Off the Kuff Rotating Header Image

November 26th, 2002:

Phone company is evil: Film at 11

I’m shocked, shocked to report that Southwestern Bell is being accused of stifling competition:

Ten companies are accusing SBC Southwestern Bell of putting up roadblocks to thwart competition.

In a complaint filed with the Texas Public Utility Commission, they claim the regional Bell has rejected a higher-than-usual number of orders for access to its network since October.

As a result, the companies contend they have been unable to provide timely and cost-competitive service to some customers who want high-capacity T1 lines for voice and data products, a market historically dominated by Southwestern Bell, the complaint says.

I have no trouble believing that Southwestern Bell is up to no good. The reason why I’m on a cable modem today is because SBC had never gotten around to wiring my two-miles-from-downtown neighborhood for DSL. If there’s a glut in the broadband market, it hasn’t affected me.

Another Enron guilty plea

A former Enron employee named Lawrence Lawyer has pleaded guilty to tax evasion charges stemming from his involvement with Michael Kopper in fradulent business deals.

Lawyer, a 34-year-old banker, admitted before Houston-based U.S. District Judge Kenneth Hoyt that he failed to report to the Internal Revenue Service $79,469 in income he received from former Enron executive Michael Kopper between 1997 and 2000.

The money was paid to Lawyer for his work on a partnership called RADR, one of several controversial side deals at Enron.

Lawyer, who will cooperate with federal officials, is the third person to plead guilty in an Enron-related case. Charges are pending against four others, including former Chief Financial Officer Andrew Fastow, who faces 78 criminal counts.

The story goes on to describe how RADR, which was basically a scheme to transfer money from one pocket to another and call it “income”, operated. Let’s hope this is another brick in the eventual cases against Fastow, Skilling, and Lay.

Voices from the past

From an op-ed in the Chron, overlooked by me but spotted by the permalinkless Blah3 (it’s the first entry for November 26, scroll down a bit) and written by a member of that notorious liberal cabal the Heritage Foundation:

There was a time when at least one senior Bush administration official thought the [Freedom of Information Act] essential because “no matter what party has held the political power of government, there have been attempts to cover up mistakes and errors.” That same official added that “disclosure of government information is particularly important today because government is becoming involved in more and more aspects of every citizen’s personal and business life, and so access to information about how government is exercising its trust becomes increasingly important.”

So spoke a young Illinois Republican congressman named Donald Rumsfeld, in a floor speech on June 20, 1966, advocating passage of the FOIA, of which he was a co-sponsor.

And then there’s this gem, written by Senator John Ashcroft and spotted by Tom Tomorrow:

There is a concern that the Internet could be used to commit crimes and that advanced encryption could disguise such activity. However, we do not provide the government with phone jacks outside our homes for unlimited wiretaps. Why, then, should we grant government the Orwellian capability to listen at will and in real time to our communications across the Web?

The protections of the Fourth Amendment are clear. The right to protection from unlawful searches is an indivisible American value. Two hundred years of court decisions have stood in defense of this fundamental right. The state’s interest in effective crime-fighting should never vitiate the citizens’ Bill of Rights.

Boy, those were the days, weren’t they?

Quixotic Quest Dept.

Four defeated state candidates in Texas are filing suit against the Texas Association of Business, claiming that money that the TAB spent in the campaigns constituted direct contributions, which are illegal under state law.

Okay, this is a little complicated. Let’s start with the story:

The TAB, in what it recently bragged was an “unprecedented show of muscle,” targeted 22 hotly contested races for the Texas House and two for the state Senate. Candidates supported by the group won 18 of the House races and one of the crucial Senate contests.

Overall, 100 of 104 House candidates and 22 of 23 Senate candidates endorsed by TAB’s political action committee won in an election that saw Republicans capture a majority of the House for the first time in 130 years.

TAB spent $2 million in the most competitive races. Only $100,000 of that amount came from its political action committee, which publicly identifies contributors.

The remainder was in direct corporate contributions for so-called issue advertising, which criticized the candidates it was trying to defeat but didn’t specifically tell voters how to cast their ballots. TAB contends the sources of those contributions are not subject to public disclosure.

