Craig McDonald Interview, Part 3 of 3

DT:When we left off with the, the last tape we were talking about a, a new research project that Texas for Public Justice been undertaking, its called Watch your Assets and you, you gave us the general overview of what the project is about. But I was hoping that you could give us a few examples, particularly those are kind of the environmental line of, of the research.

CM:Yeah, there's a there, there's a couple of examples, like I said David, I think we've done nine of these to date. And actually two of them bit off a, a pretty big piece of legislation that has some negative environmental impact, its not focused on the environment.

But that was in 2001 the Texas legislature passed some enabling legislation which allows local school districts to give tax abatements to manufacturing plants and who, who bring jobs to the local community.

This 2001, I think its called the Texas Economic Development Act, really gives these school districts to grant almost at will local tax breaks with very l, well, we discovered in the project that there's been some several hundred million dollars in tax breaks granted, some to very dirty industries in east Texas particularly.

And that our bottom line was that these tax breaks probably weren't necessary, that the plants would've engaged in the same behavior with or without the school tax abatements. And that the school tax abatements that were being given, that is the virtually public tax dollars, which are being given to these companies were not being accounted for very well.

There was some broad criteria and there were some contracts that were developed, negotiated between a local school district and the company who receives the tax subsidy.

there was virtually no follow-up or oversight to see that, that for the tax break that the number of jobs was being created that was agreed to in the contract. There was virtually no central point to track these contracts. It was all done very loosely at the local school district level.

Now what happens is that school districts, this was really a piece of legislation that you might even say started out with all good will and intent, was trying to create jobs in school districts, to bring jobs to school districts that were what I, I forget the proper term, but the, the least rich, the poorer school districts who received money from Robin Hood and not paid to Robin Hood.

You know, a school district now, when it meets a certain threshold has to give some of its tax money to the central pockets, redistribute it to the poorer school districts around the country. Its the way Texas equalizes, and equalizes is by far the wrong term, but its the way Texas redistributes some of its wealth to fund schools in, in poorer districts.

Well this Bill had some good intention to try to bring jobs to those poorer districts but we found that its really been taken advantage of by the property rich districts. And its in the interest of the property rich districts because they can use this to defeat the Robin Hood rules.

A factory which is currently, perhaps, paying, lets just arbitrarily say a million dollars in school property taxes, can engage in one of these contracts and agree to bring more jobs, a standard agreed (?) without really ever delivering on the promise to bring them. And the school district can then vote to abate its million dollar property tax bill in exchange for the job.

However in a wink, the school district and the company, instead of paying the school property taxes, which would be subject to the Robin Hood rules, if the million dollars went to the school and it was a property rich school, that school would have to turn around and give that million dollars to the state to be distributed to a poor school district.

Well the business and the school districts with a wink and a nod agree to a what they call a payment in lieu of taxes. If you cut our tax, give me an abatement so we don't pay the million dollars in school taxes; we will give you a fifty million dollar payment in lieu of those taxes.

So the school districts gets fifty million dollars that it would otherwise, if it was a school tax, would have to give back to the state to a poor district. So now it gets fifty million dollars, the corporation saves or it, it gets a half the money, instead of a million dollars, it gets five hundred thousand dollars, excuse my math here.

So they agree to pay half the taxes as a payment in lieu of taxes, so the corporation saves money, the school district makes money that it wouldn't have made and the people who really get screwed in the whole deal are the poor school districts of Texas.

So we thought that was absolutely a misuse of public assets, misuse of this whole ability of school districts to grant tax abatements, and again, they're mostly for manufacturing industries that aren't desirable anyway.

And so that was one of the, the issues that we a, a paper we did, Lauren Reinlie is the director of that project, she's done a wonderful job documenting some of the abuses on a case-by-case basis and then we published them and as you mentioned, this report we called Watch Your Assets.

We also took a look at, there's been quite a bit of controversy locally here in Austin, where the city, not the school district, but the Austin City government has granted a hundred and seventeen million dollars in tax abatements to, I believe its seven or eight development projects, local development, mixed use projects that have come into Austin, you know, apartment, housing, other projects for quote economic development purposes.

