Declarations

Kay Bailey Hutchison's political two-step gets under way next week with an 18-city tour — starting in her old high school in La Marque — to announce that she'll seek the Republican nomination for governor against an incumbent who's held the job longer than anyone in state history.

By the end of the week, she'll have stopped in Houston, San Antonio, Austin, Nacogdoches, Waco, Tyler, Dallas, Wichita Falls, Amarillo, Lubbock, Laredo, Harlingen, Corpus Christi, Fort Worth, Abilene, Midland, and El Paso to tell people why she's taking on fellow Republican Rick Perry.

Exploratory committees for high office are common. This one has been unusual, in part because Hutchison has come close to running for Guv twice before, and in part because she's been dropping hints about this particular race for so long.

But the interest is not all about her.

Hutchison has been able to hold the political mob's attention mainly because so many other political moves will be based on hers. You know the drill by now: If Hutchison quits, so-and-so quits to run for her job, freeing their job for so-and-so, and so on and so on.

She's got two important announcements left, and she's telegraphed both of them. First, she's going to announce — apparently next week — that she is, in fact, running for governor. That's in case you weren't convinced by the fact that she raised $6.7 million during the first six months of the year for her state campaign account. Second — and she has indicated this will happen in October or November — she's expected to resign from her Senate seat to devote her full time and attention to the race for governor.

That's the announcement that has everybody so tense. Even some of the people who hope she'll quit early don't think it makes political sense for her to do so. But it would allow her to focus — without all of the distractions of Washington, D.C., and health care and Congress, etc., etc., etc. — on the race against Perry.

And as soon as she quits — assuming she does so, and does it before the early January filing deadline for next year's political races — she'll lose everyone's attention for a bit. The focus of the political class will turn to a special election for U.S. Senate, to Gov. Perry's appointment of a temporary stand-in for Hutchison, and all the musical chairs that follow.

How They'd Succeed

It's August and there's not all that much going on in state government at the moment and so some talkers have turned to what might happen if Lt. Gov. David Dewhurst leaves office early to become a U.S. senator (either as an appointee or as the winner of a special election for that job), should Kay Bailey Hutchison quit early to run for governor.

We'll keep it short: Senate President Pro Tempore Troy Fraser, R-Horseshoe Bay, would be constitutionally obligated to call the Senate together within 30 days of Dewhurst's departure to elect an interim Lite Guv from their own ranks. The winner of that election would hold the post until voters picked a replacement in the next elections.

This last arose when George W. Bush became president and Rick Perry became governor. The Senate elected Sen. Bill Ratliff, R-Mount Pleasant, to the corner office. He didn't run for that office when the full term came up; Dewhurst won the 2002 election and has held the job since then.

If any of this happens this time, the senator elected to lead the Senate probably won't have the same amount of juice Ratliff had. He got to serve during a legislative session. If Dewhurst moves on, his interim successor will serve only until an elected Lite Guv takes over at the beginning of the regular legislative session in 2011.

The Judge's Day in Court

Sharon Keller, presiding judge of the state's highest criminal court, gets a hearing next week (Monday, in San Antonio) on her handling of a last-ditch attempt to stop the execution of Michael Richard in 2007.

His lawyers say Keller refused to accept their legal filings in the case after a five o'clock deadline; Richard was killed a short time later. The State Commission on Judicial Conduct charges that she violated the state constitution and the Texas Code of Judicial Conduct.

State District Judge David Berchelmann Jr., acting as a special master, will hold a hearing and make recommendations to the Texas Supreme Court. Unfavorable rulings could result in her removal from the Texas Court of Criminal Appeals, where she's the chief judge.

All Plugged Up

Land Commissioner Jerry Patterson plans to give Texas Railroad Commissioners a billion things to think about next week, including the reason for their existence.

During the commission's regular meeting next Tuesday, Patterson will challenge commissioners to hold a show-cause hearing and consider levying a 10-digit fine against ExxonMobil for deliberately destroying viable oil wells in South Texas and then filing false documents about those wells with the commission.

