Tuesday, August 28, 2007

Edwards Goes After the 'Corporate Democrats' -- Is This a Turning Point for His Campaign?

By Joshua Holland - AlterNet - August 26, 2007
In a dramatic speech, John Edwards fired a major broadside against corporate America and, more significantly, "corporate Democrats," -- the likes of which hasn't been heard from a viable candidate with national appeal in decades.

Last week, John Edwards fired a broadside against corporate America and, more significantly, "corporate Democrats," the likes of which hasn't been heard from a viable candidate with national appeal in decades.

Edwards is en fuego right now, and if he keeps up the heat, his candidacy will either be widely embraced by the emerging progressive movement or utterly annihilated by an entrenched establishment that fears few things more than a telegenic populist with enough money to mount a credible campaign.

"It's time to end the game," Edwards told a crowd in Hanover, New Hampshire. "It's time to tell the big corporations and the lobbyists who have been running things for too long that their time is over." He exhorted Washington law-makers to "look the lobbyists in the eye and just say no."

Real change starts with being honest -- the system in Washington is rigged and our government is broken. It's rigged by greedy corporate powers to protect corporate profits. It's rigged by the very wealthy to ensure they become even wealthier. At the end of the day, it's rigged by all those who benefit from the established order of things. For them, more of the same means more money and more power. They'll do anything they can to keep things just the way they are -- not for the country, but for themselves.

[The system is] controlled by big corporations, the lobbyists they hire to protect their bottom line and the politicians who curry their favor and carry their water. And it's perpetuated by a media that too often fawns over the establishment, but fails to seriously cover the challenges we face or the solutions being proposed. This is the game of American politics and in this game, the interests of regular Americans don't stand a chance.

It's a structural argument, and Edwards didn't pull punches in calling out his fellow Democrats, saying: "We cannot replace a group of corporate Republicans with a group of corporate Democrats, just swapping the Washington insiders of one party for the Washington insiders of the other." The rhetoric was a clear signal that Edwards is going to beat the drums of reform as a contrast to Barack Obama and Hillary Clinton in the primaries.

About a third of the speech focused on the trade deals that Bill Clinton championed, and his argument that those "wedded to the past" can't provide the answers was a barely-veiled rebuke of the Clintonian arm of the party, and the media's chosen "front-runner" for the nomination.

If Democrats are engaged in an existential struggle between the party's establishment and its grassroots, Edwards is obviously betting that the grassroots' passion and energy will trump the Machine Democrats message' apparatus -- this was a speech that was not written by the usual coterie of Beltway consultants.

The most striking aspect of Edwards' speech was his implicit argument that class still exists. For years, both parties have obscured the divisions that are so prominent in modern American society, painting a picture of a country in which we're all part of an entrepreneurial class with more or less similar interests -- a key ingredient in the false "center" to which politicians and Beltway pundits kow-tow. "Let me tell you one thing I have learned from my experience," Edwards said last week. "You cannot deal with them on their terms. You cannot play by their rules, sit at their table, or give them a seat at yours. They will not give up their power -- you have to take it from them."

It was an explicit rebuke of Obama's "new politics" -- Obama recently told the Washington Post that "the insurance and drug companies can have a seat at the table in our health-care debate; they just can't buy all the chairs." Obama's approach to "cleaning up Washington" is not bad, but ultimately tinkers around the edges of a corrupted legislative system.

Edwards is not so conciliatory on the subject. "For more than 20 years, Democrats have talked about universal health care," he said. "And for more than 20 years, we've gotten nowhere, because lobbyists for the big insurance companies, drug companies and HMOs spent millions to block real reform."

Contrast that naked confrontation of corporate power with the tepid appeals to working Americans that were a trademark of John Kerry's 2004 campaign. In announcing his candidacy, Kerry offered a bit of demagoguery about CEOs -- he segued from bashing Cheney and Halliburton --and boldly promised to end tax breaks "that help companies move American jobs overseas." Also in his plan for corporate accountability: "No more contracts for companies, no matter how well-connected they are, until they decide to do what's right."

