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RICK PERRY

RESEARCH BOOK APRIL 2010


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TABLE OF CONTENTS:
Rick Perry Strategic Memo Top 10 Perry Vulnerabilities James Richard Rick Perry Personal Outline Texas Has Suffered Under Perry Healthcare Statistics Show Texans Worse Off Education Statistics Show Texans Worse Off School Vouchers Tuition Increases and Deregulation Community Colleges Sex Education State Pension Funds State Board of Education Scandals Fred Gough, the Perry Gail Lowe Connection Perrys Record on Taxes and the Budget Perry Refused to Sign No New Taxes Pledge Perrys Record on Increasing Taxes and Fees 1987: Perry Voted for Largest Tax Increase in State History 1990: Perry Voted for $500 Million Tax Increase 2002: Perrys Increase in Vehicle Inspection Fees Declared Unconstitutional 2003: Perry Signed into Law First Major Fee Increase in 12 Years 2004: Perrys Tax Proposal Soundly Rejected 2005: Perrys Plan Helps Rich 2006: Perrys Education Bill Increased Taxes, Business Taxes Skyrocket 2007: Perry Doubled Marriage License Fee 2009-2010: Perrys New Tax/Fee Increases Perry Opposes the Income Tax State Budget Doubled Under Perry State Debt Increased 157 Percent Under Perry Perrys Work to Manage Property Tax Increases Perry Re-Allocated Gas Taxes Perrys Proposal for a Vehicle Mileage Tax Perrys Support for Toll Roads Perry is a Big Spender Perry Supported the Bank Bailout Perrys Tax-Payer Funded Rental Mansion New State Agencies Created by Perry Texas Enterprise Fund Failures Wealthy Donors Fund Perrys Lavish Lifestyle Rick NASCAR Perry Drives a Mercedes Benz State Agencies Under Perry Spending Lavishly at Liquor Stores Perry Doesnt Respect Texans Rights Trans-Texas Corridor HPV Vaccine Scandal Link Strategies, LLC CONFIDENTIAL Research 5-6 7-12 13-22 23 23- 27 27-32 33 33-35 35-36 36-38 39-52 53-63 64-65 66 66-67 67 67 67-68 68 68-71 71-72 72-73 73-74 74-75 75-76 76 76-77 77-78 78-79 79 79-80 80-83 84 84-85 85-91 91-93 93-94 95-101 102-104 105-111 112 112-117 117-118 2

Texas State Schools for the Mentally Retarded Scandals Texas Youth Commission Scandals TDEx Data Mining Database Abused by the Governors Office Perrys Record of Opposing Transparency and Fighting Back Against TPIAs Perrys Personal Wealth Tied to Public Service and Questionable Business Deals Perrys State Salary and Pension Perrys Blind Trust, Wealth and Land Deals Perrys First Profitable Land Deal Assisted by Perry Appointee Questions Surround Land Sale and Beneficial Legislation Perrys Profits from Land Originally Owned by Republican State Senator Perrys Profits from Kinetic Concepts Stock Purchase Raise Questions Perrys Blind Trust Other Wealth and Income Anita Perrys Income Perry Uses His Office to Reward Campaign Donors and Friends State Contracts Given to Donors Appointments Given to Donors Texas Enterprise Fund Tied to Donors Fast Tracking Orders Tied to Donors Perrys Actions on Behalf of Donors Perry Sought Ethanol Waiver Benefiting Donors Campaign Cash from Toll Road Interests Proposal to Expand Gambling Additional Favors for Donors Perry Punished Hutchison Supporters, Demanded Loyalty Perrys University Regent Appointees Largely Donors Perry Meddled in Regents Operations Perrys Money from Washington Perrys Money from Big Polluters Perry Appointees Give Back for Money Cannon Fundraising Effort Perrys Vetos Jay Kimbrough Cashed in from Connections to Perry TexasOne Charity and Rick Perry Rick Perrys Revolving Door Lobbyists Perry Appoints Lobbyists as Chiefs of Staff Perry Appoints Lobbyists to Gubernatorial Staff Perry Appoints Lobbyists to Prominent Positions General Perry Lobbyist Ties Perry Vetoed Legislation to Stop Revolving Door Lobbying at the County Level Ties to Jack Abramoff Controversial DC Lobbying Contract The Federalist Group Lobbying Lottery Privatization Lobbyists Other Examples of Questionable Lobbyist Influence Perry Uses State Funds/Campaign Funds for Personal Use Official Travel with Spouse/Family Perrys Excessive International and Domestic Travel Increasing Expenses at the Governors Office Link Strategies, LLC CONFIDENTIAL Research

118-125 125-133 134- 156 157-165 166-167 167-169 169 169-171 171-175 175-177 177-180 180-184 184-185 185-186 187 187-190 190-203 203-210 211-212 212 212-213 213 213-214 214 214-216 216-219 219-220 220 220-221 222-248 249-259 260-265 266-273 274 274-277 277-280 280-281 281-282 282 282-284 284-288 288-291 291 291-293 294 294 294- 298 298-305 3

Pork Spending Perrys Over-Reliance on Privatization Proud Supporter of Privatization IBM Health and Human Services Accenture Privatizing Foster Care Department of Transportation Toll Roads Cintra The Lottery Perry Travels Excessively on the Taxpayer Dime Trips Out of State During the Legislative Session Excessive Vacations The State Plane Perry Misses Important Events Federal Funds Were Refused Because They Had Strings Attached Unemployment Stimulus Race to the Top Funding Flip Flop: Perry Supported Federal Funding from Bush OTHER Texas Department of Transportation Perry and Child Protective Services Rick Perry on Hispanics and Latinos RICK PERRY ON THE ISSUES Healthcare Education Energy Death Penalty Execution Reprieves and DNA Testing Gun Rights Abortion Immigration Crime on the Border Trade Gay Rights Gambling

305-307 308 308 309- 310 310-312 312-313 313-316 316-317 317-319 320 320-322 322 322-323 323-325 326-327 327-330 330-332 332-334 335-354 355-365 366-382 383 383-436 437-473 474-484 484-487 487-488 488-489 489-490 491-494 494-495 495-496 496-497 497-498

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RICK PERRY STRATEGIC MEMO


Rick Perry has a long record of accomplishments during his quarter century career as an elected official, and hes run extremely aggressive political campaigns during this time. It should come as no surprise that Perry will attempt to muddle the failures of his administration with his successes, and use spin and attacks to try to make this election a referendum on Bill White, instead of on his own record of divisive and inneffective leadership, rampant cronyism, and misguided policies that have hurt Texas families. During this upcoming election, Perry will also have the advantage of incumbency to help his campaign. In the past, Perry used the power of his office to encourage endorsements by doling out state grants to Sheriffs who publicly supported his campaign. It should be expected that Perry will continue similar strategies, especially since he now controls billions in stimulus funds and also controls several very large pools of money to encourage business investments in the state. Perry is a shameless hypocrite. Rick Perry frequently attacks opponents for something he himself is guilty of. We saw this numerous times in the heated Republican primary this year. Perry nick-named Kay Bailey Hucthison, Washington Kay, even though Perry has accecpted over $2.6 million in campaign contributions from donors in D.C. and Virginia, and has spent $300,000 in campaign funds to pay for numerous trips to Washington, staying at 5-star Washington hotels, and eating at fancy Washington restaurants. Perry also doesnt have a problem railing against over-spending in Washington while simultaneously accecpting the third highest amount of stimulus funds, behind only New York and California. Throughout the remainder of this campaign, we should expect Perry to continue his hypocritical attacks this is big part of his communications strategy. Their goal is to take Perrys biggest weaknesses (rampant cronyism, getting rich while in office, poor fiscal management, and support for big-government programs like the Trans-Texas Corridor and mandatory HPV shots) and find ways to make it appear that White has a worse record on similar issues. Perrys team has already started implementing this plan, as we saw with their attacks on libraries closing in Houston. They got ahead of our eventual attacks on Perrys mis-management of state services, and we should expect that they will continue this strategy to muddle our eventual attacks. Perry and his team drive home singular messages. As we saw throughout the Republican primary, Perry and his team find one attack and stick with it. This trend has certainly continued in the first portion of the general election. It should be understood that Bill White will be refered to, now throughout Election Day, as liberal trial lawyer Bill White, the candidate who supports all of Barack Obamas liberal, job-killing policies. It should also be expected that Perrys team will continue to use the attack that Bill hid his tax releases, so what else is he hiding? Dont throw the kitchen sink at Perry. As we saw with Kay Bailey Hucthisons failed campaign, attacking Perry for everything he has done wrong is a losing strategy. Perrys campaign ignored nearly all of Kays attacks and merely pivoted to their own attacks. The only way to make an attack work on Perry is to continusouly drive home a singular message until the media, and optimally, the general public, begin to tune into the argument. Weve seen the success of this strategy through the relentless attacks on Perrys education record. Perry has been caught using overly-optimistic data, called-out for allowing the politicization of the Board of Education and for accecpting millions of dollars from his board of regents appointees. Perrys record is his biggest weakness.

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There is nothing Perry can do to change the past, and nothing he can do to take back all of the bad decisions he has made, or his inappropriate/unethical actions. There are dozens of ways the campaign could criticize Perry, but it will take a focused and persistant effort to make his vulnerabilities resonate with voters across the state. The campaign should certainly have overall themes to attack Perry, which tie closesly into policy/campaign rollouts and day to day news stories, but the campaign should also seriously consider micro-targeted attacks, especially since the media markets in Texas are so large and the demographics so different. Recommendations: Determine a strategy for dealing with the Perry campaigns reliance on muddling issues. One technique should be the utilization of the counter-attack, which is especially useful because Perrys campaign typically uses the same attack over and over again. An example would be, if we determined that we were going to attack Perry for the recent closing of a state-funded program, and expected him to attack us for the closing of libraries in Houston, we should prepare an extensive attack on the health of libraries in Texas under Perry and then tie this into the original attack. As the campaign progresses, and Perrys team begins to hone in on several attacks against White, our counter-attack strategy, and our strategy to re-frame Perrys vulnerabilities should become a more important part of our overall communications strategy. Another example of this would be in regards to Whites tax records. The Perry campaign wants to make Whites personal finances an issue, because they know that Perrys personal finances are one of his biggest weaknesses. Perry is a career politician who has cashed over $2 million in government checks, and who has gotten rich off insider land and stock deals. His son even owned stock in a company that was given a large grant from Perrys governmental business development slush fund. At some point, the campaign will need to make a strong push to let voters know about the availability of Whites personal financial disclosures, and begin counterattacks on Perrys personal finances. Then we will be able to get back to the real issues that Texas voters care about, and have the opportunity to make the case that, during this campaign about how to move Texas forward, it seems like everytime Perry opens his mouth we only hear a noun, a verb, and something about releasing tax forms. Continue to push narratives that contracidct Perrys closely guarded public image. Rick Perry would like Texans to believe that he is some sort of folksy brush-clearing Governor, but the truth is, the taxpayers and his wealthy donors are funding his extravagant lifestyle. Weve seen the way that Perrys rental mansion resonates with average voters, and as we begin to rollout more attacks that are similar (Perry stays at the nicest hotels in the world and eats at the fanciest resturants), we should see a similar response. Craft microtargeted attacks to help Texans get a local reason for why they shouldnt give Rick Perry another four years in office. Consider having government ethics announcements that would create significant negative attention for Rick Perry. Some issues to consider proposing for a White administration: a pledge to end revolving-door lobbying in the Governors office by enforcing a cooling off period between public and private political work, a pledge to ban accecpting contributions from recipeients of business development funds (ETF, TEF, etc.), a pledge to ban accepting trips funded by donors and corporations with business before the state, a pledge to institute term limits for the governor (three terms, so Perry would have to join the pledge), a pledge to not politicize the board of regents by not forcing a political litmus test, etc. 6

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TOP 10 PERRY VULNERABILITIES


#10. Perry Would Rather Cut Education Funding and Drive State Deeper in Debt Than Take Federal Funds. Over the past year and a half, Perry has made it clear that hes willing to reject federal funds for various state programs, even if the funds would have made a positive impact on the state. In March 2009, Perry rejected $556 million in stimulus dollars for unemployed Texans because it had too many strings attached. Then, just four months later, Perry asked the federal government for a $170 million loan for the states unemployment trust fund because the funds were depleted faster than expected. In November 2009, Perry directed the Texas Education Commission not to commit the state to the adoption of national education standards, ensuring that the state would not receive race to the top funding. This unilateral decision ensured that Texas wouldnt receive up to $700 million in federal stimulus money for education. Perry said he made the decision because the program smacks of a federal takeover of our public schools. Just one month after Perrys decision, the Texas Education Agency proposed $135.5 million in cuts to various programs. Critics of Perry were appropriately outraged that he would not fight for hundreds of millions of dollars in federal funding for education when just a few years earlier, he had been one of the strongest supporters for President Bushs No Child Left Behind Act, which not only included hundreds of millions in federal funding, but included significant strings attached to the funding. Perry is a 25-Year Career Politician Who Got Rich Off Public Service. Rick Perry was first elected to public office in 1985 and has held public office ever-since. Throughout these last 25 years Perry has cashed over $2 million dollars in government checks, which has allowed him to live a lavish lifestyle which includes driving around in his Mercedes Benz. Along with his taxpayer salary, if Perry were to retire at the end of his current term, he would receive $74,750-a-year in pension for the rest of his life. Anita Perry, Ricks wife, also cashed in on his public service. In 2000, while Perry was Lieutenant Governor, almost half of the familys $138,000 income came from Anitas public affairs consulting work. Some of her clients included pharmaceutical companies and health care providers, both of whom would have had business in front of the state. Perry Gave Huge Taxpayer-Funded Contracts; Quality of Government Suffered. Governor Rick Perry has spent his tenure as governor working to make the state of Texas more efficient through privatization. Efficiency, to Rick Perry, means taking responsibility away from government and hastily moving it to the private sector. But over the past ten years, the increased outsourcing and privatization has not increased efficiency, but rather, wasted taxpayer money and decreased the quality of service provided to Texans. The only people reaping benefits from Perrys privatization efforts are those who are awarded the contracts. The largest contract ever signed by the state was awarded to the Bermuda-based company Accenture LLP. Perrys former chief of staff, Ray Sullivan, was working for Accenture when they received the $889 million contract for privatizing screening processes in the Health and Human services department, a contract that was canceled only after a few years due to failed systems, and significant complaints from consumers. In light of the failure of the Accenture contract, the San Antonio Express-News had this to say: Perhaps the best lesson to be gleaned from the experience of the Texas Health and Human Services Commission with Accenture LLP is this: Modernization of the state's public services is not necessarily synonymous with privatization. Unfortunately for Texans, Perry still hasnt learned this lesson, and he continues to push his privatization initiatives. In 2005, the Texas Health and Human Services Commission overpaid Clarendon National Insurance by $20 million for their work to operate an insurance program for low-income children Link Strategies, LLC CONFIDENTIAL Research 7

#9.

#8.

in rural Texas. The Commissioner in charge of the contract, Albert Hawkins, who was appointed by Perry, said he had never seen a contract so beneficial to a company doing business with the state. According to the San Antonio Express News, Hawkins was also unaware that it was a nobid contract and he was unable to find documents related to how the agency decided to award it to the company. Incredibly, the contract expressly stated that Clarendon was guaranteed it would not lose money in administering the rural health care program. In 2008, IBM was fined $900,000 for failing to make timely computer backups as part of an $863 million outsourcing contract. The Department of Transportation said that resolving computer problems that used to take a state employee less than an hour to fix were taking as long as a week with the outsourced contract. In 2009, United Health Group, which was paid more than $1.2 billion to provide managed care since 2003, was fined more than $1 million by the state over mounting complaints, which included delayed and denied medical care. The Dallas Morning News said that this incident showed that Perrys outsourcing efforts failed needy Texans and taxpayers. #7. Texas Taxpayers and Perrys Wealthy Donors Fund His Lavish Lifestyle. Perry lives a lavish lifestyle funded by Texas taxpayers and rich campaign donors. While renovations were being made on the Governors mansion, in the midst of the national economic crisis, Perry moved his family into a $9,000 per month taxpayer-funded secluded, limestone mansion with a heated pool, an outdoor cabana and a guest house. By comparison, when former Arkansas Governor Mike Huckabees mansion was being renovated, Huckabee stayed in a triple-wide trailor. Perry and his wife have also have enjoyed several taxpayer-funded junkets across the world. In 2004, Perry, his wife, and his daughter, took a six day trip to Italy. According to official records released to the San Antonio Express-News Perrys schedule included three days that were almost completely free of official duties. Also in 2004, Perry and his wife took a trip to the Bahamas with supporters and aides and spent money on golf, and scuba diving. In 2005, Perry sent his wife on an eight-day trade mission to Japan that cost taxpayers over $42,000. In October 2009, Perry spent $12,321 on security detail for a trip to Las Vegas in order to attend a bachelor party dinner for his son. When questioned about his trip to sin city, Perry said he also met with one of Nevadas Republican gubernatorial candidates. In 2009, Perry and his wife traveled to Israel so that Perry could receive the Defender of Jerusalem award. The trip was financed by one of his campaign donors and by the investment firm Doheny Global Group, but Perrys official security detail also had to make the trip, which ended up being paid for with taxpayer funds. Perrys trip to Israel funded by his donors was far from the only occasion when he took advantage of his campaign account. A review of Perrys campaign expenditures show his campaign spent tens of thousands of dollars putting Perry up in 5-star hotels and spas across the globe. In Rome, his campaign spent nearly $3,000 so Perry could stay at the Grand Hotel Parco Dei Principi & Spa, a 5-star hotel and spa in the heart of Rome with a sumptuous style surrounded by a stunning botanical garden. In Istanbul, his campaign spent more than $2,200 so he could stay at the Ritz Carlton, featuring exceptional accommodations, world-class cuisine, a nurturing spa and impeccable service. It is unclear what campaign activity took place on the four occasions Perrys campaign paid to have him stay luxury hotels overseas. Perrys campaign also spent thousands putting him up ritzy domestic hotels, resorts and spas, such as The Peninsula Beverly Hills, the Waldorf Astoria in New York, and the Willard Continental in Washington.

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Speaking of Washington, Perrys expenditures prove he likes to spend time there. Despite a public hatred of Washington, Perrys campaign has spent more than $300,000 in travel expenses to send Perry there on several occasions to stay at the nicest Washington hotels and eat at the nicest Washington restaurants. #6. Perrys Personal Wealth Tied to Public Service and Questionable Business Deals. Public service has certainly been a financial windfall for Perry, but thats not the only way hes become a millionaire. Hes also gotten rich off real estate land deals, many say due to inside information and his political connections. According to a 2009 report by the Associated Press, Perry has made about $2 million in pretax profits from buying and selling real estate since 1991. Some of Perrys questionable deals include: In 1993, Perry purchased a 9.3 acre tract of land, and then less than two years later sold it to computer magnate Michael Dell for nearly four times what he paid for it. The land was recommended to Perry by real estate investor Tim Timmerman because it separated Dells property from the only available sewage line. In 2008, Perry appointed Timmerman to the Lower Colorado River Authority. On January 24, 1996, Rick Perry was in San Antonio to speak at a luncheon sponsored by the Texas Public Policy Foundation, a group founded by Kinetic Concepts, Inc. founder James Leininger. On the same day, Perry purchased 2,800 shares of Kinetic Concepts stock. Also on this same day, a California investment group began buying 2.2 million shares in the company, significantly boosting the stocks value. Not long after Perry purchased the stock, he sold it for a $38,000 profit. Significant questions were raised after this episode and reporters began to question whether Leininger passed on inside information to Perry, which would have been a felony. Perry responded to the criticism by saying that he had no knowledge of his brokers transactions. A week later, as if to insulate himself from Perrys possible crime, Perrys broker reminded him that he had been ordered to make the KCI stock purchase. Perry then changed his story and said, I may have called and said sell something thats not performing and buy some more KCI stock. After Perrys admission that he ordered the stock purchase, Leininger continued to deny that he had passed on any insider information. In 2001, as if to reward Leiningers silence, or perhaps to reward him for hundreds of thousands of campaign contributions, Perry appointed him to the Texas Board of Health. In 1996, Rick Perry purchased a piece of land that was recommended to him by a long-time Austin Developer, and one of his close friends, Gary Bradley. About two and a half years later, the Texas legislature began to debate bill HB 1704, which the Austin American-Statesman said would undermine Austins managed-growth plans because it allowed projects to be developed under less strict environmental rules. During this process, Perry claimed that the legislation would have no affect on the price of his land, and that he had not lobbied on behalf of the bill. The Austin American-Statesman disagreed with Perrys assessment of his land value, saying, HB 1704 made Perry's land more valuable by boosting the development potential for surrounding parcels. The newspaper also reported that Perrys staff met with city of Austin staffers to discuss the legislation. The legislation eventually passed, and six days later, Perrys blind trust sold his property for a $239,000 profit. In 2001, Rick Perry bought a piece of land from his long-time friend and Republican State Senator Troy Fraser for $313,762. Troy later acknowledged that he had purchased the land with the intention of selling it to Perry. Immediately after purchasing the land, Perry protested the property tax bill, arguing that the land was worth $100,000 less than the appraised value. The 9

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protest was filed on the governors behalf by Colleen McHugh, who at the time was Perrys chair of the Texas Public Safety Commission. During the negotiations McHugh hired Perrys former chief of staff Barry McBee as a lobbyist, and three days later, the reappraisal was approved. In 2007, Perry sold the land for $1.14 Million, for a profit of $823,766significantly more than appraised price of $310,000. Also in 2007, the value of the land was re-appraised at $600,000, which was almost double the amount it was appraised during the six prior years. In 2009, the property was re-appraised again, and the value increased to $937,000. The significant reduction in appraised value of this land while owned by Gov. Perry helped save him at least $14,000 in taxes. Perrys sale of this land also helped him to surpass the million-dollar mark in annual income for the first time. #5. Perrys Revolving Door Lobbyists. Since becoming Governor, Perry has a history of appointing lobbyists as his Chiefs of Staff and to other prominent positions within his administration. Though the ethical implications of doing so have been questioned repeatedly over the years, Perry defends the appointments, saying that I think the lobby by and large is a place where substantial knowledge resides, where there are men and women who have great understanding of the legislative process and the issues that face the state of Texas. Indeed, these individuals have a strong understanding of the legislative process, and specifically how to manipulate it in favor of certain interests. There are numerous examples of revolving door lobbyists circulating through Perrys office, and their ties to the lobby have been repeatedly called into question when Perrys actions have appeared convincingly in sync with these lobby interests. Mike Toomey is the most glaring example of a lobbyist holding sway over Perrys decisions and actions on important legislation. A longtime ally and friend of the Governors, Toomeys lobby work had him representing varied interests like Texans for Lawsuit Reform and HMOs, all of which opposed legislation vetoed by Perry shortly before he named Toomey as his Chief of Staff. At the time of his appointment, Toomeys firm and clients were being subpoenaed in the investigation of Texans for a Republican Majority and right before taking over as Perrys Chief of Staff, Toomey reorganized his lobbying firm, giving him (as one lobbyist remarked), a place to park his clients while he is on the governors payroll. Toomeys relationship with Perry continued to cause controversy after he left the Governors Office and returned to lobbying. In 2008, Perry issued an executive order calling for all girls in Texas to receive the HPV vaccine which is manufactured by the drug company Merck, a client of Mike Toomeys. According to an editorial in the Austin American Statesman, Merck stands to make millions of dollars as Gardasil becomes a mandatory vaccination in Texas and billions if other states follow Texas' lead. Since the HPV controversy, Perry has continued to fight on behalf of lobbyists. In June 2009, Perry vetoed SB2468, a bill that would have closed the lobbyist/government employee revolving door loophole at the county level. In an ironic twist, on the very same day Perry vetoed this legislation, he named lobbyist Ray Sullivan as his new Chief of Staff. #4. Perry Uses His Office to Reward Campaign Wealthy Donors and Cronies With TaxpayerFunded Contracts. Throughout Perrys 10 years as Governor, he has raised millions of dollars for his campaign committee from people and organizations who had business in front of the state. An early analysis showed that from 1997 to 2001, Texas Department of Transportation contractors contributed nearly $240,000 to Perry and were later awarded almost $1 billion on contracts from the state. Other companies that contributed to Perry and were eventually awarded state contracts include: United Health Group Inc., which was awarded a contract to coordinate care for the Texas Health and Human Service Commission and contributed $28,000 to Perrys campaign committee; The Aetna Insurance Company, which was awarded a contract to administer Teachers medical accounts and contributed $15,000 to Perrys campaign committee; and Zachry Construction and Williams Brothers Construction who were awarded contracts to 10

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operate large portions of the Trans-Texas Corridor project and contributed $354,450 to Perrys campaign committee. One extreme example of an apparent quid pro quo were several local hurricane Ike clean-up contracts awarded to Ashbritt Environmental Inc. weeks after Ashbritt gave Perry $120,000 in campaign cash. Ashbritt also contributed to Perrys inaugural committee and donated $38,500 in in-kind private air travel to the RGA while Perry was chairman of the organization. Throughout Perrys administration, its also become common knowledge that in order to get appointed to a position by the Governor, you must contribute to his campaign committee. In just five years, from January 2000 to December 2005, Perrys campaign received nearly $3.9 million from 330 appointees or their family members. Perry also took nearly $6.1 million since he became Governor in 2000 from non-students he appointed to boards of regents across the state. The Houston Chronicle reported that Perry may be the biggest beneficiary in Lone Star history of campaign cash for appointments. Another one of Perrys fundraising tools has been his personal slush fund to attract businesses to the state, the Texas Enterprise Fund. Perry has awarded hundreds of millions of dollars of grants to businesses, and in many instances the money had to be clawed back because the businesses failed to meet their required goals. Many of the companies who received milliondollar grants turned around and gave Perry thousands of dollars in campaign contributions. In 2004, Perry awarded the Texas Energy Center a $3.6 million grant. That same month, the director of the Texas Energy Center contributed $1,000 to Perry. In 2006, Perry awarded Torchmark, an insurance company, a $2 million grant. Six months later the Torchmark CEO contributed $2,500 to Perry. In August 2007, Perry awarded a $22 million grant to a web hosting company called Rackspace. Just three months later, the Rackspace US Inc. PAC contributed $10,000 to his campaign committee. When taken as a whole, the companies who received TEF grants have contributed hundreds of thousands of dollars to Perrys campaigns. #3. Big Brother Rick Perry Pushes Big Government Over the Rights of Texans. Over the past few months, Perry has been quick to cite the 10th amendment to the constitution, which grants powers to the state over the federal government, when justifying his opposition to some of the Obama administrations initiatives. In the past, Perry has been less eager to cite the rights guaranteed through the constitution when it contradicted his own administrations goals. Take the Trans-Texas Corridor. Perrys pet-project to create a massive transportation network across the state would have required the government to utilize eminent domain to seize nearly 600,000 acres of private land. The public was appropriately outraged over his plan and 20 counties passed resolutions opposing the plan, which was eventually scrapped. In 2006, Perry outlined his fiscal priorities for homeland security dollars and directed they be spent on an electronic database known as the Texas Data Exchange (TDEx). This databases goals were to give criminal justice agencies across the state access to information on every Texans interaction with police officers, from traffic stops to open police investigations. The database was eventually expanded to include national records from the FBI, the DEA, the Bureau of Prison Management and the Bureau of Alcohol, Tobacco and Firearms. As the power of the database grew, so did the concern from average citizens and legislators, because the database was under complete control of the Homeland Security division in the Governors office. The Texas Observer reported on the database, calling it a political opposition researchers dream. Democratic Rep. Lon Burnam said that the over-reach were seeing here is phenomenal and Rep. Richard Raymond said that there were security breaches, losses of data, and non-law enforcement individuals who had access to the TDEx database. Legislators eventually held hearings and in October 2007, the database was moved from the Governors office to the Department of Public Safety. Link Strategies, LLC CONFIDENTIAL Research 11

In 2007, Perry infamously decided that he would sidestep the legislatures opposition and sign an executive order to require Texas schoolgirls to receive a vaccination for the sexually transmitted disease called the Human Papillomavirus (HPV). Texans were outraged by Perrys unilateral decision to step between a patient and a doctor, but even more so when it was reported that Perrys former chief of staff was a lobbyist for the company that made the vaccine. #2. Texas State Budget Doubled Under Big Spending Rick Perry; State Debt Up Over 150%. Perry wants Texans to believe that he is a fiscal conservative, but his numbers dont add up. Since Perry took over as Governor, Texas debt has increased by 157 percent, up to $31.25 billion in FY2008. The state budget has also grown, from $98 billion when he first took office, to $182 billion. And Perry was only able to balance the most recent budget by accepting billions in federal stimulus money. To date, Texas has requested or been allocated $22.7 billion dollars in stimulus money, the third most behind only New York and California. Perry has been quick to criticize the federal bailout and stimulus plans, but in 2008, Perry encouraged the leadership of the U.S. House and Senate to approve the billion-dollar bailout package for Wall-Street banks. To pay for his spending, Perry has repeatedly shown he is not afraid of raising taxes and fees. In 1987, as a Texas legislator Perry voted for a $5.6 billion tax increase the largest tax increase in state history. In 1990, Perry once again voted for a huge, $500 million tax increase. As governor in 2003, Perry signed into law the first substantial increase in state fees in 12 years. These fees included increases in fishing licenses, auto-titles, and professional licenses for nurses and towtruck operators. #1. Texas & Texans Have Suffered Under Perry. Perry can spin his record any way he wants, but the facts are clear: Texas has suffered under Perry. Median Wages across the country have increased since 2000, but in Texas, the median wage is lower than both the national average and the southern region of the U.S. The poverty rate in Texas has also increased under Perrys watch, from 15.4 percent in 1999 to 15.8 percent in 2008 (most recent statistics available). In 2003, when Perry was informed that Texas was the 49th healthiest state, he responded, Thank God for Mississippi. At the time, Texas was ranked 30th in the country in terms of the quality of health care and had the largest percentage of people without health insurance. In 2007, the uninsured rate in every major Texas city was higher than the national average. In 2009, Perrys abstinence-only education plan, which was one of the most expensive sex-education programs in the country, proved it was ineffective-- Texas was reported to have the second highest number of teen pregnancies in the country. Also in 2009, it was reported that Texas was leading the nation in the percentage of uninsured children. In 2010, The Washington Post reported that six million Texans were without insurance, which was the highest rate in the nation. In terms of education improvements, Perry hasnt done much better than his record on healthcare. In 2009, Texas ranked 49th in teacher pay, 44th in expenditures per student, 47th in state aid per pupil, and 41st in graduation rates. In 2010, Perry once again proved that he puts petty politics above the needs of Texans by unilaterally halting Texas application for Race to the Top education funding. This federal program could have helped bring hundreds of millions of dollars in new education funds to the state. All the while, while Perry was politicizing education funding, the graduation rates in Texas urban cities was hovering around 50%.

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12

JAMES RICHARD RICK PERRY: PERSONAL OUTLINE


TYPE
Date of Birth

DETAILS
March 4, 1950 Paint Creek, Haskell County

CITE
[AP, 3/4/09] [Abilene Reporter-News, 4/18/08] Office of the Governor

Marriage (s) Children High School College Professional

Married Anita Thigpen in 1982

Griffin and Sydney

Office of the Governor

Graduated from Paint Creek High School, 1968

[Abilene Reporter-News, 11/11/09] Office of the Governor

Graduated from Texas A&M, 1972 For Yearbook photos, see Addendum B State representative, 1985-91 State Agriculture Commissioner, 1991-99 Bank Director, Haskell National Bank 1997

[Fort Worth Star-Telegram, 10/28/02] [Austin AmericanStatesman, 6/11/97, Personal Financial Disclosure] [Abilene Reporter-News, 4/18/08, Associated Press, 1/20/99] [Abilene Reporter-News, 4/18/08] Rickperry.org

Elected lieutenant governor in 1998, Inaugurated January 19, 1999 Sworn-in as Governor of Texas Dec. 21, 2000 when George W. Bush resigned to become president. Elected Governor in 2002 and 2006

Wife Professional

Director of Outreach and Development, Texas Association Against Sexual Abuse, 2003-present The Perryman Group, 1997-2001 Hubble Communications Inc., 1995-1996

Personal Financial Disclosures

Military

Military service: Between 1972 and 1977, served in the United States Air Force flying C-130s in the U.S., Europe and Middle East.

[Abilene Reporter-News, 4/18/08]

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Religious Affiliation Address & Property Tax info

Perry is a member of Austin's Tarrytown United Methodist Church.

