Posted by: reddiva | June 9, 2010

This is Why It’s Different When It Happens at Home


In April, I wrote on this blog about a candidate for Governor of Texas – specifically the Democratic candidate, Bill White.  I quoted an article from Texas Insider.

AUSTIN – On Day 16 of refusing to release his income tax returns, Democratic gubernatorial nominee Bill White – critics claim – has been caught lying to the Texas Ethics Commission (TEC).  A trial lawyer, White appears to have failed to report more than $83,000 in income from a real estate partnership to the TEC, according to his 2009 income tax return and disclosure documents he filed with the Texas Ethics Commission February 16, 2010.

“This is no little White lie,” said Republican Party of Texas Chairman Cathie Adams.

“This is a failure to comply with the very laws that White is campaigning to uphold as the state’s chief executive officer. The people of Texas deserve more transparency from Bill White, and they deserve leaders who will comply with the law,” Adams said.

White’s spokesman, Katy Bacon, has confirmed that White received the income as reported on his 2009 income tax return. But there is no mention of this income anywhere on White’s filing with the Texas Ethics Commission.

That real estate partnership in question, Wedge Group, is already at the center of a controversy stemming from White’s tenure as mayor of Houston.

For years, White has claimed that he received no income from Wedge Group while he was mayor of Houston, but his 2009 income tax return – the only income tax return he has released so far – shows $83,677 in income from Wedge during 2009 alone.

White’s tenure began in January 2004 and ended in January 2010.

To date, White has only released his 2009 income tax return, and only after mounting pressure on him to do so. Republican party officials, and the Perry Campaign itself, have been pressing White for weeks saying it is long past time for Bill White to match Gov. Rick Perry and disclose all of his income tax returns so that Texans might learn what other undisclosed payments may be hidden within them.

[…]

At the time, I did not fully appreciate the gravity of the accusation against Bill White.  Obviously, I know that a politician who is actively seeking election has a responsibility to provide ALL of the proper documents required by the jurisdiction of the office the candidate is seeking.

Had I done a little more research into the reason Democratic candidate for Governor of Texas had at that time refused to release the required income tax returns, I would have been screaming to the top of my lungs that the man is a fraud!

I have to give credit where credit is due.  Thank you, Governor Perry, for being steadfast in your demand for Mr. White to come clean with Texas voters.  Had you not been so diligent in this matter, the chances are that I would have missed the importance of the issue.  Naturally, I would not have voted for Mr. White anyway – he’s a Democrat and to me that translates into “liberal Socialist” in today’s political climate.

Governor Perry, I am reprinting the statement you released today exactly as you wrote it.  I want to help you spread the word about what Texas could expect if through some quirk of ignorance on the part of Texas voters Mr. White should be elected to the office he seeks.

Texans, read Governor Perry’s statement and help get the word out.  We do not want this kind of leadership in Texas.

Statement From Texas Governor Rick Perry Regarding Bill White Profiteering From Hurricane Disaster

June 9, 2010

“By his own admission, Bill White intervened regarding a contract given to BTEC, a company he had personal financial ties with, to provide generators for the Houston Coastal Water Authority following Hurricane Rita’s landfall in 2005. If this is true, and Bill White did unethically steer taxpayer dollars to a company he had a personal financial stake in, I am calling on him to immediately resign from the race for governor.

“Hurricane Rita was one of the worst natural disasters to ever hit our state, affecting hundreds of thousands of Texans. For the mayor of Houston to engage in profiteering during a tragedy is unacceptable and local authorities should investigate this alleged violation of public trust, as well as any others that may exist. Bill White has an obligation to the people of Texas to address these allegations immediately.

“There is no greater responsibility for a governor than to protect citizens from a natural disaster. I am proud that Texas is a national leader in emergency preparedness and response, and I will continue to make this a priority as we enter the current hurricane season.”

BACKGROUND

Following the landfall of Hurricane Rita in 2005, Houston Mayor Bill White directed the Coastal Water Authority to award a $1.8 million contract to BTEC, a company whose majority owner, the Wedge Group, had White on its payroll for more than $81,000 in 2005.