Hillary Clinton's economic proposals track with the thinking popular among the ostensible "progressives" at the DLC and the Third Way -- policies that give Americans the "opportunity" to save for retirement, a decidedly centrist approach to spiraling college costs and other familiar policies from the 1990s. She's not a fair trader nor a free trader, she says -- she's for "smart trade," "pro-American" trade.

Edward's speech about the economy isn't the only time that he's strayed from the bounds of "respectable" discourse in Washington. In May, he said that the "war on terror" was a political "bumper sticker" that the administration used to "justify everything [Bush] does: the ongoing war in Iraq, Guantanamo, Abu Ghraib, spying on Americans, torture."

Edwards isn't the only candidate in the race making such bold statements, of course. Rep. Dennis Kucinich (D-OH) has long spoken of economic issues in the kinds of terms Edwards used last week. But John Edwards was the vice presidential nominee on a presidential ticket that won 59 million votes and he's raised $23 million in the current cycle (20 times what Kucinich has raised), and that means that corporate media is forced to cover him. So far, they've mocked him, written stories about his haircuts, pushed shadowy innuendo about his personal business dealings and suggested his focus on poverty is disingenuous or hypocritical, but they simply can't write him off as a member of the fringe. Unlike Kucinich, they can't ignore him.

John Edwards is becoming a very different kind of candidate, and his growing message of empowerment and attack on the corporate class may prove to be the most interesting story of campaign 2008.

Monday, August 27, 2007

TX Gov. Rick Perry Attends Bilderberg in Istanbul, 2007

Watch video
Perry's security detail paid by taxpayers.

Perry's point man helping Craddick too

By CLAY ROBISON - Houston Chronicle - Aug. 26, 2007
AUSTIN — Gov. Rick Perry thinks Speaker Tom Craddick is a fine fellow and a great Texan. But he really doesn't care whether Craddick survives the current challenge to his leadership, provided the House majority stays within the Republican family.

That's the official word from the governor's office, but there are doubters, and their doubts are being reinforced by the fact that Perry's chief political consultant is now advising Craddick's political action committee.

Dave Carney, the New Hampshire-based political specialist who helped Perry get re-elected with 39 percent of the vote last year, has been enlisted by Stars Over Texas, a committee founded by Craddick and administered by his daughter to help Republicans win election to the Texas House.

Historically, the PAC has raised funds for Republican incumbents and candidates in selected races against Democrats. But now that several Republican House members are challenging Craddick's leadership, some of the speaker's opponents may be wondering if the committee's resources will be directed against them in next year's GOP primaries.

Officially, the answer is no. The PAC will continue to help elect Republicans, not unseat the party's incumbents.

"Carney, to the best of my knowledge, is not going to be involved in primary fights. He's there to build on a Republican (legislative) majority," said Perry spokesman Robert Black.

Carney didn't return phone calls, but talk persists that he already has been indirectly involved in recruiting primary opponents for some of Craddick's detractors and may become openly involved in Republican primary races for House seats being voluntarily vacated by incumbents.

Since the political game is rife with paranoia, the talkers, both for and against Craddick, don't want to be named.

Perry may not run again and may have been annoyed at Craddick for losing control of the House during the end-of-session rebellion last spring. Moreover, it was hard to tell which of the two — Craddick or Perry — had a rougher session, as many of the governor's priorities took a beating from Republican lawmakers.

But some believe that Perry views Craddick, perhaps because of his fundraising ability, as the best Republican to remain speaker while Democrats try to wage a comeback in House races.

Perry will be governor for at least one more legislative session, and Black insists he intends to be a player — except in House politics.

"The governor is going to work for Republican candidates and campaign for Republicans next year. That's what he's going to do to grow the Republican majority," Black said.

"The governor has always had a good and a strong relationship with Craddick. (But) it does not matter who the speaker is."

Security isn't cheap
My colleague, Peggy Fikac, recently reported that taxpayers paid more than $250,000 in security expenses for 10 foreign trips made by Gov. Perry and his wife since 2004.

Those included business recruitment and other official trips, a Grand Cayman vacation last year and a controversial 2004 trip to the Bahamas, where the governor reportedly discussed education issues with, among others, campaign donors.

Even closer to home, the governor's security — provided through the Texas Department of Public Safety — isn't cheap.

