eorge W. Bush calls them ''my best friends.'' They are Texans, men of pride and substance, and considerable generosity. They stand out as his fund-raising ''pioneers,'' business partners, and financial angels.
In the last six years, Bush's Texas friends raised most of the $40 million that he used in two gubernatorial races and became the single-biggest group of donors to the $56 million war chest of his presidential campaign.
With the help of his deep-pocketed allies, Bush rose from being the son of a famous man to being a two-term governor of the nation's second-biggest state; a multimillionaire and a formidable contender for the presidency. It was Texas money that, flowing into the Bush campaign early this year, primed his phenomenal money pump and made him a front-runner.
In return, Governor Bush has shown his gratitude and loyalty.
He has appointed his ''best friends'' to the state boards and commissions that regulate business and the environment in Texas. He has invited polluters to craft air pollution standards in a state that is facing federal sanctions for its dirty air. He has given contributors the power to make investment decisions for the huge state employee pension funds and university endowments. He has championed his friends' cause to make the courts more protective of corporate interests, at the expense of plaintiffs.
''What did some of the smartest CEOs in the country get from Governor Bush for $50 million worth of contributions? The answer is: proven performance,'' said Thomas Smith of the Austin-based consumer group Public Citizen.
Though limited by federal law to giving only $1,000 to a candidate for president, most of Bush's financial angels compounded their clout by the common practice of collecting bundles of tens of thousands of dollars in contributions from family members, friends, and business associates. Some have also given five-figure gifts of unregulated ''soft money'' to the Republican Party. Many are serving as ''pioneers'' - members of a select group of wealthy men who have each vowed to raise $100,000 or more for the governor's presidential campaign.
Campaign donors in American politics are motivated by varied impulses. Some give money from a sense of public service. Some seek political celebrity. Some donate out of fraternal or ideological kinship. Some want access, favors, and receptivity when they plead their cause with government. Explicit quid pro quos are illegal and quite rare.
Nor is it fair to ascribe a sinister meaning to every link between Bush, his friends and donors, and the Texas state government. I n some notable cases - involving HMOs and nuclear waste - the Bush administration has frustrated the wishes of big contributors. ''Association does not equal causality,'' said Thomas Ricks, the president of the University of Texas Investment Management Co., whose board includes big Bush donors who have voted to invest state funds with business associates and other major contributors. A ''connect-the-dots approach'' can unfairly distort innocent connections and coincidences, Ricks said.
''Governor Bush makes decisions based on what is best for Texas,'' said Bush campaign spokeswoman Mindy Tucker. ''Our contributors are people who have seen Governor Bush's outstanding leadership here in the state and want him to be president of the United States.''
But just as Bill Clinton and Michael Dukakis demonstrated a governor's unique prowess at raising funds from home-state interests for the presidential efforts, they also showed - in the debates over business regulation in Arkansas or the pollution of Boston Harbor - how gubernatorial records are a two-edged sword. An examination of Bush's record offers a glimpse at how powerful interests gather and sustain each other at the top of the political and corporate worlds.
Tort reform
Take, for example, the stately Houston law firm of Vinson & Elkins, which represents a variety of industrial, high-tech, and other corporate interests. There are three Bush ''pioneers'' at the firm - Joe Allen, Thomas Marinis, and Robert Whilden - who have pledged to raise $300,000 from their colleagues and associates and have collected $185,000 for the Bush presidential campaign. It is the single biggest bundle of cash in his treasury.
The big law firms in Texas divide by a process of self-selection into corporate defense firms, which represent the state's wealthier interests and side toward Republican candidates, and plaintiff firms, which make their money by suing big corporate interests and tend to give money to Democrats. Vinson & Elkins is a corporate defense firm.
When Bush ran for governor in 1994, he selected four issues on which to build his campaign platform. One of the issues was tort reform, which is a legalistic way of saying that he thought the laws in Texas were too favorable to the plaintiffs. In his first term as governor, Bush successfully pushed tort reform through the Texas legislature.
The lawyers at Baker & Botts, another Houston firm that specializes in corporate litigation, formed the sixth-largest group of donors, giving $86,000 to Bush's presidential campaign by mid-September and more than $80,000 to Bush's gubernatorial campaigns.