[Austin AmericanStatesman, 10/25/01]

Currently living in West Austin during Governors Mansion renovations at 8113 Hickory Creek Drive, Austin, TX, 78735. Governors Mansion 1010 Colorado St Austin, TX 78701-2334 1610 Leopard Ln College Station TX 77840-2663 Brazos County 3609 Fall Trl Austin, TX 78731-5838 Travis County 101 Westlake Dr West Lake Hls, Tx 78746-5825 Travis County 2507 Exposition Blvd Austin, TX 78703-1735 Travis County 3920 Pecos Austin, TX 78767 Travis County 2200 Windsor Rd Austin, TX 78703-3115 Travis County 605 N Avenue F Haskell, TX 79521-4521 Haskell County 40.02 acres Owned by Rick and Anita Perry Haskell County Raw land 29.119 Acres Owned by Rick Perry Travis County Raw Land 9.311 Acres Owned by Rick Perry Travis County Raw Land The information contained below may be incomplete due

[Austin AmericanStatesman, 9/27/07, link]


[Associated Press, 9/29/07] [Nexis, Personal Financial Disclosures]

Previous Addresses

[Nexis, Personal Financial Disclosures]

[Texas Ethics Commission, 1993 Personal Financial Disclosure] [Texas Ethics Commission, 1993 Personal Financial Disclosure] [Texas Ethics Commission, 1993 Personal Financial Disclosure] [Texas Democratic Party

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Personal Voting History

to changes in Perrys address, and the overall quality of the Texas VAN. 1994: Voted on Election Day for General 1996: n/a 1998:Early Vote for General 2000:Early Vote for Primary and General 2002:Early Vote for Primary and General 2003:Early Vote for Sept. Constitutional Amendment 2004: Early Vote for Primary and General 2005: Early Vote for November Constitutional Amendment 2006: Early Vote for Primary, Primary Runoff, and General 2007: Early Vote for May Municipal and November Constitutional 2008: Early Vote for Primary and General 2009: Early Vote for May Municipal and General 2010: Early Vote for Primary

VAN]

Campaign Contributions Made Public Licenses

Perrys campaign finance records can be sent upon request

Perry has talked on many occasions about going hunting and fishing, but there is not a public database available to determine if/when he got his license.

Personal Financial Disclosure Business / UCC Tax Liens Civil Court Search Criminal Court Search Bankruptcy Court Search

PFDs can be sent upon request. For information on Perrys wealth, click here. NA

None.

See Addendum A

NA

NA

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ADDENDUM A Dessie Maria Andrews V. Rick Perry, Anita Perry, et all. According to documents filed in the Western District of Texas (Austin) on July 31, 2008, Dessie Maria Andrews sued Rick Perry, Anita Perry, and approximately 30 other defendants for a civil rights violation. Plaintiff alleged that through a series of incidents, her son and her grandchildren were denied their civil rights and placed in an abuse foster home at the direction of Child Protective Services. The case was dismissed without prejudice because Andrews lacked standing to assert claims on behalf of her grandchildren, and for lack of jurisdiction. [United States District Court for the Western District of Texas Austin Division, Cause No. A-08-CA-587LY, 7/31/09] CASES INVOLVING PERRY AND TEXAS POLITICIANS There are hundreds of cases where Rick Perry is listed as a Defendant along with numerous other Texas/national politicians. Its very common for Governors to be listed on lawsuits, and the large majority of these are frivolous and inconsequential. Also, many of them were filed by people in prison who included Perry merely because he was Governor. The majority of these cases were left off this list. There are also several cases where its unclear whether the James R Perry associated with the lawsuit is in-fact Governor Rick Perry. Also, due to the date that some of these cases were filed, not all documents are listed online. The information contained in each paragraph would allow someone to visit the relevant court houses across Texas to acquire the full documents. Gill, et al v. NationsBank Corp, et al. Filed on 2/15/1994, this lawsuit was based on 29:1001 E.R.I.S.A.: Employee Retirement and it was dismissed because it was settled out of court. Its not clear if the Plaintiff James R Perry is in fact Governor Rick Perry, because the documents are not available through the PACER online court system. [Fort Worth, 4:94-cv-00104-A, Date filed: 2/15/1994] Cruz v. Perry, et al. Filed on 4/14/1998, this lawsuit was a 42:1983 Prisoner Civil Rights case. Its not clear if the Plaintiff James R Perry is in fact Governor Rick Perry, because many of the documents are not available through the PACER online court system. It is clear however that the Plaintiff was incarcerated and suing many people for various civil rights violations. [Galveston, 3:98-cv-00180, Date filed: 04/14/1998] Gomez v. Clerk US Ct TX City, et al. Filed on 5/24/02, this lawsuit was a Prisoner Civil Rights case and it was dismissed. [Beaumont, 1:02-cv-00375, Date filed 5/24/02] Gomez, et al v. Bush, et al. Filed on 8/08/2003, this lawsuit was a Prison Civil Rights case and had a non-reportable closing. [Galveston, 12/31/2004] Copeland v. Owens, et al. Filed on 1/05/04, this lawsuit was a Prison Civil Rights case and it was dismissed. [Sherman, 4:04-cv-00003-PNB-DDB, Date filed 1/05/2004] Golden v. Perry. Filed on 1/09/2003, this lawsuit was a Prison Civil Rights case and it was dismissed. [Galveston, 3:03-cv-00015, Date Filed 1/09/2003] Muhammad v. Perry et al. Filed on 5/08/2006, this lawsuit was dismissed before any actions were taken. The plaintiff alleged that Perry violated the fourth amendment, fifth amendment, sixth amendment, and eighth amendment. He also requested an order or protection against Perry and ordered him to move out of the Governors mansion. [Houston, 4:06-mc-00183, 5/08/2006]

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Bauman v. Perry, et al. Filed on 1/16/2007, this lawsuit has a non-reportable closing. [McAllen, 7:07mc-00003, Date filed 1/16/2007] Gilbert v. Perry et al. Filed on 5/09/2007, this lawsuit was a 28:1331 Fed. Question: Medical Malpractice case and was dismissed due to a settlement. The basis of the complaint was as follows:

[Wichita Falls, 7:07-cv-00070-R, Date Filed 5/09/2007] Associated Republica, et al v. State of Texas, et al. Filed on 3/09/2001, this lawsuit was a 890 Other Statutory Actions and was dismissed. Rick Perry and the State of Texas submitted briefs in this case. [Western District of Texas (Waco), 6:01-cv-00083-WSS-WRF] Barrientos, et al v. State of Texas, et al. Filed on 8/11/2003, this lawsuit was a 42:1973 Voting Rights Act and it was voluntarily dismissed. [Laredo, 5:03-cv-00113] GI Forum of Texas v. State of Texas, et al. Filed on 10/15/2003, this lawsuit was a 28:1331 Federal Question: Other Civil Rights and it was transferred to another district. The basis of the complaint was that the plaintiff, the American GI Forum of Texas, sought declaratory and injunctive relief to enforce Latino voting rights as guaranteed by the Voting Rights Act of 1965 and the 14th and 15th Amendments to the U.S. Constitution. The plaintiff also saught a declaratory judgment that the congressional redistricting plan signed by the Texas Governor on October 13, 2003 violated its members civil rights because the plan unlawfully dilutes the voting strength of Latinos. [Victoria, 6:03-cv-00124] State of California v. Perry. Filed on 6/21/2001, this lawsuit was filed on behalf of the state of California, acting by and through California Governor Gray Davis and sought to require Rick Perry and the state of Texas to extradite Debra Kay Schmidt, who was charged with felony kidnapping. The lawsuit alleges that the state of California sent the extradition request to Rick Perry but received no response. [United States District Court Western District of Texas Austin Division, 1:01-cv-00387-SS] United States Of America v. State of Texas et al. Filed on 6/26/2009, this lawsuit was filed by the U.S. Attorney General and sought to enjoin the defendants from depriving individuals housed at 13 Texas State Schools and Texas State Centers of rights, privileges, or immunities secured or protected by the Constitution and laws of the United States. Governor Perry was sued in his official capacity only. [1:09cv-00490-SS] This lawsuit included a 61 page settlement in order to resolve the investigation of the Texas State School facilities being conducted by the Department of Justice. Settlement with the DOJ Forced Texas State Schools to Immediately Cease Placing Individuals in Prone Restraint, Except in Certain Extenuating Circumstances.

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[United States v. Texas Settlement, United States District Court for the Western District of Texas, 6/26/2009] Prone Restraint Means Any Physical or Mechanical Restraint That Places the Individual in a Face-Down Position for an Extended Amount of Time and Not During an Incident of Physical Restraint.

[United States v. Texas Settlement, United States District Court for the Western District of Texas, 6/26/2009] Wyatt v. Perry. Filed on 2/14/2008, the Plaintiff alleged that the defendant owned him the sum of one hundred thousand, million, billion, trillion, quadrillion, Quintillion, Sextillion, Octillion, Nanillion, Deillion, Zillion dollars for handcuffing the plaintiff during a medical examination.

[Houston, 4:08-cv-00531] League of United Latin American Citizens et al v. The State of Texas et al. Filed on 12/01/2006, this lawsuit involved the Special General Election for the United States Congress District 23, which was a result of an order by the United States District Court for the Eastern District of Texas. The order was entered as a result of an opinion by the United States Supreme Court which found that the District 23 Link Strategies, LLC CONFIDENTIAL Research 18

adopted by the Texas Legislature in 2003 was a violation of Section 2 of the Federal Voting Rights Act. The lawsuit attempted to change the date of the special election, which was originally scheduled to be held on Tuesday December 12, 2006, which is the date of the Feast of the Virgin of Guadalupe and a Holiday of Obligation for Roman Catholics, and especially for the Mexican American populations. The lawsuit was dismissed after both parties agreed to allow early voting before the Tuesday Election day. [United States District Court for the Western District of Texas (San Antonio Division), 5:06-cv-01046-XR] David Wallace Croft and Shannon Kristine Croft v. Rick Perry, Governor of the State of Texas. Filed on 08/07/2007, this lawsuit is based on an amendment of Texas Government Code 3100.101 signed by Rick Perry on 6/15/2007 that was passed by the legislature that read, in relevant part: Honor the Texas flag; I pledge allegiance to thee Texas, one state under God, one and indivisible. Essentially, the Croft family was arguing that this amendment was in violation of Amendment 1 of the Constitution which read, in relevant part, Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof. [United States District Court for the Northern District of Texas (Dallas Division), 3:07-cv-01362-K] ADDENDUM B

PERRY AT TEXAS A&M


Rick Perry attended Texas A&M from 1969 1972. Attached below are images from the Aggieland Yearbook that were acquired from the Texas A&M Library. Several of the group photos included at the bottom are not dated, but if for some reason we wanted to release them, we could acquire more details from the library.

Rick Perrys Freshman Yearbook Picture. [Aggieland Yearbook, Texas A&M Library]

Rick Perrys Junior Yearbook Picture. [Aggieland Yearbook, Texas A&M Library]

Rick Perrys Sophomore Yearbook Picture. [Aggieland Yearbook, Texas A&M Library] Link Strategies, LLC CONFIDENTIAL Research 19

Undated Yearbook Picture of Rick Perry. [Aggieland Yearbook, Texas A&M Library]

Rick Perrys Senior Yearbook Picture. [Aggieland Yearbook, Texas A&M Library] Junior Yell Leader Picture with Rick Perry. [Aggieland Yearbook, Texas A&M Library]

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TEXAS HAS SUFFERED UNDER PERRY


Perry can spin his record any way he wants, but the facts are clear: Texas has suffered under Perry. Median Wages across the country have increased since 2000, but in Texas, the median wage is lower than both the national average and the southern region of the U.S. The poverty rate in Texas has also increased under Perrys watch. In 2003, when Perry was informed that Texas was the 49th healthiest state, he responded, Thank God for Mississippi. At the time, Texas was ranked 30th in the country in terms of the quality of health care and had the largest percentage of people without health insurance. In 2007, the uninsured rate in every major Texas city was higher than the national average. In 2009, Perrys abstinence-only education plan, which was one of the most expensive sex-education programs in the country, proved it was completely ineffective-- Texas was reported to have the second highest number of teen pregnancies in the country. Also in 2009, it was reported that Texas was leading the nation in the percentage of uninsured children. In 2010, The Washington Post reported that six million Texans were without insurance, which was the highest rate in the nation. In terms of education improvements, Perry hasnt done much better than his record on healthcare. In 2009, Texas ranked 49th in teacher pay, 44th in expenditures per student, 47th in state aid per pupil, and 41st in graduation rates. In 2010, Perry once again proved that he puts petty politics above the needs of Texans by unilaterally halting Texas application for Race to the Top education funding. This federal program could have helped bring hundreds of millions of dollars in new education funds to the state. All the while, while Perry was politicizing education funding, the graduation rates in Texas urban cities was hovering around 50%. ECONOMIC STATISTICS SHOW TEXAS WORSE OFF Texas Has a Lower Median Wage Than The National Average and the Southern Region of the United States. According to the Center for Public Policy Priorities, The real value of median wages across the country has increased slightly by an average of 2 to 4 percent since 2000. Texas has a lower median wage level in comparison to both the national average and the southern region of the United States, with Texans receiving 3 percent less than the national average and 4 percent less than the southern region of the U.S. In 2008, the Texas median wage was $14.09, $1.65 lower than the national average of $15.74. [Center for Public Policy Priorities, 10/16/09, link] The Poverty Rate Increased from 1999-2008. [USDA.org, Accessed 3/15/10, link]

RURAL

URBAN

TOTAL

HEALTHCARE STATISTICS SHOW TEXANS WORSE OFF 2003: Health Care Cuts Could Force an Estimated 8,300 Pregnant Women to Lose Prenatal Care. According to The Dallas Morning News, Because of the reductions, an estimated 8,300 pregnant women could lose prenatal care. More than 158,000 elderly and frail Texans could see their number of home health care hours go down by 15 percent. And 180,000 children could either lose coverage under the Children's Health Insurance Program or receive fewer benefits, including mental health care. [The Dallas Morning News, 7/21/03] Link Strategies, LLC CONFIDENTIAL Research 23

2003: Health Care Cuts Could Force 158,000 Elderly and Frail Texans Home Health Care Hours to Go Down by 15 Percent. According to The Dallas Morning News, Because of the reductions, an estimated 8,300 pregnant women could lose prenatal care. More than 158,000 elderly and frail Texans could see their number of home health care hours go down by 15 percent. And 180,000 children could either lose coverage under the Children's Health Insurance Program or receive fewer benefits, including mental health care. [The Dallas Morning News, 7/21/03] 2003: Health Care Cuts Could Force 180,000 Children to Either Lose Coverage or Receive Fewer Benefits from the Childrens Health Insurance Program. According to The Dallas Morning News, Because of the reductions, an estimated 8,300 pregnant women could lose prenatal care. More than 158,000 elderly and frail Texans could see their number of home health care hours go down by 15 percent. And 180,000 children could either lose coverage under the Children's Health Insurance Program or receive fewer benefits, including mental health care. [The Dallas Morning News, 7/21/03] 2003: Texas Ranks 30th in Quality of Health Care and has the Largest Percentage of People Without Health Insurance. According to the University Wire, Texas, the state with the largest percentage of people without insurance, ranks 30th in quality of health care, and has the highest automobile and homeowner's insurance rates in the nation. Gov. Rick Perry made severe cuts in Medicaid, a program that had the potential to expand coverage to thousands of people around the state. [University Wire, 10/6/03] 2004: One of Every Four State Budget Dollars is Spent on Medicaid. According to the Austin American-Statesman, A recent Legislative Budget Board report showed that Texas' Medicaid budget grew 90 percent from 1994 to 2003, at a time when the overall state budget grew 65 percent. About one of every four state budget dollars -- $29 billion of the $118 billion -- is now spent on Medicaid, officials said. [Austin American-Statesman, 2/15/05] 2005: Half of All the Births in Texas are Funded by Medicaid. According to the Austin AmericanStatesman, Half of all the births in Texas are funded by Medicaid, said Stephanie Goodman, a spokeswoman for the Texas Health and Human Services Commission. Medicaid and (Children's Health Insurance) programs cover one of every three kids. [Austin American-Statesman, 2/15/05] Perry Said Statistics Ranking Texas 18th in the Nation for the Percentage of Children Covered by Medicaid and 46th for the Percentage of Children Covered by Employer-Sponsored Health Insurance were Alarming. According to the Austin American-Statesman, In a speech to the Texas Hospital Association, Perry noted that Texas ranks 18th in the nation for the percentage of children covered by Medicaid and 46th for the percentage of children covered by employer-sponsored health insurance. He called that last statistic alarming. Since 1999, he said, the number of children on public insurance rolls has doubled. [Austin American-Statesman, 2/15/05] 2005: There Were Approximately 77,600 Uninsured Residents in Collin County. According to The Dallas Morning News, There are approximately 77,600 uninsured residents in Collin County. These are people who have no insurance, no Medicaid, no Medicare and who do not qualify for the Collin County Health Department Indigent Health care fund. [The Dallas Morning News, 9/16/05] 2007: Uninsured Rate in Every Major Texas City is Higher Than the National Average. According to the Health Insurance Law Weekly, Nearly one-fourth of Texas residents -- about 5.5 million men, women and children -- are uninsured. The uninsured rate in every major Texas city is higher than the national average, and Texas' share of uninsured children, more than 25 percent, also is higher than the national average. In 2005, eight of 10 non-elderly uninsured Texans came from working families -- nearly 70 percent from families with one or more full-time workers. [Health Insurance Law Weekly, 5/13/07] Link Strategies, LLC CONFIDENTIAL Research 24

2003: When Perry was Informed that Texas was the 49th Healthiest State, He Responded, Thank God for Mississippi. According to The Texas Observer, In 2003, when Gov. Rick Perry was informed that Texas was the 49th healthiest state, his response was, Thank God for Mississippi. [The Texas Observer, 1/23/09] In Some Texas Counties, Up to 40 Percent of Residents Have No Health Insurance. According to The Washington Times, Over the last few days, in the sharp glare of national headlines on health reform, Mr. Perry's health record has become a national scandal. By percentage and number, Texas has more uninsured than any other state in America, with one out of four Texans lacking health insurance. In some Texas counties, up to 40 percent have no health insurance. Contrary to the claims of some, even if non-citizens (who include legal residents as well as illegal immigrants) were removed from the statewide estimate, Texas would still have the highest uninsured rate in the country with 4.1 million uninsured citizens. [The Washington Times, 8/2/09] One in Six Uninsured American Children Reside in Texas. According to The Washington Times, One in six uninsured American children resides in Rick Perry's Texas. In 2003, Mr. Perry cut more than 200,000 kids from the state's Children's Health Insurance Program (CHIP). Over the course of his tenure, rather than insure more kids with the $958 million that the federal government specifically set aside for Texas to expand CHIP, Mr. Perry sent those taxpayer dollars back to Washington, D.C., so that other states like Illinois could use those dollars to provide coverage to all of their children. In 2009, when 29 of 31 Texas senators voted to expand CHIP, Mr. Perry said he'd veto the bill. [The Washington Times, 8/2/09] Texas is Second in the U.S. in the Number of Teen Pregnancies. According to The Washington Times, Owing to the lowest reimbursement rates in the United States, nursing homes are leaving Texas just as baby boomers seek care. After years of opposition to basic public health education, Texas is second in the U.S. in teen pregnancies. [The Washington Times, 8/2/09] Senator Eliot Shapleigh (D El Paso) Claimed Perrys Record on Health Care is the Worst in the United States. According to the Abilene Reporter-News, We should build on the success of Medicare and Medicaid to ensure all Texans have access to health care. Health reform is Texas' best hope for lowering our staggering rates of uninsured and for getting health care costs under control. From state Sen. Eliot Shapleigh, D-El Paso, who represents one of the poorest senate districts, a passionate critic of Texas' health care system: "Perry's dismal record on health care leaves him in no position to attack responsible leaders actually working to find solutions. Rick Perry's record on health care is the worst in the United States, Shapleigh charged. One in six uninsured children in America live in Texas. Texas has more uninsured than any other state. Not a single Texas city reaches the national average for citizens covered with health insurance. [Abilene Reporter-News, 8/30/09] September 2009: Health Insurance Premiums in Texas Increased 91.6 Percent Since 2000. According to the blog Off the Kuff, A national report that was released today says family health insurance premiums in Texas increased 91.6 percent since 2000 4.6 times faster than earnings. The report by the nonprofit consumer organization Families USA says the rise in health care premiums for workers went from $6,638 for the average Texas family to $12,721 a year, but folks often got less for their money rather than more, according to the report. At the same time, median earnings of Texas workers rose from $23,032 to $27,573, a 19.7 percent increase. [Off the Kuff, 9/17/09] 2003: Perry Cut the Childrens Health Insurance Program In Three Years Coverage for 230,000 Children was Discontinued. According to The Dallas Morning News, Under Perry, state health coverage took one of its biggest hits in 2003. Because health costs drive so much of the state budget, programs went under the meat cleaver when the state needed to slash $10 billion to balance the 2003 budget. Perry and Republican legislative leaders insisted on closing the gap without raising taxes. One of the biggest cuts was in the Children's Health Insurance Program. Among the things lost were dental, Link Strategies, LLC CONFIDENTIAL Research 25

vision, mental health and hearing services for the children of working-poor families. The eligibility rules to get into the CHIP program also were tightened. In the next three years, the state discontinued subsidizing insurance coverage for 230,000 children, cutting the program almost in half. [The Dallas Morning News, 12/22/09] 2003: Perry Cut Reimbursement Rates for Doctors in 1990, 90% of Primary Care Doctors Accepted Medicaid Patients, in 2008 Only 38% Accepted Medicaid Patients. According to The Dallas Morning News, Also cut in 2003 were Medicaid reimbursement rates to doctors and hospitals. As a result, many doctors have refused to treat Medicaid patients and hospitals have struggled. In a 1990 Texas Medical Association survey, 90 percent of primary care doctors accepted Medicaid patients. Last year, 38 percent did. [The Dallas Morning News, 12/22/09] 2009: Number of Texas Children Enrolled in Subsidized Healthcare Down from Six Years Ago. According to The Dallas Morning News, In his campaign stump speech, Perry touts the 2003 budget and the tough decision-making of the time. And while the Legislature has since restored most of the benefits and tweaked eligibility criteria, the enrollment of 491,000 children is below what it was six years ago - even though the state's population has climbed more than 2 million people since then. Hundreds of thousands of eligible children are not enrolled. [The Dallas Morning News, 12/22/09] Number of Child Immunizations Increased Under Perry. According to The Dallas Morning News, On the good side, he said, the most effective way to improve health is through child immunizations and prenatal care. Texas has improved on both of these fronts, Banning said. In 2002, 65 percent of children were immunized, but that reached 77 percent last year, with much of the growth occurring after Perry signed an executive order prompting the state health agency to improve. [The Dallas Morning News, 12/22/09] Public Citizen Study Shows That Tort Reform Did Not Save Consumers Money EmployerProvided Insurance Costs Increased About 114% in Texas. According to The Dallas Morning News, But a study just released by the liberal-leaning national group Public Citizen shows that lawsuit limits have not led to any savings for consumers. There is no evidence that any of the savings has been passed on to patients or taxpayers, the study found. Citing state and federal agency statistics, the study shows Texas insurance premiums for individuals getting health coverage through their employer grew about 114 percent to an average of $4,205, which is about the same rate as national figures. [The Dallas Morning News, 12/22/09] U.S. Census Bureau Report Released in August 2008 Showed Over 5.5 Million Texans are Without Health Care. According to the blog Think Progress, Texas has the highest percentage of those without health insurance in the entire country. A U.S. Census Bureau report released last August showed that nearly 25 percent of Texans (just over 5.5 million residents) lacked insurance (compared to a national average of 15.5 percent). [Think Progress, 7/24/09, link] Families USA: 9.3 Million Texans Were Uninsured at Some Point in 2007-2008. According to Families USA, Approximately 9.3 million Texans43.9 percent of residents under age 65were uninsured at some point in time during 2007-2008, according to a report released today by the health consumer organization Families USA. In fact, 7.5 million of those uninsured Texans, 80.5 percent of the total, were uninsured for six months or more during that time. [FamiliesUSA.org, 3/26/09, link] Perrys Healthcare Plan Would Cap Annual Benefits at $25,000 for Parents. According to the Fort Worth Star-Telegram, The Texas plan, a demonstration project that sought a federal waiver on Medicaid, didn t cover enough people, provide enough benefits or have enough funding. That pretty much sums up the difficulty of a single state solving the healthcare conundrum. The Texas proposal also capped annual benefits at $25,000 for parents, a low bar that the Centers for Medicare and Medicaid Services would never support. There is no precedent under CMS-approved demonstrations to approve Link Strategies, LLC CONFIDENTIAL Research 26

an annual benefit limit as low as $25,000, even for an expansion population, acting Director Dianne Heffron wrote a year ago. [Fort Worth Star-Telegram, 7/5/09] August 2009: Texas has More Than 2.1 Million Low-Income Adults without Health Insurance. Texas has more than 2.1 million low-income adults who don t have health insurance. It was never clear how many in that target audience would be helped by the insurance subsidy, but estimates were put at 10 to 20 percent. [Fort Worth Star-Telegram, 7/5/09] August 2009: Four Million Texans are Uninsured and $12 Billion in Annual Hospital Care Goes Unpaid in Texas. According to the Fort Worth Star-Telegram, An additional 4 million in the state are also uninsured, according to estimates. And almost $12 billion in annual hospital care goes unpaid in Texas. [Fort Worth Star-Telegram, 7/5/09] 25% of Texans are Uninsured The Highest Percentage of Any Other State. According to the Fort Worth Star-Telegram, Medicaid is a joint federal-state program that provides health coverage to lowincome residents, primarily children, the elderly and the disabled. Nearly 2.8 million, including 2 million children, are on Medicaid in Texas. The proposals in Washington, Goodman said, would add almost 3 million people to the Texas program over the next three years. Texas has a higher percentage of uninsured people, 25 percent, than any other state. [Fort Worth Star-Telegram, 8/1/09] Houston and Dallas-Fort Worth Only Behind Boston in Total Healthcare Costs Per Employee. According to the Fort Worth Star-Telegram, Among the major metropolitan areas, only Boston had higher healthcare costs per employee than Houston and Dallas-Fort Worth. In the Metroplex, healthcare costs are 19 percent higher than in Washington and Los Angeles and 18 percent higher than in Atlanta. But the median income in Texas trails that in Washington, California, Georgia and the nation. [Fort Worth Star-Telegram, 10/11/06] Six Million Texans are Without Insurance The Highest Rate in the Nation. According to The Washington Post, In Texas, for example, one quarter of the population, or 6 million people, are without insurance -- the highest rate in the nation. The state ties with Virginia, Missouri and Alabama for the country's toughest Medicaid eligibility rules -- parents qualify only if they earn less than $5,500 a year. State regulations in Texas are loose, allowing insurers to charge higher-risk customers 25 times more than healthier ones. [The Washington Post, 2/14/10] More Than 1.4 Million Texas Children were uninsured in 2008. According to the Austin AmericanStatesman, More than 1.4 million Texas children were uninsured in 2008, the foundation estimates. The state had the most uninsured children in the nation that year; California ran second at more than 1.1 million. [Austin American-Statesman, 1/30/10] Texas Leads the Nation in the Percentage of Uninsured Children. According to The Washington Post, Regarding the Nov. 6 op-ed by Newt Gingrich and Texas Gov. Rick Perry, Let states lead the way: Texas is a leader in health care, but not the way the authors suggest. Texas leads the nation in the percentage of uninsured children (19.6 vs. 11 percent nationwide). For Texas adults, it's even worse. Thirty percent are uninsured, compared with 20 percent nationally. In Texas, a working parent in a family of three can't get Medicaid if he or she makes more than $308 a month. The national average is $908. [The Washington Post, 11/13/09] EDUCATION STATISTICS SHOW TEXANS WORSE OFF 2001: Of Texans Over 25 about 79% have High School Diplomas and only 24% have Completed College. According to the Austin American-Statesman, Texas ranks low among the states in the percentage of its residents who finish high school or college. That indicator scares employers and should goad legislators into action. About 79 percent of Texans 25 and older have high school diplomas or Link Strategies, LLC CONFIDENTIAL Research 27

equivalency diplomas. Only 24 percent have completed college. The state lags national averages in both cases. The state must do better, particularly in educating its expanding Hispanic population. [Austin American-Statesman, 1/7/01] 2003: Perry Proposed Reducing Funding for Community College Employee Health Care by 65%. According to the Corpus Christi Caller-Times, Proposed cuts to government programs and agencies could have a significant impact on rural Texas, officials said Thursday at the inaugural Rural Texas Summit Gov. Rick Perry has proposed reducing by 65 percent state funding for community college employee health care premiums. And many lawmakers have advocated deregulating university tuition so the schools can make up funding losses from deep cuts. Rural community colleges don't have the tax base to make up budget cuts and that's our work force training, Keffer said. The proposals are there, but you have people fighting for you. [Corpus Christi Caller-Times, 2/21/03] 2003: Perrys Budget-Cutting Suggestions Included a 12.5% Cut for Community Colleges and a Decrease in the Amount of Employees Health Insurance Paid by the State. According to Community College Week, Community colleges likely will be forced to raise tuition and local property taxes to make up for a loss of already low-state funding, he said. Besides the 12.5 percent cut, community colleges may have to start paying a greater portion of their employees' health insurance. The $175 million idea is among Gov. Rick Perry's budget-cutting suggestions. [Community College Week, 3/3/03] 2004: Rising Costs, Complaints Caused Perry and Legislators to Create a Committee to Oversee Tuition Rates One Year After Deregulation. According to the University Wire, Almost a year after hastily throwing the door to deregulation wide open, Texas legislators are finally feeling the draft and giving tuition a closer look. Governor Rick Perry and state legislators recently assigned a committee to oversee and review tuition rates statewide. Perry also required the Legislative Budget Board to hire a firm to audit UT System spending. The moves are prompted in part by the stampede of students -- and their parents -- giving legislators an earful over the size of tuition hikes. UTA tuition increased $10 per credit hour this semester with an additional $17 increase coming this fall and further hikes are likely for spring 2005. Engineering and nursing students have been hit even harder. [University Wire, 3/9/04] 2003: Perry Signed Deregulation Bill Allowing Universities to Set their Tuition Rates. According to the Associated Press, Universities will be able to set their own tuition rates under legislation signed into law by Gov. Rick Perry. The hotly debated bill changes current law that lets the Legislature set tuition rates. [AP, 6/23/03] 2005: Tuition Rates Increased an Average of 23% from Fall 2003 to Fall 2004. According to the Associated Press, The Legislature and Gov. Rick Perry deregulated rates for the first time in 2003. University governing boards were given control of tuition rates, a power previously held by the Legislature, to meet rising expenses. Tuition costs rose an average of 23 percent from the fall of 2003 through last fall. [AP, 2/12/05] 2005: Since Tuition Deregulation UT Raised Tuition and Fees 37%. According to the Austin American-Statesman, Two years ago, legislators gave universities the power to set their own tuition rates. At the time, Lt. Gov. David Dewhurst and many other lawmakers swung between ambivalence and outright opposition to tuition deregulation. But both Gov. Rick Perry and House Speaker Tom Craddick wanted to give universities the ability to set their own tuition UT has since raised its tuition and fees 37 percent. University officials said the increases made up for decreases in state higher education money. [Austin American-Statesman, 3/10/05] 2006: Cost of Tuition Increased Nearly 66% Since Perry Signed Tuition Deregulation Bill. According to the University Wire, Tuition at Texas A&M University has increased nearly 66 percent in the past four years, and it appears the sky is the limit, said Matt Davis, a senior 28

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communication major. Tuition was $88 per credit hour at A&M before deregulation in 2002, according to figures provided by the Office of Student Business Services. Since deregulation, tuition has increased every year to the current $145.70 per credit hour. The increased tuition at public universities in Texas has garnered attention from gubernatorial candidates and college voters heading into the polls on Tuesday. Tuition deregulation went into effect on Sept. 1, 2003, after Gov. Rick Perry signed House Bill 3015. According to the bill, governing boards at each university may set the tuition rate for that institution based on what the board considers appropriate to increase graduation rates, manage university facilities and enhance employee performance. [University Wire, 11/2/06] 2008: Recent Figures Showed Tuition Increases of 164%, 130% and 120% at Three State Universities. According to the Houston Chronicle, WHEN Texas Gov. Rick Perry met with state university regents concerning higher education this month, the one subject that was rarely mentioned was soaring tuition at state universities. It's a pretty big elephant in the room to ignore. Since 2003, when the Legislature deregulated tuition rates, costs borne by students and their parents have jumped an average 112 percent. Legislators once set tuition rates. Any increases had to be approved by the Legislature. Under deregulation, the regents of an institution are free to raise tuition whenever they choose. The most recent figures from the Texas Higher Education Coordinating Board reveal the University of Texas at Austin had the most precipitous rise, 164 percent. Texas A&M wasn't far behind at 130 percent, followed by the University of Houston at 126 percent. To put that in perspective, a student who had to come up with $4,126 for UH tuition and fees for two 15-hour semesters in 2003 had to pay $7,284 last year. And that was before the latest vote by the UH board of regents to raise tuition and fees another 6 percent. [Houston Chronicle, 6/6/08] 2009: Perrys Plan to Freeze Tuition Rates Only Applied to Incoming Freshman who Finish College in Four Years. According to the Houston Chronicle, In a nod to families anguishing over the cost of a college diploma, Gov. Rick Perry on Tuesday suggested freezing tuition rates for incoming freshman at Texas universities, at least for those who finish in four years. This will help Texas families plan while giving students another incentive to finish on time, Perry said in his State of the State speech to the Legislature. [Houston Chronicle, 1/28/09] 2009: Perrys Budget Cuts and Tuition Deregulation Hurt Children and Students in Texas. According to the Houston Chronicle, 2003 Called for: $10 billion in budget cuts and college tuition deregulation. Action: Cuts knocked about 213,000 out of the Children's Health Insurance Program, but the cuts have since been restored. Perry says budget cuts kept the state's business climate healthy. Action: Unregulated tuition has increased an average of 53 percent at state universities. [Houston Chronicle, 1/27/09]