According to new information from the agency, the protective detail racked up $24,630 in expenses July 18-29 to protect Perry and his family on a vacation to San Diego. Perry wasn't there the entire 12 days, but spokesman Black noted that security officers go in a "couple of days early."

The security detail submitted another $5,614 in expenses for a five-day trip to Pittsburgh, where the governor spoke to a Boy Scouts group in April.

Perry's own official travel expenses normally are paid by his political fund or by a privately financed economic development program controlled by his office.
Read more

Area's foreclosures are mostly mid- and low-priced homes - 90% of posted sales are on homes with loans of $250,000 or less

By STEVE BROWN - The Dallas Morning News - Friday, August 24, 2007
The bulk of North Texas home foreclosures continue to be moderate and low-price homes, according to a new study.

Addison-based Foreclosure Listing Service – which tracks foreclosure postings in more than a dozen Texas counties – reports that 90 percent of the loan defaults so far this year were on houses valued at $250,000 or less.

"It's pretty much been that way for the last three or four years," said Foreclosure Listing Service chief executive George Roddy, who's surprised the volumes aren't even higher at the lower end of the market.

Foreclosure postings for the first nine months of 2007 show that almost 31,000 homes valued at more than $4.5 billion have been scheduled for forced sale by lenders.

That's a jump of 12 percent in number and 19 percent in value from the same period of 2006.

On average, the loans being foreclosed on this year were made in 2003.

More than half of the Dallas-Fort Worth home loans in foreclosure this year are held by the country's biggest mortgage firms, Fannie Mae and Freddie Mac, Foreclosure Listing Service found.

And fewer than 2,000 of the foreclosures – about 6 percent of the total – were from homeowners defaulting on home equity loans.

"It has not impacted the market as much as I thought they would," Mr. Roddy said.

The number of higher-priced homes in foreclosure has increased by large percentages this year, but they still represent a negligible portion of the market.

Only about 1 percent of the foreclosure postings for the first nine months of 2007 were for houses valued at more than $500,000.

Mr. Roddy said those numbers could increase now that lenders are charging higher interest rates for so-called jumbo loans, over $417,000.

"There's a big issue now with these jumbo loans and all the speculative homebuilding out there," he said.

"That's got to be of concern to these builders."

Read more in the Dallas Morning News

PUC bares weak teeth on TXU deal - In notes, regulators worry about how to protect public

By ELIZABETH SOUDER - The Dallas Morning News - Sunday, August 26, 2007

On the Friday in February when news leaked of a record-breaking offer to buy TXU Corp., the company's top government liaison met with the state's top utility regulator to alert him of the deal.

Then Paul Hudson, chairman of the Public Utility Commission, spent the weekend worrying. The commissioner's job is to protect the public. But a loophole in the state law that deregulated the electric industry makes the commission virtually powerless to block a merger that might harm consumers.

"It is fair to say that the more I think about our discussions yesterday, my concern grows," Mr. Hudson wrote in an e-mail to Curt Seidlits, TXU's senior vice president for government advocacy, that Saturday.

On Monday, Feb. 26, TXU officially announced the $45 billion offer from Kohlberg Kravis Roberts & Co. and TPG. In a conference call with analysts, TXU made it clear that the buyout wouldn't require PUC approval.

The announcement rattled consumer groups and some lawmakers. Some proposed a bill that would expand the PUC's authority over transactions. But TXU lobbyists persuaded legislators to apply the new rules only to future utility deals, leaving the door open for the TXU sale.

Commissioners can only try to persuade the buyers to be good to consumers, or else face a web of bureaucratic rules and procedures.

Trouble is, commissioners know that putting an investor through a bureaucratic gauntlet would backfire. If investors pull out of Texas, there will be no one to finance the new power plants and electricity wires the state needs to support a growing population. Commissioners call it the "death spiral."

The three commissioners and their staff met with buyout officials more than a dozen times during March to suggest ways the investors could protect the public from unfair rates, unreliable service or dwindling competition in the industry.

Within weeks of the announcement, the investors gave commissioners and staff an initial list of commitments meant to show that the out-of-state investors cared about Texas.

