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2006 governor's race lawsuit back in court
April 6, 2009

The Perry campaign and the governors group will ask state District Judge John Dietz on Thursday to throw out the case. Perry lawyers say that Bell has not proved that the Perry campaign intentionally hid contributions made by Bob Perry (no relation) and that Bell is now quibbling over a couple of reporting errors that didn't even draw fines from the Texas Ethics Commission.

Written by Jason Embry, The Austin American Statesman

In the final weeks of the 2006 campaign for governor, Republican incumbent Rick Perry's campaign attacked Democratic challenger Chris Bell for accepting a seven-figure contribution from a Houston trial lawyer.

But about that time, Perry operatives were trying to persuade the national Republican Governors Association to put as much as $2 million into his campaign, knowing that the group was about to get its own seven-figure contribution from a Texas donor. That donor would turn out to be Houston homebuilder Bob Perry.

Rick Perry eventually got $1 million from the governors on his way to a rather easy re-election win. A year later, Bell sued Perry and the association, alleging that the governor kept the public from fully knowing the source of the money.

The Perry campaign and the governors group will ask state District Judge John Dietz on Thursday to throw out the case. Perry lawyers say that Bell has not proved that the Perry campaign intentionally hid contributions made by Bob Perry (no relation) and that Bell is now quibbling over a couple of reporting errors that didn't even draw fines from the Texas Ethics Commission.

But in the meantime, depositions taken and evidence gathered in the 17-month-old case have shed new light on Perry's strategy in the 2006 race and shown how winning campaigns, even when they're ahead, don't take anything for granted.

Perry might have to run even harder in 2010, when he's expected to face his most serious challenge yet, from a fellow Republican who's won her share of statewide elections: U.S. Sen. Kay Bailey Hutchison.

The 2006 race featured four major candidates: Perry, Bell and two independents, then-Comptroller Carole Keeton Strayhorn and humorist Kinky Friedman.

Perry was considered the favorite throughout the race, but the rest of the field was tougher to predict. Strayhorn, currently a candidate for Austin mayor, was a longtime Republican but pulled key Democratic constituencies — trial lawyers and teachers — away from Bell, who suffered from a lack of name identification and funding. And the cigar-chomping Friedman appealed to some anti-establishment liberals and Libertarians.

Perry consultant Dave Carney said in a January deposition that the campaign asked the Republican Governors Association for a contribution early in the election cycle.

"I think their thought was, you know ... we were so far ahead that we didn't necessarily need the money," Carney said.

On Sept. 28, 2006, the Perry campaign had $9.2 million in the bank. But the campaign would soon push for help from the governors association.

On Oct. 4, 2006, Carney and Perry chief of staff Deirdre Delisi met with Massachusetts Gov. Mitt Romney, the chairman of the governors group, and Romney said that he was about to get $1 million from a contributor in Texas whom he would not identify, the Perry campaign told Bell's lawyers in response to a question.

Bob Perry cut the governors association a $1 million check Oct. 6.

After the Romney meeting, according to the Perry campaign's legal team, Delisi learned from Bob Perry's lawyer that the homebuilder had made a contribution, and Delisi asked the lawyer, Buddy Jones, "to encourage the RGA to make some contributions in Texas since the RGA had raised such significant funds from Texas."

'Making Bell a factor'

About the same time, the Perry campaign was feeling new pressure to raise money because its strategy wasn't quite working out, Carney said in his deposition.

Perry operatives wanted to keep Bell strong so that Democrats would stick with him instead of flocking to Strayhorn. They also needed Friedman to keep voters away from Strayhorn, who was in the strongest position among challengers to raise money. At the end of September, Strayhorn had $5 million, and Friedman and Bell each had less than $1 million. (Ultimately, Perry reported spending $23 million on his re-election effort. Strayhorn spent $12.6 million, Bell $6.5 million and Friedman $3.8 million.)

Perry focused his attacks on Bell.

"Chris Bell, you know, just was never a factor," Carney said in the deposition. "We had to make him a factor because we needed to keep people from going to Strayhorn."

Two Friedman problems worried the Perry camp even further, Carney said. In the fall of 2006, the Burnt Orange Report, a liberal blog, posted audio of a racially insensitive comedy performance from Friedman in 1980. His opponents pounced. And in the one gubernatorial debate in early October, Friedman's jokes bombed, Carney said.

"He was just dead in the water," Carney said. "So it was in that October period we were really concerned that — that he would disappear in terms of support, even quit the race, and that sort of, you know, weird Austin vote would go to Carole."

Phil Musser, executive director of the Republican Governors Association during the 2006 election cycle, said in a deposition last October that the Perry campaign requested $2 million in early to mid-October 2006. Musser committed to giving the campaign $1 million in the form of two checks, he said, citing cash flow issues.

At the same time, the Perry campaign was publicly attacking Bell for taking $1 million from trial lawyer John O'Quinn, who had also pledged to raise another $4 million for the Democrat.

"A scandal-plagued personal injury trial lawyer is funneling millions of dollars to Democrat Chris Bell," said a Perry campaign commercial launched Oct. 13.

On Oct. 26, the governors group sent Texans for Rick Perry a $500,000 check. On Oct. 30 and 31, Bob Perry gave the governors group a check for $50,000 and another for $500,000. And on Nov. 1, Musser, the group's executive director, personally handed a $500,000 check to Rick Perry at the association's Washington office.

"Instead of Bob Perry just sending them a million bucks and them reporting it, they just funneled it through RGA," said Buck Wood, Bell's lawyer.

Small reporting error?

Wood said he doesn't have to prove that there was an intention to cover up the contribution, even though he thinks there was. Instead, the case focuses on the fact that the Perry campaign misidentified the governors group on its campaign finance reports leading up to the election. Because of the way the campaign identified the group, it did not have to disclose the group's donors over the previous year, as it would normally be required to do.

"It effectively kept anybody from knowing what was going on about these contributions," Wood said.

Pointing to a section of state law that allows candidates to recover money when their opponents make errors, Bell is seeking damages.

But lawyers for the Perry campaign say that, at worst, the campaign made a reporting error, and they're quick to point out that Bell dropped a section of his lawsuit alleging a conspiracy. The Texas Ethics Commission declined to fine the Perry campaign for a late report when it corrected its campaign finance records, saying, "The original reports were in substantial compliance."

"Their case has gotten down now to the point that they're trying to make it on one small, inadvertent reporting error," said Stephen McConnico, a lawyer for the Perry campaign.

Last month, Perry lawyers asked Bell campaign manager Jason Stanford during a deposition whether there were numerous instances in which the Bell campaign improperly reported contributions to the Ethics Commission.

"Numerous and very colorful," Stanford responded.

Wood said the errors they cited are, for the most part, not similar to the ones made by Perry's team.

Bell also is suing the governors association, saying that the group did not establish itself in Texas early enough to make a contribution and that it bears some responsibility for its contributor list not being on file with the state.

The group will also seek Thursday to have the case thrown out, and it has argued in court filings that it followed state law.

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