2004: Latino Education Attainment Lagged as Higher Education Budgets Continued to be Cut. According to an editorial in the San Antonio Express-News, As the millennium dawned, state leaders snapped to what demographers had been saying for two decades. Texas' Latino population growth is rapidly outpacing other groups, but their educational attainment lags far behind For the past three years, the Hispanic (enrollment) growth has averaged a little over 18,000 students a year, said board spokesman Ray Grasshoff. That is 5,000 short of the 23,000 additional Latino students needed per year And we can't expect great progress in achieving these goals if we continue to cut state funding for community colleges and universities, forcing administrators to make it up with higher tuition and fees. Institutions of higher learning budgets were cut 11 percent this biennium, and Gov. Rick Perry has asked administrators to cut 5 percent more off their next budget. That is not smart at all. They need more funding, not less. [San Antonio Express-News, 8/1/04] 2006: Texas A&M Student Showed Abstinence-Only Based Education Increased Sexual Activity in Ninth Graders. According to the Corpus Christi Caller-Times, If the purpose of sex education is to Link Strategies, LLC CONFIDENTIAL Research 29

prevent sex, pregnancy, and STDs, then abstinence-only based education is not the answer. A look at overall state trends reflects the same. According to a study conducted by researchers at Texas A&M University, teenagers in 29 high schools became increasingly sexually active, despite taking courses emphasizing abstinence-only themes. The study showed about 23 percent of ninth-grade girls had sex before receiving abstinence education. After taking the course, 29 percent of the girls in the same group said they had had sex. A look at boys in the tenth grade showed an even greater increase, from 24 percent to 39 percent. [Corpus Christi Caller-Times, 9/4/06] Perry Championed Abstinence-Only Sex Education while Bush Doubled Abstinence Education funding from 2002 to 2005. According to the Corpus Christi Caller-Times, So how much money is being spent on this failing policy of abstinence-based education? Quite a lot, actually. Federal funding has steadily increased each year under the Bush administration. According to the U.S. Department of Health and Human Services, approximately $82 million was spent on abstinence education in 2001. By 2005 that amount had doubled to about $167 million. And the president's 2006 budget asked for $206 million. Gov. Rick Perry is also a champion of abstinence-only sex education. Are his advisors not reading the same studies the public is? Or is he intent on staying the course despite ever-accumulating evidence that the curriculum isn't working? [Corpus Christi Caller-Times, 9/4/06]

2006: Chris Bell Spokeswoman Said Texas Had the Lowest Graduation Rate in the County. According to the Associated Press, Of course Chris Bell is angry, said Bell spokeswoman Heather Guntert. Rick Perry has a historic record of failure, which is why two-thirds of Texans want to fire him. Guntert quoted statistics that put Texas as having the most uninsured children and lowest graduation rate in the country. Perry can talk all he wants about the job climate in Texas but the cost of our dropout rate will be $114 billion in economic productivity over the next decade, Guntert said.[AP, 10/29/06] 2007: Perry Budget Included $154 Million in Funding Cuts for Health Insurance Coverage at all of Texas 50 Community Colleges. According to The Insurance Policy, Students attending community colleges in Texas might see tuition increases as a way for campuses to deal with state funding cuts by Governor Rick Perry. The cuts were a part of a $152 billion biennium budget which included $154 million in state funding cuts for health insurance coverage at all of the state's 50 community colleges according to an article on Kcbd.com. [The Insurance Policy, 6/19/07] 2007: Informing Young People about Sexuality Consisted Only of Abstinence Training while Texas was Number 1 in the Country for Teen Births. According to the Waco Tribune-Herald, Oh, yes. We talk a good game. But when it comes to doing something, policymakers shift into the onedimensional. In the case of informing young people about sexuality, it's in the form of abstinence training. In some Texas school districts, it's the closest thing children will get to sex education. That's because Congress pumps $113 million a year into federal abstinence programs. Texas schools imbibe heavily from this font. And the result? Texas is No. 1 in teen births. True, Texas' teen birth rate dropped 19 percent between 1991 and 2004. However, over that time the nation's rate dropped by a third. [Waco Tribune-Herald, 11/8/07] 2007: Perry Stood by Current Law and Felt Abstinence Was the Only way to Avoid Pregnancy. According to Cox News Service, The governor has also stood by and will continue to support the current law. He feels that abstinence is the only 100 percent way to avoid pregnancy, said spokeswoman Allison Castle. Castle also noted that while Texas tops the teen birth rate, it does not have the highest teen pregnancy rate; it is ranked fifth, with Nevada on top. [Cox News Service, 12/13/07] Every 10 Minutes, a Teenager in Texas Gets Pregnant. According to Cox News Service, How often does a teenager in Texas get pregnant? -Every 10 minutes, a teen in Texas gets pregnant. -Every 10 hours, a 14-year-old teen gets pregnant. 30

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-Every 3 hours, a 15-year-old teen gets pregnant. -Every 1.5 hours, a 16-year-old gets pregnant. -Every 52 minutes, a 17-year-old gets pregnant. -Every 35 minutes, an 18-year-old gets pregnant. -Every 28 minutes, a 19-year-old gets pregnant. -Every 10 minutes, a Texas teen gives birth. [Cox News Service, 12/13/07] 2009: Perrys Failed Education Promises. According to the Austin American-Statesman, Gov. Rick Perry in recent state of the state speeches and what resulted. Issue: Early childhood funding Result: He called in 2007 for an $80 million boost for the Early Start prekindergarten program, but lawmakers did not significantly increase funding. Issue: Higher education incentives Result: He called in 2007 for $350 million in performance-based incentive funding for higher education. The Legislature provided $100 million. Issue: Teacher merit pay Result: Perry called in 2005 for an end to the system that pays teachers based solely on their experience. The next year the Legislature created the country's most ambitious merit pay plan for teachers. [Austin American-Statesman, 1/27/09] 2009: Texas Had the Most Extensive and Expensive Abstinence-Based Sex Ed Program in the Country and One of the Highest Teen Birth Rates. According to the Austin American-Statesman, Anyone who thinks this state's abstinence-based sex education program is working to prevent teen pregnancy hasn't been to a mall in a while. Not all those kids with kids skipped that class. There is a huge disconnect in Texas that too many state officials will not acknowledge - and it's costing the state a fortune in cash and human capital. Here it is in black and white: Texas has the most extensive and expensive abstinence-based sex education program in the country AND one of the highest teen birth rates of the 50 states. [Austin American-Statesman, 3/4/09] Texas Spent $18 Million on Abstinence Programs. According to the Austin AmericanStatesman, Though Texas spent $18 million on abstinence programs last year and teaches it in almost all 1,700 public high schools, the heavy focus on abstinence fails Texas students at every level. According to the Texas Department of State Health Services, another teenage girl gets pregnant every 10 minutes in Texas, and one has an abortion every 48 minutes. What's that say about the abstinence-based sex education program in effect here for nearly 15 years? It doesn't work. And it's expensive. Medicaid - our tax dollars - paid for more than 17,000 teen births two years ago at a cost of more than $41 million. [Austin American-Statesman, 3/4/09] Report Showed One in Every 35 Texas Teenage Girls Will Get Pregnant by Age 17. According to the Austin American-Statesman, The state reports that one in every 35 Texas teenage girls will get pregnant by age 17. The most shocking statistic in a long list of shocking statistics is that one of every 5,280 12-year-old girls gets pregnant. This state's teen birth rate at last count was 63 per 1,000 girls between 15 and 19 years old. That's the third highest in the country (the national average is 41.9). And nearly 25 percent of those were giving birth for at least the second time. [Austin American-Statesman, 3/4/09] Perry Spokeswoman Said We Oppose any Sex Education Other than Abstinence until Heterosexual Marriage. According to the Austin American-Statesman, Gov. Rick Perry's office said he is comfortable with the abstinence-based approach. We oppose any sex education other than abstinence until heterosexual marriage, said his spokeswoman. Perry and other state leaders clinging to this failed model need to get their heads out of the sand about sex education. They need a trip to the mall. [Austin American-Statesman, 3/4/09]

2009: Statistics Showed Nearly 53% of Texas High Schoolers had Sexual Intercourse and Texas Youth are less Likely to Use Condoms. According to the Associated Press, Texas spent a nation-high $17 million last year for abstinence education programs that continue to stir debate about whether classes promoting virginity before marriage work in public schools. Federal statistics in June showed that Link Strategies, LLC CONFIDENTIAL Research 31

52.9 percent of Texas students in ninth through 12th grades had sexual intercourse, compared with 47.8 nationally. The Centers for Disease Control and Prevention also reported that Texas youths are less likely to use condoms. Public schools in Texas are not required to offer sex education, but those that do must make the lessons abstinence-focused. Instructions about condoms are couched in terms of how often they fail, according to state law. [AP, 7/13/09] 2009: Texas Ranked 49th in Teacher Pay, 44th in Expenditures per Student, 47th in State Aid Per Pupil and 41st in Graduation Rates. According to the Breckenridge American, The accusation that Texas has valued tax cuts over children and budget cuts over higher education have put Texas at risk in her ability to compete and succeed. Figures to support those concern come from state statistics. Average teacher salaries as a percentage of average annual pay puts Texas teachers 49th. Texas ranks 44th in current expenditures per student and 47th in state aid per pupil in average daily attendance. The high school graduation rate ranks Texas 41st. [Breckenridge American, 9/29/09] 2009: $300 Million Spent on Merit Pay for Teachers didnt Increase Student Achievement. According to the Dallas Morning News, For the $300 million spent on merit pay for teachers over the last three years, Texas was hoping for a big boost in student achievement. But it didn't happen with the nowdefunct program, according to experts hired by the state. The Texas Educator Excellence Grant, or TEEG, plan did not produce the academic improvements that proponents including Gov. Rick Perry hoped for when the program was launched with much fanfare in 2006, a new report from the National Center on Performance Incentives said. There is no systematic evidence that TEEG had an impact on student achievement gains, said researchers for Texas A&M University, Vanderbilt University and the University of Missouri. [Dallas Morning News, 11/4/09] Perry Spokeswoman Said Governor Still Endorsed Performance-Based Pay. According to the Dallas Morning News, The study focused on flaws in the way the program was designed and did not conclude whether merit pay for teachers in general is a good idea. A spokeswoman for Perry, who established a pilot merit pay program four years ago that grew into the TEEG program, said the governor still endorses the concept of performance-based pay. The governor supports incentivizing our best teachers through merit pay and he worked with the Legislature to consolidate these programs into one with an increase in total funding, said Allison Castle, a Perry spokeswoman. [Dallas Morning News, 11/4/09]

2010: Perry Halted Application for Race to the Top Education Funds While Urban Graduation Rates were Around 50%. According to the Colorado Independent, This report comes in the wake of news that, months into the project, conservative Republican Texas Governor Rick Perry put a halt to his states application to win millions of dollars in Race to the Top federal Department of Education funds. With urban graduation rates in Texas hovering around 50 percent, Texas would seem ill-prepared to toss away funding opportunities. [Colorado Independent, 1/14/10] 2010: Since 2008, 22,697 Non-U.S. Citizens Attended Texas Universities at In-State Tuition Rates. According to the Austin American-Statesman, As of 2008, 22,697 non-U.S. citizens and permanent residents had attended Texas colleges or universities at in-state tuition rates. More than 10,000 were enrolled in fall 2008, the latest count available. [Austin American-Statesman, 2/15/10] Perry Signed Bill to Allow Texas High School Graduates to Pay In-State Tuition Rates, Even if They Werent Citizens Yet. According to Black Issues in Higher Education, Under bills recently introduced by state and federal lawmakers, itwould be significantly easier for some illegal immigrants to afford a college education -- and for the colleges to afford the students The Texas legislation, sponsored by state Rep. Rick Noriega, wouldallow any graduate of a state high school to pay in-state tuition rates, provided the individual has resided in the stare for at least three years and signs a waiver agreeing to seek legal permanent residency. The Noriega bill was sent to Gov. Rick Perry, who signed it last month. [Black Issues in Higher Education, 7/5/01] 32

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SCHOOL VOUCHERS Perry Received More than $323,000 from Private-School Voucher Proponents. According to the Associated Press, Putting Children First spokesman Greg Talley said the group is drafting a pilot program and I bet it will concentrate on economically disadvantaged children in low-performing schools. Sharp's campaign said Perry has received more than $ 323,000 from leaders of the private-school voucher movement in Texas, plus donations totaling $ 70,000 from two voucher advocates who live out of state. [AP, 9/29/98] Perry Received $2.2 Million Campaign Loan from Supporters of School Vouchers 10 Days before Election. According to the Associated Press, Gov.-elect Rick Perry received a $ 1.1 million campaign loan from proponents of creating school vouchers - an education concept his opponent called dangerous - 10 days before the Nov. 3 election. According to Perry's campaign finance report for the period of Oct. 25 to Dec. 31, Perry received the loan on Oct. 25. It was underwritten by William A. McMinn of Houston, James R. Leininger of San Antonio and James Mansour of Austin Leinenger is one of 100 wealthiest Texans and has spent millions of dollars trying to influence elections and public policy. Democratic party leaders criticized the loan, which according to the report was paid back at 8 percent interest on Dec. 17. [AP, 1/15/99] Perry Flew to Bahamas to Talk Public School Finance with Two of His Biggest Donors, Who Favor Vouchers. According to the El Paso Times, Gov. Rick Perry is taking heat for his recent trip to the Bahamas to talk about public school finance with two of his biggest financial contributors -- who want school vouchers Perry defended his island retreat as an opportunity for real progressive conversation. [El Paso Times, 3/6/04] Perrys Bahamas Trip Investigated by Texas Ethics Commission for Converting Political Contributions to Personal Use. According to the Houston Chronicle, Gov. Rick Perry's weekend trip to the Bahamas with select advisers and contributors - which provoked political controversy - also is being investigated for possible violations of state ethics laws, the governor's office confirmed Thursday. The Texas Ethics Commission is trying to determine if Perry illegally used political donations to pay for trip expenses for himself; his wife, Anita; and three staffers. It is illegal for an officeholder to convert political contributions to personal use. [Houston Chronicle, 4/23/04]

TUITION INCREASES AND DEREGULATION Perry Said Deregulation of Tuition Levels Would Be Beneficial and Costs Wouldnt Jump Dramatically. According to the University Wire, The candidates for Texas lieutenant governor both touted education Wednesday as the key to the state's future success, but disagreed over how tuition rates should be determined at colleges and universities. Democratic candidate John Sharp and Republican candidate Rick Perry -- both graduates of Texas A&M University -- took opposing views after the program over whether state colleges and universities should have more autonomy in setting their own tuition and fee levels But Perry, the state agriculture commissioner, said deregulation of tuition levels at public colleges and universities would be beneficial, adding that costs wouldn't jump dramatically because it would be bad business. I am a firm believer that the market will find its level, he said. If the University of Texas, for instance, were to price itself out of the market, I think it would be to their certain disadvantage. [University Wire, 6/11/98] Perry Signed Bill to Allow Texas High School Graduates to Pay In-State Tuition Rates, Even if They Werent Citizens Yet. According to Black Issues in Higher Education, Under bills recently introduced by state and federal lawmakers, itwould be significantly easier for some illegal immigrants to afford a college education -- and for the colleges to afford the students The Texas legislation, Link Strategies, LLC CONFIDENTIAL Research 33

sponsored by state Rep. Rick Noriega, wouldallow any graduate of a state high school to pay in-state tuition rates, provided the individual has resided in the stare for at least three years and signs a waiver agreeing to seek legal permanent residency. The Noriega bill was sent to Gov. Rick Perry, who signed it last month. [Black Issues in Higher Education, 7/5/01] Since 2008, 22,697 Non-U.S. Citizens Attended Texas Universities at In-State Tuition Rates. According to the Austin American-Statesman, As of 2008, 22,697 non-U.S. citizens and permanent residents had attended Texas colleges or universities at in-state tuition rates. More than 10,000 were enrolled in fall 2008, the latest count available. [Austin American-Statesman, 2/15/10]

Perry Signed Deregulation Bill Allowing Universities to Set their Tuition Rates. According to the Associated Press, Universities will be able to set their own tuition rates under legislation signed into law by Gov. Rick Perry. The hotly debated bill changes current law that lets the Legislature set tuition rates. [AP, 6/23/03] Rising Costs, Complaints Caused Perry and Legislators to Create a Committee to Oversee Tuition Rates One Year After Deregulation. According to the University Wire, Almost a year after hastily throwing the door to deregulation wide open, Texas legislators are finally feeling the draft and giving tuition a closer look. Governor Rick Perry and state legislators recently assigned a committee to oversee and review tuition rates statewide. Perry also required the Legislative Budget Board to hire a firm to audit UT System spending. The moves are prompted in part by the stampede of students -- and their parents -- giving legislators an earful over the size of tuition hikes. UTA tuition increased $10 per credit hour this semester with an additional $17 increase coming this fall and further hikes are likely for spring 2005. Engineering and nursing students have been hit even harder. [University Wire, 3/9/04] Tuition Rates Increased an Average of 23% from Fall 2003 to Fall 2004. According to the Associated Press, The Legislature and Gov. Rick Perry deregulated rates for the first time in 2003. University governing boards were given control of tuition rates, a power previously held by the Legislature, to meet rising expenses. Tuition costs rose an average of 23 percent from the fall of 2003 through last fall. [AP, 2/12/05] Since Tuition Deregulation UT Raised Tuition and Fees 37%. According to the Austin AmericanStatesman, Two years ago, legislators gave universities the power to set their own tuition rates. At the time, Lt. Gov. David Dewhurst and many other lawmakers swung between ambivalence and outright opposition to tuition deregulation. But both Gov. Rick Perry and House Speaker Tom Craddick wanted to give universities the ability to set their own tuition UT has since raised its tuition and fees 37 percent. University officials said the increases made up for decreases in state higher education money. [Austin American-Statesman, 3/10/05] Cost of Tuition Increased Nearly 66% Since Perry Signed Tuition Deregulation Bill. According to the University Wire, Tuition at Texas A&M University has increased nearly 66 percent in the past four years, and it appears the sky is the limit, said Matt Davis, a senior communication major. Tuition was $88 per credit hour at A&M before deregulation in 2002, according to figures provided by the Office of Student Business Services. Since deregulation, tuition has increased every year to the current $145.70 per credit hour. The increased tuition at public universities in Texas has garnered attention from gubernatorial candidates and college voters heading into the polls on Tuesday. Tuition deregulation went into effect on Sept. 1, 2003, after Gov. Rick Perry signed House Bill 3015. According to the bill, governing boards at each university may set the tuition rate for that institution based on what the board considers appropriate to increase graduation rates, manage university facilities and enhance employee performance. [University Wire, 11/2/06]

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Recent Figures Showed Tuition Increases of 164, 130 and 120% at Three State Universities. According to the Houston Chronicle, WHEN Texas Gov. Rick Perry met with state university regents concerning higher education this month, the one subject that was rarely mentioned was soaring tuition at state universities. It's a pretty big elephant in the room to ignore. Since 2003, when the Legislature deregulated tuition rates, costs borne by students and their parents have jumped an average 112 percent. Legislators once set tuition rates. Any increases had to be approved by the Legislature. Under deregulation, the regents of an institution are free to raise tuition whenever they choose. The most recent figures from the Texas Higher Education Coordinating Board reveal the University of Texas at Austin had the most precipitous rise, 164 percent. Texas A&M wasn't far behind at 130 percent, followed by the University of Houston at 126 percent. To put that in perspective, a student who had to come up with $4,126 for UH tuition and fees for two 15-hour semesters in 2003 had to pay $7,284 last year. And that was before the latest vote by the UH board of regents to raise tuition and fees another 6 percent. [Houston Chronicle, 6/6/08] Perrys Plan to Freeze Tuition Rates Only Applied to Incoming Freshman who Finish College in Four Years. According to the Houston Chronicle, In a nod to families anguishing over the cost of a college diploma, Gov. Rick Perry on Tuesday suggested freezing tuition rates for incoming freshman at Texas universities, at least for those who finish in four years. This will help Texas families plan while giving students another incentive to finish on time, Perry said in his State of the State speech to the Legislature. [Houston Chronicle, 1/28/09] COMMUNITY COLLEGES Perry Announced Funding Cuts for Community Colleges. According to the Austin AmericanStatesman, Members of an Austin Community College budget committee met in emergency session Friday to discuss the college's latest financial crisis: an additional $4.3 million in proposed state funding cuts for next year. The newest cuts were announced this week by Gov. Rick Perry, who said Texas community colleges might have to pick up part of the costs of insurance for their employees beginning in 2004. The cuts could mean a multimillion-dollar shortfall for ACC, even if voters approve a 5-cent tax increase in the spring. Last month, Perry told community colleges they would probably lose 7 percent of their state funding for this year. For ACC, that would be $3.2 million of its $45.3 million state appropriation. [Austin American-Statesman, 2/15/03] Perry Proposed Reducing Funding for Community College Employee Health Care by 65%. According to the Corpus Christi Caller-Times, Proposed cuts to government programs and agencies could have a significant impact on rural Texas, officials said Thursday at the inaugural Rural Texas Summit Gov. Rick Perry has proposed reducing by 65 percent state funding for community college employee health care premiums. And many lawmakers have advocated deregulating university tuition so the schools can make up funding losses from deep cuts. Rural community colleges don't have the tax base to make up budget cuts and that's our work force training, Keffer said. The proposals are there, but you have people fighting for you. [Corpus Christi Caller-Times, 2/21/03] Perrys Budget-Cutting Suggestions Included a 12.5% Cut for Community Colleges and a Decrease in the Amount of Employees Health Insurance Paid by the State. According to Community College Week, Community colleges likely will be forced to raise tuition and local property taxes to make up for a loss of already low-state funding, he said. Besides the 12.5 percent cut, community colleges may have to start paying a greater portion of their employees' health insurance. The $175 million idea is among Gov. Rick Perry's budget-cutting suggestions. [Community College Week, 3/3/03] Community Colleges Officials Said they would Raise Property Taxes if Lawmakers Approve Perrys Request of another 5% Budget Cut. According to the Corpus Christi Caller-Times, Currently, the state supplies 32 percent of community college funding, which doesn't entirely cover instructional Link Strategies, LLC CONFIDENTIAL Research 35

costs, officials said. Community colleges will raise property taxes if lawmakers follow through with Gov. Rick Perry's request of state agencies to trim budgets by another 5 percent, officials added. [Corpus Christi Caller-Times, 7/20/04] Perry Budget Included $154 Million in Funding Cuts for Health Insurance Coverage at all of Texas 50 Community Colleges. According to The Insurance Policy, Students attending community colleges in Texas might see tuition increases as a way for campuses to deal with state funding cuts by Governor Rick Perry. The cuts were a part of a $152 billion biennium budget which included $154 million in state funding cuts for health insurance coverage at all of the state's 50 community colleges according to an article on Kcbd.com. [The Insurance Policy, 6/19/07] Restoration of $154 Million Amounted to a Rejection of Gov. Rick Perry and his Veto. According to the Corpus Christi Caller-Times, Never mind the costume of incentives that dressed up the agreement announced out of Austin this week that restored $154 million in community college funding. The core of the agreement amounts to a rejection of Gov. Rick Perry's veto and affirmation of the valuable role played by community colleges in the state's higher education system. Political unity is hard to find in Austin, but Perry's veto achieved it; everybody was against it. With 50 community colleges across the state, with an enrollment of more than a half million students, virtually every state representative and senator either has a community college in his district or has constituents who teach or attend a community college. The uproar caused by the veto prompted the state's major political players to find a solution. [Corpus Christi Caller-Times, 10/28/07] Odessa College Forced to Raise Enrollment Fees Due to Lack of Funding for Employee Health Insurance. According to the Odessa American, Odessa College's budget is getting tighter, though overall tuition is not slated for an increase until the second semester To offset that, tuition will jump. Johnson said the budget includes a slight tuition increase in the spring. Utilities have gone up, insurance is up and the legislature still hasn't funded our health insurance, Johnson said. Since Gov. Rick Perry vetoed health insurance funding in 2007, community colleges have had to pay for employee costs without any state assistance. It's estimated about $600,000 will be raised through a spring enrollment increase of $5 per credit hour for in-district students and $10 per hour for those outside the district. In addition, a 2 percent enrollment increase is projected for the college. [Odessa American, 7/29/09] SEX EDUCATION Texas A&M Student Showed Abstinence-Only Based Education Increased Sexual Activity in Ninth Graders. According to the Corpus Christi Caller-Times, If the purpose of sex education is to prevent sex, pregnancy, and STDs, then abstinence-only based education is not the answer. A look at overall state trends reflects the same. According to a study conducted by researchers at Texas A&M University, teenagers in 29 high schools became increasingly sexually active, despite taking courses emphasizing abstinence-only themes. The study showed about 23 percent of ninth-grade girls had sex before receiving abstinence education. After taking the course, 29 percent of the girls in the same group said they had had sex. A look at boys in the tenth grade showed an even greater increase, from 24 percent to 39 percent. [Corpus Christi Caller-Times, 9/4/06] Perry Championed Abstinence-Only Sex Education while Bush Doubled Abstinence Education funding from 2002 to 2005. According to the Corpus Christi Caller-Times, So how much money is being spent on this failing policy of abstinence-based education? Quite a lot, actually. Federal funding has steadily increased each year under the Bush administration. According to the U.S. Department of Health and Human Services, approximately $82 million was spent on abstinence education in 2001. By 2005 that amount had doubled to about $167 million. And the president's 2006 budget asked for $206 million. Gov. Rick Perry is also a champion of abstinence-only sex education. Are his advisors not reading the same studies the public is? Or is 36

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he intent on staying the course despite ever-accumulating evidence that the curriculum isn't working? [Corpus Christi Caller-Times, 9/4/06] Perrys Office was Satisfied with Current Sex Education in Texas Schools Despite Data Showing it Didnt Work. According to the Waco Tribune-Herald, The other day our governor's office was presented with data that showed Texas' approaches to sex education and contraception don't work at all. The response? Don't bother us with results. Actually, what Rick Perry's office said is, The governor's office is satisfied with current law. [Waco Tribune-Herald, 11/8/07] Informing Young People about Sexuality Consisted Only of Abstinence Training while Texas was Number 1 in the Country for Teen Births. According to the Waco Tribune-Herald, Oh, yes. We talk a good game. But when it comes to doing something, policymakers shift into the one-dimensional. In the case of informing young people about sexuality, it's in the form of abstinence training. In some Texas school districts, it's the closest thing children will get to sex education. That's because Congress pumps $113 million a year into federal abstinence programs. Texas schools imbibe heavily from this font. And the result? Texas is No. 1 in teen births. True, Texas' teen birth rate dropped 19 percent between 1991 and 2004. However, over that time the nation's rate dropped by a third. [Waco Tribune-Herald, 11/8/07] Perry Stood by Current Law and Felt Abstinence Was the Only way to Avoid Pregnancy. According to Cox News Service, The governor has also stood by and will continue to support the current law. He feels that abstinence is the only 100 percent way to avoid pregnancy, said spokeswoman Allison Castle. Castle also noted that while Texas tops the teen birth rate, it does not have the highest teen pregnancy rate; it is ranked fifth, with Nevada on top. [Cox News Service, 12/13/07] Every 10 Minutes, a Teenager in Texas Gets Pregnant. According to Cox News Service, How often does a teenager in Texas get pregnant? -Every 10 minutes, a teen in Texas gets pregnant. -Every 10 hours, a 14-year-old teen gets pregnant. -Every 3 hours, a 15-year-old teen gets pregnant. -Every 1.5 hours, a 16-year-old gets pregnant. -Every 52 minutes, a 17-year-old gets pregnant. -Every 35 minutes, an 18-year-old gets pregnant. -Every 28 minutes, a 19-year-old gets pregnant. -Every 10 minutes, a Texas teen gives birth. [Cox News Service, 12/13/07]

Statistics Showed Nearly 53% of Texas High Schoolers had Sexual Intercourse and Texas Youth are less Likely to Use Condoms. According to the Associated Press, Texas spent a nation-high $17 million last year for abstinence education programs that continue to stir debate about whether classes promoting virginity before marriage work in public schools. Federal statistics in June showed that 52.9 percent of Texas students in ninth through 12th grades had sexual intercourse, compared with 47.8 nationally. The Centers for Disease Control and Prevention also reported that Texas youths are less likely to use condoms. Public schools in Texas are not required to offer sex education, but those that do must make the lessons abstinence-focused. Instructions about condoms are couched in terms of how often they fail, according to state law. [AP, 7/13/09] Texas Had the Most Extensive and Expensive Abstinence-Based Sex Ed Program in the Country and One of the Highest Teen Birth Rates. According to the Austin American-Statesman, Anyone who thinks this state's abstinence-based sex education program is working to prevent teen pregnancy hasn't been to a mall in a while. Not all those kids with kids skipped that class. There is a huge disconnect in Texas that too many state officials will not acknowledge - and it's costing the state a fortune in cash and human capital. Here it is in black and white: Texas has the most extensive and expensive abstinenceLink Strategies, LLC CONFIDENTIAL Research 37

based sex education program in the country AND one of the highest teen birth rates of the 50 states. [Austin American-Statesman, 3/4/09] Texas Spent $18 Million on Abstinence Programs. According to the Austin AmericanStatesman, Though Texas spent $18 million on abstinence programs last year and teaches it in almost all 1,700 public high schools, the heavy focus on abstinence fails Texas students at every level. According to the Texas Department of State Health Services, another teenage girl gets pregnant every 10 minutes in Texas, and one has an abortion every 48 minutes. What's that say about the abstinence-based sex education program in effect here for nearly 15 years? It doesn't work. And it's expensive. Medicaid - our tax dollars - paid for more than 17,000 teen births two years ago at a cost of more than $41 million. [Austin American-Statesman, 3/4/09] Report Showed One in Every 35 Texas Teenage Girls Will Get Pregnant by Age 17. According to the Austin American-Statesman, The state reports that one in every 35 Texas teenage girls will get pregnant by age 17. The most shocking statistic in a long list of shocking statistics is that one of every 5,280 12-year-old girls gets pregnant. This state's teen birth rate at last count was 63 per 1,000 girls between 15 and 19 years old. That's the third highest in the country (the national average is 41.9). And nearly 25 percent of those were giving birth for at least the second time. [Austin American-Statesman, 3/4/09] Perry Spokeswoman Said We Oppose any Sex Education Other than Abstinence until Heterosexual Marriage. According to the Austin American-Statesman, Gov. Rick Perry's office said he is comfortable with the abstinence-based approach. We oppose any sex education other than abstinence until heterosexual marriage, said his spokeswoman. Perry and other state leaders clinging to this failed model need to get their heads out of the sand about sex education. They need a trip to the mall. [Austin American-Statesman, 3/4/09]

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STATE PENSION FUNDS


PENSION FUND EMPLOYEE RETIREMENT SYSTEM (ERS) STATUS
ERS Reported Its Rate Return was Down 4.58 Percent for the Fiscal Year. According to the Houston Chronicle, The Employees Retirement System of Texas reported its rate of return was down 4.58 percent for the fiscal year ending Aug. 31, and that was before the market volatility of the past several weeks. [Houston Chronicle, 10/7/08] From September 30 2007 to June 30 2008, ERS Portfolio Dropped by More than $2 Billion. According to the Fort Worth Star-Telegram, On international stocks, the portfolio of the Employees Retirement System of Texas declined in value by 18 percent; its U.S. stock portfolio dropped by 15 percent. About 60 percent of its $22.6 billion total portfolio is in stocks. From Sept. 30, 2007, to June 30, the value of its overall portfolio dropped by more than $2 billion. [Fort Worth Star-Telegram, 10/5/08]

TEACHERS RETIREMENT SYSTEM (TRS)