Mostly, the buyers pledged to do things that appeared to be part of their business strategy anyway: Rename each business unit, cut prices, build only three of the 11 proposed coal-fired power plants and avoid saddling TXU's electric delivery unit, Oncor, with excess debt.

According to e-mails and meeting notes reviewed by The Dallas Morning News, the commissioners weren't satisfied. They worried that debt costs might rise due to the buyout and that the reliability of Oncor's portion of the power grid might suffer.

Mr. Hudson asked the investors to put "more flesh on commitments," according to meeting notes taken by a PUC staff member March 26.

And he worried about a much larger issue: whether the buyout of the state's biggest power company might shake the stability of the entire industry. He told the investors that the retail and wholesale portions of the deal were not "off the table," according to the notes.

Mr. Hudson has sounded more aggressive than the other commissioners when he talks about how far a new utility investor should have to go. During meetings, he's brought up the idea of a "net benefits" test – that is, requiring an investor to show that it would bring a benefit to the public.

The other two commissioners have said it's probably OK if the investor simply shows it won't harm the public.

Wires and poles
Since deregulation, PUC's main thread of power over the utility industry is in the wires and poles part of the business, such as Oncor.

It has little power over the vast electricity generation part of TXU's business, called Luminant, or its retail company, called TXU Energy. Those parts of the business are free to compete in an unregulated marketplace.

But delivery companies are still monopolies, and PUC sets the rates they charge.

So as TXU was selling itself to private equity companies, the corporation had to notify PUC that Oncor was being sold. The commission will hold a hearing on the filing in October.

If the commissioners find the sale, due to close by year-end, isn't in the public interest, they still can't block it outright. They can only refuse to allow the new Oncor owners to pass along certain costs to ratepayers. The commission still sets Oncor's rates, which represent a sliver of consumers' bills.

Commissioner Barry Smitherman, a former investment banker from Houston, calls the rate tool a "meat ax," hardly an effective way to protect the public. Squeezing profit leaves a company with less money to invest in more power lines, harming the reliability of the entire system.

Mr. Smitherman spoke to the TXU investors about ways to protect Oncor in case TXU's other businesses go bust, and about employment and reliability, according to notes from a March 21 meeting. He didn't talk to them about making promises for the retail or wholesale businesses. In fact, the notes show the meeting concluded with a discussion of how to limit the scope of the proceeding.

The third commissioner, Julie Caruthers Parsley, doesn't appear to have done much persuading at all. The propriety of talking to the investors about the filing makes her uncomfortable.

The News requested all correspondence and calendar entries for commission and staff about the TXU buyout. The request yielded only one calendar entry showing a meeting between Ms. Parsley and KKR representatives, and no correspondence between Ms. Parsley and the buyout group.

"It's totally appropriate, but I'm a little more cautious on those sorts of things than other commissioners have been," Ms. Parsley said in an interview.

"In a legal world, if I know I'm going to file a lawsuit, I can't go up to a judge I hope I'm going to be assigned to and say, 'Hey, I'm going to have a case and I'm going to file it in your court next week, and how do you think you're going to respond?' "

Negotiating ends
The negotiating time ended April 25 when the buyers filed official notice with PUC of a change in Oncor's ownership. Commissioners aren't allowed to talk about pending cases.

Oncor's filing included a few promises that addressed commissioners' concerns, such as limiting the debt costs that Oncor would pass along to ratepayers and continuing to invest in power lines. Also, Oncor is to negotiate commitments with other stakeholders, such as labor groups or consumer advocates, about employment, customer service and reliability.

But the buyers went no further with their commitments concerning the retail and wholesale businesses at TXU.

The next time someone wants to buy a regulated power line company in Texas, things will be different.

The Legislature passed a law last spring to require utilities to gain prior approval by the PUC of the sale of a wires and poles business. The law doesn't apply to pending acquisitions, including the TXU buyout.

Passing the law took all session. As the commissioners worked out their buyout issues with the investment group, they also helped lawmakers draft bills.

On the day TXU announced the deal, Sen. Troy Fraser, R-Horseshoe Bay, filed Senate Bill 896, originally designed to give the commission the authority to investigate instances of market manipulation. It picked up an amendment giving the PUC authority to block a merger or acquisition.