And we questioned whether that money was necessary, in this report, whether why are the taxpayers of Austin, this represents taxes paid by a hundred and twenty-eight thousand homeowners. So the tax revenue from a hundred and twenty-eight thousand houses per year went to pay for these businesses to develop their businesses and their retail complexes inside the city limits.

Now you don't have to look very far around to figure that people are doing this anyway. We don't need to give out this hundred and seventeen million.

Why are we spending a hundred and twenty-eight thousand households worth of taxes to fuel growth here? Growth that is questionable, by any, most environmental standards, growth that we need to control better. We don't need to, we don't need to give gross incentives to happen in Austin, its happening anyway.

The task in Austin, Austin is how to control it. And this particular issue, this particular tax abatement we looked at for Austin, or series of tax abatements.

We, we actually had some impact, the city is rethinking the whole use of tax abatements in the future, it may not use them. Some activists in the city, mostly made up of small businessmen who don't get the tax abatements, have qualified a charter amendment that will be put before the vot voters in Austin to end these abatements.

We think, again, this is a questionable use at best of the community's public assets. That tax revenue could be going to lots of different things and not to promote a new condo project downtown. So, again, that's another what we thought was a, a misuse of the public assets in the public commons that needed to be documented.

DT:I guess a third study topic that I, I was curious about is, is the T. Boone Pickens' interest in, in developing wind energy and, and groundwater resources.

CM:Groundwater, right, right. Yeah, again, I, I guess you could say this, the ability of to grease the way for wind and T. Boone Pickens' water ventures actually came out of the Texas legislature as well.

And the we've done two of these Watch Your Assets projects on water related issues, on the commoditizing of the water that flows into the aquifer at San Antonio.

And about this T. Boone Pickens' venture of trying to build a water pipeline that would allow him to buy water from the Ogallala Aquifer that is north Texas and Oklahoma and sell that water his goal is to buy that water and sell that water to the thirsty new suburbs of north in Dallas/Fort Worth, the Metroplex.

The development there needs water to grow and so there are some who are trying to make a commodity of that water to, you know, the, the Texas way to get rich on it and deliver the water to fuel development, which is, you know, questionable at best from an environmental perspective.

The legislature passed, again, authorizing legislation that allowed T. Boone Pickens' particularly but anybody could engage in this, to create what they call a freshwater district.

T. Boone Pickens' bought eight acres of land where this pipeline would go; he needed the right of way. And that eight acres allowed him to create, to get the property owners within that eight acres, employees (?) to vote to create one of these special districts.

They did that this year, they got the, the legislative approval, alright, they created the district through a vote of I think there were six or seven voters, that's eight people voted, they created the district.

And what that allows T. Boone Pickens' to do, is it gives him and his water and energy company, really gives it to this district which he controls because its closely held, its his property, its his people living on the property, but it gives them the power to use eminent domain to build a pipeline anywhere in the state of Texas.

So it really greases the way and takes away the power that used to be held by a broader group of citizens, it gives it to a closely held group of T. Boone's compadres and it allows them to create a pipeline to move water from any place in Texas to any other place in Texas.

So it really gives him the heads up to engage in his new business to sell water and he's actually going to use that same right of way to, he claims, to fuel the transmission lines for his wind farms, so he's going he's, he's going to get a doubleheader out of it.

But the problem with it is that, again, its another example where a very powerful interest, T. Boone Pickens', can go to the legislature and get some powers given to him privately that we believe should best be held by the politic, by the state, not by the eight people, the, the people who live on T. Boone Pickens' eight acres.

So we have tried to that, that was one of the topics we exposed was the misuse of what we believe is the eminent domain laws in Texas to benefit T. Boone, to benefit the developers of northwest Dallas.

DT:You, you've identified a, a lot of shortcomings in the way money is used in politics in Texas and, and actually across the country. I was wondering if you might be able to outline some of the, the agenda that you might have for trying to remedy some of those problems.