TRS Average Earnings Over 10 Years were 3.3 Percent. According to the Austin AmericanStatesman, Over the past 10 years, the fund's average earnings were 3.3 percent, compared with an expected return of 8 percent. It was sobering news for the board of the $94 billion pension fund and its 1.3 million retired and active members It now has 83 cents for every dollar needed to cover promised benefits over the long term, which is the lowest funded level since 1987. That figure is expected to decrease next year, because $18 billion in investment losses will be accounted for over several years. [Austin American-Statesman, 12/12/09] TRS Funds Plummeted from $105 Billion in August 08 to $67 Billion in March 2009. According to the Austin American-Statesman, During the market tumult of the past year, the fund's assets plummeted from almost $105 billion in August 2008 to $67 billion in early March and then soared back up to $89 billion as of August. For the fiscal year, which ended in August, the 39

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market return on the pension fund's assets was down 13.5 percent. [Austin American-Statesman, 12/12/09]

TEXAS MUNICIPAL RETIREMENT SYSTEM (TMRS)

TMRS Lost 1.3 Percent of Value. According to the Austin American-Statesman, And the Texas Municipal Retirement System, which covers employees in most small to midsize Texas cities, lost 1.3 percent last year. Round Rock, Georgetown, Pflugerville and more than 800 other cities are part of that system. [Austin AmericanStatesman, 5/5/09] TMRS Had 2.7 Percent Return While Other Saw Funds Declining an Average of 15.5 Percent. According to the Austin American-Statesman, For 60 years, the Texas Municipal Retirement System had been a conservative steward of the pension dollars entrusted to it by hundreds of small and midsize cities and their employees. The retirement contributions from workers and taxpayers in Round Rock, Georgetown, Pflugerville and more than 800 other cities were all socked away in government and corporate bonds that produced a dependable if not stellar return. That conservative approach unique among large public pension systems today - did gird the $14.6 billion fund against the market collapse last year. At the end of September, it had a 2.7 percent return, while its counterparts across the country saw their funds decline, on average, by 15.5 percent, according to Pensions and Investments, a money management publication. The fund's return turned negative by the end of the year, however, and ended 1.3 percent down as corporate bonds, in particular, lost their luster. [Austin American-Statesman, 3/23/09]

Texas Major Public Investment Funds Were Returning to Good Health. According to the Austin American-Statesman, Texas' major public investment funds have stanched the bleeding from the past year's historic financial market losses and are returning to good health. As of the end of September, the assets of the Employees Retirement System of Texas fund and the Permanent School Fund had plumped up to almost the same size they were a year ago. The Teacher Retirement System of Texas was just below that mark, too, said Brian Guthrie, the retirement system's deputy director. The funds have not, however, bounced back to where they were before September 2008, when the collapse of Lehman Brothers sent the financial markets - and the funds' balances - into free fall. All of the state's major funds bottomed out in late February or March, some having lost about 30 percent of their August 2008 value. [Austin American-Statesman, 11/7/09] Pension Fund Investors Make Top Government Salaries. According to the Texas Tribune, At the state government level, the top salaries go to investment people at the Teacher Retirement System, the Link Strategies, LLC CONFIDENTIAL Research 40

Employee Retirement System, and the state treasury, which is part of the Comptroller's office. TRS and ERS together, for example, have 13 people making $200k a year or more five of them making $300k or more. The top guy is Thomas Harris, the chief investment officer at TRS, whose base salary is $480,000. [Texas Tribune, 11/12/09] Retirement Funds Were Not Set Up to Give Cost-of-Living Adjustments. According to the Austin American-Statesman, The funds were not set up to give regular cost-of-living adjustments and can provide additional payments only when they are able to cover their current and projected obligations within a 31-year period. Neither fund is anywhere near that point, even though both are recovering from last fall's stock market plunge. The teacher fund, which has 1.2 million participants, held investments worth $78 billion as of late April, up about 10 percent from the February valuation of $70.6 billion. Last August, the fund was valued at $104.9 billion. The employee fund, which was valued at $15 billion in February, was at $17.5 billion as of late April and had $21.4 billion last August. It has more than 200,000 active and retired members. Even so, current estimates indicate the funds will not be at a level that would permit benefit increases. That situation, however, could change with a market rebound. [Austin American-Statesman, 6/10/09] ERS and TRS Outsourced 25 and 10 Percent of their Investments, Respectively. According to the Austin American-Statesman, Operating out of plush offices on two floors of the downtown Frost Bank Tower, UTIMCO relies heavily on outsourcing, hiring "external managers" who are experts in complex investments to handle the university's trust funds. The largest of these is the Permanent University Fund, which generates investment income that supports schools in the UT and Texas A&M systems. Today, about 86 percent of that fund's assets are handled by external managers. By comparison, the Employees Retirement System of Texas outsources 25 percent of its investments; at the Teacher Retirement System of Texas, the figure is less than 10 percent. Texas' major trust funds have different goals, so their investment strategies vary. Pension funds are legally obligated to pay eligible members fixed retirement benefits, so they tend to favor more conservative investment strategies; a university endowment's goal is to maximize returns to supplement annual school budgets and can be more aggressive. [Austin American-Statesman, 2/16/09] Poor Fund Returns Prevented, Delayed Bonuses for Investors. According to the Austin AmericanStatesman, At the Employee Retirement System of Texas, a nearly $18 billion fund, there is an incentive program for the investment team, but no one will be getting a bonus for 2008 because the fund return was down 4.85 percent as of Aug. 31 , spokeswoman Mary Jane Wardlow said. At the Teacher Retirement System of Texas, the negative investment returns in 2008 will delay - but not erase - $2.7 million in bonuses to be given to investment division employees of the nearly $81 billion fund. [Austin American-Statesman, 2/6/09] EMPLOYEE RETIREMENT SYSTEM (ERS) BOARD OF TRUSTEES Three board members are appointed, one each by the Governor, Speaker of the House, and the Chief Justice of the Texas Supreme Court and three are elected by ERS members and retirees. [Ers.state.tx.us, Accessed 4/8/10] All old board meeting minutes posted here. Ann S. Fuelberg, Executive Director, Employees Retirement System of Texas Ann S. Fuelberg was appointed Executive Director of the Employees Retirement System of Texas (ERS) by the ERS Board of Trustees in 2004. [Ers.state.tx.us, Accessed 4/8/10] Mr. I. Craig Hester, Chair Link Strategies, LLC CONFIDENTIAL Research

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I. Craig Hester was appointed by Texas Supreme Court Chief Justice Wallace B. Jefferson in 2005 after serving 13 years on the Investment Advisory Committee. [Ers.state.tx.us, Accessed 4/8/10] Ms. Cydney Donnell, Vice-Chair Cydney Donnell was appointed to the ERS Board of Trustees by Governor Rick Perry in June 2007. [Ers.state.tx.us, Accessed 4/8/10] Ms. Yolanda "Yoly" Griego, Member Yolanda Griego was elected to the ERS Board of Trustees in 2003 and serves as one of three elected members. [Ers.state.tx.us, Accessed 4/8/10] Ms. Cheryl MacBride, Member In October of 2009, Cheryl MacBride was appointed by the ERS Trustees to fill a vacancy on the board. [Ers.state.tx.us, Accessed 4/8/10] Mr. Owen Whitworth, Member Owen Whitworth was elected to the ERS Board of Trustees in 1999, and re-elected in 2005. [Ers.state.tx.us, Accessed 4/8/10] Mr. Donald Wood, Member Donald E. Wood was appointed to the ERS Board of Trustees by Speaker of the House Tom Craddick in January 2009. [Ers.state.tx.us, Accessed 4/8/10] AUDIT COMMITTEE The Audit Committee is composed of three members of the ERS Board of Trustees. The Audit Committee is responsible for monitoring the internal audit function to assure compliance with the requirements of the Internal Auditing Charter. The Audit Committee meets at least four times a year. [Ers.state.tx.us, Accessed 4/8/10] Don Wood, Chair P.O. Box 13207 Austin, TX 78711 Term Expires: 8/31/2014 Appointed by Speaker of the House Tom Craddick Cydney Donnell P.O. Box 13207 Austin, TX 78711 Term Expires: 08/31/2012 Appointed by Governor Rick Perry Owen Whitworth P.O. Box 13207 Austin, TX 78711 Term Expires: 8/31/2011 Elected Member

INVESTMENT ADVISORY COMMITTEE Link Strategies, LLC CONFIDENTIAL Research 42

Statute authorizes the ERS Board of Trustees to establish advisory committees as it deems necessary. The Investment Advisory Committee (IAC) was created to consult and advise the board on investments and investment related issues. Generally, the IAC meets the day before each board meeting to consider investment related issues in depth. [Ers.state.tx.us, Accessed 4/8/10] Vernon D. Torgerson, Jr., CFA, Chair Senior Vice President and Executive Trust Officer First National Bank P.O. Box 1600 San Antonio, Texas 78296 Term Expires: 8/31/2011 Milton Hixson, Vice-Chair 6034 West Courtyard Dr., Ste. 380 Austin, Texas 78730 Term Expires: 8/31/2011 Bob Alley 730 Honor Drive Kerrville, Texas 77356 Term Expires: 8/31/2012 J. Luther King, Jr. CFA T Luther King Capital Management 301 Commerce Street, Suite 1600 Forth Worth, Texas 76102 Term Expires: 8/31/2011 Ken D. Mindell Senior VP, Treasurer & Director of Investments Rosewood Management Corporation 2101 Cedar Springs Road, Suite 1600 Dallas, Texas 75201 Term Expires: 8/31/2010 Laura T. Starks, Ph. D. Charles E. & Sarah M. Seay Regents Chair in Finance Finance Department - CBA 6.250 The University of Texas at Austin Austin, Texas 78712 Term Expires: 8/31/2012 Link Strategies, LLC CONFIDENTIAL Research 43 Lenore M. Sullivan 1717 Arts Plaza, Residence 1801 Dallas, TX 75201 Term Expires: 2/23/201

ERS FUND PERFORMANCE State Employees Allowed to Retire, Work for the State Again and Subsequently Receive Salary and Pension. According to the Texas Tribune, A mounting number of state employees are retiring from work then getting rehired to the same jobs, padding and in some cases nearly doubling their state salaries with pension checks. Since lawmakers loosened restrictions on the practice a decade ago, the number of retirees returning to state jobs has grown by more than 1,300 percent, from 400 in 1999 to 6,200 this year. [Texas Tribune, 11/23/09] Texas Return to Work Policy Allows State Employee to Be Rehired after 90 Days. According to the Texas Tribune, Under Texas return to work policy, a state employee who retires can be rehired after a 90-day hiatus. In addition to their salary, they receive pension payouts averaging $2,000 a month, and continue to get health benefits. Employees Retirement System (ERS) rules say retiring employees cant be given a promise of employment when they leave and must certify that they dont have another job with the state lined up. But state workers say these rules are rarely followed, and that gentlemens agreements abound. [Texas Tribune, 11/23/09] Return to Work Restrictions were Lifted in 2001. According to the Texas Tribune, Lawmakers have gone back and forth on return to work since they first instituted it in 1951. At that time, retirees who wanted their jobs back had to have their pension payments suspended first. By 1981, retirees who returned to work received partial payments. And in 2001, the restrictions were lifted all together. In the last legislative session, lawmakers backtracked slightly, forcing retirees to take 90 days off before returning to work, and requiring the hiring agency to contribute to the ERS on behalf of the returning employee. [Texas Tribune, 11/23/09]

Senator Robert Duncan Said Retired State Employees Wont Received Additional $500 Checks this Year. According to the Texas Tribune, Retired public employees discovered yesterday that they would not receive additional $500 checks this year. According to Senator Robert Duncan, R-Lubbock, they shouldnt hold their breath for more benefits next cycle either. I dont think well be able to, he said. The constitution restricts any sort of benefit enhancement unless the fund is actuarially sound. Its not. [Texas Tribune, 11/25/09] Legislature Tried to Provide Retirees with One-Time Payment of $500. According to Austin American-Statesman, But there is a concern among retirees that they can't keep up with rising costs unless they get a benefit boost. The Legislature tried to provide the retirees a one-time payment of $500 in the 2010-11 budget. Because of lingering legal questions, the budget writers made the payment contingent on approval by the Texas attorney general. In late November, the attorney general determined that the payment could not be made because it might violate the state constitution. [Austin American-Statesman, 12/12/09] House and Senate Negotiators Announced a Plan to Give $500 Bonuses to Retired State Workers. According to the Dallas Morning News, Lead negotiators also said Thursday that they still hope to give state employees a one-time bonus in lieu of a pay raise. In wrapping up their budget deal late Wednesday, the 10 House-Senate negotiators announced a compromise plan to give $500 bonuses this year to retired state workers and retired teachers. A separate bill would have to pass, and Attorney General Greg Abbott would have to say it's permissible to send checks to retirees outside of pension plans. [Dallas Morning News, 5/22/09] ERS Reported Its Rate Return was Down 4.58 Percent for the Fiscal Year. According to the Houston Chronicle, Gov. Rick Perry said Monday that the economy in Texas is in much better shape than it is nationally but noted that state government can't take anything for granted. We're not an island, he said.

As strong as our economy is, we're still interlaced with the economies of other states that are easily in worse condition than we are. Even as Perry convened a closed-door meeting of financial leaders from several state agencies to discuss the worsening financial picture, there were warning signs for Texas, including: Losses to the state's multibillion-dollar pension funds for state employees and teachers. The Employees Retirement System of Texas reported its rate of return was down 4.58 percent for the fiscal year ending Aug. 31, and that was before the market volatility of the past several weeks. [Houston Chronicle, 10/7/08] From September 30 2007 to June 30 2008, ERS Portfolio Dropped by More than $2 Billion. According to the Fort Worth Star-Telegram, The stock portfolios of some of the state's largest investments funds - supporting government employees' retirements and public education - have taken quite a beating this year. By summer, the value of some of the funds had dropped by billions of dollars On international stocks, the portfolio of the Employees Retirement System of Texas declined in value by 18 percent; its U.S. stock portfolio dropped by 15 percent. About 60 percent of its $22.6 billion total portfolio is in stocks. From Sept. 30, 2007, to June 30, the value of its overall portfolio dropped by more than $2 billion. [Fort Worth Star-Telegram, 10/5/08] ERS Overhaul Plan Wad Overdue, Over Budget and a Source of A Bitter Blame Game. According to the Austin American-Statesman, A project to overhaul pension-administration technology at the Employees Retirement System of Texas is nearly three years overdue, untold millions of dollars over budget and the source of an unusually bitter blame game The project started in May 2003, the last piece of the $24 billion retirement system's plan to put customer services online - including helping people plan for and finalize their retirement - and streamline the agency's administrative functions. Once it's implemented, for example, state employees who want to retire can call the agency and be quickly walked through an online process. Currently, workers are mailed a packet of about a dozen forms, which must be filled out and mailed back. Between 300 and 400 state workers retire each month, the system said. [Austin American-Statesman, 8/19/07] Former ERS Chief Technology Officer Sued Over Termination, Blamed the System for Slow Progress on Overhaul. According to the Austin American-Statesman, The retirement system's former chief technology officer, Kurt Lehmann, has filed a wrongful termination lawsuit against the agency in state District Court in Travis County. Lehmann, a former high-level technology officer at two Fortune 500 companies, alleges the system has grossly mismanaged the project, overpaid contractors and hid costs from the Legislature. The retirement system denied those allegations in court. Separately, it released more than 100 pages of internal documents, including parts of Lehmann's personnel file, that portray him as intelligent and driven but so abrasive that he ran off co-workers, managed through intimidation and alienated technology vendors - all of which set back the pension project. [Austin American-Statesman, 8/19/07] TEACHERS RETIREMENT SYSTEM TRS BOARD OF TRUSTEES R. David Kelly, Chairman, 2011 Dallas Partner in Carleton Residential Properties Prior to joining Carleton, Kelly was with Trammell Crow Company as a director of its capital markets on a nationwide basis. Earlier during his six-year career with Trammell Crow, Kelly oversaw a $4.35 billion portfolio of real estate properties in the Western United States, and he was instrumental in restructuring and refinancing a $75 million national real estate portfolio. He also served as chairman of the Texas Public Finance Authority. Kelly received his bachelors degree from Harvard University and completed an MBA at the Stanford University Graduate School of Business Administration. Kelly is a direct appointment of the governor.

Linus D. Wright, Vice-Chairman, 2011 Dallas Former Texas Public School Teacher, Principal and Superintendent Wright earned degrees in Economics and Educational Administration from Austin College and served Texas public schools for 40 years as teacher, principal and assistant superintendent with 10 years as superintendent of Dallas ISD. Wright served under President Reagan as undersecretary of education. He is president of Stillwell Residence for Retired Teachers and president-elect of Senior Citizens of Greater Dallas. Wright is appointed by the governor from the three retired member candidates who are nominated by retired TRS members. Todd Barth, 2015 Houston President, Bowers Properties Inc. Todd Barth of Houston is president of Bowers Properties Inc. He is a member of the State Bar of Texas, and past member of the Permanent School Fund Investment Advisory Committee for the Equity Real Estate Portfolio. He is also a member of the Texas Business Hall of Fame Foundation Board of Directors and past vice president of finance for the Neuhaus Education Center. Barth received a bachelor's degree from the University of Rochester, a Master of Business Administration from the Owen Graduate School of Management, and a law degree from Vanderbilt University. Barth is a direct appointment of the governor. Charlotte Clifton, 2013 Snyder Teacher, Snyder Independent School District Clifton is the immediate past president of the Texas Classroom Teachers Association. She received a bachelors degree from Lubbock Christian University and a masters degree in reading education from Texas Tech University. Clifton is currently a teacher in the Snyder Independent School District. She is appointed by the governor from the three public school district active member candidates nominated by employees of public school districts. Robert Gauntt, 2013 Houston Founding Partner of Avalon Advisors L.P. Gauntt serves on the advisory board of the University of Texas McCombs School of Business and is past director of Hope Worldwide-Houston. Additionally, he is chairman of the Foundation for the Council on Alcohol and Drugs Houston and a board member of the Greater Houston church, River Oaks Baptist School Endowment and West University Little League. Gauntt received a bachelors degree and masters degree from the University of Texas at Austin. He is a direct appointment of the governor. Eric C. McDonald, 2013 Lubbock Owner and CIO, McDonald Capital Management McDonald is owner and chief investment officer of McDonald Capital Management. He is a chartered financial analyst and an advisory board member of the Texas Tech Student Managed Investment Fund and State Board of Education Permanent School Fund Investment. He is also a board member of the Texas Tech Ranching Heritage Association Endowment and South Plains Council of the Boy Scouts of America, and past president of the Rotary Club of Greater Lubbock. McDonald received a bachelors degree from the University of Texas at Austin and a masters of business administration from Texas Tech University. He is appointed by the governor from a list prepared by the State Board of Education. Christopher Moss, 2015 Lufkin Vice President, The Advanced Financial Group

Christopher Moss is vice president of The Advanced Financial Group and is a registered representative of Woodlands Securities Corporation, member FINRA and SIPC, and an investment advisory agent of Woodlands Asset Management Inc. He is a member of the Pineywoods Chapter of the National Association of Insurance and Financial Advisors and vice chair of the Volunteer Services Council of the Lufkin State Supported Living Center. Moss is also past president of the Lufkin Host Lions Club and currently serves as chair of the Angelina County Vision 2020 Government Foundation and treasurer for the Family Crisis Center of East Texas. He received a bachelors degree from Texas A&M University and earned a masters degree in Business Administration from Sam Houston State University. Moss is appointed by the governor from a list prepared by the State Board of Education. Philip Mullins, 2011 Austin Power Plant Operator, University of Texas Austin Mullins has 30+ years of experience in the trades including 15 years experience as a business owner. He earned a B.A. from Florida State University. He is a parishioner at San Jose Catholic Church in Austin and speaks Spanish as a second language. He was elected to the UT Austin Staff Council in 2001 and served on the committee that wrote the current UT Grievance Policy. He is a member of the Texas State Employees Union. Mullins is appointed by the governor from the three higher education active member candidates nominated by employees of institutions of higher education. Nanette Sissney, 2015 Whitesboro School Counselor, Whitesboro Independent School District Nanette Sissney of Whitesboro is a school counselor for the Whitesboro Independent School District. She is a member of the Texas Classroom Teachers Association Executive Board, second vice president of the Delta Kappa Gamma Kappa Zeta Chapter, and a member of the Texoma Counseling Association. She is also a trustee for the First United Methodist Church of Whitesboro and a volunteer with the Whitesboro Ministerial Alliance. Sissney received a bachelor's degree from Texas Woman's University and a master's degree in education from Southeastern Oklahoma State University. Sissney is appointed by the governor from the three public school district active member candidates nominated by employees of public school districts. TRS FUND PERFORMANCE Teachers Retirement Fund will Feel Effects of Financial Upheaval for Many Years. According to the Austin American-Statesman, The worst of the past year's financial upheaval might be over, but the fund that provides retirement benefits to Texas teachers will feel the effects for many years, actuaries said Friday. There is virtually no way that this state can give a permanent increase to your retirees in the foreseeable future, said Michael Carter, an outside actuary for the Teacher Retirement System of Texas. [Austin American-Statesman, 12/12/09] Drop in Funds Earning Was a Clear Signal that the State and TRS Members Will Need New Funding Options. According to the Austin American-Statesman, Over the past 10 years, the fund's average earnings were 3.3 percent, compared with an expected return of 8 percent. It was sobering news for the board of the $94 billion pension fund and its 1.3 million retired and active members. It was also a clear signal that the state - and perhaps active members - will probably need to ante up more in 2011, and the Legislature might have to reduce benefits for future retirees It now has 83 cents for every dollar needed to cover promised benefits over the long term, which is the lowest funded level since 1987. That figure is expected to decrease next year, because $18 billion in investment losses will be accounted for over several years. [Austin American-Statesman, 12/12/09] TRS Funds Plummeted from $105 Billion in August 08 to $67 Billion in March. According to the Austin American-Statesman, During the market tumult of the past year, the fund's assets plummeted from almost $105 billion in August 2008 to $67 billion in early March and then soared back up to $89

billion as of August. For the fiscal year, which ended in August, the market return on the pension fund's assets was down 13.5 percent. [Austin American-Statesman, 12/12/09] TRS Fund Increased in Value Since the Spring, with Most Recent Quarterly Performance the Best in History, but Returns Alone Wont Dig the Fund out of the Hole. According to the Austin AmericanStatesman, The fund has been on an unprecedented upswing since the spring, and the most recent quarterly performance was the best in its history, with more than $10 billion in investment returns, said Britt Harris, the fund's chief investment officer. But it is not likely that investment returns alone will dig the fund out of the hole. Getting the fund back to its 2008 level would require a one-year return of 38 percent or an annual 11 percent return for 10 years, the actuaries said. [Austin American-Statesman, 12/12/09] San Diego Union-Tribune Blasted former Deputy Chief Investment Officer of TRS. According to the Austin American-Statesman, The San Diego Union-Tribune took a dig at the Teacher Retirement System of Texas in an editorial last week blasting the hiring of Lee Partridge, the former deputy chief investment officer for TRS, to serve as the new outside investment chief for San Diego County's employee retirement system. The editorial referred to TRS' performance over the past year as less-thanmediocre as it called into question whether Partridge's contract, from which he could reap more than $1 million as an independent contractor, was justified. Partridge recently resigned from TRS to start a new firm, Integrity Capital LLC. [Austin American-Statesman, 9/22/09] TRS Investment Chief had Base Salary of $402,000. According to the Austin American-Statesman, As the new investment chief for the Teacher Retirement System of Texas, Britt Harris has by far the largest paycheck in state government - $40,000 a month plus a potential bonus. He started work Monday. If Harris made that much over the course of a year, his annual pay would be $480,000. But his pay will drop to $402,000 annually on Sept. 1. He will remain eligible for bonuses that could push his total compensation to about $700,000. Harris' larger starting salary is to compensate him for relocating his family from Connecticut. Harris' compensation reflects the $100 billion teacher fund's willingness to pay unheard-of state salaries to attract investment managers it believes can boost returns. Harris' pay is more than double the compensation earned by the investment chiefs at the state's other large pensions and endowments, such as the Employee Retirement System of Texas and the Texas Permanent School Fund, which helps pay for public education. (State pay figures don't include higher education employees.) [Austin American-Statesman, 12/10/06] 2005: TRS Reported Investement Income of $11.7 Billion. According to the Austin AmericanStatesman, The $93 billion Teacher Retirement System of Texas, one of the nation's largest pension funds, reported investment income of $11.7 billion in the fiscal year. The system handily beat the 12.7 percent return of the Employees Retirement System of Texas and outpaced the broad stock market, as measured by the Standard and Poor's 500 index, by about 4 percentage points. [Austin AmericanStatesman, 11/5/05] TRS BACKGROUND & ADDITIONAL INFORMATION Perry Appointed Lufkin Financial Adviser Christopher Moss to the Teacher Retirement System of Texas Board of Trustees. According to the Austin American-Statesman, Gov. Rick Perry has appointed Lufkin financial adviser Christopher Moss to the Teacher Retirement System of Texas Board of Trustees, the governor's office announced in a news release Tuesday. Moss, who received a master's degree in business from Sam Houston State University, is vice president of the Advanced Financial Group and a registered representative of Woodlands Securities Corp. [Austin American-Statesman, 3/17/10] Moss was the Vice President of The Advanced Financial Group and a Registered Representative of the Woodlands Securities Corporation. According to the States News Service, Moss is vice president of The Advanced Financial Group and a registered representative of the Woodlands Securities Corporation. He is a member of the Pineywoods

Chapter of the National Association of Insurance and Financial Advisors, a board member of Lufkin ISD Alumni Association, the Lufkin State Supported Living Center and the Junior Achievement Program of Lufkin. Moss is also past president of the Lufkin Lions Club and a former board member of Leadership Lufkin. He received a bachelors degree from Texas AandM University and a masters degree in Business Administration from Sam Houston State University. [States News Service, 3/16/10] October 2009: Perry Appointed Seth Crone to the Teachers Retirement System of Texas Board of Trustees. According to US State News, Seth Crone of Beaumont is a certified public accountant and vice president of business development for The Bank of New York Mellon Trust Company N.A. He is a member of the Chartered Financial Analyst Institute and Government Finance Officers of Texas Gulf Coast Chapter Executive Committee, fellow of the Healthcare Financial Management Association (HFMA) and past president of the HFMA Texas Gulf Coast Chapter. He is a past American College of Healthcare Executives diplomate and treasurer of the South East Texas Chapter, past member of Texas Society of Certified Public Accountants, and president of the Symphony of Southeast Texas. Crone received a bachelor's degree from Amherst College and a Master of Business Administration from New York University. [US State News, 10/22/09] Perrys Nominee to the TRS Board of Trustees, Seth Crone, Had to Step Down Because of a Potential Conflict of Interest with His Day Job at the Bank of New York Mellon Trust Co. According to the Austin American-Statesman, It was the second time in six months that Perry had to fill the spot. His previous nominee, Seth Crone, accepted the appointment in October and then stepped down because of a potential conflict with his day job at the Bank of New York Mellon Trust Co. [Austin American-Statesman, 3/17/10]

January 2009: Linus Wright Named Presiding Officer of the Teacher Retirement System of Texas Board of Trustees by Governor Rick Perry. According to Targeted News Service, Linus Wright, Class of 1949, was appointed Under Secretary of Education in October 1987 by President Ronald Reagan. He served two years in the position. Wright continues public service more than 20 years later. In January 2009, he was named presiding officer of the Teacher Retirement System of Texas Board of Trustees by Governor Rick Perry. A retired educational consultant, Wright previously served 10 years as Dallas Independent School Distinct superintendent and as superintendent and chief financial officer in the Houston Public Schools for eight years. Wright is a senior member of the Austin College Board of Trustees. [Targeted News Service, 1/12/10] October 2009: Perry Appointed R. David Kelly to the Teacher Retirement System of Texas Board of Trustees. According to US State News, Gov. Rick Perry has appointed three members to the Teacher Retirement System of Texas Board of Trustees for terms to expire Aug. 31, 2015, and named R. David Kelly of Plano chair. The board members act as trustees for Teacher Retirement System funds, securities and other assets. [US State News, 10/22/09] October 2009: Perry Appointed Todd Barth, President of Bowers Properties Inc., to the Teachers Retirement System of Texas Board of Trustees. According to US State News, Todd Barth of Houston is president of Bowers Properties Inc. He is a member of the State Bar of Texas, and past member of the Permanent School Fund Investment Advisory Committee for the Equity Real Estate Portfolio. He is also a member of the Texas Business Hall of Fame Foundation Board of Directors and past vice president of finance for the Neuhaus Education Center. Barth received a bachelor's degree from the University of Rochester, a Master of Business Administration from the Owen Graduate School of Management, and a law degree from Vanderbilt University. [US State News, 10/22/09] October 2009: Perry Appointed Nanette Sissney to the Teachers Retirement System of Texas Board of Trustees. According to US State News, Nanette Sissney of Whitesboro is a school counselor for the Whitesboro Independent School District. She is a member of the Texas Classroom Teachers Association Executive Board, second vice president of the Delta Kappa Gamma Kappa Zeta Chapter,

and a member of the Texoma Counseling Association. She is also a trustee for the First United Methodist Church of Whitesboro and a volunteer with the Whitesboro Ministerial Alliance. Sissney received a bachelor's degree from Texas Woman's University and a master's degree in education from Southeastern Oklahoma State University. [US State News, 10/22/09] October 2009: Perry Reshuffled the Teacher Retirement System of Texas Board of Trustees and Replaced the Chairman Without Any Reason for the Change. According to the blog Off the Kuff, Gov. Rick Perry plans to reshuffle the board leadership of the states $88 billion teacher retirement system, an unexpected move that has reignited concerns among the members that Perry is meddling with their pension fund. Linus Wright, a retired school superintendent who was appointed in January to lead the Board of Trustees of the Teacher Retirement System of Texas, said he has been notified by the governors office that he will soon be replaced as chairman. Wright said he was given no reason for the change. He will be succeeded by Dallas real estate investor R. David Kelly, a board trustee since 2007, Perry spokeswoman Allison Castle said. Kelly is also a member of the finance team for Perrys reelection campaign, according to a June news release. In the past, Perry has looked to the teachers fund as a potential source of investment dollars for state transportation infrastructure and the Emerging Technology Fund, which invests in startup companies in fields such as biotechnology. The board, which sets the investment strategy for one of the countrys largest public pension funds, has not yet backed an investment policy to do so. [Off the Kuff, 10/14/09] Perry Replaced the Chairman of the Texas Retirement System of Texas Board of Trustees with a Member of The Finance Team for His Re-Election Campaign. According to the Austin American-Statesman, Linus Wright , a retired school superintendent who was appointed in January to lead the Board of Trustees of the Teacher Retirement System of Texas, said he has been notified by the governor's office that he will soon be replaced as chairman. Wright said he was given no reason for the change. He will be succeeded by Dallas real estate investor R. David Kelly , a board trustee since 2007, Perry spokeswoman Allison Castle said. Kelly is also a member of the finance team for Perry's re-election campaign, according to a June news release. [Austin American-Statesman, 10/11/09]

The Governor Appoints All of the Members of the Teacher Retirement System of Texas Board of Trustees. According to the blog Off the Kuff, [T]he change comes on the heels of Perrys veto in June of a bill that would have added another retiree voice to the nine-member board. The governor appoints all of the members of the board, which is made up of five financial professionals and four retired or active Teacher Retirement System members who are nominated by the membership. [Off the Kuff, 10/14/09] TEXAS MUNICIPAL RETIREMENT SYSTEM BOARD/MEMBERS The TMRS Act provides that the administration of TMRS is entrusted in a six-member Board of Trustees, appointed by the Governor with the advice and consent of the Senate. Three Trustees are "Executive Trustees" (Gorzell, Rodriguez, and Simpson) who are either the chief executive officer, chief finance officer, or other officer, executive or department head of a participating municipality. Three Trustees are "Employee Trustees" (Linr, Hernandez, and Nixon) who are employees of a participating municipality. [TMRS.org, Accessed 4/8/10] Ben Gorzell, Chair Chief Financial Officer City of San Antonio Term expires: February 1, 2013 April Nixon, Vice Chair Chief Financial Officer City of Arlington Term expires: February 1, 2015