Unhappy senator
Mr. Fraser was already unhappy with TXU over accusations the company had manipulated the wholesale market (TXU denies doing so). He made a scene at a hearing last summer when he accused TXU chief executive John Wilder of unfairly hiking electricity rates.

The buyout group tried to cool Mr. Fraser's frustration by letting him know about the deal before the news hit. A few days before the announcement, investment group officials tracked Mr. Fraser down in Ruidoso, N.M., and interrupted his ski vacation to talk about their plans.

Still, Mr. Fraser worried publicly that the buyout might harm consumers.

"He has everyone spun up on the transaction and is pushing for a pre-merger approval amendment on one of the bills," a TXU official wrote in an e-mail to a PUC staff member.

Then Washington took note of the deal, and things got more complicated. In early March, U.S. Rep. Joe Barton, R-Ennis, sent a letter to Mr. Hudson threatening to end Texas' autonomy over its electric grid if the commission didn't scrutinize the deal closely. Texas is the only state that has its own grid, separate from the rest of the country.

"I will not ... stand idly by while investors from New York or anywhere else benefit on the backs of the Texas electricity grid or the Texas ratepayers," Mr. Barton said in the letter.

Big guns arrive
It was time to bring out the big guns. The buyers sent Wall Street rock stars Henry Kravis and David Bonderman, the leaders of the private investment companies that want to buy TXU, to Austin to shake some hands.

"Dear Mr. Kravis: Thanks for coming by today – it was a real treat to visit with you and David," Mr. Smitherman wrote in an e-mail to Mr. Kravis the evening after their meeting. Mr. Smitherman's own banking career ended when he was fired for publicly criticizing the Houston mayor.

Mr. Kravis responded: "At any time you want to reach out to me, please feel free to contact me. I will get back to you if I am tied up when you call."

By the end of the Legislative session in May, the buyout crew had persuaded a number of decision-makers to leave the deal alone.

Mr. Fraser's bill giving the PUC authority to block the deal died in the House. The amendment to expand PUC powers over transactions got tacked on to another bill and passed.

But here's the out for TXU: The law specifically says it doesn't apply to any deal filed with the commission before May 1, 2007.

The commission could still make things uncomfortable for TXU's new owners. Commissioners have lined up several pending cases that indirectly affect TXU and could be used to slap the new owners on the hand if they get out of line.

"Like any competitive environment, basketball game, football game, there are a set of rules that market participants have to follow, and if they cheat, they should be punished," Mr. Smitherman said, describing his view of the PUC's job.

The commissioners meet every couple of weeks to a packed house on the seventh floor of a state office building down the street from the Capitol.

TXU often sends a dozen people – executives, lawyers and designated liaisons. They sit on the second row to the commissioners' left.

(A PUC meeting is a bit like church. Regular attendees have their regular seats, and only visitors would disrupt the seating arrangements.)

Sending a message
Earlier this year, the commission worried that Oncor was earning too much and decided to review the company's rates for delivering electricity over power lines. The review has nothing to do with the buyout, since the commission would only consider last year's finances. But the PUC could use the review to send a message to the new owners.

"We probably don't get to a hearing until this spring. It may be even a better opportunity to take into account the effects of the [buyout] filing since we're going to conclude that one in the fall," Mr. Hudson said during a meeting in August.

The commission can't tell TXU Energy, the retail electricity provider, how much to charge. Instead, the PUC is considering changing its rules for certifying retail providers that have more than 1 million customers, which includes TXU Energy. The commission could review the finances of a large retail provider, establish additional requirements and delay certification.

And the commission has an important pending case against Luminant, TXU's competitive wholesale business.

PUC staff accused TXU of manipulating the wholesale market, and the commissioners must decide whether to punish the company. If the commission finds that TXU manipulated the market, it could fine the company a record $210 million.

The commissioners did offer the investors some clarity on one pending issue, which may indicate they are feeling comfortable with the deal.

After the PUC accused TXU of manipulating wholesale markets, the company wanted to reach an agreement on trading power in a way that the commission would find acceptable. The commission agreed.