CM:Yeah, well, the problem is there, there, there, there's a pie in the sky agenda which were a long ways from getting to in Texas, I think. And one of those would certainly be this new movement for clean money that some states have adopted, essentially public financing.

Take the private money out of the political system, that's difficult to do in light of some of the current Supreme Court rulings which protect private political money as free speech. But it can be done, its been done well in Arizona, its been done in Maine by ballot initiative. Since in Texas they don't let the masses do what they want, we don't have ballot initiatives, we don't have that power here.

I don't foresee that were going to move to a public financing system anytime soon. But I think that's a, a the ideal reform, at least in the mind of the reform community now, that if you can take the public if, if you can replace interested campaign money with basically uninterested small money provided by the public, that your political class are beholden only to voters then.

Its not like they get money from special interests to do their bidding and then go out and tell the voters what they want to hear and get elected by voters. But they really have no, they would have no reason to take that money, so they can tell voters the truth. And they're not beholden to that campaign donor knocking on their door saying, uh, remember me, can you do this for me.

So it just cleans up the system. You know, unfortunately David, its been trending the other way, we, away from public financing, though we've passed a couple of strong initiatives in a couple of states that are, seem to be working well.

And the politicians in Arizona, I think, would tell you they love that system, they love not having to go out and beg for money. They love not having to be beholden to the interest groups that come to them and want to give them money.

They love that freedom to do what's best for their constituents or their conscience, whatever, however they do it, that freedom to cut the strings between money and their political views and their voting inside the legislative body. People in Arizona love it.

On the presidential level, just for an example, a the 74 reforms are really the ref-that, that passed post Watergate on the national level, its really the model were still working under. And that, of course, created public financing at least for the presidential elections.

There's a partial voluntary public financing in the primaries, if you raise a certain amount of small money, the federal government will give you, will match that money to fund the primary elections. And the general election, the taxpayers generally pay for the National Conventions and they pay for the general election campaign.

And the general elections we've had no general election since Watergate where the participants did not participate in the public financing system. This year if John McCain and the Democratic nominee participate in it, they will each get sixteen million dollars to fund their party's conventions and they would get eighty-six million dollars to run their general election campaign in November.

George Bush has kind of busted that system for us. George Bush and Karl Rove, when they created the Pioneer bundling network to raise money on behalf of Bush's first run for the presidency in 2000, actually created the network in 1999. They created a system of bundlers that more matched the money culture in Texas that Bush and Rove had been used to.

Remember in Texas, there are no limits, as Governor Bush would get lots of contributions at a hundred thousand dollars, fifty thousand dollars, seventy-five thousand dollars. Well when Bush and Rove decided to run for the presidency, they were limited, because of the federal laws, in raising money in two thousand dollar increments.

So this network of huge funder's that Bush had relied on as a Texas politician was not much good to him in his run for president until they figured out what we call the Bundling Scheme, the most efficient Bundling Scheme ever. And you may recall it was called the Bush Pioneers.

Rove went to these traditional big donors, most of them were in Texas in the first runs, who could give a hundred thousand dollars and asked them to work their rolodexe's, work their employees and bundle together pledges of a hundred thousand dollars and therefore turning them from two thousand dollar donors back into hundred thousand dollar donors that Bush had been used to.

So they devised this very effective, very efficient bundling mechanism and it worked very well. Bush was the first candidate to win his party's nomination who chose not to participate in the public financing system in the primary because once they had devised this bundling scheme of Pioneers, they realized that they could raise much more going outside the voluntary public financing system, reaping special interest money than playing in it.

And it worked quite well for Bush at two hundred and some, two hundred and nineteen Pioneers in the next campaign. They had five hundred and fifty some Pioneers and Rangers that accounted for well over a hundred million dollars into the Bush presidential race.

Bush still, however, once the primaries were over and he had vanquished his opponents with these huge amounts of cash, in the general election Bush went back into the public financing system.