Patricia Hernandez, Municipal Court Judge City of Plainview Term expires: February 1, 2011 Carolyn Linr Director of Human Resources/Civil Service City of San Marcos Term expires: February 1, 2013 Roel "Roy" Rodriguez Assistant City Manager / MPU General Manager City of McAllen Term expires: February 1, 2011 H. Frank Simpson, City Manager City of Missouri City Term expires: February 1, 2015 TMRS FUND PERFORMANCE TMRS Changed Calculation for How Much Cities Need to Contribute. According to the Fort Worth Star-Telegram, The Southlake City Council voted unanimously Tuesday to cut benefits for city employees and retirees beginning next year in response to rising costs and the tight economyThe cuts were prompted by a recent change in how the Texas Municipal Retirement System calculates how much cities need to contribute, Hugman said. Starting this year, cities have to pay into the system based on their future liability in addition to their expected benefit costs for that year, said Bill Wallace, spokesman for the retirement system. That should make the fund more stable but immediately increased rates for Southlake and many other cities. [Fort Worth Star-Telegram, 12/2/09] Texas Municipal Retirement System Grew 13.5 Percent. According to the Austin AmericanStatesman, The Texas Municipal Retirement System, which serves employees of 800 small and midsized Texas cities, remains the anomaly in Texas. It has long employed a conservative investment strategy - with 87 percent of the fund in bonds and other fixed-income investments at the close of 2008 and that approach served the nearly $16 billion fund very well during the tumult. Since last September, the size of the fund has grown almost 13.5 percent including both investment returns and contributions. Nancy Goerdel, acting chief investment officer of the municipal retirement fund, said she cannot take credit for those stellar numbers because it wasn't a strategic move to ride the market. With the recovery under way, the fund is in a fortuitous position as it presses ahead on a new investment strategy that gradually embraces more equities, Goerdel said. [Austin American-Statesman, 11/7/09] North Richland Hills was one of Many Cities to Have Shortfalls in Pension Funding through TMRS. According to the Fort Worth Star-Telegram, North Richland Hills is among a number of cities that have shortfalls in pension funding through the Texas Municipal Retirement System. Last year, the city increased its contribution from 13.5 percent of payroll to 15.5 percent to help make up the shortfall. The city was notified in May that it would ultimately need to contribute 20.18 percent. The city has decided to phase in the increase over eight years. [Fort Worth Star-Telegram, 10/12/09] Legislature passed Law to Guarantee 5 Percent Returns for Members of TMRS. According to the Corpus Christi Caller-Times, A new law that keeps city retirement benefits profitable even in economic downturns could end up costing city taxpayers, city officials said. The law, passed by the Legislature in May, guarantees members of the Texas Municipal Retirement System a 5 percent return on their 401(k) investments each year. During years that investments perform better, benefits will be capped at 5 percent and the extra money banked. During years that returns do worse, such as the 1.3 percent loss the account suffered in 2008, the balance from better years will make up the difference. [Corpus Christi Caller-Times, 11/6/09]

TMRS Lost 1.3 Percent of Value. According to the Austin American-Statesman, The City of Austin may consider reducing retirement benefits for future employees to shore up its biggest pension fund, which lost 26 percent of its value last year and showed signs of trouble before that The state's main employee pension fund lost 28 percent in the past six months. And the Texas Municipal Retirement System, which covers employees in most small to midsize Texas cities, lost 1.3 percent last year. Round Rock, Georgetown, Pflugerville and more than 800 other cities are part of that system. Austin's main pension fund covers 3,800 retirees and 8,600 current non-civil-service employees, the bulk of the city's work force. The city has other pension funds for firefighters and police, which lost 23.5 percent and 22.5 percent, respectively, last year. The city doesn't plan to suggest changes to those funds, which are in better financial shape, Knodel said. [Austin American-Statesman, 5/5/09] TMRS Had Been a Conservative Steward of Pension Dollars. According to the Austin AmericanStatesman, For 60 years, the Texas Municipal Retirement System had been a conservative steward of the pension dollars entrusted to it by hundreds of small and midsize cities and their employees. The retirement contributions from workers and taxpayers in Round Rock, Georgetown, Pflugerville and more than 800 other cities were all socked away in government and corporate bonds that produced a dependable if not stellar return. That conservative approach - unique among large public pension systems today - did gird the $14.6 billion fund against the market collapse last year. At the end of September, it had a 2.7 percent return, while its counterparts across the country saw their funds decline, on average, by 15.5 percent, according to Pensions and Investments, a money management publication. The fund's return turned negative by the end of the year, however, and ended 1.3 percent down as corporate bonds, in particular, lost their luster. [Austin American-Statesman, 3/23/09] TMRS Was Minimally Affected by Market Turmoil due to 90 Percent of Portfolio Investments in Bonds. According to the Abilene Reporter-News, The Texas Municipal Retirement System handles city employees' pension funds. Whether you are a retiree or an active member, the TMRS benefit you have earned is secure, an alert on the agency's Web site states. The current issues on Wall Street have no direct effect on your TMRS benefit. Unlike a retirement savings program, such as a 457 or 401(k) plan, your TMRS account does not lose value when stock prices go down. Bill Wallace, TMRS director of communications, echoed the agency's Web site. The short answer, with regard to the Texas Municipal Retirement System and the recent Wall Street events, is that we have only been minimally affected by the market turmoil, Wallace said. TMRS is in the first year of a transition from an all-bond investment portfolio into a mix of stocks and bonds. Because our trustees approved a gradual transition (1 percent of the fund per month for 2008 into stocks, split between domestic and foreign), we are less than 10 percent invested in the stock market. According to the TMRS Web site, about 90 percent is invested in bonds. The market value of our portfolio has gone down, but the income stream that will pay 5 percent interest to your account in December is secure, the TMRS Web site states. [Abilene Reporter-News, 10/16/08]

STATE BOARD OF EDUCATION SCANDALS


The Texas State Board of Education is a 15 member elected board. The board has gained national attention over the last year in their analysis and examination of curriculum and textbooks for Texas students. One of the requirements of the SBOE is to set the Texas Essential Knowledge Standards (TEKS) once every ten years. These standards determine what must be taught in Texas schools, what textbooks can be used and is the basis for the Texas Assessment of Knowledge and Skills (TAKS) test. Although they have received attention for their controversial decisions in the past, most notably for middle school Health textbooks in 2004, the board has received national press coverage and has sparked a national debate over their proposed Social Studies curriculum this spring and their changes to the Science curriculum in the spring of 2009. The debate over Science curriculum last spring ended in a compromise among board members, each saying they succeeded in certain places and lost a few battles in others. The debate that garnered most of the attention was over language that applied to all areas of science, but was most controversial in regard to evolution. The language had said that Texas schools should teach the strength and weaknesses of scientific theories. Many claimed that this opened the door to teaching creationism. After substantial debate, the language was changed to teaching all sides of scientific theories, and evolution proponents claimed a victory. The Social Studies curriculum debate that is currently in progress has become even more controversial than any of the previous debates and changes. State Board of Education meetings have received a wealth of press coverage, both locally and nationally, and the situation has even been mocked and mentioned on The Colbert Report. The board has taken the liberty to remove historical figures, distort history, and remove significant minority figures from history books. Rick Perry has provided no leadership to help guide the board, and has been absent in his support or opposition of their ridiculous proceedings. The national stories have not been especially positive and have embarrassed Texas and its citizens. But Texans have more to worry about than what the national papers and Steven Colbert are saying about their state. When real issues regarding the education of Texas youngest minds hit the national spotlight and its time for a real leader to step up, Rick Perry is noticeably absent. ABOUT THE BOARD Board Became More Socially Conservative after 2006 Election. According to the Texas Tribune, While McLeroy has held his seat since 1998, its only been in the last three years that he has had the opportunity to push his conservative goals forward. In 2006, the board gained two new conservative members, and soon emerged as a clash site between social conservatives and moderates. Later in 2007, the governor appointed McLeroy chair. Though the board had (and still has) ten Republican and five Democrats, seven socially conservative Republicans had formed a reliable voting bloc that, with the swing vote of Democratic member Rick Agosto, gave them the power to push forward a socially conservative agenda Geraldine Miller, a Republican outside the ultra-conservative bloc, has been on the board since 1984. She said the 2006 shift led to a board less focused on bipartisan efforts. This is the first time thats ever happened, she said, and it does cause concern, in many peoples view, of what is happening on our board. [Texas Tribune, 11/3/09] State Board of Education Described as an Elected 15 Member Board. According to the Texas Education Agency, The State Board of Education (SBOE), an elected 15 member board, and the Commissioner of Education oversee the public education system of Texas in accordance with the Texas Education Code. [Texas Education Agency, Accessed 3/16/10]

Perrys Duties Included Appointing One of the Elected Members to Lead the SBOE as Chair. According to the Texas Tribune State Board of Education Page, The Texas State Board of Education is an elected 15-member body that oversees the public education system in Texas. Members run in partisan elections and represent single-member districts for four-year terms. The governor appoints one member to lead the board as chair. The chair, like other guberatorial appointees, is confirmed by the Texas Senate. [Texas Tribune, Accessed 3/18/10] Every 10 Years, the SBOE is Required to Set the Texas Essential Knowledge Standards in Each Subject Area. According to the Texas Tribune State Board of Education Page, Every 10 years, board members set the Texas Essential Knowledge Standards (TEKS) in each subject area, determining what must be taught in schools and which textbooks will be used. TEKS is the basis for the Texas Assessment of Knowledge and Skills (TAKS) test, a standardized test used to determine whether students are meeting standards at specific grade levels. The board also oversees investment in the Permanent School Fund. [Texas Tribune, Accessed 3/18/10] SOCIAL STUDIES CURRICULUM TEXTBOOK DEBATE Former Texas Lt. Gov. Wrote Texas from Lone Star State to Laughing Stock State. According to the Texas Tribune, As former Texas Lt. Gov. Bill Hobby wrote in a comment on one of our SBOE blog posts last week, Texas From Lone Star State to Laughing Stock State. [Texas Tribune, 3/17/10] Colbert Report Did Satirical Take on Texas History Books. According to the Texas Tribune, It was only a matter of time, what with the onslaught of national coverage and dueling editorials in The New York Times and on Fox News, before The Colbert Report would jump into the fray with its own satirical take on the Texas history textbook situation. [Texas Tribune, 3/17/10, Link to Video] Dallas Morning News: Board showed Remarkable Disregard for Documented Historical Fact in Move to Exclude Tejanos from Alamo Defenders. According to the Dallas Morning News, Its majority vote to de-emphasize (among other things) Thomas Jefferson, FDR, and the establishment clause to the Bill of Rights, and to weight public school curricula with more American exceptionalism, gun rights, freemarket cheerleading and the dangers of overregulation does not exactly make Texas appear a bastion of scholarly excellence In a remarkable disregard for documented historical fact, the board's majority squashed a move to introduce students to the Tejanos among the Alamo defenders. [Dallas Morning News, 3/16/10] White Said SBOE Was Making Texas an Object of Ridicule. According to the Trail Blazers Blog in the Dallas Morning News, Democrat Bill White is making the Texas Board of Education -- which voted last week to drop Thomas Jefferson from the world history curriculum, placed Jefferson Davis' inaugural address alongside Abraham Lincoln's speeches and required that students be taught "the unintended consequences" of civil rights legislation -- an issue in the governor's race. White's urging Texans to send Rick Perry an email objecting to the board's conservative take on new curriculum standards for social studies. White says the board is making Texas an object of ridicule. The current and former board chairmen are evangelical Christians and Perry appointees. [Dallas Morning News, 3/17/10] Archbishop Oscar Romero Was Just One of Many Historical Figures Left out of Texas Curriculum Standards. According to the Voice blog for the Kansas City Star, Texas Gov. Rick Perry has some bad news for the Vatican. Archbishop Oscar Romero, the influential cleric infamously assassinated by a right-wing death squad, a man who made a valiant stand for human rights during El Salvadors U.S.-backed civil war, just wasnt a big enough deal to be included in Texas social studies curriculum. Romero, murdered 30 years ago this month, is being considered for sainthood in Rome and is indisputably a central figure in the history of the late Cold War era. But he is just one of many historical figures who no longer make the cut in the Texas Board of Educations revised curriculum standards. [Kansas City Star, 3/15/10]

Conservatives Argued Too Many Minorities were Wedged into Curriculum. According to the Kansas City Star, Racially charged debates have broken out about whether to include Cesar Chavez, Sonia Sotomayor and civil rights cases concerning Mexican-Americans. Conservatives have argued that too many minorities are being wedged into existing curriculum. One board member even proposed adding country music and deleting mentions of hip-hop. [Kansas City Star, 3/15/10] Texas Board of Education Approved New Curriculum that Put A Conservative Stamp on History. According to the New York Times, After three days of turbulent meetings, the Texas Board of Education on Friday approved a social studies curriculum that will put a conservative stamp on history and economics textbooks, stressing the superiority of American capitalism, questioning the Founding Fathers commitment to a purely secular government and presenting Republican political philosophies in a more positive light. The vote was 10 to 5 along party lines, with all the Republicans on the board voting for it. [New York Times, 3/12/10] Republicans on SBOE Passed More Than 100 Amendments to Curriculum Standards. According to the New York Times, Since January, Republicans on the board have passed more than 100 amendments to the 120-page curriculum standards affecting history, sociology and economics courses from elementary to high school. The standards were proposed by a panel of teachers. We are adding balance, said Dr. Don McLeroy, the leader of the conservative faction on the board, after the vote. History has already been skewed. Academia is skewed too far to the left. [New York Times, 3/12/10] Hispanic Board Member Stormed out of Meeting after Efforts to Include more Latino Figures as Role Models were Consistently Defeated. According to the New York Times, Efforts by Hispanic board members to include more Latino figures as role models for the states large Hispanic population were consistently defeated, prompting one member, Mary Helen Berlanga, to storm out of a meeting late Thursday night, saying, They can just pretend this is a white America and Hispanics dont exist. They are going overboard, they are not experts, they are not historians, she said. They are rewriting history, not only of Texas but of the United States and the world. [New York Times, 3/12/10] Berlanga Left Meeting, Told Board: We Can All Pretend that we Live in white American and Hispanics Dont Exist. According to the Texas Tribune, Then, in a climactic moment, member Mary Helen Berlanga, D-Corpus Christi, lost it and decided to leave the meeting. But before she did, she gave her own speech, and according to the Tribune's Brian Thevenot, Berlanga didn't mince words: Ive done all I can do today, folks. Ive listened, tried to work with you, given you names, come back with new amendments to satisfy everyone and nothing works. You complained about the lists (of Hispanic figures) being too long And now it looks like youre able to put in the names all of these people, God knows who they are. So Ive had it Im leaving for the evening. Everyone can go ahead and remove the Tejanos who died at the Alamo and we can all pretend that we live in white America and Hispanics dont exist. [Texas Tribune, 3/12/10]

Conservative Board member Cynthia Dunbar Helped Cut Thomas Jefferson from List of Figures Whose Writings Inspired Revolutions. According to the New York Times, Cynthia Dunbar, a lawyer from Richmond who is a strict constitutionalist and thinks the nation was founded on Christian beliefs, managed to cut Thomas Jefferson from a list of figures whose writings inspired revolutions in the late 18th century and 19th century, replacing him with St. Thomas Aquinas, John Calvin and William Blackstone. (Jefferson is not well liked among conservatives on the board because he coined the term separation between church and state.) The Enlightenment was not the only philosophy on which these revolutions were based, Ms. Dunbar said. [New York Times, 3/12/10] McLeroy Pushed to Ensure Students Studied Violent Philosophy of Black Panthers and Republicans Support for Civil Rights Legislation. According to the New York Times, Dr. McLeroy, a dentist by training, pushed through a change to the teaching of the civil rights movement to ensure that students study the violent philosophy of the Black Panthers in addition to the nonviolent approach of the

Rev. Dr. Martin Luther King Jr. He also made sure that textbooks would mention the votes in Congress on civil rights legislation, which Republicans supported. Republicans need a little credit for that, he said. I think its going to surprise some students. [New York Times, 3/12/10] Conservative Board Members Said they Were Trying to Correct Liberal Bias in Curriculum. According to the New York Times, The conservative members maintain that they are trying to correct what they see as a liberal bias among the teachers who proposed the curriculum. To that end, they made dozens of minor changes aimed at calling into question, among other things, concepts like the separation of church and state and the secular nature of the American Revolution. [New York Times, 3/12/10] Conservative Board Member Barbara Cargill Won Passage of Amendment Requiring Teaching of the Importance of Personal Responsibility for Life Choices. According to the New York Times, In the field of sociology, another conservative member, Barbara Cargill, won passage of an amendment requiring the teaching of the importance of personal responsibility for life choices in a section on teenage suicide, dating violence, sexuality, drug use and eating disorders. The topic of sociology tends to blame society for everything, Ms. Cargill said. [New York Times, 3/12/10] Conservative Bloc of SBOE Joined Together to Vote in Favor of Conservative Issues. According to the Texas Tribune, Yesterday, the conservative bloc on the board made the most of their votes, joining together to vote against an amendment that would have required explaining the reasons for the separation of church and state. Then there were their successful votes that limited the discussion of race and gender issues and the votes that emphasized conservative issues like gun rights, limited government and free markets. [Texas Tribune, 3/12/10] SBOE Voted Down Amendment To Teach Students About the Value of Separating Church and State. According to the Texas Tribune, In a party-line vote, the State Board of Education moments ago voted down an amendment that sought to teach students about the value of separating church and state. The amendment, by Mavis Knight, D-Dallas, read: Examine the reasons why the founding fathers protected religious freedom in America by barring the government from promoting or disfavoring any particular religion above all others. One of the board's most ardent social conservatives, Cynthia Dunbar, R-Richmond, gave an impassioned rebuke of the historical evidence for church-state separation, ultimately calling it simply inaccurate. [Texas Tribune, 3/11/10] New Draft of Standards for Public School History Textbooks Included Milestones of Conservative Politics. According to the Houston Chronicle, Texas high school students would learn about such significant individuals and milestones of conservative politics as Newt Gingrich and the rise of the Moral Majority but nothing about liberals under the first draft of new standards for public school history textbooksThe first draft for proposed standards in United States History Studies Since Reconstruction says students should be expected to identify significant conservative advocacy organizations and individuals, such as Newt Gingrich, Phyllis Schlafly and the Moral Majority. [Houston Chronicle, 8/20/09] PAST BOARD INTERFERENCES SCIENCE CURRICULUM McLeroy Led Board in Fight to Describe the Weaknesses of Evolution. According to the Texas Tribune, As McLeroy led the board in rewriting English and Science state standards, injecting moral teachings into each, he and his allies clashed with teachers groups and mainstream education experts. When the board prepared to review the science curriculum, a bitter public battle began regarding how to teach evolution. McLeroy made headlines when he fought for the state science curriculum to describe the weaknesses of evolution. He succeeded in generating a curriculum that questions the fossil record on evolution and in the process became a symbolic leader for Christian conservatism. The ensuing political row over science standards cost him the board chairmanship. As the debate reached a fever

pitch, the Senate deemed McLeroy too controversial and declined to confirm his reappointment as chair. Governor Perry then chose Gail Lowe, an equally conservative if quieter member, for the chairmanship. [Texas Tribune, 11/3/09] SBOE Replaced Strengths and Weaknesses with All Sides in Science Curriculum Language. According to the El Paso Times, The state Board of Education on Friday adopted a new science curriculum for Texas public schools, dropping a 20-year requirement that teachers cover the "strengths and weaknesses" of evolutionary theory. Still, proponents of teaching evolution ended up unhappy, as the board voted 13-2 for a plan requiring teachers and students to examine all sides of scientific theories. Some saw this as an allowance for teaching creationism. The curriculum will take effect during the 2010-11 school year and will dictate what material publishers include in science textbooks. Supporters of the strengths and weaknesses phrase said including it would protect free discussion of scientific theories in the classroom. But critics have linked the phrase with creationism, and said it would undermine the quality of science education. [El Paso Times, 3/28/09] SBOE Compromised on New Science Curriculum Standards. According to the Austin AmericanStatesman, The State Board of Education on Friday passed science curriculum standards that members described as a compromise between those who are critical of teaching evolutionary theories without scrutiny and those who feared attacks on evolution would lead to the teaching of creationism in Texas schools. After the 13-2 vote, it was social conservatives on the board who were doing most of the celebrating while scientists expressed concerns. The new standards remove current requirements that students be taught the strengths and weaknesses of scientific theories. Instead, teachers will be required to have students scrutinize all sides of the theories Friday's adoption comes after many months of debate over drafts for the standards, which were last revised in 1998. On the one hand, the standards encourage questions about certain evolutionary concepts, satisfying those who are critical of the theory. But those supportive of evolution were partly mollified because calls to teach insufficiencies or weaknesses of the theory were rejected. [Austin American-Statesman, 3/28/09] Board Members Removed Provision that Would have Raised Questions about Key Principles of the Theory of Evolution. According to the Dallas Morning News, Social conservatives lost another skirmish over evolution Friday when the State Board of Education stripped two provisions from proposed science standards that would have raised questions about key principles of the theory of evolution. In identical 8-7 votes, board members removed two sections written by Chairman Don McLeroy that would have required students in high school biology classes to study the sufficiency or insufficiency of common ancestry and natural selection of species. Both are key principles of Charles Darwin's theory of evolution. Five Democrats and three Republicans joined to narrowly outvote the seven Republicans on the board aligned with social conservative groups. The science standards were ultimately adopted 13-2, setting the state's curriculum in the subject for the next decade. The standards will determine what students are taught in class and what must be covered in science textbooks... Friday's votes came a day after social conservatives lost one of their key objectives in the debate over evolution - to require that science teachers and textbooks cover the weaknesses of Charles Darwin's theory as well as its strengths. That proposal failed on a 7-7 vote. [Dallas Morning News, 3/28/09] SBOE Members Turned Aside Efforts by Social Conservatives to Include Teaching the Weaknesses of Evolution Theory in Texas Classrooms. According to the Dallas Morning News, In a decision watched by science educators across the nation, the State Board of Education on Thursday narrowly turned aside a last-ditch effort by social conservatives to require that weaknesses in the theory of evolution be taught in science classes in Texas. Board members deadlocked 7-7 on a motion to restore a longtime curriculum rule that "strengths and weaknesses" of all scientific theories - notably Charles Darwin's theory of evolution - be covered in science classes and textbooks for those subjects. The tie vote upheld a preliminary decision by the board in January to delete the strengths-andweaknesses rule in the new curriculum standards for science classes that will be in force for the next decade. That decision, if finalized in a last vote today, changes 20 years of Texas education policy. [Dallas Morning News, 3/27/09]

No Fewer than 54 Scientific and Educational Societies Called For Removal of Flawed Evolution Amendments. According to the National Center for Science Education, As the Texas state board of education prepares for its final vote on a new set of state science standards, no fewer than fifty-four scientific and educational societies are calling for the approval of the standards as originally submitted without misleading language about "strengths and weaknesses" and without the flawed amendments undermining the teaching of evolution proposed at the board's January 2009 meeting. In their statement, organized by the National Center for Science Education, the societies write, Evolution is the foundation of modern biology, and is also crucial in fields as diverse as agriculture, computer science, engineering, geology, and medicine. We oppose any efforts to undermine the teaching of biological evolution and related topics in the earth and space sciences, whether by misrepresenting those subjects, or by inaccurately and misleadingly describing them as controversial and in need of special scrutiny. [National Center for Science Education, 3/25/09] Evolution Debate Hinged on Final Vote of SBOE. According to the San Antonio Express-News, The fight over how evolution is taught in Texas public schools is heading for a showdown this week. Whether school children learn traditional teachings about evolution or what many scientists describe as a watereddown version hinges on a final vote of the State Board of Education that has both sides girding for battle... The board's seven social conservatives want to restore the "strengths and weaknesses" standard involving evolution. And they're pushing the amendment that would instruct students to evaluate fossil types. Some scientists contend that gaps in fossil records create scientific evidence against universal common descent. The board's five Democrats favor removing the strengths and weaknesses provision - leaving Republicans Bob Craig of Lubbock, Geraldine Miller of Dallas and Patricia Hardy of Fort Worth as the swing votes. All three voted with the science experts in January to remove the strengths and weaknesses standard. [San Antonio Express-News, 3/23/09] Even Republican Party Urged SBOE to Overturn Provision Requiring Teacher to Present Both the Weaknesses and Strengths of Evolution. According to the San Antonio ExpressNews, Even the Texas Republican Party has entered the fray, with a resolution urging the board to overturn a preliminary decision in January to remove a provision requiring teachers to present both the weaknesses and strengths of evolutionary theory, or the origins of life. Scientists generally oppose that standard, arguing there is no weakness in basic evolutionary theory taught at the high school level. The language by the anti-evolutionists about doubt or weaknesses or controversy involving evolution is just rhetoric. Doubts or weaknesses don't exist among scientists, said Texas Citizens for Science President Steven Schafersman. He and others want the board to reverse two amendments tentatively approved in January casting doubt on common descent - and fossil records. The common descent theory goes back to Charles Darwin's principles of evolution and holds that all organisms come from a common ancestor. Those two amendments put a stain on the scientific quality of the science standards written by the science experts, Schafersman said. [San Antonio Express-News, 3/23/09]

HEALTH TEXTBOOKS SBOE Approved Health Textbooks that Promoted Traditional Marriage and Sexual Abstinence and Contained Little Information on Condoms and Contraception. According to the Dallas Morning News, The State Board of Education adopted new health textbooks Friday that promote traditional marriage and sexual abstinence while providing scant information about condoms, contraception and other sensitive sex-related topics. Critics railed against the new high school texts, saying they'll be of little use to sexually active teenagers who need advice on avoiding unwanted pregnancies and sexually transmitted diseases. Texas leads the nation in teenage births. But most board members said they preferred the overriding emphasis on abstinence. They don't believe it necessary for textbooks to present comprehensive information on condoms and other forms of contraception. [Dallas Morning News, 11/6/04]

Publishers Gave into Pressure to Define Marriage as Between a Man and a Woman but Rejected More Striking Changes. According to the Dallas Morning News, Publishers also gave in to last-minute pressure from some board members to clearly define marriage as a lifelong union between a man and woman, and eliminate words that could suggest same-sex civil unions, such as partners and couples. The more striking changes suggested by social conservatives -- including language that said homosexuals are more likely to use illegal drugs and commit suicide -- were rejected by the publishers. [Dallas Morning News, 11/6/04] Critics Said New Books Were a Step Backward. According to the Dallas Morning News, The very sad news is these books contain absolutely no information about family planning or disease prevention, said Samantha Smoot, president of the Texas Freedom Network, which often spars with social conservatives on education issues Ms. Smoot and other critics said the books are a step backward from the health books that have been used in Texas schools since their adoption in 1994. Most of those books contain information about condoms and contraception. By contrast, three of the four health textbooks approved Friday include almost no information on those topics, focusing instead on abstinence as the only way to prevent pregnancy and disease. [Dallas Morning News, 11/6/04] SBOE Member Terri Leo Objected to Health Textbooks, Said they Legitimized Gay Marriage by Censoring the Heterosexual Definition of Marriage in Texas. According to the Fort Worth StarTelegram, Disputes about gay marriage and contraception at a State Board of Education meeting Thursday derailed consideration of about a half-dozen health textbooks scheduled for use in Texas classrooms next fall. The 15-member panel had planned to vote on the books, but member Terri Leo, RSpring, objected, saying that some of the texts legitimized gay marriage by censoring the heterosexual definition of marriage in Texas. In documents presented to the board, Leo said the proposed books for Texas middle school and high school students use asexual stealth phrases that fail to conform with the state definition of marriage. [Fort Worth Star-Telegram, 11/5/04] BOARD MEMBERS Current Board Members According to the Texas Education Agency: Rick Agosto Lawrence A. Allen Mary Helen Berlanga David Bradley Barbara Cargill Bob Craig Cynthia Noland Dunbar Patricia Hardy Mavis B. Knight Terri Leo Gail Lowe Don Mcleroy Ken Mercer Geraldine Miller Rene Nuez State Board of Education was Waiting for Perry to Appoint a New Chairman. According to the Associated Press, Members of the State Board of Education say they want to help Texas' budget crisis by cutting spending, a priority of Gov. Rick Perry. There's just one problem: the board can't meet until Perry appoints a new chairman. The governor has not decided who will lead the 15-member elected board, spokeswoman Kathy Walt said Wednesday. The board oversees the $17 billion Permanent School Fund, the purchase of textbooks, testing and other areas. It last met Nov. 15. I'm looking forward

to seeing a chairman appointed, said member Don McLeroy, R-Bryan. We're ready to get organized. [AP, 2/13/03] Perry Named Gail Lowe as Chair of State Board of Education. According to the Associated Press, As Gail Lowe takes the helm of the State Board of Education, the turmoil-laden panel that has long been a battleground in the fight between social conservatives and liberal watchdogs, the incoming chairwoman is decidedly unapologetic about her conservative Christian views. Lowe was appointed to the spot last month by Gov. Rick Perry to replace former chairman Don McLeroy, whose appointment to a second term as chairman was rejected by the state Senate Gov. Rick Perry surprised observers with his selection of Lowe, 52, a mild-mannered, small-town newspaper publisher who acknowledges she's not a broad visionary but more of a nuts-and-bolts person. She'll replace McLeroy, an ardent conservative targeted by critics for his outspoken views on creationism and support of teaching students weaknesses of evolutionary theory. [AP, 8/15/09] Perry Picked McLeroy as Chairman of SBOE. According to the New York Times, Of the seven members of the Christian bloc, Ken Mercer is in a battle to keep his seat, Cynthia Dunbar recently announced she wont run for re-election and after 11 years of forceful advocacy for fundamentalist causes on the Texas state board, during which time he was steadfastly supported by everyone from Gov. Rick Perry who originally picked him as chairman to tea-party organizers, Don McLeroy is now facing the stiffest opposition of his career. Thomas Ratliff, a well-connected lobbyist, has squared off against McLeroy in the Republican primary and is running an aggressive campaign, positioning himself as a practical, moderate Republican. [New York Times, 2/11/10] McLeroy was Demoted from Chairman of SBOE due to Concerns Over his Religious Views. According to the New York Times, Indeed, dentistry is only a job for McLeroy; his real passions are his faith and the state board of education. He has been a member of the board since 1999 and served as its chairman from 2007 until he was demoted from that role by the State Senate last May because of concerns over his religious views. Until now those views have stood McLeroy in good stead with the constituents of his district, which meanders from Houston to Dallas and beyond, but he is currently in a heated re-election battle in the Republican primary, which takes place March 2. [New York Times, 2/11/10] McLeroy Lost Primary for School Board, Two Other Members Not Seeking Re-election. According to the New York Times, The standards, reviewed every decade, serve as a template for textbook publishers, who must come before the board next year with drafts of their books. The boards makeup will have changed by then because Dr. McLeroy lost in a primary this month to a more moderate Republican, and two others one Democrat and one conservative Republican announced they were not seeking re-election. [New York Times, 3/12/10] Don McLeroy was Chairman of Education Board. According to the Houston Chronicle, There will never be a bridge long enough to span the gulf between my world and the world according to Don McLeroy, the former board chairman. But as a professional historian, I was disturbed for different reasons. These, I suspect, would no more reassure the board's liberal members than they would the conservatives. [Houston Chronicle, 3/13/10]

BOARD MEMBERS CAMPAIGN FINANCE GAIL LOWE, CHAIR Some contributions Available Via Excel, see attached document Handwritten PFD Reports, Only contributions over $500 below:

Mr. and Mrs. Fred Gough Graham, TX 76450 $12,000 8/2/08 Lampasas County Republican Party Lampasas, TX 76550 $1,000 8/13/08 LAWRENCE ALLEN, VICE CHAIR $0 Contributions TERRI LEO, SECRETARY All Contributions Available Via Excel, See Attached Document BARBARA CARGILL, CHAIR COMMITTEE ON INSTRUCTION All Contributions Available Via Excel, See Attached Document KEN MERCER, VICE CHAIR COMMITTEE ON INSTRUCTION All Contributions Available Via Excel, See Attached Document GERALDINE MILLER, COMMITTEE ON INSTRUCTION All Contributions Available Via Excel, See attached document DAVID BRADLEY, CHAIR COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND Contributions Beginning October 2008 available via excel, see attached document Handwritten PFD Reports Available for January and July Semiannual 2008 Reports (detailed reports from previous years not available) Only contributions above $500 listed below: Tom Owens Lumberton, TX 77657 $1,000 8/21/07 Richard B. Neill Fort Worth, TX 76132 $980 1/25/08 RICK AGOSTO, VICE CHAIR COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND All contributions available via excel, see attached document

CYNTHIA NOLAND DUNBAR, COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND All contributions available via excel, see attached document RENE NUEZ, COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND Detailed reports only available after July Semiannual report 2007 One contribution listed: Paul Moreno El Paso, TX 79902 $100 11/13/08 BOB CRAIG, CHAIR COMMITTEE ON SCHOOL INITIATIVES All contributions available via excel, see attached document MAVIS B. KNIGHT, VICE CHAIR COMMITTEE ON SCHOOL INITIATIVES Contributions beginning January Semiannual 2004 available via excel, see attached document MARY HELEN BERLANGA, CHAIR COMMITTEE ON SCHOOL INITIATIVES Contributions beginning July Semiannual available via excel, see attached document PATRICIA HARDY, CHAIR COMMITTEE ON SCHOOL INITIATIVES Some contributions available via excel, see attached document Handwritten PFD Reports, Only contributions over $500 below: $5018.07 listed on January Semiannual 2009 report, no donor listed