If TXU sticks to the agreement, the commission cannot accuse TXU of market manipulation.

Former PUC Chairman Pat Wood called the wholesale agreement a "seminal event" for the deal. Shareholders will vote whether to accept the buyout Sept. 7.

"That does 10 times more than this merger-of-the-wires-business hearing that they're going to have later this fall, as far as investor comfort," he said in an interview.

Barry Smitherman: 'Liberated' by his employer after an opinion piece on Houston, he says he's pursuing his real interests.
When Banc One Capital Markets fired Barry Smitherman in 2002 because he wrote an opinion piece for the newspaper complaining about Houston's financial condition, Mr. Smitherman finally had time to finish his book, If Jesus Were an Investment Banker.

The book describes Christ's leadership qualities and includes the idea that often it's OK to fire people because it allows them move on to work that better suits them. Mr. Smitherman calls it "liberating" employees.

Mr. Smitherman had worked his way up the investment banking ladder to become managing director of the municipal bond department in the Chicago office.

He didn't think his hometown of Houston was getting a good deal on its bonds, so he helped write the opinion piece for the Houston Chronicle with some City Council friends. Later, Mr. Smitherman considered running for mayor himself, but he hasn't pursued that idea yet.

The opinion piece upset folks at City Hall, which upset some of Mr. Smitherman's colleagues, which upset his employers, who quickly liberated Mr. Smitherman from his position.

Mr. Smitherman moved his family back to Houston, found a job as assistant district attorney and began scouting for political appointments.

Originally, Mr. Smitherman applied to the governor for a regent posting at his alma mater, Texas A&M University, among other jobs. He filled out the four-page application by hand in his quick, deliberate print.

The governor eventually appointed Mr. Smitherman to the PUC instead.

The liberation from banking "turned out to be a blessing for me," Mr. Smitherman said. "I would have never become a prosecutor, which was, when I went to law school, really what I wanted to be. I ended up going for the money instead of the prosecutorial role right out of school."

Still, Mr. Smitherman refers to that opinion piece as the "one that cost me a couple million dollars."


Age: 49

Hometown: Houston

College: Texas A&M University, Class of 1980

Graduate work: University of Texas School of Law, Harvard University School of Government

Friends in high places: Sen. Kyle Janek helped him get the PUC appointment; former Houston City Council members Mark Ellis and Michael Berry helped write the opinion piece.

Membership: Former member of the C Club of Houston, a group of 100 local businessmen who support conservative candidates; director of Ballet Austin

Political contributions: $11,500 to Gov. Rick Perry since 2002, $3,725 to the C Club since 2000

Appointed to PUC: 2004

Term ends: August 2007, but he remains on the commission until the governor appoints someone else.

Julie Parsley: Texas' former solicitor general basks in the glory of standing before the Supreme Court. Julie Caruthers Parsley keeps a large framed drawing in her office of a shining moment in her career: the day she argued a case before the Supreme Court. And lost.

Ms. Parsley argued in 2002 that when there's a lawsuit against a state, the state should be allowed to shift the case to federal court without waiving the state's immunity from being sued in federal court. Confusing? The Supreme Court didn't follow the logic, either.

Still, the day stands out in Ms. Parsley's career as Texas' solicitor general, and she beams when she describes it.

"I got lots of questions. I got a sentence out, then Scalia and Rehnquist were talking to each other about how bad our position was. 'They're talking out of both sides of the mouth!' ... And I said, 'Your honors, I respectfully disagree,' " she said. "It was great."

It wasn't the only time the nation's top court turned Ms. Parsley down. She also appealed a 2001 decision that required Texas to retry a death row inmate whose lawyer fell asleep during the trial.

Ms. Parsley argued that the inmate had to prove that his lawyer's behavior affected the outcome of the case, similar to the way a court would handle a drunk or mentally ill lawyer. The Supreme Court declined her appeal.

Ms. Parsley said her whole family accompanied her to Washington for her big day, even her parents and in-laws.

Just last year, her husband, Lee Parsley, nearly became a justice himself. Mr. Parsley, a lobbyist, ran for a seat on the Third Court of Appeals and lost.