We had never had a presidential general election since Watergate with, with candidates who went outside the public finance system. Bush's success has resulted in every major campaign copying him, every major campaign now, Clinton, Obama, Edwards, McCain, Guilani, Romney, they all used this system of bundlers, mostly corporate executives who can pull together huge amounts of money and in ways that may indeed be coercive, Its a very troubling system.

And deliver it and get credit for the campaigns for delivering not their legal limit of two thousand dollars, but for delivering hundreds of thousands of dollars. So they get the political clout that comes with a contribution that is hundreds of times the legal limit and the candidates get to amass much more money which gives them incentives to go outside the clean system.

Why take the public money in a clean system when it limits you, what you can spend. If you think you can make the calculation that well, if I rely on the corporate executives from New York and California and the big moguls around, I can raise two or three times the money that the public voters are going to give me.

And no one, no successful candidate has stayed in the public financing system in this election for the primaries. And all the campaigns have started to raise private money; they haven't made commitments, but have started to raise private money. When they ask for a contribution from you for the primary, they're also asking for a contribution to be stocked away in an account for the general election.

Most of the candidates are calculating, I believe, that they can raise much more money from s private interest than they can get in the eighty-six million dollars from the treasury. So I think were going see the first campaign, national campaign for president that's run with private money, in many, many years.

And I think the public financing system at the federal level will be dead. So, that's troubling. Its trending away from public financing and again, I don't think it was on the agenda for anytime soon in Texas.

But there are some reforms I think would make a difference in Texas and we've been responsible for passing some.

I mentioned the prohibition on, on legislators lobbying, that's a very good change. We also, legislators who are members of the Bar, attorneys, could actually just by the stroke of a secret paper filed with the court, could stop a lawsuit in its tracks while the legislature was in session. Its called the Power of Continuance.

That power was exercised in secret and brought tens and tens of thousands of dollars into the pocket of legislative lawyers. We exposed so many abuses of that and it cost a couple of members of the legislature their seats.

And we passed a reform that stopped that practice of selling your office this to a corporation that had a lawsuit pending against it. So we have made some strides and I've talked about some of the strides we've made in electronic disclosure.

The disclosure laws have gotten better, that's because we and a Coalition of Friends, Common Cause and often Smitty had Public Citizen and the League of Women Voters had been pushing for that better disclosure, And we've made some strides.

The things that are on our agenda, which are tougher to get, that would make a difference, they're not nirvana or pie in the sky, is we absolutely believe that we need a citizens commission to do redistricting. We got to take the re redrawing the Congressional maps and the state maps out of the hands of the politicians and giving it to a citizens commission.

Right now, when you go to vote for a member of the legislature, the winner of that election is predetermined by where the lines are drawn. So we say the politicians pick the voters in the system, the voters don't pick the politicians because the politicians control, control how the lines are drawn.

If we could take that single power and give it to a, a nonpartisan, non-interested citizens commission to draw the lines, their incentive would be to draw them for not the least competitive districts, but the most competitive. Lines should be drawn that put voters together that are fifty-fifty Republican, Democrat or where, so that, so that we can have a real election on real issues that's meaningful. Right now we don't have those.

We think we could get that with a, a citizens redistricting commission. And that legislation has been carried by some bipartisan group in the legislature and it passed the Senate last year. There, there's some hope for that. So that's one, one item on, on our agenda.

I talked about the clout of the big donor in Texas, a hundred and forty-three mega-donors who give a hundred thousand dollars or more. We simply want a cap on what you can give as an individual to all the politicians in the state during one election cycle. We think that cap should be the same place the federal cap is, about a hundred thousand dollars.

Once James Leininger or Bob Perry or Fred Beerman, some of the liberal trial lawyer funder's, for example, give a hundred thousand dollars, we think they ought to be able to go home so that there will be some more competition for where the money comes from and we, in some sense, small d, democratize the system.

If we drew that line at a hundred thousand dollars, we would virtually take out some fifty million dollars off the top of the system that's extremely concentrated. And that's reform that has been introduced the last couple of sessions, it, it may go through.