Other big contributors to Bush's gubernatorial campaigns expressed their interest in tort reform via five-figure contributions to a PAC called ''Texans for Lawsuit Reform.''
Energy deregulation
One of Vinson & Elkins's big clients is the Enron Corp., a diversified energy firm that surpassed Compaq computers as the Houston area's biggest company last year, with $31 billion in sales. The CEO of Enron, Kenneth Lay, is another Bush ''pioneer,'' as is the former CEO, Richard Kinder. Donors connected to Enron have given the fourth-biggest bundle of donations to the Bush presidential campaign - $90,000 - and have already donated $167,000 in soft money to the GOP. Lay, Kinder, and other Enron executives gave about $220,000 to Bush's two gubernatorial campaigns. They also contributed more than $50,000 to the lawsuit reform PAC.
Enron is not only interested in tort reform; it is a national player in the emerging new market of deregulated energy sales, in which firms buy and sell electric power that used to be monopolized by public utilities. Energy deregulation was another cause that Bush embraced as governor.
Air pollution
Enron was also one of a group of industrial firms that benefited from a ''grandfather'' loophole in the Texas 1971 Clean Air Act. As the state's rapidly growing urban corridors were subsequently jammed with suburban subdivisions and automobile traffic, air quality deteriorated. The Houston and Dallas-Fort Worth areas now fail to meet federal clean-air standards, and have been threatened by the US Environmental Protection Agency with sanctions.
During the Bush years, environmental groups pushed to close the grandfather loophole. Bush offered a voluntary compliance plan instead, and invited the big polluters to draft the program.
The public was not invited to the industry meetings. After attending a meeting of the voluntary compliance committee, one Dupont Chemical engineer reported to his superiors that ''the concept put forward was that the industry group and the governor's office would develop the program, then take it to some broad-based group, including public representatives, who would then tweak it a little bit and approve it. ... The leadership doesn't have any real value for public involvement.''
Bush's voluntary approach was approved by the Texas legislature this year - but not until the legislators added tough fines to prod polluters and significantly reduce emissions. Bush went along with the changes and signed the plan.
''Governor Bush became the first Texas governor in 20 years to address emissions from grandfathered sources,'' said campaign spokeswoman Tucker. ''At Governor Bush's urging more than 100 plants pledged to reduce emissions by 100,000 tons a year, and Texas has become only the third state to require pollution reductions as part of the permitting process from grandfathered utility companies.''
During the course of his two gubernatorial campaigns, Bush received a campaign contribution from every one of the top 100 grandfathered companies, and tens of thousands of dollars more from their lobbyists and lawyers. All told, they gave Bush more than $560,000 from 1993 through 1998, according to a survey by Public Research Works, an Austin research group.
Texas elected officials are prohibited by state law from collecting campaign contributions when the legislature is in session. The ban, however, does not extend to federal campaigns. As the legislature debated Bush's voluntary compliance plan last spring, representatives from the grandfathered firms, including Vinson & Elkins and its clients Enron and Alcoa, donated more than $315,000 to the governor's presidential campaign.
Bush's campaign finance records show the grandfathered companies have since donated an additional $300,000 or more, giving Bush more than $1.1 million in donations from these firms since 1993.
The list of grandfathered firms whose executives or employees have given the biggest bundles of money for Bush includes Enron ($90,000), El Paso Energy ($37,000), Reliant Energy ($29,000), Dow Chemical ($20,000), Eastman Chemical ($18,000), Occidental Petroleum ($20,000), Exxon ($18,000), Shell ($14,000), and Mobil ($10,000).
Environmentalists do not think Bush's voluntary approach is tough enough. ''This could be George W.'s Boston Harbor,'' said Peter Altman, the director of SEED, a coalition of environmental groups. He referred to the way that Vice President George Bush used the pollution of Boston Harbor to attack Dukakis during the 1988 presidential campaign. ''A Democratic candidate could point the same finger at Bush that his father pointed at Dukakis.''
Real estate
Vinson & Elkins also represented the National Association of Real Estate Trusts in 1997, when Bush sent a tax reform bill to the Texas legislature that would have granted tax breaks to billions of dollars of commercial properties owned by real estate investment trusts, also called REITs.