When a utility company, such as TXU, disagrees with a decision by the Public Utility Commission, the company may appeal to the Third Court of Appeals.

Ms. Parsley said her husband would have recused himself from any cases that involved her. She said she didn't help much with his campaigning or fundraising.

Still, Mr. Parsley attracted a $1,000 donation former TXU chief executive Erle Nye, who says he contributes to lots of judicial candidates because he thinks the races are important.


Age: 45

Hometown: Baytown

College: Texas A&M University, Class of 1984

Graduate work: Texas Tech School of Law

Friends in high places: U.S. Sen. John Cornyn, Railroad Commissioner Victor Carrillo

Prior job: Solicitor general

Appointed to PUC: 2002, reappointed 2005

Term ends: September 2011

Paul Hudson:
Don't make him the center of attention – or even snap his photo – but chat him up about policy. Frederick Hudson, who goes by his middle name, Paul, hates having his picture taken.

So in the PUC meeting room, among the photos of commissioners, past and present, there's a gap where Mr. Hudson's photo should be.

Julie Parsley once filled the space with a doctored photo of Mr. Hudson with Elvis-style hair. That picture quickly vanished.

Since then, the PUC chairman filled the gap with a child's drawing of a wind farm given to him after a public appearance.

You see, Mr. Hudson has no political ambitions. He's a policy guy. He spent most of his career behind the scenes, advising the governor and former utility commissioners.

He won't talk about his hobbies or how he spends his free time. That's private. He doesn't have a résumé handy to give to a reporter. And he hardly ever consents to interviews.

After four years as a commissioner, feeling the pressure from legislators and the governor's office, industry groups and the media, Mr. Hudson thinks wistfully about the careers he almost pursued, long ago, in other lives.

At 19, he trained to be a firefighter in Austin. He left shortly after the training was over to finish his education.

Then he studied to become a teacher. But after completing student teaching in a low-income area where some high school kids were reading at second-grade level, Mr. Hudson walked away from that career as well.

He's considering returning to the classroom after his PUC stint is over. Next time, he'll probably be on a college campus.

Mr. Hudson wonders if he should have stuck with firefighting. He could have retired this year, with 20 years on the job. The photo hanging in his office of his firefighting training class is probably the only picture of him in the building.


Age: 39

Hometown: Austin

College: University of Texas at Austin, Class of 1991

Graduate work: Arizona State University

Prior jobs: Director of policy for Gov. Rick Perry

Appointed to PUC: 2003

Term ends: 2009
Read more in the Dallas Morning News

Sunday, August 26, 2007

Does Perry really have the power? - He says yes, but orders clash with laws that make governor weak

By CHRISTY HOPPE / The Dallas Morning News - Thursday, February 22, 2007

AUSTIN – A lot of lawyers and legislators and some judges don't think Gov. Rick Perry is as powerful as he thinks he is. And basically, they have the absence of law on their side.

In three well-publicized executive orders, Mr. Perry has directed 65 percent of school districts' spending into the classroom, faster consideration of coal plant permits, and vaccinations against the cancer-causing and sexually spread human papillomavirus.

But barring a bona fide emergency, there is no language in state law that gives the governor authority to tell a state agency what to do, legal experts said. And Texas' constitution makes the governor one of the weakest in the nation.

As a result, a state district judge this week rescinded the coal plant order, a lawsuit to nullify the HPV vaccination order was filed Thursday, and lawmakers said they might craft legislation that will better define what the governor can do with executive orders. And it won't be much.

"The bottom line is that an executive order is a statement by the governor of Texas about what he thinks is in the best interest of the state. But he can't issue an order and tell that agency or hearing examiner that, 'You have to do this,' " said University of Texas law school professor Steve Bickerstaff, who has served as director of constitutional research for the Texas Legislative Council and is one of the foremost authorities on the Texas Constitution.

"Essentially, most or all executive orders are nothing more than the expression of the view of one citizen of the state," Mr. Bickerstaff said.

The governor disagrees; he argues that the Texas Constitution gives him the power by virtue of proclaiming him "the Chief Executive Officer of the State."

"People get really twisted up over process, and I understand that," said the governor's press secretary, Robert Black. "But state agencies have an awful lot of power. And it's the governor's job to provide leadership and direction for the executive branch of government.