So that cap on aggregate contributions, we think is even more important than a cap on individual contributions. If you want to take your hundred thousand dollars and give it all to one candidate, go ahead, but then you're done.

Alright, now you can, you do that and you can give it to a lot of candidates. So we've got to stop, cut it off at the aggregate, more important than cutting it off contribution by contribution.

We didn't talk much about the money in the court system, and we've done lots of work documenting money to the Civil Court Judges in Texas. Again, they act just like other politicians, there's virtually very little limits, in reality, no limits on what can be given to a justice in Texas.

And justices in Texas run on partisan ballots and they run just like any other candidate. They can take money from any source, non-corporate, but they can take money from the very lawyers, law firms and parties who are in their courtroom that day, who say, they swing the gavel with one hand and collect the money with the other at the same time.

And its a corrupt system that needs to be changed. We need to move to public financing for our judiciary or we need to move to an appointment system, a merit selection system as they call it. One thing is clear, we need to get the money out of the courtroom because the money influences judicial so, so decisions. The judges themselves and survey after survey tell you that it does.

So we also think we have to stop the practice the of what we call the revolving door in Texas, where a member of the Texas legislature, who, legislature and/or their chief, key staff, there are no restrictions from them resigning from the legislature one day and being a high paid lobbyist the next day.

They go from a seven thousand dollar a year public servant, the next day they sign on for a lobbying contract and they become a million dollar lobbyist the next day. It happens time and time again.

Key example is Todd Baxter here, who head of the telecommunications subcommittee, quit his office before his term was up to become a lobbyist for the telecommunications industry, paid a hundreds and hundred thousand dollars.

There's an absolute conflict of interest in that system. We need to know that when our legislators are sitting in the legislature that they're voting for our interests and not voting to please the person that's going to hire them tomorrow.

And right now we don't have that. Donna Howard, a freshman, well, she's not a freshman anymore, but a local Representative has drafted cooling off legislation that will slow down the revolving door.

The position of Texans for Public Justice is that once you ask for the publics trust to serve in the legislature, you should be banned for life from coming back to lobby your colleagues unless you're doing it pro bono for a nonprofit group.

You shouldn't be able to make money to come back and, and lobby your legislator, to lobby your, your fellow colleagues. You can't sell the public trust again as a commodity. So Donna Howard has a Bill to at least provide a two year cooling off, that you can't just flip the next day as happens so often here.

So we need to close the revolving door, we need campaign limits, we need to change the way we select judges and we need to change the way we draw district lines here, take a lot of politics out of the legislature. Those are some reforms that I think are winnable in the next few years. (misc.)

DT:Craig, you, you've told us about your work from grassroots organizing at the local level to working on policy at the national level, to working on disclosure in, and on campaign finance reform here at the state level in Texas.

And, and I was curious, what is it that appeals to you about this work? What drives you to do it where you don't have the normal fame and fortune reward?

CM:Boy, you know, that's kind of a tough question and that's an evolving question. I've always been a political junky, so this fits me perfectly. I think I was, you know, watching the Huntley-Brinkley Report back in the 50's when I was five years old, on TV. So I've always had interest in politics and actually ran my first political campaign when I was I guess I was ten years old at Kent Hills Elementary School.

We did a mock presidential campaign and I was Dick Nixon. And, so I was a surrogate Dick Nixon and we kicked JFK's ass at Kent Hills, even though JFK became the president eventually.

So I've always been involved in politics and on, it's just been a fascination for me. And I think a growing sense that you could commit yourself to justice and get by, you know, you could, you could do good work and that was the, the highest calling you could do.

I think that was instilled in me, in part, I grew up during the Civil Rights Movement and I always felt bad that I might've been a little too old for it,or too young for it. It was, you know, it was a there wasn't much of a role for me then, but I certainly observed it and saw the power that the, the change you could bring to the political system through individual action.

You know, and you kind of witness it and they say isn't that tremendous that that can be done and maybe you should dedicate yourself to that. And I actually years later, even in Grand Rapids, ended up knowing a couple of freedom riders and people who have been in the Civil Rights Movement, so that inspired me.