Edward Bass Fort Worth, TX 76102 $1,000 2/25/08 Charles Butt San Antonio, TX 78204 $1,000 3/5/08 Peter ODonnell Jr. Dallas, TX 75201 $1,000 2/28/08 Charlie Geren Fort Worth, TX 76101 $1,000 2/25/08 Gib Lewis Fort Worth, TX 76111 $500 2/4/08 DON McLEROY, CHAIR COMMITTEE ON SCHOOL INITIATIVES Contributions beginning January Semiannual 2001 available via excel, see attached docuement

Link Strategies LLC Confidential Document 63

FRED GOUGH, THE PERRY GAIL LOWE CONNECTION


FRED GOUGH GAVE HEAVILY TO GAIL LOWE Handwritten PFD Reports: Mr. and Mrs. Fred Gough Graham, TX 76450 $12,000 8/2/08

Two-Thirds of Lowes Money Came from Fred Gough, a Big Backer of Gov. Rick Perry. According to the Fort Worth Star-Telegram, Science is at stake in the election for the Texas state school board. And voters in Denton County, Wise County, Granbury and Stephenville can make a difference. Two Denton County challengers - one a conservative Libertarian, the other a liberal Democrat - are both taking on a Hill Country Republican who describes herself as a creationist and doubts humans have anything to do with climate change. The chairman and a faction on the State Board of Education are completely trying to tear down science in Texas, said Carrollton Libertarian John E. Shuey, a former John McCain county campaign chairman. Hes running as the independents choice against incumbent Gail Lowe of Lampasas for the board of education Neither Bogle nor Shuey has much money to campaign. Lowe has plenty: $17,000, two-thirds of it from Graham car dealer Fred Gough, a big backer of Gov. Rick Perry. [Fort Worth Star-Telegram, 10/12/08] PERRY APPOINTED LOWE AS CHAIR OF SBOE Perry Named Gail Lowe as Chair of State Board of Education. According to the Associated Press, As Gail Lowe takes the helm of the State Board of Education, the turmoil-laden panel that has long been a battleground in the fight between social conservatives and liberal watchdogs, the incoming chairwoman is decidedly unapologetic about her conservative Christian views. Lowe was appointed to the spot last month by Gov. Rick Perry to replace former chairman Don McLeroy, whose appointment to a second term as chairman was rejected by the state Senate Gov. Rick Perry surprised observers with his selection of Lowe, 52, a mild-mannered, small-town newspaper publisher who acknowledges she's not a broad visionary but more of a nuts-and-bolts person. She'll replace McLeroy, an ardent conservative targeted by critics for his outspoken views on creationism and support of teaching students weaknesses of evolutionary theory. [AP, 8/15/09] Link Strategies LLC Confidential Document 64

GOUGH AND PERRYS CAMPAIGN CONNECTION Fred Gough was a member of Rick Perrys 2006 Steering Committee. According to Texas Weekly, Rick Perry announces the members of his 2006 reelection steering committee Gov. Rick Perry's steering committee Pam and Fred Gough Graham. [Texas Weekly, Accessed 3/18/10] Gough Gave to Perry the same day it was announced he would serve on Perrys Finance Committee. According to Texas Weekly, The governor also uncorked the names of people who've agreed to serve on his campaign finance committee: Graham: Fred Gough. [Texas Weekly, 1/13/05]

D te a A ou m nt Ls at 21-Oct-02 $50.00 G ough 1 3-Jan-05 $2,500.00 G ough 2 8-Jan-02 $1,000.00 G ough 17-Jul-00 $1,000.00 G ough

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Gough Opposed Perry in Letter to the Editor Calling Him Slick Rick Perry. In a Letter to the Editor in the Corpus Christi Caller-Times, Fred Gough wrote: Perry, not again! Texans do not warrant another term of Slick Rick Perry. Is Texas to become the first state owned by a foreign country or countries, such as Spain? Slick Rick has asked the Legislature to cut budgets, but not his 273-person staff. Parks and Wildlife was to receive $105 million, but received only $21 million. The System Benefit Fund was used to help balance the budget, not to help the poor pay electric bills, which this money is set aside for. After signing certain legislation, TXU paid him for his autograph, something which Slick Rick is well known for. One in six Texans lives in poverty. Texas ranks 49th in park spending. Texas has the nation's lowest per capita park spending. Texas ranks fifth in overall poverty. The Democrats can't win in Texas, Kinky can't, a Libertarian can't, three unknown independents can't, and a Socialist write-in can't. Enough is enough, it's time for Carole Keeton Strayhorn! FRED GOUGH [Corpus Christi Caller-Times, 9/13/06] Fred Gough Supported Carole Keeton Strayhorn, Opposed Perry in Letter to the Editor in 2006. In a Letter to the Editor in the Austin American-Statesman, Fred Gough wrote: Republican Gov. Rick Perry has had his turn at running our great state. His record speaks for itself. He is giving up Texas land to foreign countries. Have you received your $2,000 property tax break yet? He is also the proud father of Texas' largest tax increase. Democratic candidate Chris Bell is simply unknown and has no real record. He does have a million-dollar litigator who is trying to buy the Governor's Mansion for the both of them. Independent candidate Kinky Friedman comes across as a racist and compares himself to Jesus Christ. The bottom line is that independent candidate Carole Keeton Strayhorn has the credentials, experience and leadership to run Texas. FRED GOUGH, fred12352@aol.com [Austin American-Statesman, 10/21/06]

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PERRYS RECORD ON TAXES & BUDGET


SUMMARY: While Perry says he opposes raising taxes, he has refused to sign a no new taxes pledge and in November left open a window to increase the gas tax, and his TxDOT exploring a new vehicle mileage tax. In 1987, Perry voted for a $5.6 billion tax increase the largest tax increase in Texas history. In 1990, Perry voted once again for a $500 million tax increase, which raised the sales tax and numerous other taxes. In 2003, Perry signed into law the first major increase in Texas fees in 12 years. These fees included a new $5 stamp for freshwater fishing, an increase in auto-title fees, and an increase in professional license fees for nurses and tow truck operators. In 2006, Perry signed into law a tax plan which raised taxes on businesses, used cars and cigarettes and reduced property taxes. Perry promised a $2,000 reduction in property taxes for the average Texan, but the actual savings amounted to $536. In addition, by 2008, 84 percent of small-business owners claimed they saw their taxes increase 100 percent under Perrys plan. According to the Austin American Statesman, The two-year state budget has grown from $98 billion to $182 billion in the decade since Perry became governor. Perry balanced his most recent budget with $12.1 billion in federal stimulus money. The Texas state debt is currently $31,253,863,000. From 1999 to 2009, Texas 10-year period, total debt outstanding increased from $12.17 billion in FY1999 to $31.25 billion in FY2008, an increase of 157 percent.

As the national and global economies struggle to recover from their financial woes, Texas is displaying strength that is built on conservative fiscal discipline. www.rickperry.com [accessed 3/12/10]

PERRY REFUSED TO SIGN NO NEW TAXES PLEDGE Perry declines to rule out tax hike headline in the Fort Worth Star Telegram [3/15/03] 2004: Perry Never Signed the Anti-Tax Pledge. According to the Dallas Morning News, The nation's No. 1 anti-tax crusader, Grover Norquist, who traveled with Gov. Rick Perry to the Bahamas in February, is pushing hard behind the scenes to sway the debate on school finances in Texas. Armed with I-won't-raise-taxes pledges signed over a dozen years by 37 state representatives and four senators - all Republicans - Mr. Norquist is trying to hold their feet to the anti-tax flame. Mr. Perry has never signed the anti-tax pledge but has Mr. Norquist's blessing. [Dallas Morning News, 5/8/04] 2003: Perry Refused to Commit to No New Taxes. According to the Fort Worth Star-Telegram, Gov. Rick Perry, who has repeatedly promised not to raise taxes despite a budget crunch, cracked the door open to that possibility Friday. Asked if he might change his no new taxes pledge if the shortfall grows larger than $9.9 billion, Perry was noncommittal. I don't think so, he said. I feel confident that we can craft a budget within available revenue. Even if the shortfall is, say, $2 billion more in the red? I think playing the what-if game is not particularly of great utility, he responded. The comments are a break Link Strategies LLC Confidential Document 66

from previous statements. In late February, Perry chastised a reporter who asked if he might waver on the tax pledge. [Fort Worth Star-Telegram, 3/15/03] Perry Not Opposed to Allowing Local Communities to Increase Taxes. According to the DMN, While noting that he generally opposes higher taxes, he said that wouldn't keep him from signing a bill giving local counties the right to raise local taxes or fees for rail. I don't have an entrenched opposition that would deny people at the local level the right to make this decision, he said. [Dallas Morning News, 1/21/09] 2009: Perry Open to Raising Taxes or Fees to Fund Transportation. According to the Fort Worth Star Telegram, Perry previously said he was open to a bill that would raise taxes or fees to fund transportation if it was focused on North Texas. By the end of the session, the measure had expanded to allow several other parts of the state to participate. [Fort Worth Star Telegram, 6/10/09] PERRY RECORD ON INCREASING TAXES & FEES 1987: PERRY VOTED FOR LARGEST TAX INCREASE IN STATE HISTORY Perry wasnt always afraid of new taxes headline in the Austin American Statesman [5/27/04] 1987: Perry Voted for $5.7 Billion Tax Increase; Largest in State History. According to a column in the Austin American Statesman, In the 1987 funding crunch, with an estimated 28 percent gap between revenue and projected expenses, Texas' vital services were saved from decimation by thoughtful House and Senate leaders. They sensed that overdoing cuts aimed at waste, fraud and abuse could cause future problems -- sometimes including waste, fraud and abuse. Then-Gov. Bill Clements, a Republican, finally dropped his pledge to veto any tax bill over $2.9 billion. He signed the largest state tax increase in history -- $5.7 billion -- to finance the two-year budget. Why? We did what we had to do, Clements said at the time. I don't think we had any choice. One young House Democrat who agreed then, and voted for that tax bill, was named Rick Perry. Wonder whatever happened to that guy? [Austin American Statesman column, 5/27/04] Perry Voted for a $5.6 Billion Tax Increase in 1987. According to the Houston Chronicle, Texas' state budget shortfall may hit a nightmarish $ 12 billion by early next year, according to a key Republican lawmaker. The governor, who voted for a $ 5.6 billion tax increase in 1987, said tax hikes aren't the answer this time. I've done this before, Perry said, and I know that with the right type of leadership, the right kind of focus, the right type of budget planning, you don't need to raise taxes. [Houston Chronicle, 8/30/02] 2002: Opponent Accused Perry of Voting Twice for the Largest Tax Increase in State History. According to the Associated Press, Republican Gov. Rick Perry and Democratic opponent Tony Sanchez disagreed about the adequacy of the state's school accountability system as they both emphasized education ThursdayAs for state taxes, Sanchez repeated that he first wants to examine the $114 billion state budget to look for inefficiencies. I'm not going to talk about taxes. They're off the table, Sanchez said. Then, he added, Rick Perry voted twice for the largest tax increase in the history of Texas in 1987. Perry, then a Democrat in the Texas House, voted for a 1987 bill that broadened and increased the state sales tax. The bipartisan bill was signed by Republican Gov. Bill Clements. [AP, 4/11/02] 1990: PERRY VOTED FOR $500 MILLION TAX INCREASE 1990: Perry Voted For $500 Million Tax Increase; Raised Sales Tax, Numerous Other Taxes. According to the Houston Chronicle, Democratic lieutenant governor candidate John Sharp went on the offensive Monday, criticizing Republican Rick Perry for his 1989 support of legislation to allow the early Link Strategies LLC Confidential Document 67

release of prison inmates and to increase taxes. But Perry said votes like those that he says he made as a Democratic state representative were made to show support for the Democratic leadership and inspired him to become a Republican later that year. In a special session in the spring of 1990, the Legislature passed a tax bill to raise almost $ 500 million. It boosted the state sales tax by one-fourth of a cent and raised numerous other taxes as well. [Houston Chronicle, 12/2/97] 2002: PERRYS INCREASE IN VEHICLE INSPECTION FEES DECLARE UNCONSTITUTIONAL Perrys Increase in Out-of-State Inspection Fees Ruled Unconstitutional. According to the Houston Chronicle, But, wary of voter reaction to the new fees and taxes, the bill emerged with about threequarters of the funding coming from an inspection fee on all out-of-state vehicles -- a fee that went from $ 1 to $ 225 per vehicle with a stroke of Gov. Rick Perry's pen. The fee was challenged by two Austin-area auto dealers and ruled unconstitutional by state District Judge Lora Livingston. [Houston Chronicle, 7/25/02] Perrys Enormous Vehicle Inspection Fee Increase Declared Unconstitutional. According to the Dallas Morning News, Rather than pass a bill with too little money, legislators raised the fee that new Texas residents pay at their first Texas vehicle inspection to $ 225, up from just $ 1. After Gov. Rick Perry signed the bill into law, however, car dealers sued and got the new fee declared unconstitutional. That left $ 20.5 million for the first year instead of $ 137 million - with just a dribble of pollution cuts to show for the effort. [Dallas Morning News, 1/13/03] 2003: PERRY SIGNED INTO LAW FIRST MAJOR FEE INCREASES IN 12 YEARS No new taxes, but fees could rise, Perry says headline in the Houston Chronicle [1/9/03] No new taxes, but more fees; Lawmakers boost fees and fines to beef up state revenue headline in the San Antonio Express News [6/10/03] GOP says it held line against taxes; but Texans face millions more in fees Dallas Morning News headline [6/3/03] I don't think fee increases are just unilaterally - or bilaterally, for that matter - taken off the table. The user fee concept is acceptable. Perry in 2003 [San Antonio Express News, 1/9/03] We raised some [user] fees and fines, but for the first time since World War II, the Texas Legislature this year spent less of its general revenue than in the previous budget cycle. Perry in 2003 [Washington Times, 9/25/03] San Antonio Express News: Taxes Didnt Go Up, But Many Texans Still Are Going to be Paying More to the State. According to the San Antonio Express News, Taxes didn't go up, but many Texans still are going to be paying more to the state. Although lawmakers avoided new taxes in the legislative session that ended last week, they authorized surcharges and higher college tuition, vehicle registration fees and penalties for traffic violations. Gov. Rick Perry, who led the no-new-taxes chorus, already has signed into law measures authorizing a fee of up to $40 for licensing real estate instructors and a $6 increase in the $150 annual registration fees for professional land surveyors. Another measure that requires land surveyors, landscape architects, interior designers and property tax consultants to pay $200 for annual occupational licenses awaits Perry's action. Under the approach, $50 of each fee would be earmarked for public education and $150 would go to general state operations. [San Antonio Express News, 6/10/03] Texas Fees Had Not Been Raised Since 1991. According to the Houston Chronicle, State fees haven't been raised, at least to any widespread extent, since 1991, when the Legislature also created the state lottery and passed the last general tax increase to help balance the budget at the end of Texas' last Link Strategies LLC Confidential Document 68

significant recession. Now, Perry says some fees may have to be raised again. Revenue-raisers have to originate in the House, and Speaker-apparent Tom Craddick, who also opposes higher taxes, hasn't yet spoken out on fees. But nobody should be surprised if he shares Perry's view. [Houston Chronicle, 1/12/03] Dallas Morning News Details 2003 Fee Increases: Tuition: Colleges and universities could set their own tuition, a responsibility historically reserved for the Legislature. Critics say it guarantees higher costs, but supporters say some students may see a savings. Lawyers: A mandatory $ 65 annual fee would be added on top of dues and occupational taxes paid by lawyers to help fund legal services for the indigent. And nonresident lawyers would have to pay a $ 250 fee to take part in Texas court proceedings. Behind bars: A $ 15 fee would be added to bail bonds - other than cash or personal bonds - to help fund longevity pay for assistant prosecutors. Apartments: Landlords could add a 5 percent late charge to renters' water bills not paid by the due date. Courthouses: A records management and preservation fee would go from $ 5 to $ 10 on civil actions filed with a district clerk. And a $ 15 filing fee could be charged for motions for modification or motions for contempt in child custody cases. Fishermen: A new $ 5 stamp would be required to fish in fresh waters, beginning in September 2004. That would be in addition to the cost of a resident fishing license, which was increased from $ 19 to $ 23 last week by the Texas Parks and Wildlife Commission. Bad drivers: Drivers would pay tens of millions in "surcharges" above the regular fines for traffic violations, providing more money for emergency room care and highways and rail lines. The charges include: A $30 fee added on all traffic tickets. $ 100 for driving without a license or with a suspended license. Points would be assigned for certain driving infractions, and the more infractions, the higher the penalty. A moving violation would be two points; a moving violation that resulted in an accident would be three points. Points would be assessed on speeding tickets only for those going 10 percent over the limit, such as driving 78 in a 70 mph zone. Those getting six points within a three-year period would be fined $ 100, and $ 25 for each point above six. Motorists convicted of DWI would be fined $ 1,000 and $ 1,500 for each subsequent infraction. And $ 2,000 would be assessed if the driver's blood alcohol level exceeded 0.16 twice the legal limit. Auto titles: The fee for car and pickup title transfers would jump from $ 13 to $ 28 across the state, and to $ 33 in the Dallas-Fort Worth and Houston-Galveston areas because of violations of federal clean-air rules. Additional charges would be placed on the sale, use and lease of diesel trucks and equipment, with the money used for anti-pollution programs.

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Drunken driving: A $100 surcharge would be added to driving while intoxicated and other alcoholrelated convictions. The money would be used to help fund emergency medical services and trauma care facilities. [Dallas Morning News, 6/3/03]

DMN: Perry and the Legislature Have Also Raised Several State Fees. According to the DMN, To combat a budget shortfall, Perry and the Legislature have also raised several state fees [in 2003]. Among the increases were vehicle registration costs, tens of millions of dollars in surcharges on traffic violation fines, and professional fees for lawyers, nurses and tow truck operators. [Dallas Morning News, 10/16/09] Americans for Prosperity Criticized Perrys Education / Tax Plan; It Should be Revenue-Neutral. According to the Austin American Statesman, Perry's insistence on a revenue-neutral plan that shifts taxes instead of simply raising them is in line with a plan unanimously approved by the Senate this year. That proposal, which died in the House, called for reducing property taxes while increasing and expanding the state's sales tax. Tax opponents said Perry was on the mark. It should be revenueneutral. We should not be putting more dollars in education, but getting more education for our dollar, said Peggy Venable, state director of Americans for Prosperity, a group that advocates limited government. [Austin American Statesman, 12/20/03] Strayhorn Accused Perry of Raising $2.7 Billion in Fees; Begging for Lawmakers to Pass Largest Tax Increase in History. According to a column in the San Antonio Express News, In a 60-second radio spot running in 130 markets, Strayhorn accuses Perry of raising $2.7 billion in state fees. She also says he begged lawmakers to pass the largest tax increase in state history. Never mind that lawmakers in 2003 approved the $2.7 billion to balance enormous budget deficits. And never mind that Strayhorn offers no school-funding plan of her own. [San Antonio Express News, 8/24/05] 2003: Strayhorn Blasted Perry for $2.7 Billion in Fee Increases Including New $5 Fishing Stamp Increases in State Employee Health Care Costs. According to the San Antonio Express News, Drawing sharp rebukes from fellow Republicans, Comptroller Carole Keeton Strayhorn on Wednesday called nearly $2.7 billion in looming fee increases and state employee benefit reductions a September surprise for taxpayers. Strayhorn itemized more than 60 fiscal strategies approved by lawmakers, ranging from a new $5 freshwater fishing stamp to reductions in annual $1,000 school employee healthcare bonuses and requirements that state employees pay more in insurance co-payments in the fiscal year starting Monday. Strayhorn said the impact amounts to five to 10 times that imposed by legislators in 1999 and 2001. [San Antonio Express News, 8/28/03] 2003: Perry Refused to Endorse Cigarette Tax. According to the Associated Press, Under state law, all tax bills must begin in the House, where the new Republican leadership has resisted efforts this session to raise or create new taxes. A cigarette tax bill is lingering in the Ways and Means Committee and deadlines for preliminary passage of House bills passed last week House Speaker Tom Craddick, R-Midland, and Republican Gov. Rick Perry have adamantly refused to endorse the cigarette tax push. [AP, 5/19/03] Perry on Cigarette Tax in 2003: It Aint Going to Happen. According to the Houston Chronicle, Comptroller Carole Keeton Strayhorn said Monday a $ 1-a-pack cigarette tax increase would help balance the state budget without gimmicks, but Gov. Rick Perry quickly shot down the idea. It ain't going to happen, Perry said. It's pretty straightforward -- there isn't going to be a cigarette tax increase in this session of the Legislature. We'll get this budget balanced without having to enhance these revenue sources. [Houston Chronicle, 5/20/03] Perry Rejected Cigarette Tax, Proposed Increasing Speeding Fines. According to the Austin American-Statesman, A day after again rejecting a cigarette tax increase that supporters said would curtail a dangerous habit and help pay related health care costs, Gov. Rick Perry on Tuesday backed a plan to combat bad driving and its related costs by making it more expensive. Under the plan, part of Link Strategies LLC Confidential Document 70

Perry's ambitious transportation package, the state would tack a $30 surcharge on some speeding tickets, and repeat offenders would face new fines that would be used, in part, to pay for trauma care. Those who object to stronger fines don't have to pay them, Perry said. They simply have to change their driving habits. [Austin American-Statesman, 5/21/03] 2003: Perry Said Expanding Sales Tax not Needed to Balance Budget Shortfall. According to the Associated Press, Gov. Rick Perry said Friday that he believes expanding the state sales tax - an idea pushed by some of his fellow Republicans - would be a new tax, something he promises won't be needed to balance a $10 billion shortfall. If you were to pass a piece of legislation that says you no longer have an exemption, you would tax that item, that's a new tax, Perry said. I don't think that one's too difficult for people to fathom. [AP, 2/28/03] Perrys 2003 Driver Responsibility Program Collected $18 Million in Fees from Repeat Drunk Drivers. According to the Dallas Morning News, The 2003 Driver Responsibility Program - which Mr. Perry once said was supposed to put about $1 billion into statewide trauma care by 2010 - was projected to raise $347 million in 2004 and 2005 from fees charged to drunken drivers and repeat traffic offenders. So far, the program has produced about $18 million a year in fees, largely because DPS didn't start collecting fines from those offenders until a year after the program was supposed to start and because the Austin-based vendor hired last fall to collect those fees has delivered only about 20 percent of what is owed the fund. [Dallas Morning News, 7/16/05] Houston Received Most Money from Texas Emissions Reduction Plan. According to the Austin American Statesman, About three dozen Austin-area companies have been awarded more than $6 million in grants to replace equipment and retrofit engines with pollution-reducing technology as part of a state program designed to improve air quality, Gov. Rick Perry announced Wednesday. The local environmental grants are part of more than $80 million that is being spent statewide as part of the Texas Emissions Reduction Plan, which aims to bring air quality in the state into compliance with federal mandates in some major cities. Money for the program, approved during the 2001 legislative session and signed into law in June 2003, is coming from increases in vehicle title transfer fees that Texans pay when they buy new cars, state officials said. The Houston-Galveston area received the most money: $36.4 million for 43 projects. The Dallas-Fort Worth area received $29.6 million, the San Antonio area got $2.5 million, and the rest was divided among projects in the Beaumont-Port Arthur, Corpus Christi, El Paso, Tyler and Victoria areas [Austin American Statesman, 7/29/04] 2004: PERRY TAX PROPOSAL SOUNDLY REJECTED December 2003: Perry Hinted He was Open to Cigarette Tax. According to the Fort Worth Star Telegram, Other than a personal income tax, no revenue-generating ideas are off the table when lawmakers convene to fix the state's school finance woes, Gov. Rick Perry said Friday. Perry refused to voice support for any particular tax. But he hinted that he was open to increasing the cigarette tax as part of a package to lower property taxes and eliminate the school finance system known as Robin Hood, so named because of its rich-to-poor redistribution features. [Fort Worth Star Telegram, 12/20/03] 2004: Perry Proposed $7.1 Billion Education Plan. According to the San Antonio Express News, Smokers, gamblers and fans of adult entertainment would pay more to increase public school funding and lower local property taxes under a plan pitched Thursday by Gov. Rick Perry at Fox Tech High School. Other money would be raised if Perry succeeds in closing loopholes that now allow some companies to escape the franchise tax and some used-car buyers to underpay sales tax by misstating the purchase price. Perry put his public education plan's cost at $7.1 billion over nearly three years. [San Antonio Express News, 4/9/04] 2004: Perrys $2.5 Billion Education Funding Plan Increased Business, Auto Sales, Cigarette and Topless Bar Taxes. According to the San Antonio Express News, Perry also has proposed $2.5 billion in new education spending on top of enrollment growth. He would pay for his plan by closing a Link Strategies LLC Confidential Document 71

franchise-tax provision that allows many companies to escape the levy, tightening auto-sales-tax collections, imposing a $1-a-pack cigarette tax increase, instituting a $5 entry fee at topless bars, and installing video lottery terminals at racetracks. He plans to personally outline his plan before a legislative committee. He said there has been a lot of misinformation about the plan and that he wants to present it in its proper light. [San Antonio Express News, 4/17/04] Perry Introduced School Funding Plan Which Included Legalizing Slot Machines and Taxes on Smoking and Adult Entertainment. According to the Austin American Statesman, The governor didn't want new business taxes. The House didn't want slot machines. And the Senate didn't want to vote on a dead-end bill that would raise taxes. That combination meant that Lt. Gov. David Dewhurst on Friday had to do something he desperately didn't want to do: Stand on the south steps of the Capitol and acknowledge that lawmakers will not solve the school finance conundrum before the special session ends Wednesday. Perry introduced a plan in early April to split the state's tax roll, contemplating different school property tax cuts for residential and commercial property. The plan depended on revenue from legalizing slot machines, raising cigarette taxes and creating a new fee on adult entertainment. [Austin American Statesman, 5/15/04] Perry Plan to Cut Property Taxes By Raising Sin Taxes Soundly Rejected by House. According to the Associated Press, Perry wanted to cut school property taxes by $6 billion and replace that money with revenue from such sources as a $1-per-pack tax increase on cigarettes and a $5 tax on some adult entertainment, including strip clubs. He also sought to introduce state-taxed video lottery terminals at racetracks. However, the House soundly rejected Perry's proposal on Tuesday. The bill passed Wednesday would cut property taxes by $3 billion, or about 20 percent, raise the sales tax to 7 percent from the current 6.25 percent, and raise cigarette taxes from the current 41 cents a pack to $1.41, which was part of the governor's proposal. [AP, 5/5/04] Perry Proposed $5 Tax at Topless Bars. According to the Buffalo News, Today, sin has not only become more acceptable, it's on the verge of becoming official policy. With the state looking to change the way it funds public education, Gov. Rick Perry is proposing an expansion of sin taxes, including a $5 levy on every soul who enters a topless bar. Now they can feel guilty and public-spirited at the same time. [Buffalo News, 4/24/04] Perry Proposed $1 Increase in Cigarette Tax. According to the Associated Press, Republican Gov. Rick Perry is proposing that Texas increase its cigarette tax by $1 per pack, up from its current 41 cents per pack. If approved, the $1.41-per-pack tax would make Texas' rate among the highest in the nation. [Associated Press, 4/25/04]

2005: PERRY PLAN HELPS RICH Perrys plan helps rich at others expense; A Chronicle analysis shows wealthy would save, but renters would pay more Headline in the Houston Chronicle [6/23/05] 2005: Perrys Tax Plan Would Help Rich; Renters End Up Paying More. According to the Houston Chronicle, Gov. Rick Perry's plan for property tax relief would provide a windfall for the wealthiest families in Texas, but for lower-income renters the governor's plan would be a financial drain on the family budget, a Houston Chronicle analysis showed. And after more than a year of legislative wrangling over property tax relief, the tax savings for the median family in Texas would amount to about $ 150 a year under Perry's plan - a savings of about $ 12.75 a month. In the Chronicle analysis of Perry's plan, a family of four that rents a home out of an income of about $ 35,000 a year would end up paying about $ 72 a year more in state taxes. But a family of four with an income of about $ 150,000 a year and owns a home valued at $ 300,000 would receive a state tax cut of about $ 567 a year. [Houston Chronicle, 6/23/05]

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Perrys Plan Decreased Property Taxes Through Increased Homestead Exemption; Close Franchise Tax Loopholes. According to the AP, Attention shifted to Perry's school funding proposal Monday, after the House tax-writing panel was unable to garner support for their version of a tax bill last week. Perry's plan would decrease property taxes, partially through an increased homestead exemption; would close the franchise tax loopholes that now allow many businesses to avoid paying; would increase the sales tax to 6.95 percent and would add $1 to the cigarette tax. Policy analysts for Perry answered questions about the plan from members of the House Ways and Means Committee, many of whom seemed critical that while the plan closes loopholes, it doesn't attempt to increase the business structures that are required to pay the business tax. Perry's plan does close loopholes in the law that allow most Texas businesses to avoid paying. [Associated Press, 6/27/05] 2006: PERRY EDUCATION BILL INCREASED TAXES; PROPERTY TAX CUT LOWER THAN EXPECTED; BUSINESS TAXES SKYROCKET 2006: Property Tax Cut, New Education Spending Approved by Legislature. According to the San Antonio Express-News, Legislative leaders celebrated final approval Friday of a school funding plan designed to meet a Texas Supreme Court order and public clamor for property tax cuts. Lawmakers also gave final approval for a new business tax and a used motor vehicle sales tax for additional property tax cuts. They've reached agreement on a $1-per-pack cigarette tax, which is predicted to pass Monday. The combination of property tax cuts and school reform measures triggered praise from supporters and howls from critics. Today is a historic day in our state, Gov. Rick Perry said about the bills he promoted. With overwhelming bipartisan support, legislators have provided $15 billion in property tax relief, a net tax cut of more than $6 billion, across-the-board pay raises for teachers, and the largest performance pay plan in the nation to reward classroom excellence. [San Antonio Express-News, 5/13/06] Perry Called New Tax Package Historic. According to the Houston Chronicle, Lawmakers on Friday all but wrapped up work on a sweeping school finance and property tax package, putting previous failures behind them and proving that the Republican majority can pass a major tax bill. All members of the Legislature can hold their heads high, proud of the historic work they have done, said Gov. Rick Perry, whose political capital was on the line had the session ended in a stalemate as did four previous attempts in the past two years. [Houston Chronicle, 5/13/06] Perry Said he Would Sign Tax Package. According to Education Week, Gov. Rick Perry said last week that he would sign the package of tax and appropriations bills that the legislature passed to meet the state supreme court's June 1 deadline to rewrite Texas' property-tax code and still adequately finance schools. [Education Week, 5/24/06]

2007: Average Property Tax Savings Two Years after Bill were $536, not the $2,000 Perry Claimed. According to the Austin American-Statesman, Gov. Rick Perry said during his 2006 re-election campaign that owners of the average-value home in Texas would get a $2,000 tax cut from the plan. But that claim did not take into account that property values would increase or that school boards would add a few pennies back to their tax rates. Two years into the tax cut, the savings on the average-value home in the Austin district has been $536. [Austin American-Statesman, 10/22/07] Strayhorn Accused Perry of Misleading Texans on Size of Property Tax Cut. According to the Houston Chronicle, Independent gubernatorial candidate Carole Keeton Strayhorn on Wednesday accused Gov. Rick Perry of misleading Texans about the size of a property tax cut they will receive under recently passed legislation. Perry's new re-election campaign commercials brag that the package will produce an average $2,000 public school property tax cut for Texas homeowners over the next three years. But Comptroller Strayhorn, the state's chief fiscal officer, said the legislation will give average Texas homeowners a cut of only $598 over the three-year period. She said this year's tax cut will average $52 for homeowners. The governor is not telling the people of Texas the truth, said Strayhorn. He is exaggerating, inflating and misstating what Link Strategies LLC Confidential Document 73

the average homeowner is going to see on his or her tax bill by more than 300 percent. [Houston Chronicle, 5/25/06] Tax relief far short of promise headline in the San Antonio Express News [12/9/07] Homeowners waiting for tax relief; Some blame small savings on Perry, while experts point to property values headline in the Houston Chronicle [12/9/07]