White was CEO of Wedge Group from 1997-2003. In 2001, Wedge Group purchased a controlling interest in BTEC, and Bill White became a manager and board member of BTEC. In 2006, Bill White invested one million dollars in the company, and soon thereafter made more than a half-million dollars in profit.

When Bill White released his 2004-2008 income tax returns on June 8, 2010, his campaign said, “Bill performed no services for his former employer after he began his service as mayor in 2004.”

Later that day, when confronted with facts about BTEC’s role in Hurricane Rita, “White said he saw no conflict of interest in the arrangement,” according to the Associated Press, and the White campaign told KTRK-TV in Houston, “Bill White had no financial interest in BTEC during the time of Hurricane Rita.”

The timeline below reveals the truth about Bill White’s financial relationship with BTEC and the conflict of interest he had in 2005 when the company was awarded a $1.8 million contract following Hurricane Rita’s landfall.

TIMELINE OF BILL WHITE AND BTEC/WEDGE GROUP

April 7, 1997: Bill White named CEO of Wedge Group.

Dec. 17, 2001: Houston Business Journal reports, “The Wedge Group, a Houston-based investment firm has bought a 70 percent stake in BTEC Turbines, a Houston company that designs and manufactures control systems for gas turbine generators.” The investment is reported to be $20 million.

Dec. 6, 2003: Bill White elected mayor of Houston.

Dec. 8, 2003: Bill White resigns as Wedge Group CEO.

2005: Bill White receives $81,854.65 in “wages, tips, and other compensation” from Wedge Services, LLC, as he reports on his 2005 income tax return. He also reports $3,633,085 in “gross receipts and sales” that Bill White says is a payment from Wedge Services “based on the realized value of gains from investments he had previously managed.”

June 29, 2005: In a Houston Chronicle article about corruption at Houston City Hall, Bill White says, “If there is somebody who has done anything improper in terms of receiving a benefit for city business, they ought to quit and hire a good defense lawyer, because we’re going to try to help the prosecutors go after them.”

Sept. 13, 2005: Texas Franchise Tax Public Information Report for BTEC LLC declares that WEDGE-BTEC Investment, Inc. has a 50.31 percent ownership interest in BTEC LLC.

Sept. 23, 2005: Hurricane Rita makes landfall.

Fall 2005: BTEC awarded $1.8 million contract by the Coastal Water Authority at the direction of Houston Mayor Bill White. As the Associated Press reported on June 8, 2010: “White said he called the company to help provide power generators to ensure the Houston-area refineries and the adjoining city of Baytown could maintain their water supply during the power outages. The company then got an emergency contract with the regional Coastal Water Authority, White recalled.”

2006: Bill White receives $83,626.09 in “wages, tips, and other compensation” from Wedge Services, LLC, and suffers a $4,922 “passive loss” from his partnership in BTEC Investments LLC, as he reports on his 2006 income tax return.

2007: Bill White earns $556,513 in “passive income” from his partnership in BTEC Investments LLC, and receives $109,014.58 in “wages, tips, and other compensation” from Wedge Services, LLC, as he reports on his 2007 income tax return.

2008: Bill White receives $103,497.67 in “wages, tips, and other compensation” from Wedge Services, LLC, and suffers a $12,336 “passive loss” from his partnership in BTEC Investments LLC, as he reports on his 2008 income tax return. This BTEC figure is contradicted by a personal financial disclosure Bill White files with the U.S. Senate on May 15, 2009, covering his 2008 activity. In that disclosure, White declares between $100,000 and $1,000,000 in partnership income from “BTEC Investments, LLC, – Business of refurbishing gas-fired turbines.” White notes this value is a “good faith estimate.”

2009: Bill White earns $163,000 in “passive income” from his partnership in BTEC Investments LLC, and receives $83,676.88 in “wages, tips, and other compensation” from Wedge Services, LLC, as he reports on his 2009 income tax return.

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