How commissioners choose to act, he says, could determine the future health of the state's Permanent School Fund, which is fed with taxes on oil and gas leases overseen by the General Land Office. Much of the oil that will feed the PSF, he says, will come from wells that are reopened after they've been plugged for a while. And oil producers need to have confidence in government documents that describe the plugging of wells that will someday be reopened.

"If there's no reasonable expectation that what is at the Railroad Commission is accurate, then the state of Texas takes a big hit," Patterson says.

Exxon spokesperson Margaret Ross says the company behaved responsibly and has done nothing wrong.

"The allegations are groundless and paint a false and misleading picture of ExxonMobil's involvement in the O'Connor oil and gas leases in Refugio County," she says.

The political context spices up the scenario. Two of the three commissioners, Elizabeth Ames Jones and Michael Williams, are making runs at the U.S. Senate, assuming incumbent Kay Bailey Hutchison steps down for gubernatorial campaign purposes. And chairman Victor Carrillo's term expires after the 2010 general election. All three, like Patterson, are Republicans.

Patterson is seeking reelection and will be on the ballot as well. He says he's trying to defend the education money linked to the wells. "I'm a statewide elected official. I can talk about anything I want to talk about," Patterson says.

The Railroad Commissioners are staying out of the Exxon conversation for now.

"We're treating this as any kind of complaint that we would get," commission spokesperson Ramona Nye says. "It's not at the commissioners' level yet."

Houston oil and gas lawyer Jeff Weems, who's running for Railroad Commissioner as a Democrat — challenging Carrillo — agrees with Patterson that commissioners should take a close look at allegations that Exxon filed false reports.

"I think it's quite an important thing for the commission to consider, because that is certainly within their authority and certainly within their realm of responsibility also," says Weems, who says he is familiar with the details of the case.

The case involves Exxon, the Emerald Oil Company and descendants of the wealthy O'Connor family, which owns the oilfield. Court documents say that in the 1950's, the family negotiated a very favorable royalty rate (50 percent) with Exxon to produce oil from about 100 wells on their Refugio County land.

Over the decades, according to court filings, Exxon determined it could not economically produce oil on that land at the high royalty rate. After failed negotiations with the family, the company plugged its wells (finishing in 1992) and subsequently filed reports with the Railroad Commission indicating how it plugged the wells.

The family leased out a portion of the old Exxon field to Emerald, which began the process of re-entering plugged wells, relying on the documents Exxon had given the commission. Emerald workers found those documents to be inaccurate. In about half of the wells, workers encountered materials other than the concrete plugs they expected, including cut casings, "junk" (a technical term meaning anything that's not supposed to be in the borehole) and explosives.

Emerald and the family took Exxon to court, alleging the company had deliberately sabotaged the wells to prevent subsequent producers from exploiting the resources. A jury ruled against Exxon, awarding the family $18.6 million in damages. The Texas Supreme Court reversed the jury's decision without addressing the facts of the case, ruling that the O'Connors waited too long to complain. The parties have filed motions for the court to rehear the case. Patterson hopes justices will issue a ruling on a rehearing by the end of this year.

The well-plugging reports that Exxon initially filed with the commission are at odds with what the company's representatives testified in court, Patterson says.

"They've now set themselves up. [The reports] don't reflect what they testified in trial court they did. They can't win this one," Patterson says.

The Railroad Commission has the authority to issue fines of $1,000 per day for filing fraudulent documents, and $10,000 per day per well for waste or sabotage, Patterson says. (Start multiplying $10,000 by the number of wells and years, and you'll get to $1 billion pretty quick.)

Even more important than a one-time record-breaking fine, Patterson says, is ensuring that companies wishing to reenter plugged oil wells can rely on Railroad Commission documents about the plugged wells.

"Reentry is how we're going to be producing oil in Texas from now on," he says. "There are no new oilfields."

Comptroller Susan Combs, in a letter to the court that sides with Patterson, says the earlier ruling "could reduce the flow of the state's revenues" and writes that the impact on the so-called Rainy Day Fund — filled with oil and gas production taxes — could be an even bigger fiscal threat. And because that's used to shore up the state in tough times, she argues, any damage to the Rainy Day Fund could then prompt bond-rating agencies to lower their expectations for Texas bonds, raising the state's borrowing costs.