State law prohibits direct corporate contributions to political races. But TAB believes it successfully skirted that ban by buying the issue ads.

In two separate lawsuits filed in state district court in Austin, the four defeated Democrats contend the corporate expenditures were illegal.

If I’m understanding this correctly, the plaintiffs are saying that TAB’s purchase of the “issues ads” is a direct contribution, and TAB says it isn’t.

Here’s what I think is the relevant law from the state elections code. I Am Not A Lawyer, so make of it what you will:

§ 253.091. Corporations Covered

This subchapter applies only to corporations that are organized under the Texas Business Corporation Act, the Texas Non-Profit Corporation Act, federal law, or law of another state or nation.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.092. Treatment of Incorporated Political Committee

If a political committee the only principal purpose of which is accepting political contributions and making political expenditures incorporates for liability purposes only, the committee is not considered to be a corporation for purposes of this subchapter.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.093. Certain Associations Covered

(a) For purposes of this subchapter, the following associations, whether incorporated or not, are considered to be corporations covered by this subchapter: banks, trust companies, savings and loan associations or companies, insurance companies, reciprocal or interinsurance exchanges, railroad companies, cemetery companies, government-regulated cooperatives, stock companies, and abstract and title insurance companies.

(b) For purposes of this subchapter, the members of the associations specified by Subsection (a) are considered to be stockholders.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.094. Contributions and Expenditures Prohibited

(a) A corporation or labor organization may not make a political contribution or political expenditure that is not authorized by this subchapter.

(b) A corporation or labor organization may not make a political contribution or political expenditure in connection with a recall election, including the circulation and submission of a petition to call an election.

(c) A person who violates this section commits an offense. An offense under this section is a felony of the third degree.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.095. Punishment of Agent

An officer, director, or other agent of a corporation or labor organization who commits an offense under this subchapter is punishable for the grade of offense applicable to the corporation or labor organization.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.096. Contribution on Measure

A corporation or labor organization may make campaign contributions from its own property in connection with an election on a measure only to a political committee for supporting or opposing measures exclusively.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

§ 253.097. Direct Expenditure on Measure

A corporation or labor organization not acting in concert with another person may make one or more direct campaign expenditures from its own property in connection with an election on a measure if the corporation or labor organization makes the expenditures in accordance with Section 253.061 or 253.062 as if the corporation or labor organization were an individual.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987.

Sections 253.061 and and 253.062 cover contributions by individuals:

§ 253.061. Direct Expenditure of $100 or Less

Except as otherwise provided by law, an individual not acting in concert with another person may make one or more direct campaign expenditures in an election from the individual’s own property if:

(1) the total expenditures on any one or more candidates or measures do not exceed $100; and

(2) the individual receives no reimbursement for the expenditures.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987; Acts 1997, 75th Leg., ch. 864, § 243, eff. Sept. 1, 1997.

§ 253.062. Direct Expenditure Exceeding $100

(a) Except as otherwise provided by law, an individual not acting in concert with another person may make one or more direct campaign expenditures in an election from the individual’s own property that exceed $100 on any one or more candidates or measures if:

(1) the individual complies with Chapter 254 as if the individual were a campaign treasurer of a political committee; and

(2) the individual receives no reimbursement for the expenditures.

(b) An individual making expenditures under this section is not required to file a campaign treasurer appointment.

Amended by Acts 1987, 70th Leg., ch. 899, § 1, eff. Sept. 1, 1987; Acts 1997, 75th Leg., ch. 864, § 244, eff. Sept. 1, 1997.

If you understand all that, you’re a) a lawyer, b) smarter than me, or c) both. If so, feel free to enlighten me in the comments.

My ignorance of the legal nuances aside, I think there’s a better chance that I’ll be the starting quarterback for the Cowboys on Turkey Day than any relief being given to the plaintiffs in this suit. It’s pie-in-the-sky, it goes against the state’s unofficial motto (“Creating a Friendly Climate for Bidness Since We Kicked Santa Anna’s Ass All Them Years Ago”), and the state Supreme Court is full of Republicans who live on campaign contributions. It’s just not gonna happen.

