Texas Gov. Rick Perry’s Subsidy Slush Funds Highlight Apparent Pay-To-Play Problem

August 26, 2011

Now that Texas Gov. Rick Perry has entered the 2012 presidential race, several newspapers have compiled compelling evidence suggesting Perry is an aggressive “pay-to-play” politician, doling out government appointments, contracts, and economic development subsidies in exchange for campaign cash.


New York Times

confirmed Texans for Public Justice’s previous findings (See

TPJ’s Rick Perry Primer

): “A review of Mr. Perry’s years in office reveals that one of his most potent fund-raising tools is the very government he heads. Over three terms in office, Mr. Perry’s administration has doled out grants, tax breaks, contracts and appointments to hundreds of his most generous supporters and their businesses.” The Times highlighted two programs, the Texas Enterprise Fund and the Emerging Technology Fund, which we at Good Jobs First have criticized in




. This apparent cronyism has not paid off for the state: the Texas Enterprise Fund has been called the “

Phantom Jobs Fund

” because of its failure to create jobs.

A recent

Wall Street Journal

op-ed called Perry’s use of Texas economic development funds akin to reverse Robin Hood: “taking from the average taxpayer and giving to someone [with connections].” Tea-party-backed politicians in Texas have called Perry’s use of the funds, “fundamentally immoral and arrogant.” We find it surprising that nobody has yet pointed out that the Emerging Technology Fund can actually take an equity stake in companies it subsidizes. Government ownership of private enterprise would seem counter-intuitive for a self-proclaimed free-marketeer.

We know that Texas is an


example of subsidies gone awry, but it isn’t alone. Northrop Grumman executives


to Virginia Gov. Bob McDonnell’s inaugural committee, for example, before


$3 million from Virginia’s Governor’s Opportunity Fund in addition to other subsidies.

With many states still hiding basic information from taxpayers about who gets subsidies, it is time for all states to beef up their transparency systems and come clean. The corrupting potential of campaign cash needs to be incorporated into economic development safeguards just as it has for


in a handful of cities and states.