She didn't attach a number to that prediction.

Weems isn't sure why commissioners haven't questioned Exxon and the other parties sooner, saying that the commissioners should have been aware about false reports, since the lawsuit is well known among oil and gas law practitioners. He said allegations of sabotaging wells are rare, characterizing them as "urban legends."

"They certainly know about it now. They certainly need to hold hearings now," Weems says.

It is the time for the Railroad Commission to flex its muscle, Patterson says.

"If Exxon prevails, the signal is made, the message is sent that you don't have to put down the truth in documents at the Railroad Commission — 'Don't worry about our rules and regulations. We're not going to bother to make sure you do them right,'" Patterson says. "The next question is, why have a Railroad Commission?"

— by a Texas Weekly Correspondent

Running Shoes

Rep. Edmund Kuempel, R-Seguin, says he'll run for reelection next year. Kuempel, first elected in 1982, had a late night heart attack in a Capitol elevator during the last legislative session and almost died. But he was back in his seat before the regular session ended, worked through the short special session that followed, and wants to stay. He's the chairman of the House Licensing & Administrative Procedures Committee, where gambling and alcohol bills go and which could have a lively session in 2011, when fiscal issues could force a fresh look at gaming in Texas. And he's one of a handful of Republicans who helped San Antonio Republican Joe Straus overthrow House Speaker Tom Craddick at the beginning of this year.

• Rep. Joe Crabb, R-Atascocita, won't seek reelection next year. Crabb, elected in 1992, has thought about leaving before but apparently intends to retire for real this time around. He's a Methodist minister and told supporters he's going to do some preaching, some business and spend more time with his family. Dr. Martin Basaldua and Humble ISD trustee Dan Huberty are among the tire-kickers in that HD-127 race. Republicans dominate that district in state elections; it's the 22nd most Republican House district on the Texas Weekly Index.

• Sen. Dan Patrick, R-Houston, wants to remain Sen. Dan Patrick, R-Houston. He'll seek election to a second term next year. But there's a twist. Lookit: "If an opportunity presents itself to serve in the United States Senate, I will seriously consider it at the appropriate time, but my sights are set on the Texas Senate."

• Freshman Rep. Tara Rios Ybarra, D-South Padre Island, will get a Democratic primary opponent next year in HD-43 — one who's got the backing of former Rep. Juan Escobar, who is in turn the guy knocked off last year by Rios Ybarra. The new candidate? J.M. Lozano, of Kingsville, who announced his candidacy on YouTube. He's a businessman who operates three franchise restaurants.

• U.S. Rep. Joe Barton, R-Ennis, finished third (with 13.9 percent) in the 1993 special election that put Kay Bailey Hutchison in the U.S. Senate. He might take another swing at it, according to an aide, Sean Brown, quoted in the Fort Worth Star-Telegram. "Congressman Barton continues to watch the developments in Texas politics with an interested eye. He believes serving the entire state of Texas as their next senator would be an honor. If and when an opportunity presents itself, he will discuss it with his wife, family and supporters before making any decision."

• Kinky Friedman is starting to move around, in a political sense, with fundraisers headlined by Willie Nelson and Three Dog Night. The Nelson gig is on September 16 at Gleneagles Country Club in Plano. For $1,000, supporters get to "Eat with Willie, drink with Willie, listen to Willie, get autographs from Willie, get silly with Willie, argue with Willie, dance with Willie — anything else depends on you and Willie!" Two days later, Three Dog Night will play in San Antonio for $250 per person, with the proceeds going to Friedman's campaign. He's running — if he runs — as a Democrat this time. He finished fourth in the governor's race in 2006, when he ran as an Independent.

• Republican Ted Cruz picked up endorsements from more than 50 members of the Texas Federation of Republican Women, including, he says, the majority of the group's leaders who are allowed to take sides in GOP primaries (some of the officers are prohibited during their terms). The former state solicitor general is running for attorney general on the assumption that his former boss — current AG Greg Abbott — runs for something else next year.