Bush had a personal financial interest in one of the most prominent Texas REITs - Crescent Real Estate Equities - which is run by Richard Rainwater, one of Bush's former partners in the Texas Rangers baseball team. The blind trust that managed most of Bush's assets during his time as governor owned thousands of shares of Crescent. According to his 1998 financial disclosure forms, Bush made between $100,000 and $1 million when his Crescent stock was sold.
Rainwater was the financial angel who, with Edward ''Rusty'' Rose and others, underwrote Bush's 1989 purchase of the Rangers. Rainwater has contributed $100,000 to Bush's gubernatorial campaigns over the years, and Rose about $40,000. Rose is a ''pioneer.''
Crescent was the beneficiary of two controversial real estate deals approved by the Texas Teacher Retirement System, whose board members are appointed by the governor. Crescent, in each case, helped the pension system get out of a sour investment - but in the process picked up valuable commercial properties at low prices.
The Crescent firm's law business is handled by the Dallas law firm Jenkens & Gilchrist, which - having given more than $100,000 - is the third-biggest source of contributions to Bush's presidential campaign. David Laney, the chairman at Jenkens & Gilchrist, was appointed by Bush to head the Texas Transportation Commission in 1995. Laney is another of the Bush ''pioneers.''
University of Texas investments
Bush's investment in the Texas Rangers was the one major asset that was not put in his blind trust during his term as governor. In 1998, Bush, Rainwater, Rose, and the other Rangers investors sold the team - for which they had paid $86 million in 1989 - to Thomas O. Hicks, a Dallas investment banker and pro sports owner, for $250 million.
The governor's share of the team had grown from 1.8 percent to almost 12 percent for his work in assembling the original partnership and acting as managing partner, and so he reaped a disproportionate share of the profit. For his initial $606,000 investment, Bush received $14.9 million.
Bush, it turned out, had friends on both sides of the deal. Thomas Hicks and his family and associates have given about $100,000 to Bush's gubernatorial campaigns. The officers and employees of the Hicks business empire have joined to make more than $86,000 in contributions for the Bush presidential war chest - making them the seventh-biggest group of donors. They have also donated $47,500 in soft money to the GOP. Brother Steven Hicks is a ''pioneer.''
Thomas Hicks is a financial wizard, sporting entrepreneur, and philanthropist. In addition to the Rangers, he also owns the Dallas Stars hockey team and a nationwide chain of radio stations. In 1996, the UT regents named Hicks as chairman of UTIMCO, a newly formed investment company, to manage $11 billion of the university's endowment.
Donald L. Evans, an old Texas friend of the governor's, is the national finance chairman for the Bush presidential campaign and the Bush-appointed chairman of the UT board of regents, which delegates investment decisions to UTIMCO. Tom Loeffler, another ''pioneer'' who gave more than $140,000 to Bush's gubernatorial campaigns, is vice chairman of the board of regents. Raul Romero, A.W. ''Dub'' Riter, and A.R. ''Tony'' Sanchez, three other members of the board of regents, are ''pioneers.'' Sanchez gave $100,000 over the course of Bush's 1994 and 1998 campaigns. Vinson & Elkins serves as UTIMCO's legal counsel.
The interlocking ties between Bush and the UT and UTIMCO directors alarmed public interest groups and Texas legislators - particularly when the state's newspapers reported how the UTIMCO board, meeting in closed sessions, made decisions to invest $1.6 billion of the state's money in private investment firms. Several of the investments were made with firms that had pre-existing or subsequent business dealings with Hicks, or were run by his old friends.
Another $96 million investment was made by UTIMCO with the Maverick Capital Fund of Dallas, in which Sam and Charles Wyly own an interest. Charles Wyly is another Bush ''pioneer.'' Together, the Wyly family, firms, and associates have given more than $113,000 to Bush's gubernatorial campaigns, $45,000 in soft money to the GOP in this election cycle, and more than $10,000 to his presidential treasury.
UTIMCO's president, Ricks, defended the investments. ''Hicks was one member of the board of directors. He doesn't control the board,'' Ricks said. ''UTIMCO does not consider any political factors in its investments.''
