August 21, 2005

Targets of Dewhurst's Wrath Symbolize
the Old School and New in Austin Lobby

By Mike Hailey
Capitol Inside Editor

The two lobbyists cited by Lieutenant Governor David Dewhurst in a blistering sine die assessment of special interest influence on the Texas Legislature represent the old school and new wave approaches to making a living as a member of the Austin lobby.

As the president of the Texas Oil & Gas Association, Rob Looney is the chief legislative advocate for an 86-year-old organization that represents an industry that helped define state folklore and legend and sent gushers of revenue into state coffers when times were good. Former state House member Bill Messer - by contrast - has a list of lobby clients that mirrors a Texas economy that's diversified considerably since the collapse of oil prices 20 years ago left the state swamped in red ink.

Most members of the lobby in Texas used to work for either trade associations like TXOGA, corporations or law firms until a new breed of lobbyists struck out on their own in the 1980s and started contracting independently with multiple clients with a variety of interests ranging from private companies to professional organizations to city governments, school districts and other local governmental entities. Messer - a Belton native who represented the Central Texas city as a conservative Democrat for seven years - was one of the original hired guns.

Looney and Messer are considered to be among the best in the state at the jobs that they do. While Looney has the organizational support of a group comprised of industry leaders from a field that's synomous with Texas, Messer has incomparable access to the pinnacle of power in the Capitol's west wing. Messer is one of House Speaker Tom Craddick's most trusted confidants, advisors and friends. The two served together in the lower chamber while Messer was a member from 1979 to 1986.

Messer was one of three lobbyists that Craddick selected to oversee his transition into the speaker's office when it was clear he would win the post at the start of the regular session in 2003. But Messer's connections don't stop at the House. He's in business with another former House colleague, Mike Toomey, an ex-Republican lawmaker who was Governor Rick Perry's chief of staff until returning to the lobby last fall. But Messer's relations in the east wing may now be suspect as a result of an intense rivalry that's developed between Craddick and Dewhurst compounded by the lieutenant governor's critical appraisal of his lobbying efforts this summer.

Dewhurst mentioned Messer and Looney when pressed by reporters after blasting "rich greedy lobbyists" without naming them specifically at first while lamenting on the failure of the school finance effort after the second special session ended Friday.

But Looney's opposition to the Senate's business tax plan didn't come as a surprise. His group has favored keeping the state's franchise tax in place at its current rate since the issue was on the table during the first special session on school finance in 2004. Looney headed a committee of oil and gas producers who met at least once a week during the regular session. The association at the same time provided legislators with copies of a document brimming with information about the tax burden already shouldered by the oil and gas industry and the economic impact it has on the state. The report's conclusion wasn't stated in any uncertain terms. No other industry in Texas carries a tax burden that heavy, according to the report. The state not only taxes oil and gas production, but it levies taxes on oil well servicing and regulation as well. And with its huge investment of capital in refineries, pipelines and production equipment, the industry pays a hefty property tax bill for local school operations and maintenance as well.

State Senator Ken Armbrister, a Victoria Democrat with a substantial number of petrochemical plants in a district that's bordered on the southeast by the Gulf of Mexico, said Friday that plant managers have told him they'd be willing to pay more in state business taxes if they could have property tax relief in return. But Looney's organization, which represents more than 2,000 members in the oil and gas business, and other trade associations decided that the property tax reductions under consideration at the Capitol were not worth the price of expanding the state business tax and closing loopholes.

Dewhurst had appealed personally to Looney's group earlier this summer - and he left the impression that he planned to contact oil and gas company executives as a way to turn up the pressure on their lobbyists at the Capitol. But Looney's group and other business organizations held their ground.

Looney teams with Ben Sebree at the state association - and the group has contracts with outside lobbyists such as Walter Fisher, Lee Woods and several others. Individual companies are represented by their own in-house help and hired gun lobbyists as well.

The clash over the tax plan underscores how the oil and gas association remains a powerful force at the Capitol despite the fact that production levies have fallen substantially as a percentage of the state tax pie since accounting for more than 28 percent of it in the early 1980s. Taxes on production dropped to less than 12 percent of the total state tax base by 1987 after oil prices began to plummet the previous year. Oil and gas production contributed less than 2 percent to the state's total tax intake when it hit a record low in 1999. That percentage share doubled as natural gas prices soared within the past few years. But the price of relying so much on one industry was a record tax increase in 1987 - and the state's economy and tax base have been more diverse since that time.

Messer understands the plight of the oil and gas industry as a lobbyist for Chesapeake Energy Corporation - one of the nation's largest producers of natural gas with operations in five states including Texas. He understands similar concerns shared by two more clients - the Texas Chemical Council and the Association of Chemical Industry of Texas - that he lobbies for along with the Texas Association of Independent Nursing Homes, Texas Association of Realtors, Texas Hospital Association, Texas Hotel and Lodging Association, Texas Greyhound Association, Texans for Lawsuit Reform and a number of private firms such as State Farm Insurance and Texas Instruments. He also looks out for interests he used to represent in the Legislature such as Scott and White Hospital and the city of Temple.

While Messer had numerous clients opposed to the tax plan this year, few waged a fight as publicly intense as tobacco giant Philip Morris did in its opposition to a proposed hike in taxes on cigarettes, cigars and other products it makes and sells. Perry has been particularly critical of the cigarette companies lobby campaign to kill the part of the tax plan that pertained to them.

But while lobbyists like Messer and Looney can be obstacles to legislation that state leaders are pushing, they also can afford to be lightning rods to which the public's anger and frustration can be directed without causing them any real financial damage or future influence. Lobbyists, in fact, are more likely to see their stock go up when blamed for killing legislation that the clients they represent view as bad for their businesses.

Dewhurst turned his criticism to the lobby this after suggesting that the House was at fault for the failure of the school finance plan on which lawmakers were unable to agree during the regular session, last year's special session and two more this summer. Craddick, who'd been pointing fingers at the Senate, shifted his focus this week to school superintendents. Until then, Dewhurst and Craddick had been portraying each other in negative lights daily by pointing to the others as the culprit in the blame game.

The two Republican leaders apparently realized their exchange of criticism was being counterproductive. They will be on the ballot next year. Messer and Looney are not.