• The Mid-Cities Democrats up in the DFW area will host Rep. Kirk England, D-Grand Prairie, later this month, and the billing is provocative: "Rep. England will speak... about the recently ended 81st Legislative Session, his first as a Democrat, and will discuss what it might take to bring other currently serving moderate Republican legislators to the Democratic Party."

Pork Patrol

You can get a quick look at congressional earmarks — who got them, how much they got, and so on — on a new database assembled by the Center for Responsive Politics.

You can rank them by member of Congress, amount, and so on. For instance, U.S. Sen. Kay Bailey Hutchison, R-Texas, ranked 17th among senators in 2009, winning $46.7 million in earmarks without help; she ranked 21st when you total the earmarks she got in cooperation with others ($243.8 million). U.S. Sen. John Cornyn, R-Texas, is down the list a bit, with $4.3 million in solo earmarks and $140.7 million with others.

Among Texans in the House, U.S. Rep. Chet Edwards, D-Waco, led the way with $38.4 million in solo earmarks and $151.8 million working with others (that was sixth overall in the U.S House). U.S. Rep. Ron Paul, R-Surfside, was next, with $80.8 million in earmarks cooperating with others and $14.9 million solo.

Five members of the Texas delegation — U.S. Reps. Louis Gohmert, R-Tyler; Jeb Hensarling, R-Dallas; Kenny Marchant, R-Carrollton; Michael McCaul, R-Austin; and Mac Thornberry, R-Clarendon — didn't request any earmarks in 2009.

Political People and Their Moves

Bill Allaway is stepping down as president of the Texas Taxpayers and Research Association, a job that will now be filled by Dale Craymer, TTARA's chief economist and the head of TTARA's Research Foundation. Allaway plans to do some work for TTARA and for other clients (he's remaining in the same offices).

Obie O'Brien moves up to vice president of government affairs at Apache, where he's been lobbying since 1992.

Jennifer Sims, who'd been running external affairs at the Department of Family and Protective Services, jumps to the Department of State Health Services to head something called the Office of Priority Initiative Coordination.

Press Corps Moves: Chris Tomlinson is joining the Texas Observer after 14 years with the Associated Press, most recently doing international stories for the wire service. He's replacing Brad Tyer, who won a reporting fellowship at the University of Michigan.

Deaths: Austin attorney and former judicial candidate Mina Brees, 59, in Denver. The cause of death hasn't been disclosed.

Quotes of the Week

Former Travis County District Attorney Ronnie Earle, asked on Austin's KOOP-FM whether he's considering a run for Texas attorney general as an alternative to a possible run for governor: "Elected lawyers have to be careful what they say, and I'm tired of watching my mouth."

Luis Vera, attorney for LULAC, on the Texas Democratic Party's "Texas two-step" primary system and LULAC's charge that it discriminates against Hispanics, quoted by KERA in Dallas: "That's the irony of this whole court fight: they want to claim that they are champions of the Voting Rights Act, but as long as it applies to everybody else and not themselves. And that's a pretty sad situation."

Mark Miner, a spokesman for Rick Perry, after the Associated Press revealed that Perry claimed a homestead exemption for a College Station home where he's never lived: "Although approved by the Brazos County Appraisal District, Gov. Perry today has chosen to withdraw the homestead exemption for his house in College Station. The governor plans to reimburse Brazos County $183.16 in tax savings for the year 2008."

U.S. Rep. Sheila Jackson-Lee, D-Houston, telling constituents why she talked on a cell phone while one of them asked her a question, quoted in the Houston Chronicle: In Congress, we have to multi-task."

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Texas Weekly: Volume 26, Issue 30, 17 August 2009. Ross Ramsey, Editor. Copyright 2009 by Printing Production Systems, Inc. All Rights Reserved. Reproduction in whole or in part without written permission from the publisher is prohibited. One-year online subscription: $250. For information about your subscription, call (512) 302-5703 or email biz@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.