But hey, as long as we’re dreaming, here’s what I’d like to see happen. I’ve seen this suggestion before, including in the blogosphere (can’t remember where, unfortunately), and I think it has merit: Let everyone contribute as much as they want, but all funds go into a blind trust and then dispersed anonymously to the candidates. If candidates don’t know who’s giving them the quid, they will have less incentive to give back the pro quo.

There are two main flaws with this approach – it requires a bureaucracy to handle the money, and politicians are never going to be truly in the dark about who their biggest supporters are. I don’t think the first objection is that big a deal. As for the second, I refuse to let the perfect kill the good.

That doesn’t address the “issues ads” that the plaintiffs in this suit are complaining about. I can’t think of any way to restrict them that doesn’t cause First Amendment concerns, so what I’d like to see is more stringent disclosure laws. If the Citizens For A Better Tomorrow want to run an ad asking why Candidate Johnson hates America, puppies, and motherhood, I think the ad should be proceeded by giving the contact information for CFABT, to wit

“The following ad was paid for by Citizens For A Better Tomorrow, PO Box 666, Boston, MA, 02134, 617-555-1234,, Jerome Horwitz (President)”

In addition, all officers of CFABT and everyone who contributes above a certain level (say $100) should be publicly available.

Like I said, all that is for the perfect world that I hope to live in some day. In the meantime, I’ll try to keep an eye on this case, but I fully expect it to go nowhere.

Budget projections

This is going to be such a fun year for the State Lege. The Legislative Budget Board can’t even agree on projections for state economic growth and its implications for next year’s budget:

In a battle portending more to come, legislative budget leaders Monday narrowly fended off a conservative move to severely limit state spending in the next two years.

Instead, the Legislative Budget Board set a spending ceiling of $54.9 billion for the 2004-2005 budget, enough to maintain existing government services at current levels.

The board, in its most spirited debate in years over setting a spending cap, sided with Republican Comptroller Carole Keeton Rylander’s projection that Texas’ economy will grow nearly 11.8 percent during the next budget cycle.

“I think it was quite significant. Usually the Legislative Budget Board rubber stamps the number unanimously,” said board member Rep. Rene Oliveira, D-Brownsville.

“We were expecting a fight today,” he added. “We were expecting a close vote, and we were right.

Three Republican legislators argued that growth is more likely to be 7.8% and that the budget ceiling should be set lower as a result. (Annoyingly, the article doesn’t specify what the lower ceiling would have been if they had gotten their way.)

I have to say, I think the pessimists have the better argument. I just don’t believe that 11.8% growth next year is realistic. Maybe it’s that I’m feeling gloomy about the state of the ecomony overall and the wave of cutbacks, layoffs, and pullouts going on here, I don’t know. I sure hope the pessimists and I are wrong, but I wouldn’t bet on it just yet.

Despite that, I think the Board was right not to force cuts in existing services by imposing a lower budget cap. I think Ron Wilson gets it right:

“We’ve got a ceiling here at the Capitol. Am I going to jump high enough to touch it? No, but it’s there,” Wilson said. “If you have to estimate a ceiling, I’d rather estimate a ceiling that gives us room than one that does not.”

When Comptroller Carole Keeton Rylander gives her report on revenue in January, then it would be appropriate to revisit this issue. I’ve criticized Rylander before for her rosy deficit projections, but by January she should be in a put-up-or-shut-up position.

(It should also be noted that the main critics of Rylander’s projections in that earlier post I just cited are from the University of North Texas, the same place that gave the lowball 7.8% growth estimate. Guess if I lived in Denton, I’d be a sourpuss, too. Anyway, at least they’re consistent.)

David Rushing update

No correction or letters-to-the-editor printed in the Chron as of today regarding David Rushing. I’ll be keeping an eye on it.

On a slightly egotistical note, this site is higher result in a Google search for “David Rushing” than any of his Houston Review articles. That oughta frost him.