DALLAS — The Republican favorite in the race for Texas governor is trying to use his Democratic opponent's job as a bond attorney against her.
He also wants to limit the ability of any bond attorney to serve in public office.
Both candidates are attorneys, and both are trying to use the others' record as lawyers for negative campaign fodder.
The Republican, Attorney General Greg Abbott, is attacking the work Democrat Wendy Davis, a state senator, did as bond counsel for Dallas-Fort Worth International Airport and other governmental entities, as Davis accuses Abbott of ethics violations involving a $3 billion bond-funded cancer research program.
Abbott faces Davis in the Nov. 4 general election for governor.
As attorney general, Abbott has approved every bond issue in Texas since he took office in December, 2002. The attorney general's approval is required as a pro forma measure but can be withheld in the event of litigation.
Abbott, facing accusations that he failed to rein in improper grants at the Cancer Prevention and Research Institute of Texas, sought to turn the tables on Davis. On March 13, he called for a ban on state officials serving as bond counsel, saying it gives them a personal incentive to increase local debt.
"Elected officials shouldn't profit off of their positions and line their own pockets at the taxpayers' expense," Abbott said in a prepared statement. "They are supposed to represent the interests of their constituents rather than their own self-interest. It is particularly reprehensible for lawmakers to profit from taxpayers as bond counsel for public entities that add more to the public debt of taxpayers."
Davis's partner in the Fort Worth law firm of Newby Davis is Brian Newby, former chief of staff for Republican Gov. Rick Perry. Prior to being named chief of staff, he served as Perry's general counsel. The pair formed Newby Davis in 2010.
Abbott's attacks are not the first aimed at Davis' work as bond counsel. In her 2012 race for re-election to the state Senate, she faced nearly identical rhetoric from Republican challenger state Rep. Mark Shelton.
"It is not right for Davis to vote to raise taxes and then steer herself lucrative public contracts," Shelton said in a statement in 2012. "This abusive self-enrichment is nothing short of Davis being a greedy public officer who is robbing taxpayers' pockets to line her own pockets."
The Newby Davis firm has served as bond counsel on 20 deals, according to a report Davis issued as part of her campaign disclosure. Among the largest clients were DFW, for which her firm was co-bond counsel, Tarrant Regional Water District, and the Fort Worth Independent School District.
DFW has issued $4.5 billion of debt in the past two years amid record refunding and new money for a $2.3 billion terminal remodeling project.
The Tarrant Regional Water District is building a $2.3 billion pipeline that will bring water to Dallas and Fort Worth from East Texas reservoirs 150 miles away.
The Fort Worth ISD issued $123 million earlier this year with approval from voters in 2013.
Although much has been made in Texas news media of Davis' release of her list of public clients, the work of her firm has been disclosed in official statements for all issuers. The opinion of bond counsel is always included on the first page of official statements.
While acknowledging that the firm's work violated no rules or laws, Abbott and newspapers across the state have raised questions about whether her role was proper while she was serving in the state Senate.
Attorneys make up about 30% of the Texas House and Senate, where lawmakers are paid $600 per month, or $7,200 per year, plus a per diem of $150 for every day the Legislature is in session that adds up to $28,200 in the odd-numbered years when the legislature meets.
The work of bond counsel usually flies below the public radar as their role in certifying the legality and tax exemption of an issue is typically routine. However, the bond counsel can sometimes help clear some daunting legal or political obstacles.
As co-bond counsel on the DFW issues, Davis worked with the firm Bracewell & Giuliani, whose senior counsel Ray Hutchison was instrumental in getting DFW off the ground in 1974. Hutchison, a Republican and former candidate for governor, is married to former Sen. Kay Bailey Hutchison, R-Texas, who voted in the Senate on matters affecting DFW and other airports.
McCall Parkhurst & Horton, the top bond counsel in Texas, also worked with Newby Davis on DFW deals but was not involved in the selection of the co-bond counsel, according to McCall Parkhurst partner Alan H. Raynor.
"It is not our practice to comment on political issues," Raynor said in response to a question about Abbott's proposal.
At NTTA, McCall Parkhurst had provided bond counsel services to the board since its inception in 1997.
Representatives of the African-American and Hispanic communities in North Texas were demanding a breakup with NTTA's legacy contractors and seeking more minority representation in 2011.
Davis' partner Newby is African-American, and their firm appeals to clients seeking firms headed by minorities and women. That factored into their hiring as DFW co-bond counsel. Minority-owned firms are also frequently hired as co-financial advisors or underwriters on deals.
In 2011, then NTTA board member Kenneth Barr proposed hiring Newby Davis as co-bond counsel for work on the Chisholm Trail Parkway toll road, NTTA's first project in Fort Worth. Barr, mayor of Fort Worth from 1996 to 2003, served on the city council with Davis, who was elected in 1999. Davis, a former Republican, switched parties in 2006.
Barr, who is now chairman of the NTTA, formed a consulting firm with Newby and Cantey Hanger attorney David Chappell in 2009 called Barr Newby Chappell Consulting. Newby and Davis were formerly with Cantey Hanger, as well.
When the tollway board voted unanimously to hire Newby Davis, Barr said that he didn't ask the authority's legal counsel whether he should abstain because of his past relationship with Newby and Chappell, calling it an oversight.
The NTTA revealed in its preliminary official statement for a November 2011 issue that the Federal Bureau of Investigation was investigating the board for unspecified practices.
In December 2011, the board agreed to pay legal fees for David Denison, who was identified as one of the board members under investigation.
Denison revealed a possible conflict after the Fort Worth Star-Telegram reported his involvement in the purchase of 625 acres along the planned Chisholm Trail Parkway.
So far, Newby Davis has not worked as bond counsel on an NTTA deal, according to Raynor.
"Any such determination in the future would be by the NTTA Board," Raynor noted.
Abbott still faces questions involving his role in the $3 billion bond-funded Cancer Prevention and Research Institute of Texas scandal involving allegations of CPRIT improperly funding firms headed by donors to the campaigns of Gov. Rick Perry and Lt. Gov. David Dewhurst. Davis' campaign said CPRIT awarded $42 million to Abbott donors.
The only indictment in the CPRIT investigation named Jerald "Jerry" Cobbs, the former chief commercialization officer for the agency. Cobbs was accused of improperly awarding an $11 million grant to Peloton Therapeutics.
The indictment came a year after the Travis County district attorney's Public Integrity Unit opened a criminal investigation into how CPRIT awarded grants. The PIU's funding was eliminated by Gov. Rick Perry after the 2013 legislative session.
Abbott did not attend any of CPRIT's 23 Oversight Committee meetings but sent a staff member, prompting an attack from Davis as she was preparing to run for governor.
"The indictment of a former CPRIT official confirms that Greg Abbott has betrayed Texas taxpayers by failing to show up to even one CPRIT oversight board meeting," Davis said in a prepared statement. "Greg Abbott has yet to fully explain why he failed in his basic oversight responsibilities to Texas taxpayers."
