million and $6.9 million for those 144 lobbyists.

"People who don't normally play are playing, and people who do play are playing more aggressively," said Bill Miller, a partner at the influential lobbying firm Hillco.

That means public school districts are also involved. Many districts hired their own lobbyists or benefited from lobbyists hired by umbrella groups such as the Texas School Alliance. Two separate firms, including Hillco, represented the Dallas Independent School District.

Together, the 122 lobbyists working for school districts, umbrella groups and education-related companies were paid between $2.9 million and $6.2 million since Jan. 1. Exact figures are not available because forms require the firms to report amounts only in a range such as less than $10,000 or $10,000 to $24,999.

"The schools want more money, and they want the reform package to reflect what they need or want," Mr. Miller said. "Many years come and go and do not produce what is considered big. This looked big."

Campaign finance watchdogs said they were surprised by the amount of lobbying dollars that school districts paid. But the representation was essential, they said, to keep up with the business groups that routinely influence lawmakers.

"I can understand them thinking that they had to be there at the table to try to influence the decisions that lawmakers are making," said Suzy Woodford, executive director of Common Cause of Texas.

'Outrageous sum'

Tom "Smitty" Smith, director of the Texas office of Public Citizen, said the special session resulted in "an outrageous sum of money" for lobbyists. While The Dallas Morning News' analysis focused on the subjects of alcohol, education, gambling and tobacco, millions more were spent by business seeking to avoid new taxes.

"What is telling is that the gambling and tobacco interests combined are spending as much as to protect themselves from taxation or to get new business as the education lobby," Mr. Smith said.

Several lobbyists said the amount being spent this year was perhaps more than previous years, but that is because of the special session. Some of the clients may have signed with lobbyists not just to influence lawmakers during the session, but are also preparing for the regular session that begins next January.

Some lobbyists have represented both education and gambling interests, according to The News' analysis.

Lobbyist Ann Messer reported that her clients included the Texas Greyhound Association, which supports the legalization of slot machines, as well as the Texas School Alliance and the Houston Independent School District.

Several other lobbyists reported that they represented both the Alabama-Coushatta Tribe of Texas, which could have placed slots on its reservation, and Texans for Good Schools.

Anti-gambling interests, including the Dallas-based Texans Against Gambling, also entered the lobbying fray. Allyn & Co., a Dallas public relations firm, wrote a letter for Rep. Linda Harper-Brown, R-Irving, which opposed slot machines and included the signatures of 23 other House members.

Allyn & Co. also has a long-term relationship with out-of-state casinos that could lose business if slot machines opened in Texas.

The proposal to extend gambling seems to have stalled for the moment, after the House passed a bill but stripped a proposal to legalize slot machines at racetracks.

But just before the start of the special session on April 20, many casino companies either hired more lobbyists or directed their lobbyists to ratchet up contacts with lawmakers.

"When it became clear the governor would call a special session and include gambling language, we took a more aggressive approach," said Jan Jones, senior vice president of government relations for Harrah's Entertainment. "If the state is going to consider gambling, we want to be at the table."

Harrah's hired the lobbying team that includes former state Rep. Stan Schlueter. Since January, the casino company paid the firm between $80,000 and $175,000, according to disclosure records.

Gaming strategy

Harrah's, which owns casinos in Louisiana and Nevada, said it directed its team to oppose slot machines, but not because of concerns they would lose business. Instead, the company pushed for full-blown casino gambling.

"Putting 40,000 slots at tracks is really not the best model for gambling," Ms. Jones said. "You should do it in a way that maximizes revenue to the state and maximizes the entertainment product."

Boyd Gaming, which owns casinos in Louisiana and Las Vegas and is acquiring a third from Harrah's, hired three lobbyists for between $50,000 and $100,000 each. Rob Stillwell, a company spokesman, said the company was interested in expanding into Texas.

"If Texas was to legalize, there are only so many places you can grow," Mr. Stillwell said. "It would have been important to make sure we had some idea what they were looking at, and what the regulatory and tax structure was going to be."

Mr. Miller, the Hillco lobbyist, said casino contracts carried higher-than-average payouts but also a lot of stress.

"Most lobbyists who sign on for it charge a lot of money," Mr. Miller said. "To pass gaming legislation is very difficult."

Reggie Bashur, whose clients included a smokeless tobacco company, said the session's emphasis on taxes – lower property taxes but a higher sales tax and sin taxes – guaranteed a lot of lobbying activity.

"Any session where there is a potential for taxes, that is going to heighten interest and end up hiring some lobbyists," he said.

E-mail dmichaels@dallasnews.com

CASH FLOWING

Since Jan. 1, lobbyists have received millions of dollars in compensation for work on several key issues whose fates are intertwined in Austin:

Alcohol and tobacco: 61 lobbyists reported receiving between $1.2 million and $2.6 million in fees.

Gambling: 83 lobbyists reported receiving between $2 million and $4.3 million in fees.

Education: 122 lobbyists reported receiving between $2.9 million and $6.2 million in fees.

Note: Compensation figures cite a range because lobbyists are not required to report specific compensation totals in their reports to the Texas Ethics Commission.