And I was politicized by the Vietnam War. I was a high school dropout, I was a draftee. In 69 I'd lost the lottery, you know, it was the first lottery, and so I had to go to the war.

There wasn't much of a support system back this wasn't Amherst, this was Grand Rapids, Michigan, conservative factory town. I felt I had, you know, no other alternative but to go, so I went.

And when I came back, I actually took a GED and went to college and got an education. But I think that experience spoke to me to say I'm never you know, I'm never going to be their fool again.

I'm never going to get fooled like this and I'm going to try to have the courage to do what's right because th, that was a, I think, a major regret of mine, that I went and served in a war that I certainly thought was unjust.

I just didn't know what to do about it or how, how to articulate it at the time. So I think I dedicated myself to learn how to make political change.

And, and when I went to work for Ralph, you know, you shear these sp-I had to carry the books around for years to all the speeches and you hear them day in and day out and some are just beautiful and marvelous.

But one thing you learn from Ralph, that if you follow him around long enough, and some people only have to hear one speech to learn it, but if you follow him around long enough, is that I do, do believe what he says, that the, you know, the highest calling in a democracy is citizenship, its being an active citizen that makes political change and that dedicates themselves to trying to make the country a better place, make the world a better place, fight for political change.

And there's not enough people to do it so but I think that helped inspire me to do it, to be in a position, to have the ability, to have the support system I have, to, you know, get up every day and work for justice. It's a wonderful thing, most people don't get to do that but, you know, I do, so.

DW:Oh, go, go on, as long as were at it, its who knows when well all next meet again. Working for justice sometimes lead to burnout, can lead to loss ofand

CM:And you're witnessing it right here as (laughing).

DW:But when that does happen, given that you do work to support environmental issues and keep, keep an environment that's worth having around, is there a place in nature or a place you like to go to refresh and recharge or just take in the, the beauty that's, that's there?

CM: Yeah, absolutely, I mean, I we've always I, think I grew up with an appreciation for the outdoors.

I remember as a kid going to Sam Campbell lectures who would come around, he's known as one of the first environmentalists, I think, in the 1950's. He was a naturalist who would go who who did a public school speaking circuit throughout the Midwest and present these wonderful nature films that were funny and entertaining that he, he had created. He came from Minnesota.

And he had, every summer they'd go play with the animals and he put together these incredibly funny, entertaining monologues. I couldn't wait every year for my school to go down and get the Sam Campbell lecture.

So I kind of grew up with an appreciation of nature. And living in Michigan, Michigan's a wonderful natural place, just wonderful. We were twenty minutes from the shores of Lake Michigan, the beautiful sand dunes and the forest.

And, you know, were a working class family, most of our vacations were in tents and camping. And so that kind of instilled an appreciation for nature. And most often with my family, though we do take, I mean, we have gone to New York City and Chicago, we do take urban vacations, but I think the vacations that we liked best with my wife and two kids are, you know, the natural ones.

We go to the national parks; we go out and hike the desert. We go rafting, we go kayaking and so I don't know which is my favorite place. I certainly enjoy going to Big Bend, I think its just a magical, magical place.

And being a Michigander, I didn't have much appreciation for the desert, you know, we're pretty snobs. Many of my friends in Michigan have never been to, never seen the desert and would, would not find any beauty or any redeeming values there but haven't, haven't come here.

And in my travels with Ralph, I've just had a wonderful life. I traveled with Ralph every, I've gone, I've been everywhere and that's because my years with Ralph on the road.

I've also had a, found an appreciation for Big Bend and the deserts that, you know, kind of, type of turf you don't see in Michigan. So I really like going out there. And maybe my favorite place to get back to and get away from it all in Texas is probably on South Congress, inside of Continental Club but there're natural places as well.

DT:Good, well, well said. I, we've asked a lot of questions. Is there anything you'd like to add?

CM:No, no but I thank you for the opportunity. I've had opportunity to talk enough.

DT:Well, thank you very much.

CM:I hope it worked out for you, if you like