84 Percent of Small-Business Owners Saw Their Taxes Increase 100 Percent Under Perrys Tax Bill. According to the Houston Chronicle, Thousands of business owners paid the state's expanded business tax Monday, many complaining that their tax burden was more than doubled under the new levy. The new tax was enacted in 2006 as part of a trade-off for reductions in school property taxes. The first collections initially were due May 16, but Comptroller Susan Combs extended the deadline a month. Her office said it will be a few days before a preliminary tabulation of returns is completed. The tax is bad news for thousands of business owners, said Will Newton, executive director of the Texas office of the National Federation of Independent Business. A survey by the group, he said, found that 84 percent of small-business owners saw their tax bills increase by more than 100 percent under the new levy. Many of the respondents didn't have to pay the old franchise tax, which the new tax replaced. [Houston Chronicle, 6/17/08] Under Perry: Many Businesses Saw Their Taxes Increase by Thousands of Dollars; Property Tax Cuts Eroded. According to the Dallas Morning News, Perry did lead the Legislature's effort in 2006 to raise taxes on business as part of a swap to cut local school property taxes. The effort expanded the state franchise tax to include all businesses with annual gross receipts over $600,000. Many businesses saw their taxes increase by thousands of dollars. This year, the Legislature raised the exemption to $1 million, a move that Perry signed into law. As part of the tax swap, school property taxes were reduced from the state cap by a third, from $1.50 per $100 of assessed value to $1. For many taxpayers, that reduction has been eroded because of rising property valuations and a provision that allows some districts to raise their cap. But rates were cut across the state. [Dallas Morning News, 10/16/09] 2008: Business Tax Generated Less Revenue for Property Tax Relief than Expected. According to the Associated Press, The state's new business tax has so far generated $4.2 billion, Comptroller Susan Combs' office said Wednesday, releasing an estimate far short of the projection Texas has been banking on. The tax was estimated to bring in $5.9 billion a year to help offset school property taxes. So far, about 133,000 payments have been received and about 46,000 businesses that requested a deadline extension have yet to pay their taxes, which were due to the state for the first time on June 16. Gov. Rick Perry has said he will propose using some of the state's surplus money about $2 billion if you subtract funds already spoken for tax relief, either to homeowners through property tax cuts or to businesses through cuts to the new tax. [AP, 6/25/08]

2006: Perry Increased Taxes on Businesses and Tobacco. According to the Austin American Statesman, The school finance solution that Perry pushed through in 2006 was, overall, a giant tax cut. But for some businesses that leased their offices and had avoided the state's main business tax, it was likely a tax increase. Ditto for smokers, who paid higher cigarette taxes. [Austin American Statesman, 3/11/10] 2007: PERRY DOUBLED MARRIAGE LICENSE FEE Perry Signed Bill Doubling Marriage License Fee; Couples Who Take Class Exempt. According to the AP, The Texas marriage license fee will would increase from $30 to $60 but would be waived for couples who take a premarital education course under a proposal the Legislature passed Tuesday, sending it next to Gov. Rick Perry. The bill calls for an eight-hour course to cover such topics as Link Strategies LLC Confidential Document 74

conflict management and communication skills. The marriage fee bill is HB 2685. Perry signed this bill into law. [Associated Press, 5/15/07; Austin American Statesman, 6/16/07] 2009-10: PERRYS NEW TAX / FEE INCREASES Perry Does Not Oppose a Gas Tax Increase. According to Dallas Morning News reporter Michael Lindenberger, In January, Perry told me he'd not oppose a gas tax increase, but it was clear it was an option he thinks will never get to his desk: Perry: If the Legislature has a various package to raise appropriate resources that are better than a user fee, then ... well okay here is my problem with the gas tax, just a flat gas tax increase: Does the guy in Van Horn need to be paying for the roads in Dallas? No. That's the reason, the political reason, that you are not going to see some big gas tax increase. [DMN Transportation Blog, 11/18/09] Perry Called Bill to Allow Local Areas to Raise Gas Tax and Fees to Pay for Transportation Projects a Huge Monstrosity With Lots of Taxes. According to the Houston Chronicle, Take another proposal, which would have allowed urban areas to raise gasoline taxes and fees locally to pay for local transportation projects. It steamed through the Senate, then met with House resistance. Anti-tax groups vigorously opposed it. With the proposal already in big trouble, Perry called it a huge monstrosity with lots of taxes. [Houston Chronicle, 6/8/09] KVII Reports That TxDOTs Vehicle Mileage Tax Could Result In The State Placing An Electronic Device On Your Car To Tax Texans By Miles Driven. The Texas Department of Transportation is beginning to explore a vehicle miles driven tax, instead of raising the gasoline tax. The gas tax hasn't seen an increase since 1991, and now with the highway funds looking slim, officials are trying to find new means, in your pocket. But how would your miles be collected? The state could place an electronic device on your car to count them, or place readers at gas stations that take your miles between fill ups. [Meredith Keller, Mileage Tax? KVII News, 1/4/10] Republican State Rep. John Smithee Criticized The Tax As A Real Privacy Issue That Smacks That Big Brother Label On The System. A method hasn't been decided yet, but Representative John Smithee says if the government does want to place a device on your car that is an invasion of privacy. Representative John Smithee said, There's a real privacy issue here from the standpoint of the government knowing how much you drive and being able to ready your speedometer and it just kind of smacks that big brother label on the system. Smithee went on to say that the folks in rural areas would be hit the hardest by this tax. The other downside most of the highway money goes to roads in major cities. [Meredith Keller, Mileage Tax? KVII News, 1/4/10] KETK Reports That The State Would Use The Vehicle Mileage Tax Either Intrusively, Electronically Or Some Other Way To Monitor And Tax How Many Miles You Drive. If you don't like the state gasoline tax, then how about taxing you based on how many miles you drive a year? Well, the study is underway... It's called a mileage tax, and the Department of Transportation says it is one of the revenue mechanisms we should be looking at in the future. It goes like this, somehow, either intrusively, electronically or some other way, the state notes how many miles you drive in a certain time period. And you are taxed on that. [Roger Gray, A Tax Too Far, KETK News, 1/4/10] Terri Hall Of Texans United For Reform And Freedom Said Of The Vehicle Mileage Tax, There Are Going To Be People Hurt By It. Terri Hall is director of Texans United for Reform and Freedom. At the end of the day, she says, there are going to be people hurt by it, and at the end of the day we have to remind ourselves, is this something that is taking us more toward liberty and freedom or more toward government control of our freedom to travel. And corridor critics just dont trust Governor Perry. The most expensive way to fund our roads, Hall said, is Link Strategies LLC Confidential Document 75

the way that Governor Perry has chosen and that's through tolls. [Roger Gray, A Tax Too Far, KETK News, 1/4/10] PERRY OPPOSES INCOME TAX 2003: Perry Opposed Personal Income Tax. According to the Fort Worth Star-Telegram, State Rep. Kent Grusendorf, R-Arlington, who was recently named chairman of the House Education Committee, said Monday that a statewide property tax or an income tax should be among the options available to solve the state's ailing school finance systemGov. Rick Perry and state Comptroller Carole Keeton Strayhorn, the state's chief financial official, have stated firm opposition to new taxes, especially a personal income tax. [Fort Worth Star-Telegram, 2/4/03] Perry: The Smartest Thing We Have Never Done Is Pass a State Income Tax. According to the San Antonio Express-News, Republican leaders agree, led by Gov. Rick Perry, who said Wednesday: The vast, vast majority of the people of the state of Texas think like I do. The smartest thing we have never done in this state is pass a state income tax. [San Antonio Express-News, 3/6/03] Perry: We Know for a Fact that Were Not Going to Have a Personal Income Tax. According to the El Paso Times, Sen. Eliot Shapleigh, D-El Paso, has made the income-tax pitch to groups around the state -- an idea recently embraced by the newspaper in Wichita Falls. But Gov. Rick Perry said there is no chance that Texas would swap other taxes for an income tax. I don't think you ought to discuss something that's not going to happen. We know for a fact that we're not going to have a personal income tax in the state of Texas, the governor said. [El Paso Times, 11/16/03] Texans Allowed Federal Deduction for State Sales Taxes. According to the Associated Press, The 251-178 vote saw an unusual number of Democrats cross party lines and back a GOP tax bill during an election year. A new federal deduction for state sales taxes and the tobacco program successfully attracted their votes Texas Gov. Rick Perry and Lt. Gov. David Dewhurst welcomed the news. Since 1986, Texas taxpayers have been punished because of their fiscal responsibility and lack of a state income tax, Perry said. Texas taxpayers will no longer be unduly burdened. [AP, 6/17/04] Perry Said Payroll and Income Taxes are Not Acceptable. According to the El Paso Times, Most state leaders agree that some sort of business activity tax will emerge as the Legislature searches for ways to move away from reliance on local property taxes to fund schools. But there is little agreement on the size or shape of such a tax We're not going to have a payroll tax, Gov. Rick Perry said. A payroll tax is not going to pass. A payroll tax is a job killer. An income tax and a payroll tax are the two things that we basically said are really not acceptable. [El Paso Times, 2/13/05] Perry Said Income Tax Was Not an Option. According to the San Antonio Express-News, But any legislative fix is not expected to include an income tax. Gov. Rick Perry said an income tax is not an option when he appointed former Comptroller John Sharp last month to lead a committee that will examine the state's tax structure. [San Antonio Express-News, 10/8/05] STATE BUDGET DOUBLED UNDER PERRY Two-Year State Budget Grew from $98 Billion to $182 Billion in Decade Since Perry Became Governor. According to the Austin American Statesman, The two-year state budget has grown from $98 billion to $182 billion in the decade since Perry became governor. That figure includes state and federal spending. He has twice signed budgets that reduced state spending, but one of those came last year, when lawmakers balanced the budget with billions of dollars from the Obama administration's stimulus package. [Austin American Statesman, 2/21/10] 2001: Perry Signed $113 Billion Budget Into Law; Spends Every Available Dollar and Then Some. According to the San Antonio Express News, A two-year state budget topping $113 billion to Link Strategies LLC Confidential Document 76

fund education, welfare, prisons and the host of other government services was signed into law Sunday by Gov. Rick Perry, who trimmed it and lamented that it spends every available dollar and then some. [San Antonio Express News, 6/18/01] 2009: Perry Signed $182 Billion State Budget. According to the Associated Press, Gov. Rick Perry has signed a slightly scaled-back state budget. Perry's office said he signed the $182 billion spending plan Friday after making $289 million in line-item veto cuts. Most of the cuts were aimed at spending for legislation that was not adopted, including an expansion of the Children's Health Insurance Program. He said lawmakers did a commendable job of crafting a two-year state budget that reduces state spending for the second time since World War II. Perry said it was noteworthy that lawmakers balanced the budget without using the state's Rainy Day Fund and provided a tax cut to 40,000 small businesses. [Associated Press, 6/19/09] 2009: Hutchinson: Perry Balanced $182 Billion State Budget With $12.1 Billion in Federal Stimulus Money. According to the San Antonio Express News, They see a two-year state budget balanced with $12.1 billion in federal stimulus money, other federal dollars left untapped, and $3.7 billion in state fees and fines collected for specific purposes instead used to cover general needs. This is really shadow taxation, said U.S. Sen. Kay Bailey Hutchison, who's gunning for fellow Republican Perry's job, about unspent dedicated fees used to balance the $182 billion state budget. It's not fiscal responsibility, and it's not good budgeting. [San Antonio Express News, 8/2/09] Texas Democrats: State in Budget Trouble Without $16.5 Billion from the American Recovery and Reinvestment Act. According to the Houston Chronicle, Texas state Sen. Leticia Van de Putte, D-San Antonio, said that without the $16.5 billion in funds from the American Recovery and Reinvestment Act, steep cuts would have been made to the state's budget. We would have been in severe trouble if we had not had it, Van de Putte told reporters in a Democratic National Committee-sponsored conference call. Van de Putte said the stimulus money has led to the creation of about 69,000 transportation jobs, an $800 pay raise for public school teachers and accounts for $1.7 billion in other education funds. [Houston Chronicle, 7/31/09]

1995 2007: Bush and Perry Each Averaged Spending Increases of 7 Percent Per Year. According to the Austin American Statesman, Texans expressed surprise Friday at Rick Perry's public suggestion that his Republican predecessor as governor, , George W. Bush, was never a fiscal conservative. Perry stuck by his assessment as aides said he has been more of a fiscal watchdog than Bush. Figures kept by the Legislative Budget Board show spending increasing at about the same pace under each governor. Spending from all sources including federal aid was $37 billion when Bush took office. It rose to $52 billion by 2001, Bush's last budget, for an average annual increase of 7 percent. The latest budget under Perry includes $82 billion from all funds, an increase of $30 billion in eight years, or about 7 percent a year. [Austin American Statesman, 12/15/07] STATE DEBT INCREASED 157 PERCENT UNDER PERRY Texas State Debt: $31,253,863,000. According to a 2009 Debt Affordability Study commissioned by the Texas Bond Review Board, Texas total debt, including self-supporting debt and not self-supporting debt totals $31,253,863,000. [Debt Affordability Study, February 2009, http://www.brb.state.tx.us/pub/bfo/DAS2009.pdf] Total Texas Debt Increased 157 Percent from FY 1999 to FY 2008. According to a 2009 Debt Affordability Study commissioned by the Texas Bond Review Board, The states Unrestricted General Revenue increased from $23.8 billion in FY1999 to $36.9 in FY2008, an increase of 55% over the 10year period (See Figure 2.8 under Debt-Service Commitments). Over the same 10-year period, the states total debt outstanding increased from $12.17 billion in FY1999 to $31.25 billion in FY2008, an Link Strategies LLC Confidential Document 77

increase of 157 percent. [Debt Affordability Study, February 2009, http://www.brb.state.tx.us/pub/bfo/DAS2009.pdf] Texas General Obligation Debt Increased 104 Percent; Revenue Debt Increased 197 Percent. According to a 2009 Debt Affordability Study commissioned by the Texas Bond Review Board, From FY1999 to FY2008, GO debt doubled from $5.30 billion to $10.78 billion, an increase of 104 percent most of which occurred in the last four fiscal years. During the same 10year period, revenue debt increased from $6.88 billion to $20.48 billion, an increase of 197 percent. [Debt Affordability Study, February 2009, http://www.brb.state.tx.us/pub/bfo/DAS2009.pdf] Texas Self Supporting Debt Increased 223 Percent; Not-Self Supporting Debt Decreased 16 Percent. According to a 2009 Debt Affordability Study commissioned by the Texas Bond Review Board, As shown in Figure 2.4, self-supporting debt which is repaid with program revenues increased by 223 percent from $8.80 billion in FY1999 to $28.41 billion in FY2008. During the same time period, not self-supporting debt which is typically repaid with general revenue, actually decreased by 16 percent from $3.40 billion in FY1999 to $2.85 billion in FY2008. However, given the new authorizations approved in the November 2007 general election plus the planned issuances in the next fiscal year, not self-supporting debt is likely to increase in the upcoming fiscal years. [Debt Affordability Study, February 2009, http://www.brb.state.tx.us/pub/bfo/DAS2009.pdf]

Forbes Ranked Texas 4th Best in Nation in Overall Debt Ranking. According to a January 2010 state debt analysis by Forbes Magazine, Texas ranked 4th best in the nation in overall debt. Forbes received a 4-star ranking with a $520 debt per capita. Utah ranked #1 with a 4-star ranking and a $447 debt per capita. Illinois ranked #50 with a 1-star ranking and a $1,877 debt per capita. [http://www.forbes.com/2010/01/20/states-debt-pensions-interactive-map.html] Hutchinson Attacked Perry for Using Debt to Finance Transportation and Other Projects. According to the Bond Buyer, Hutchison's attack on Perry's use of debt to finance transportation and other projects comes as the state is preparing to issue $1.1 billion of Build America Bonds and $5.5 billion of tax and revenue anticipation notes. Last year, Perry and Lieut. Gov. David Dewhurst chastised TxDOT for not issuing all of its authorized debt. The agency explained that it was reluctant to issue debt for projects that might not be completed. [Bond Buyer, 8/18/09] PERRYS WORK TO MANAGE PROPERTY TAX INCREASES Perry Said New Laws Will Help Improve Fairness and Accuracy in Property Appraisals. According to the San Antonio Business Journal, Several new laws are set to go into effect on Jan. 1 that should improve the appraisal process and help property taxpayers. State lawmakers passed several pieces of legislation during the 2009 session that impose limits on what is considered a comparable sale for appraisal purposes, create an expedited arbitration process and require substantial evidence to increase an appraisal after a successful appeal. It is hoped, according to the Texas Gov. Rick Perry's Office, that these measures will improve the fairness and accuracy of the appraisal process and ensure that appraisal districts are following uniform appraisal practices and procedures. House Bill 1038, authored by Rep. Ken Paxton, requires appraisers to consider all comparable properties when appraising a home, including those recently sold at foreclosure or that have decreased in value. [San Antonio Business Journal, 12/30/09] Perry Supported Bill to Lower Annual Limit for Property Appraisals; Bill Died After Local Officials Protested. According to the Fort Worth Star Telegram, Statewide, property taxes have grown from nearly $9 billion in 1985 to more than $30 billion in 2004 -- more than tripling in less than 20 years, according to Perry's office. Appraisers say values are based on home size, style, quality and comparable sales in the neighborhood. By law, appraisals for tax purposes can't grow more than 10 percent a year Link Strategies LLC Confidential Document 78

for residential homesteads, Marshall said. A bill to drop that limit, supported by Perry, died last year after leaders of cities, counties and schools across the state protested. [Fort Worth Star Telegram, 9/17/06] [Perry] vowed to continue to pursue a solution for high property appraisals, something that has been elusive throughout his administration. Houston Chronicle [8/20/07] RICK PERRY RE-ALLOCATED GAS TAXES TxDOT is Only Allowed to Borrow $1.5 Billion a Year Against the Gas Tax. According to the Austin American-Statesman, Doing that would give TxDOT what amounts to an instant infusion of $600 million a year. TxDOT is allowed to borrow only $1.5 billion a year against the gas tax. [Austin AmericanStatesman, 10/29/08] 20-Cent Gasoline Tax Has Not Increased Since 1991. According to The Houston Chronicle, Langmore said Krusee intends to draft legislation indexing the state gasoline tax to inflation in the construction industry. The current 20-cent tax - 15 cents for transportation and public safety, 5 cents for schools - has not been raised since 1991. That means the purchasing power of the gas tax has declined thanks to 14 years of inflation. [The Houston Chronicle, 2/11/05] From 1917 Until Perry Took Office TxDOT was Using the Pay-As-You-Go Financial Model. According to the Austin American-Statesman, When Gov. Rick Perry took office in early 2001, the agency was using the pay-as-you-go financial model it had employed since its 1917 founding, using a combination of gas tax and vehicle fees to pay for projects as money became available. [Austin American-Statesman, 7/30/09] Republican State Rep. Leo Berman Said Until TxDOT Is Reigned In And Gas Tax Diversions Are Stopped, Theres No Way Any Other Tax Should Be On The Agenda. But Representative [Leo] Berman told us, until TxDOT is reigned in and out gas taxes used in the way they were intended, there's no way any other tax should be on the agenda. [Roger Gray, A Tax Too Far, KETK News, 1/4/10] Perry Said Before Texas Should Consider Increasing the Gas Tax, Austin Should Stop Diverting the Money. According to the Stop the Hike website, Governor Perry said, [Our options are] raising the gas tax, getting Washington to give us more money, stopping the diversions in Austin, or tolling those roads. I think its those are all options that are on the table that we ought to talk about as a people come 2011. [Stop the Hike, 2/22/10, link] Perry Said Gas Tax Revenue Not Constitutionally Dedicated to Education Should be Spent on the States Transportation System. According to the Texas Governors Budget for 2010-2011, Gas tax revenue not constitutionally dedicated to education should be spent on the construction and maintenance of the states transportation system. I propose ending diversions from the gas tax to ensure that tax dollars are used for the purpose for which they are collected, thereby increasing the funds available to the state for road construction and maintenance. Ending this diversion complies with my commitment to truth-in-budgeting, while helping fulfill the need for transportation infrastructure. [Governor.State.TX.US, 1/27/09, link] PERRYS PROPOSAL FOR A VEHICLE MILAGE TAX KVII Reports That TxDOTs Vehicle Mileage Tax Could Result In The State Placing An Electronic Device On Your Car To Tax Texans By Miles Driven. The Texas Department of Transportation is beginning to explore a vehicle miles driven tax, instead of raising the gasoline tax. The gas tax hasn't seen an increase since 1991, and now with the highway funds looking slim, officials are trying to find new means, in your pocket. But how would your miles be collected? The state could place an electronic device on your car to count them, or place readers at gas stations that take your miles between fill ups. [Meredith Keller, Mileage Tax? KVII News, 1/4/10] Link Strategies LLC Confidential Document 79

Republican State Rep. John Smithee Criticized The Tax As A Real Privacy Issue That Smacks That Big Brother Label On The System. A method hasn't been decided yet, but Representative John Smithee says if the government does want to place a device on your car that is an invasion of privacy. Representative John Smithee said, There's a real privacy issue here from the standpoint of the government knowing how much you drive and being able to ready your speedometer and it just kind of smacks that big brother label on the system. Smithee went on to say that the folks in rural areas would be hit the hardest by this tax. The other downside most of the highway money goes to roads in major cities. [Meredith Keller, Mileage Tax? KVII News, 1/4/10] KETK Reports That The State Would Use The Vehicle Mileage Tax Either Intrusively, Electronically Or Some Other Way To Monitor And Tax How Many Miles You Drive. If you don't like the state gasoline tax, then how about taxing you based on how many miles you drive a year? Well, the study is underway... It's called a mileage tax, and the Department of Transportation says it is one of the revenue mechanisms we should be looking at in the future. It goes like this, somehow, either intrusively, electronically or some other way, the state notes how many miles you drive in a certain time period. And you are taxed on that. [Roger Gray, A Tax Too Far, KETK News, 1/4/10] Terri Hall Of Texans United For Reform And Freedom Said Of The Vehicle Mileage Tax, There Are Going To Be People Hurt By It. Terri Hall is director of Texans United for Reform and Freedom. At the end of the day, she says, there are going to be people hurt by it, and at the end of the day we have to remind ourselves, is this something that is taking us more toward liberty and freedom or more toward government control of our freedom to travel. And corridor critics just dont trust Governor Perry. The most expensive way to fund our roads, Hall said, is the way that Governor Perry has chosen and that's through tolls. [Roger Gray, A Tax Too Far, KETK News, 1/4/10] PERRYS SUPPORT FOR TOLL ROADS Tolls from Private Companies will be Market Based Essentially the Companies are Free to Charge Any Amount. According to Texas Monthly, Oh, I almost forgot. About that free money: It may be free for TxDOT, but it isn't free for you and me. The billion dollars represents the present value of future toll revenue. TxDOT finds it attractive for the same reason that buyers of lottery tickets ask for the cash option. They want their money up front--so they can use it now, so that it won't be eaten up by inflation--rather than have it dribble in over twenty years (or fifty). Meanwhile, the private toll road operator wants to get that billion dollars back. And the way the company will get it is by raising its tolls over fifty years, largely unrestrained by the public sector. Tolls will be market based--that is, whatever the traffic will bear. In effect, TxDOT's free money amounts to a tax on our children and our grandchildren. [Texas Monthly, 12/2006] Texas Monthly Claims Perrys TxDOT has Been an Aggressive Department that Regarded local Toll Agencies as Competitors. According to Texas Monthly, In the past, TxDOT cooperated with these local authorities--for instance, by making right-of-way available--but since Rick Perry has been governor, a much more aggressive department seems to regard the local toll agencies as competitors. The North Texas Tollway Authority wanted to build Texas 121, for example, but TxDOT stepped in and forced the NTTA to cede control of the project, thereby allowing TxDOT to do another concession agreement. The NTTA will be allowed to collect the tolls, but that is all. [Texas Monthly, 12/2006] TxDOT Boycotted the Texas Transportation Summit Because a Coalition That Grew Out of the Event Isnt Open-Minded About the Toll Road That Would Parallel Interstate 35. According to the San Antonio Express-News, Two state lawmakers Thursday criticized the Texas Department of Transportation for boycotting a transportation summit this week -- calling it childish and senseless. TxDOT officials said they blew off the Texas Transportation Summit because TEX-21, a statewide coalition that grew out of the event, isn't open-minded about a proposed toll road that would parallel Interstate 35. TEX-21 doesn't take positions on specific projects, but it uses the lobbying firm of Dean Link Strategies LLC Confidential Document 80

International, which has helped Dallas and other cities voice concerns about the toll road's potential to divert traffic from I-35. [San Antonio Express-News, 8/12/05] Republican Representatives Criticized TxDOTs Decision to Boycott the Transportation Summit. According to the San Antonio Express-News, It's unfortunate that one individual would act so childish, to boycott a summit that is so important to this state simply because of personal reasons, said Rep. Linda Harper Brown, R-Irving. Rep. Fred Hill, R-Richardson, a longtime member of the House Transportation Committee, told an audience of about 1,000 at the summit that it doesn't make sense to just stop talking to someone because you disagree with them. I enjoy that give and take, Hill said. We can certainly get along with TxDOT and this organization. We can do that. The audience, which included government and industry officials from three countries and about 30 states, applauded. [San Antonio Express-News, 8/12/05] TxDOTs Talking Points Said the Agency Wouldnt Pay The Sponsors of the Summit for the Opportunity to Talk to Our Friends and Local Partners. According to the San Antonio Express-News, Meanwhile, TxDOT sent out talking points to its Dallas and Fort Worth offices so officials there can respond to media questions about the agency's decision not to attend. The talking points said: Our commission has made it clear that we will not pay Dean International for the opportunity to talk to our friends and local partners, and We are always available to hear and discuss ways to improve mobility and safety, and you don't have to pay a third party to get our attention. [San Antonio Express-News, 8/12/05] HEADLINE: State officials are no-shows at Texas transportation summit [Knight Ridder Tribune Business News, 8/11/05] More Than 1,100 Government and Industry Officials from 35 States Attended the Transportation Summit. According to Knight Ridder Tribune Business News, To have no one from TxDOT here is outrageous, said Kenneth Mayfield, a Dallas County Commissioner involved with the summit. More than 1,100 government and industry officials from 35 states - - including more than a dozen members of the Texas congressional delegation and the Legislature -- have signed up for the event so far, which started Tuesday and runs through Friday. It's the highest attendance ever. [Knight Ridder Tribune Business News, 8/11/05]

Texas Legislators Think Perrys TxDOT Appointees have Given too Much Priority to Toll Roads. According to the San Angelo Standard-Times, However, the legislators - particularly House Democrats, but also some Republicans - have increasingly come to distrust the appointees selected by the longestserving governor in Texas history, Republican Rick Perry. That's the underlying spur for some of these suggestions for structural change - especially at TxDOT, where several legislators think Perry's appointees have given too much priority to toll roads. Whether to have the governor or other officials appoint how many persons to run an agency, or elect one or more people to do so, undoubtedly will continue. [San Angelo Standard-Times, 5/16/09] Winstead PC was the Underwriters Counsel for a $375 Million Toll-Road Revenue Refunding Bonds Sale. According to The Bond Buyer, A month after refunding $444 million of toll-road debt, Harris County, Tex., will bring another $375 million to market this week this time, toll-road revenue refunding bonds backed by a general obligation pledge. The tax bonds were authorized in 1983 for construction of the tollroads in the Houston area before the roads were completed and producing revenue. The refunding bonds will carry the same GO pledge as those they are taking out. A current refunding will take out a 1997 issue, and an advance refunding will take out a 2003 issue. The county has issued about $705 million of the bonds since 1991 and is authorizedto issue up to $900 million. The Houston law firm of Andrews Kurth is bond counsel while Winstead PC, also of Houston, is underwriters counsel. [The Bond Buyer, 7/10/07]

Link Strategies LLC Confidential Document 81

Perry Accepted $91,957 in Campaign Contributions from Winstead PC PAC and Winstead Employees. [Texas Ethics Commission, link]
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2007: Perry Said He was Proud of Legislation That Forced a Two-Year Moratorium Against New State Agreements with Private Corporations to Build Tollways. According to The New American, Originally, lawmakers delivered H.B. 1892 to Perry, which if not successfully vetoed would have stopped the corridor in its tracks, so Perry threatened lawmakers with a special session if the road dispute wasn't resolved. They compromised with S.B. 792. Under the new bill, ground was lost, allowing roadconstruction exemptions for several projects, but the bill wasn't a washout. The two-year moratorium against new state agreements with private corporations to build tollways survived. And TxDOT's aggressive policies were dealt a blow as authority was returned to affected localities and construction slowed, particularly on TTC-69. But Perry indicated he wasn't about to play dead in the future: I am proud to sign this legislation.... Every planned road construction project will move forward as scheduled, local leaders will have more authority ... and all toll revenue will be used for projects in the area it was raised. [The New American, 7/9/07] Senior TxDOT Officials Supported Cintras Bid to Build State Highway 121 Toll Road. According to The Dallas Morning News, Ric Williamson and his fellow transportation commissioners will find themselves in a tight corner today as they meet in Austin to decide who will build the State Highway 121 toll road.At contentious hearings this month in North Texas, local elected officials and others on the Regional Transportation Council failed to achieve an easy consensus. True, the vote was decisive - 2710 in favor of North Texas Tollway Authority building the road. But it came only after the council's professional staff argued for Cintra. Senior TxDOT officials also have backed Cintra's bid. Mr. Williamson and his fellow commissioners often depend on TxDOT's technical experts to guide their decisions. But he said the department's recommendation for Cintra won't carry any special weight with the five commissioners, all of whom were appointed by Mr. Perry. The governor has not given him instructions on how to vote, he said. [The Dallas Morning News, 6/28/07]

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Dan Shelly was a Cintra Consultant Before Becoming Perrys Legislative Liaison Later Left Government and Returned to Cintra as a Paid Advisor. According to The Dallas Morning News, Some lawmakers wonder if Mr. Perry's office and TxDOT have shown favoritism toward Cintra. One of Mr. Perry's former aides, lobbyist Dan Shelley, worked for Cintra as a consultant before hiring on as the governor's legislative liaison. When he left state government, Mr. Shelley resumed his lobbying practice and joining Cintra as a paid adviser. [The Dallas Morning News, 6/28/07] Republican Senator Robert Nichols was Surprised Over TxDOTs Commitment to Cintra, Saying, There is Just an Incredible Loyalty to a Private Company Over the Local Interest and the Desires of the Community. According to The Dallas Morning News, Sen. Robert Nichols, R-Jacksonville, is a former member of the transportation commission. He praised Cintra for providing competition that caused NTTA to increase the amount it's willing to pay for the 121 contract. Still, he said he doesn't understand why TxDOT has been so committed to Cintra's bid. There is just an incredible loyalty to a private company over the local interest and the desires of the community, Mr. Nichols said. [The Dallas Morning News, 6/28/07]

TxDOT Purposes Designed Highway Texas 45 Without a Plugerville Exit or Frontage Road Sen. Kirk Watson Said TxDOT Wanted to Maximize Its Toll Revenue. According to Texas Monthly, The announcement several years ago that the Texas Department of Transportation--TxDOT, as it's widely known--would build a toll bypass known as Texas 130 east of Austin was cause for celebration. Texas 130 was particularly welcomed by community leaders in the fast-growing town of Pflugerville, which abuts Austin to the northeast. The annexation, years earlier, by Austin of a strip of land along I-35 had kept Pflugerville from reaping the taxes generated by the high-dollar commercial property along the freeway frontage. Now, with the completion of another brand-new toll road, Texas 45, which will tie into the bypass, Pflugerville could look forward to development along the flanks of the new highway, which would relieve homeowners from bearing the principal responsibility of paying for city services. But when TxDOT announced the design of Texas 45, it had no Plugerville exit and no frontage road, and that made the adjacent property unattractive for development. What was the reason for this oversight? It was no oversight, according to state senator-elect Kirk Watson, who, as mayor of Austin, had served on the board of the federally mandated regional mobility planning organization for the Austin area. TxDOT, he says, wanted to maximize its toll revenue. [Texas Monthly, 12/2006] Alamo Mobility Authority Project Financing Originally from $450 Million in Gas Taxes and Other Public Funds Private Consortium Would Instead Pay Up Front Costs But Collect Toll Fees for 50 Years. According to the San Antonio Express-News, Spain-based Cintra and locally owned Zachry American Infrastructure delivered a proposal to state officials to build and operate toll lanes on the northern arc of Loop 1604 and on U.S. 281 north of the loop without using public money. The Texas Department of Transportation had planned to build part of the tollway, using $450 million in gas taxes and other public funds, and give it to the [Alamo] Mobility Authority, which would then use toll fees to expand the system. The consortium would save public money upfront, but would collect toll fees for up to 50 years, money that local officials would otherwise reinvest in more toll roads. [San Antonio ExpressNews, 5/12/05] Retired Air Force General and Alamo Mobility Authority Board Member Said He Felt Very Uncomfortable About the Lack of Details Regarding the Privatization of Toll Roads. According to the San Antonio Express-News, Mobility Authority board members also fretted over how much they don't know about this new twist, such as weighing the saving of public money against reinvestment of toll fees over five decades, and how construction timelines would differ. I feel very uncomfortable that I don't know more about it, said [Alamo Mobility Authority] board member Bill McBride, a retired Air Force general. The authority's staff will meet with state officials to come up with answers and report back to the board within a month. [San Antonio ExpressNews, 5/12/05] Link Strategies LLC Confidential Document 83