"To ask the governor to stop directing agencies would be tantamount to asking him to stop leading."

Mr. Perry has only asked agencies to exercise their already-established powers to implement certain policies – such as adding or subtracting to the state list of required school immunizations, Mr. Black said.

"We can do that by executive order, by letter, or by a phone call to his appointees. But the governor's ability to lead this branch of government is inherent in the office," he said.

State District Judge Stephen Yelenosky disagreed. In his order signed Tuesday, the judge said it appears that the governor can't order state administrative judges to hasten hearings on coal plants.

The judge wrote in a letter to attorneys that the case presents "a pure question of law: whether the governor may constitutionally direct a hearing officer to hold a hearing and reach a decision by a particular deadline. I have concluded that ... the governor lacks that authority."

The governor's office dismissed the ruling as the musings of "a single liberal Austin judge."

But on Thursday, Dallas lawyer Kenneth Chaiken pursued much the same argument in a lawsuit filed in Austin that will attempt to nullify the governor's order to vaccinate sixth-grade girls against HPV.

The three Dallas-area families he represents object to the order and feel it subjects their daughters to a relatively untested vaccine. Mr. Perry has noted that his order allows parents to opt out of the vaccination, although many parents and lawmakers say he still went too far.

"He constitutionally and statutorily cannot do this," Mr. Chaiken said. "The notion that the governor, on a whim, can order that every teenage girl in our state has to get a vaccine is astounding."

In addition, the House's committee on public health has moved a bill that would rescind the governor's executive order, and it has 91 of the 150 House members as sponsors.

Rep. Brian McCall, R-Plano, signed on, not because a vaccine that prevents cervical cancer is a bad idea – it might be a very good one that every family should weigh, he said.

But Mr. McCall, who wrote his doctoral dissertation on gubernatorial power in Texas, said he has never seen another governor in the state's modern history try to exercise the kind of authority that Mr. Perry has.

"I'm not criticizing the governor one way or the other. But I and about 90-odd people have co-sponsored a piece of legislation saying that you didn't have the authority to do this," Mr. McCall said.

The Texas Constitution is designed to make the governor weak – drafters of the 1876 document recoiled at a strong military governor imposed by federal officials during Reconstruction. So state lawmakers can shape the governor's authority.

House Government Reform Committee Chairman Bill Callegari, R-Katy, said a bill better defining what the governor can accomplish with executive orders "needs to be discussed."

The majority of executive orders have been signed by governors to establish task forces or advisory committees to examine certain subjects.

Mr. Callegari said lawmakers have been waiting to hear from Attorney General Greg Abbott, who has been asked to address the legal parameters of executive orders.

"It's something we need to think more actively about," Mr. Callegari said.

James Blackburn Jr., the attorney who represented environmental groups and won the court order against the governor's coal plant order, said the governor is empowered to veto legislation and run his own office. Barring an emergency, there's not much else he or she can do, Mr. Blackburn said.

He said he's not surprised that other lawyers might be mounting court challenges against other executive orders by Mr. Perry.

"There are judges willing to take a hard look at these issues and do what they're supposed to do, and that is determine if one branch of government is asserting too much unilateral power," Mr. Blackburn said.

The governor is empowered to:
• Act as chief executive officer of the state
• Sign or veto bills approved by the Legislature, or allow them to become law without his signature. On budget bills, he can veto spending for specific items.
• Call the Legislature into special session to consider specific issues
• Appoint the secretary of state and members of state boards and commissions
• Fill vacancies in state and district courts and executive offices
• Commute criminal sentences and offer pardons, if the Texas Board of Pardons and Paroles recommends that the governor do so
• Act as commander in chief of state military forces
• Demand financial accounting information from managers of state institutions
• Conduct business with other states and the U.S. government
• Call elections to fill open legislative seats
Note: Does not include powers assigned in laws approved by the Legislature
SOURCE: Texas Constitution
NOTE: James Blackburn is representing the City of Frisco on the toll rates on SH121 and has recently been retained by the Highland Village Parents group in their opposition to the route for phase 4 of FM 2499.

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