PERRY IS A BIG SPENDER


Perry lives a lavish lifestyle funded by Texas taxpayers. While renovations were being made on the Governors mansion, in the midst of the national economic crisis, Perry moved his family into a $9,000 per month taxpayer-funded secluded, limestone mansion with a heated pool, an outdoor cabana and a guest house. Perry and his wife have also have enjoyed several taxpayer-funded junkets across the world. In 2004, Perry, his wife, and his daughter, took a six day trip to Italy. According to official records released to the San Antonio Express-News Perrys schedule included three days that were almost completely free of official duties. Also in 2004, Perry and his wife took a trip to the Bahamas with supporters and aides and spent money on golf, and scuba diving. In 2005, Perry sent his wife on an eight-day trade mission to Japan that cost taxpayers over $42,000. In 2008, the Governors security detail spent $3,339 to protect him for a single day while he campaigned in Iowa for former New York Mayor Rudy Giulianis presidential campaign. In October 2009, Perry spent $12,321 on security detail for a trip to Las Vegas in order to attend a bachelor party dinner for his son. When questioned about his trip to sin city, Perry said he also met with one of Nevadas Republican gubernatorial candidates. In 2009, Perry and his wife traveled to Israel so that Perry could receive the Defender of Jerusalem award. The trip was financed by one of his campaign donors and by the investment firm Doheny Global Group, but Perrys official security detail also had to make the trip, which ended up being paid for with taxpayer funds. Perrys trip to Israel funded by his donors was far from the only occasion when he took advantage of his campaign account. Perrys campaign expenditures show his campaign spent tens of thousands of dollars putting Perry up in 5-star hotels and spas across the globe. In Rome, his campaign spent nearly $3,000 so Perry could stay at the Grand Hotel Parco Dei Principi & Spa, a 5-star hotel and spa in the heart of Rome with a sumptuous style surrounded by a stunning botanical garden. In Istanbul, his campaign spent more than $2,200 so he could stay at the Ritz Carlton, featuring exceptional accommodations, world-class cuisine, a nurturing spa and impeccable service. It is unclear what campaign activity took place on the four occasions Perrys campaign paid to have him stay luxury hotels overseas. Perrys campaign also spent thousands putting him up ritzy domestic hotels, resorts and spas, such as The Peninsula Beverly Hills, the Waldorf Astoria in New York, and the Willard Continental in Washington. Of course, the Willard Continental wasnt the only fancy hotel Perry stayed in while visiting Washington. In fact, despite a public hatred of Washington, Perrys campaign has spent more than $300,000 in travel expenses to send Perry there on several occasions to stay at the nicest hotels and eat at the nicest restaurants. Perry Didnt Even Know There was a Recession: http://www.youtube.com/watch? v=btQIVffY5cY&feature=related PERRY SUPPORTED THE BANK BAILOUT Perry Sent a Letter to House and Senate Leadership Asking Lawmakers to Approve Bailout. According to the PoliTex blog of the Fort Worth Star-Telegram, Texas Gov. Rick Perry, chairman of the Republican Governors Association and West Virgnia Gov. Joe Manchin, chairman of the Democratic Governors Association, released a joint letter to leadership of the House and Senate, asking lawmakers to approve the bailout package. [Fort Worth Star-Telegram, 10/1/08] 64% of Texans Opposed Bank Bailout. According to the Burka Blog in Texas Monthly, The Lyceum Poll: the issues Theres a lot of meat here, but the issues that I found most interesting were: Bank bailouts 25% favor 64% oppose. [Texas Monthly, 6/23/09]

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Perrys Letter Urging Congress to Pass Stimulus Package Resurfaced Amid his Criticism of Hutchison. According to the Texas Observer, Perry's campaign has loudly and repeatedly denounced Sen. Kay Bailout Hutchison for supporting that first stimulus plan. But the name-calling lost a bit of oomph this week when a letter Perry wrote with West Virginia Gov. Joe Manchin (a Democrat, for goodness sakes!) resurfaced. The letter urged Congress toerpass a stimulus package. Though he didn't endorse a specific plan, the letter makes Perry's charges against Hutchison seem more than a little hypocritical, even by usual standards. [Texas Observer, 10/1/09] Perry Caught Flak for Letter Co-Written with Democratic Governor to Urge Passage of Stimulus. According to the Lubbock Avalanche-Journal, But Perry, an ardent opponent of the package in the past year, is catching flak for a letter he wrote with West Virginia Gov. Joe Manchin - a Democrat - to congressional leaders a year ago urging Congress to pass an economic recovery package. Today's an anniversary Rick Perry would like to forget, said Hutchison campaign spokeswoman Jennifer Baker. It's one year since he joined with a Democratic governor in urging (U.S. House Majority Leader) Harry Reid and (House Speaker) Nancy Pelosi to support the financial stabilization package. It's typical Rick Perry, who's never afraid to change his position when it's politically expedient. Perry and Manchin led the Republican and Democratic governor's associations, respectively, at the time they urged passage of a stimulus package without advocating a specific plan. [Lubbock Avalanche-Journal, 10/2/09] Perry Letter Urged Congress to Pass Economic Recovery Package, Statement Issued Later Said Government Should Not Bail Out Corporate America. According to Texans for Public Justice, With the $700 billion bailout hanging in the balance in Washington on October 1, the Texas governor who heads the Republican Governors Association issued a joint statement with the head of the Democratic Governors Association urging Congress to leave partisanship at the door and pass an economic recovery package. When local media reported this endorsement, however, Governor Rick Perry issued a statement that said, In a free market economy, government should not be in the business of using taxpayer dollars to bail out corporate America. Hitting a rare populist stride, Governor Perry added, Were certainly not interested in Washington bailing out a bunch of irresponsible mortgage brokers in an industry that has too often been run on greed. [Texans for Public Justice, 10/13/08] Hutchison Accused Perry of Trying to Have it Both Ways while Encouraging Senator to Votes for the Bailout. According to the Dallas Morning News, Kay Bailey Hutchison said Wednesday that she made a mistake by supporting the initial $700 billion bailout of the nation's financial industry and would change her vote if she had the chance... If I had known how TARP would be spent, I would take it back in a heartbeat, the senator said during a taping of Inside Texas Politics at WFAA (Channel 8)... But during the show, Hutchison was forceful in her criticism of Perry, saying that as chairman of the Republican Governors Association, he urged senators to support a bailout because he feared a financial meltdown. She used a letter that Perry co-wrote with the chairman of the Democratic Governors Association to Senate Majority Leader Harry Reid as evidence that the governor wanted something done. Hutchison said Perry was trying to have things both ways. Governor Perry was the first one out of the chute to send a letter to every senator saying, Vote for it, vote for it because we are going to look at a financial meltdown, and that's what 70 senators did, Hutchison said. We didn't know what was on the horizon, and those who are in the know on this say that it would have been a financial meltdown of global proportions. [Dallas Morning News, 11/26/09] PERRYS EXPENSIVE RENTAL MANSION Perry Said He Could Relate to Hurricane Ike Victims, I Absolutely Understand They want to Get Back to Their HomesId Like to Get Back to the Mansion. According to ABC News and reported by the Burnt Orange Report blog, Rick Perry actually told reporters that he could relate to hurricane Ike victims. I absolutely understand they want to get back to their homes ... I'd like to get back to the mansion, said Perry. [Burnt Orange Report, 9/20/08, link]

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Perry Living in a $9,000-a-Month Rental House After the Governors Mansion was Heavily Damaged by an Arsonist. According to the Austin American-Statesman, The mansion was heavily damaged in June 2008 when an unknown arsonist lobbed a Molotov cocktail onto the front porch. Nobody was injured; Gov. Rick Perry had vacated the mansion for a planned renovation and is living in a $9,000-a-month rental house west of Austin while repairs continue. [Austin American-Statesman, 11/20/09] Governors Mansion was Empty When Arsonist Struck, Perry and His Family Were Living in the Rental House While the Mansion Underwent $10 Million in Mechanical Upgrades. According to the Austin American-Statesman, Even though the mansion was empty at the time - Gov. Rick Perry and his family were living in a $9,000-a-month rental house while the mansion was undergoing $10 million in mechanical upgrades - DPS officials got blasted for the lax security. Ever since, they have pushed quietly for heightened security in and around the historic home, once it is restored and the governor moves back in. [Austin American-Statesman, 10/05/09] Letter to the Editor Criticized Perrys $9,000-a-Month Rental House, Accused Him of Milking the State. According to a letter to the editor written in the Fort Worth Star-Telegram, Shady business: Is anyone disturbed that Gov. Rick Perry was milking the state and cheating too? While the Governor s Mansion is being restored, Texans are paying $9,000 a month for Perry s rental house. But for Perry, it was not enough. He claimed exemptions for a house in College Station that he does not live in. Sounds like he was defrauding his own state. State employees most likely would be dismissed if they falsified records. Paul Gerba, Bedford [Fort Worth Star-Telegram, 8/18/09] $9,900-Per-Month Rental Home Includes a Pool and Guesthouse. According to The Houston Chronicle, The Perrys might consider appealing to average Texans by making their own personal sacrifice. Seeing as how they won't be moving back into the mansion anytime soon, Texas' first family could trade the taxpayer-funded, $9,900-per-month new home rental, complete with pool and guesthouse, for more humble accommodations. Savings could benefit the restoration fund. [The Houston Chronicle, 7/17/08] Rental Home Includes a Heated Pool and Outdoor Cabana. According to the Associated Press, The governor's mansion was being renovated when an unknown arsonist torched it in June. Perry has been living in a three-story, limestone home with a heated pool, an outdoor cabana and a guest house. The state is paying some $9,900-a-month in rent while the Governor's Mansion undergoes renovations, records show. [Associated Press, 5/22/09, link] Three-Story Rental Home Includes Five Bedrooms. According to the Associated Press, Gov. Rick Perry and wife, Anita, will move out of the 150-year-old Governors Mansion next month and into a three-story, limestone home with five bedrooms, a heated pool and an outdoor cabana. [Associated Press, 1/27/10, link] Perrys Rental Home Listed on the Market for $1.85 Million. According to the Associated Press, The state will pony up $9,900-a-month in rent for at least a year while the Governors Mansion undergoes renovations starting next month. The 6,386 square foot home in a posh west Austin neighborhood has been listed on the market for more than a year, with the most recent asking price $1.85 million. [Associated Press, 1/27/10, link] Perry Family Paid a $9,900 Security Deposit and a $1,800 Pet Deposit. According to the Associated Press, In addition to a $9,900 security deposit, the Perrys will pay a $1,800 pet deposit so they can bring along their 5-year-old daschund, Lucy, according to the lease agreement. [Associated Press, 1/27/10, link] Rental House is Located at 8113 Hickory Drive in the Estates Above Lost Creek Subdivision. According to the Austin American-Statesman, Spokesman Robert Black said Link Strategies LLC Confidential Document 86

Wednesday that the two-story house is at 8113 Hickory Creek Drive in the Estates Above Lost Creek subdivision. It is near Barton Creek about 14 miles from downtown Austin, roughly a 25minute drive from the mansion at 11th and Colorado streets. [Austin American-Statesman, 9/27/07, link] Rental Home for Perrys Family on Secluded Lot. [Google Maps, Accessed 3/03/10, link]

Perrys Spokesman Said the House Might be Finished from Items in the Official Mansion. According to the Austin American-Statesman, [Spokesman Robert] Black said the house will be furnished with the Perrys own furniture and possibly items from the mansion. [Austin AmericanStatesman, 9/27/07, link] Home Rented by Perry Owned by Murrel J. Campbell, Who Contributed $3,500 to the Governors Campaign in 2005-2006. According to the Austin American-Statesman, Mostly built in 1983, the house is owned by Murrell J. Campbell, whose daughter, Melinda Grace, signed the lease on his behalf. Her husband, Guy Grace, donated $3,500 to the governor's campaign in 2005-06, according to contribution reports filed with the Texas Ethics Commission. Guy Grace also gave $2,000 to George W. Bush's presidential campaign and made contributions to two local GOP legislative candidates, online postings state. Melinda Grace said Wednesday that the Perrys' interest was a surprise to us. We're honored that he likes the house. [Austin American-Statesman, 9/27/07, link] Perrys Rental Home is Located on a 3.25 Acre Estate. According to the Austin American-Statesman, The four-bedroom, 4-bath house is described on a real estate agent's site as a 3.25-acre estate minutes from the Barton Creek Country Club. [Austin American-Statesman, 9/27/07, link] Perrys Rental Home Featured in Austin Home & Living Magazine. According to the Austin American-Statesman, The luxurious Texas-style stone home was completely renovated in 2002, with award-winning kitchen and bathroom remodel featured in Austin Home & Living, the site states. An 1,100+ sq ft guest house is also located on the property described by Black as suitable for the security detail and several rotating staff members. [Austin American-Statesman, 9/27/07, link] Perrys Rental Home in a Gated Community, and is Also Gated Itself, Neighbor Says the Home is All But Hidden from the Street. According to the Austin American-Statesman, Black said the Perrys Link Strategies LLC Confidential Document 87

appreciated the fact that the bedrooms are upstairs. So the family has some privacy away from staff or functions downstairs, Black said. The house is in a gated community and is also gated itself. Steve Highlander, who owns a nearby lot, said the home is all but hidden. You can't really see the house from the street, he said. [Austin American-Statesman, 9/27/07, link] GOVERNORS WHO SAVED TAXPAYER MONEY DURING RENOVATIONS When the Arkansas Governors Mansion was Being Renovated Gov. Mike Huckabee and His Wife Stayed in a Donated Triplewide Mobile Home. According to The Houston Chronicle, I'm sure former Arkansas Gov. Mike Huckabee and his wife, Janet, would be happy to provide some guidance on finding an affordable place. When their mansion was being renovated eight years ago, then-governor Huckabee, his wife, and the family dog stayed in a donated triplewide mobile home on the premises. Hey, it's better than some of the suggestions readers have posted on the Houston Chronicle web site. They ranged from allowing donors to time-share the mansion to putting the first couple in a FEMA trailer for a while. [The Houston Chronicle, 7/17/08] Huckabee Said the State Would Save Money by Using the Modular Home since the Mansions Administrative and Security Elements Would Not Have to Be Relocated. According to Stateline.org, Huckabee contended that the state would realize substantial savings by using the modular house since the Mansion's administrative and security elements would not have to be relocated to a rented property. [Stateline.org, 8/23/00, link]

From 1979 1982, Gov. Bill Clements, Stayed at the Cambridge Apartments While the Governors Mansion was Being Renovated. According to Texas Weekly, Black said it hasn't been determined yet where the Perrys will stay. The last governor to leave the Mansion temporarily, Gov. Bill Clements, stayed at the Cambridge Apartments north of the Capitol between 1979 and 1982. [Texas Weekly, Accessed March 3, 2010, link] Cambridge Apartments Cost $1,500 Per Month. [USAToday, 9/29/09, link]

During Renovations of the Tennessee Governors Mansion, Gov. John Brown Moved His Family to Their Personal Home. According to Wikipedia, The report went on to say that the mansion was a virtual firetrap.[18] Upon receiving the report, Brown immediately moved his family out of the mansion and back to Cave Hill, his estate in Lexington.[18] The Department of Buildings and Construction forbade use of the mansion for overnight purposes or group meetings until repairs could be made.[18] Brown's Cave Hill estate was officially designated the temporary executive mansion, and the state agreed to furnish Brown's groceries, reimburse him for entertaining official guests, and pay for telephone calls made in his capacity as governor.[19] He was also given a generous travel allowance.[19] [Wikipedia, Accessed 3/03/10, link] FIRE AT THE GOVERNORS MANSION Texas Budget Negotiators Made a Last-Minute Swap to Replace Stimulus Money that was Allocated for the Fire-Damaged Governors Mansion Renovations with State Money. According to The Associated Press State & Local Wire, Budget negotiators made a last-minute swap, replacing stimulus money that was slated to go to the renovation of the fire-ravaged Governor's Mansion with state money. Gov. Rick Perry has been a vocal critic of the federal bailout. [The Associated Press State & Local Wire, 5/27/09] $11 Million in Federal Stimulus Funds Originally Allocated to Repair the Governors Mansion. According to The Houston Chronicle, Guess the federal government isn't telling Texas what color to paint the Governor's Mansion. Texas budget negotiators have set aside $11 million in federal stimulus dollars to help repair the fire-ravaged Governor's Mansion - even as GOP Gov. Rick Perry rails against Washington for attaching strings to $555 million in stimulus dollars for unemployment insurance. I would Link Strategies LLC Confidential Document 88

not want to be a member voting to let Washington, D.C., tell us how to run our business in Texas, he said of Texas legislators trying to decide whether to take the half a billion from the government for jobless benefits. [The Houston Chronicle, 5/22/09] Total of $22 Million Allocated to Renovate the Fire-Gutted Texas Governors Mansion. According to the Austin American-Statesman, A total of $22 million half of that in federal stimulus money has been allocated in a budget compromise to restore the fire-gutted Texas Governor's Mansion, legislative leaders said Thursday. Though that's $3 million less in state money than was earlier requested, restoration officials said the amount will be enough to fit a downsized budget of $22.4 million. [Austin American-Statesman, 5/22/09, link]

Perry was in Europe on the Morning of the Fire at the Governors Mansion. According to a video posted on youtube from Lone Star Texas News, Governor Rick Perry was in Europe at the time of the fire and the news was stressful and heartbreaking. [Youtube.com, Accessed February 4, 2010, link] Rick and Anita Perry Were in Stockholm, Sweden on a Trade-Related Trip to Europe, Scheduled to Talk at an American Chamber of Commerce Event. According to The Houston Chronicle, No one was in the building, which has been closed several months for renovation, when the fire broke out. The governor has been living in a rented house in suburban Austin since last fall. He and his wife, Anita, are in Stockholm, Sweden, finishing up a weeklong, trade-related trip to Europe. Perry is scheduled to talk about wind energy at an American Chamber of Commerce event in Stockholm on Monday. [The Houston Chronicle, 6/8/08, link] Perry Notified at 2 A.M. About the Fire, Planned to Conclude His Trip Before Returning to Texas. According to The Houston Chronicle, Black said the governor was notified of the fire about 2 a.m. Austin time but planned to conclude his European trip before returning to Austin, as scheduled, on Tuesday. [The Houston Chronicle, 6/8/08, link]

Perry Accused of Not Taking Responsibility for the Mansion Fire, Texas Department of Safety Problems Partly to Blame for Lax Security. According to The Houston Chronicle, Gov. Rick Perry hasn't accepted any responsibility for the mansion fire apparently set by an arsonist last month, but as the state's CEO, he should have been aware of, and taken steps to remedy, the problems at the Texas Department of Public Safety that allowed the incident to occur. As my colleagues in Austin, Gary Scharrer and Peggy Fikac, have reported, the severely strained agency is plagued by trooper shortages, low pay and strenuous work schedules. The agency reports 250 vacant trooper positions and estimated 600 officers are expected to leave over the next three years. [The Houston Chronicle, 7/17/08] Texas Department of Public Safety Severaly Strained and Plagued by Trooper Shortages, Low Pay and Strenuous Work Schedules, Perrys Operation Border Star Part of the Problem. According to The Houston Chronicle, As my colleagues in Austin, Gary Scharrer and Peggy Fikac, have reported, the severely strained agency is plagued by trooper shortages, low pay and strenuous work schedules. The agency reports 250 vacant trooper positions and estimated 600 officers are expected to leave over the next three years. Troopers have told Scharrer that they're simply exhausted, taxed even more by a program championed by Perry called Operation Border Star, which requires them to move away from their families to the border region, where they work rotations that involve 13-hour days for 15 days. [The Houston Chronicle, 7/17/08] Trooper Guarding the Mansion on the Night of the Fire Had Just Gotten Off Another Eight-Hour Shift Hed Worked Earlier in the Day at the State Museum. According to The Houston Chronicle, The night an intruder slipped onto the mansion grounds and set the blaze, seven security cameras were broken, an infrared detection system had been out of repair for several weeks and only one trooper guarded the historic landmark. The trooper was fresh from another eight-hour shift he'd worked earlier in the day at a state museum. Warnings from troopers and the mansion's administrator apparently went unheeded. [The Houston Chronicle, 7/17/08] Link Strategies LLC Confidential Document 89

Perry Spokesman Rejected Suggestions that Perry Should be Aware of Problems at the Texas Department of Public Safety Saying, The Governor Doesnt Manage DPS. According to The Houston Chronicle, Perry's spokesman maintains that the governor was unaware of all of these problems and that he had no duty to make himself aware. You can't lay that at our feet, said Robert Black. The governor doesn't manage DPS. [The Houston Chronicle, 7/17/08] RENOVATIONS AT THE GOVERNORS MANSION State Preservation Board Estimated that Restorations on the Governors Mansion Would Cost Approximately $27 Million. According to The Associated Press State & Local Wire, Restoring the charred Texas Governor's Mansion to its historic significance, including a new wing and updated security, will cost an estimated $27 million, officials from the State Preservation Board told lawmakers Tuesday. [The Associated Press State & Local Wire, 2/3/09] Renovations on the Governors Mansion Would Include a 2,000-Square-Foot-Addition That Would Take Up Two Stories and New Basement Space. According to The Associated Press State & Local Wire, John Sneed, executive director of the State Preservation Board, said the 2,000-square-footaddition would bring the mansion into compliance with the Americans with Disabilities Act, which guarantees access and rights for people with disabilities. The new wing would take up two stories and basement space. This is probably the most complicated project you could ever ask for, said Dealey Herndon, project manager of the restoration. There's not a single part of this house that isn't damaged. [The Associated Press State & Local Wire, 2/3/09] Anita Perry Leading the Effort to Raise Private Money to Help Restore the Mansion. According to The Associated Press State & Local Wire, Anita Perry is leading the effort to raise private money to help restore the mansion. This is an extremely complex project, Herndon said. It is what it is and I wish it was different. I would give anything to have it back the way it was. [The Associated Press State & Local Wire, 2/3/09] November 2008: Texas Governors Mansion Restoration Fund Raised About $2.1 Million from Private Donors. According to The Dallas Morning News, Mrs. Perry, who lived in the mansion with her husband, Gov. Rick Perry, until the fire, created the Texas Governor's Mansion Restoration Fund in July to help raise money for its restoration. So far, the fund has raised about $2.1 million from private donors. An estimate on their goals for fundraising and the cost of the damage is still in the works. Lawmakers say they plan to seek some state money to help repair the building, although the amount is still unclear. [The Dallas Morning News, 11/26/08]

$50,000 Reward Offered for Information on the Governors Mansion Arsonist. According to The Associated Press State & Local Wire, As construction and fundraising to repair the fire-damaged Texas Governor's Mansion continue, an investigation into who started the blaze more than half a year ago drags on with no arrest despite $50,000 in reward money. So the Texas Department of Public Safety, whose Texas Rangers are leading the arson investigation, is making another plea for members of the public to come forward with any useful tips. We are continuing to pursue leads but there's been nothing fruitful thus far, DPS spokeswoman Tela Mange said in an interview about the mansion arson case this week. It just takes one good piece of information to turn it around, and the question is when we're going to get that. Though few solid leads are coming in, there are no plans to increase the $50,000 reward money that has been in place since last summer shortly after the June 8 fire, Mange said. She said there is no reason to believe someone close to the arsonist would turn that person in for an additional amount of cash. [The Associated Press State & Local Wire, 1/16/09] Friends of the Governors Mansion Raised $3 Million in Private Donations to Restore and Provide New Antique Furniture to the House. According to Texas Weekly, During the Mansion's Link Strategies LLC Confidential Document 90

renovation, the historical and antique furnishings will be removed and restored by non-profit group Friends of the Governor's Mansion. That organization was organized by then-Gov. Clements in 1979 to take care of the Mansion. It raised $3 million in private donations to restore and provide (new) antique furniture for the house. [Texas Weekly, Accessed March 3, 2010, link] Austin American-Statesman Warned that the Mansion Renovation Fund Shouldnt Become a Political Opportunity for Corporations and Lobbyists Looking to Buy Influence. According to the Austin American-Statesman, Individual contributions are fine, and we especially like the first lady's proposal to involve schoolchildren in the efforts. But the mansion fund should not become a political opportunity for corporations and lobbyists looking to buy influence. The response to the 1983 fire at the Capitol should serve as a model. Then, the Legislature paid for the restoration and expansion, preventing it from becoming another tie to bind government and big business. [Austin AmericanStatesman, 7/16/08] NEW STATE AGENCIES CREATED BY PERRY Perry Signed Bill to Create the Department of Motor Vehicles. According to the Monitor, McAllen Police Chief Victor Rodriguez said he was humbled by his appointment to the board that will oversee the newest state agency. Rodriguez was named this month to the Texas Department of Motor Vehicles Board, which has been tasked with the offshoot of the new state agency that will primarily oversee registration of vehicles and dealers Gov. Rick Perry signed in May the bill that created the DMV, which had been operated as part of the Texas Department of Transportation. The bill took effect in September. The DMV will oversee the state's motor carriers, vehicle dealers, vehicle titles and registration and auto burglary and theft prevention. The Texas Department of Public Safety will continue to issue Texas driver's licenses. [The Monitor, 10/13/09] New State Agency Designed to Protect Home Buyers. According to the Texas Observer, It seemed a boon to homebuyers when the Legislature created a new state agency in 2003 to regulate the home construction industry. For nearly a decade, homebuilders had steadily eroded consumer rights in Texas: Buyers who moved into brand-new houses and found cracked foundations and leaky roofs had little recourse. Some couldnt file a lawsuit even if they wanted. They had signed housing contracts that forced them to resolve complaints through binding arbitration hearings notorious for favoring builders. The Texas Residential Construction Commission was supposed to help change all that. Legislators talked up the new agency as a forum to resolve impasses between homeowners and homebuilders; a kind of marriage counselor for the housing sector. The agency was supposed to act as a mediator that, when necessary, would require homebuilders to make needed repairs. The commission would keep homeowners out of court and arbitration and save both sides a lot of legal fees. [Texas Observer, 2/3/05] TRCC Failed Residents, Was Captive to the Industry it was Supposed to Regulate. According to the Texas Observer, In practice, however, the Residential Construction Commission has become another Texas state agency captive to the very industry its supposed to regulate. Homebuilders are some of the states heftiest contributors to political campaigns. Their interests so dominate the TRCC that the new agency is little more than a tool to help the industry win disputes against consumers. [Texas Observer, 2/3/05]

Perry Homes Lawyer Helped Write Legislation that Created TRCC and Governor Perry Appointed him to The TRCC Commission. According to Texans for Public Justice, Publicity-shy Bob Perry, a Houston-based home builder, is getting more notoriety for his $200,000 donation to the Swift Boat Veterans for Truth than the $3.8 million he pumped into the 2002 state elections In 2002, Perry was the largest individual contributor to Gov. Rick Perry, no relation, ($225,000), Lt. Gov. David Dewhurst ($115,000) and Attorney General Greg Abbott ($537,600), and the second largest donor to Comptroller Carole Keeton Strayhorn ($100,000). All are Republicans To his critics, Perry got plenty for the $3.8 million he spent on the 2002 elections. In 2003, a Republican-controlled Legislature curbed the ability of Link Strategies LLC Confidential Document 91

consumers to file lawsuits against businesses. Krugh, the lawyer for Perry Homes, also helped write legislation that created the Texas Residential Construction Commission, a new state agency to create rules for dispute resolution between home builders and consumers. The governor then appointed Krugh to the nine-member commission. [Texans for Public Justice, 8/28/04] Bob Perry was a Major Proponent of Legislation to Create New State Agency to Handle Homebuyer Complaints. According to the Houston Chronicle, Houston home builder Bob Perry, who gives more to Texas politicians than anyone else, has a strong interest in limiting lawsuits against his company. Perry, who gives mostly to Republicans in statewide and legislative races, was a major proponent of legislation in 2003 creating a new state agency to handle complaints against builders outside of the courts. Perry and his wife, Doylene Perry, have given $130,000 to Gov. Rick Perry, no relation, so far this election cycle. Bob Perry rarely discusses his political contributions, but his spokesman Anthony Holm explained Perry's philosophy. [Houston Chronicle, 9/25/06] Legislators Created New Agency to Focus on Rural Issues. According to the Corpus Christi CallerTimes, State lawmakers passed several key measures this session intended to improve the lives of rural Texans, including a new state agency that will focus on rural issues. The rural bills addressed a wide range of issues, such as agriculture and access to health care Lawmakers began the session with a dismal report from the Select Committee on Rural Development that outlined declining school enrollment, struggling businesses, collapsing hospitals, declining health care and decreasing job opportunities in rural areas. The 90-page report included a key recommendation to create a new state agency, the Office of Rural Community Affairs. The new agency will be governed by a nine-member board with three members each appointed by the governor, lieutenant governor and house speaker. [Corpus Christi Caller-Times, 5/30/01] New State Agency Formed to Plan San Antonio-Austin Passenger Rail Service. According to the San Antonio Express-News, Meanwhile, a new state agency formed and started planning for a San Antonio-Austin passenger rail service. The Austin-San Antonio Intermunicipal Commuter Rail District received a $5.7 million grant from the federal government and hired a consulting team to draw plans for passenger rail service, including financial plans that cover funding possibilities ranging from federal transportation grants to rail fares. The district's goal is to start rail service between San Antonio and Austin/Round Rock in 2009. [San Antonio Express-News, 12/28/03] New State Agencies Replaced Old Ones in Larges Government Merger in Texas History. According to the Houston Chronicle, The largest government merger in Texas history becomes official today with the creation of two agencies whose annual budgets combined exceed $ 7 billion. Out goes the Department of Health, the Texas Commission on Alcohol and Drug Abuse and the Department of Mental Health and Mental Retardation. Except for services for the mentally retarded, functions of the three agencies are melded into the new Department of State Health Services. The new agency will also oversee the state's mental hospitals. The new Department of Aging and Disability Services combines services for the mentally retarded, the disabled and the elderly, including state schools for the mentally retarded, community care and long-term care. [Houston Chronicle, 9/1/04] Proposition 15 Passed, Created Cancer Prevention and Research Institute of Texas Agency. According to the Austin American-Statesman, In a victory for bicyclist and cancer survivor Lance Armstrong, Texas voters Tuesday approved a $3 billion bond proposal for cancer research and prevention. Texas, we've done it tonight, Armstrong told whooping supporters in Austin. The time has come to renew our national commitment to fight cancer, and Prop. 15 is going to make that happen. We will beat this dreaded disease, and we will win. Proposition 15 will establish the Cancer Prevention and Research Institute of Texas to distribute up to $300 million a year in grants for 10 years. Public and private educational institutions and medical research facilities in Texas could apply. Supporters hope the initiative will lure top scientists to research cancer, which kills 35,000 Texans a year. Gov. Rick Perry said in a statement, We will look back on this day as a turning point. [Austin American-Statesman, 11/7/07] Link Strategies LLC Confidential Document 92

New State Agency, Cancer Prevention and Research Institute of Texas, Was Ready to Spend Upward of $3 Billion over 10 years. According to the San Antonio Express-News, A new state agency is ready to spend upward of $3 billion over the next decade trying to cure cancer. That would make the Cancer Prevention and Research Institute of Texas the nation's second-largest source of cancer research funding, behind only the National Cancer Institute. Lance Armstrong, the cycling champion and cancer survivor, helped sell the plan to Texas voters in 2007 through a bond measure. The first wave of funding is expected to be handed out by spring. Institute leaders say the money will gamble on high-risk research and attract big-name scientists to Texas. But a sagging economy has some skittish about future funding. State lawmakers already didn't fully fund the institute over the first two years, leaving $150 million on the table. [San Antonio Express-News, 10/3/09] Perry Signed Bill to Create the Texas Military Preparedness Commission. According to the Associated Press, Gov. Rick Perry signed a bill creating the Texas Military Preparedness Commission. The panel will advise the governor and the Legislature on defense issues, including how to strengthen the position of Texas military bases as the 2005 round of base closures approaches. [AP, 5/28/03] Perry Created the Texas Military Preparedness Commission, that Reports Directly to the Governors Office. According to the Austin American-Statesman, Perry also recently created the Texas Military Preparedness Commission, a nine-member board that answers directly to Perry's office and oversees all state military programs. [Austin American-Statesman, 1/22/04] TEXAS ENTERPRISE FUND FAILURES/SCANDALS This research is ongoing. For more information on Perrys contributions from companies awarded TEF grants click here. Medina Accused Perry of Using Texas Enterprise Fund to Reward His Friends. According to the Texas Observer, For the past six years, Texas Gov. Rick Perry has lorded over a controversial stash of taxpayer money known as the Texas Enterprise Fund, dispensing huge sums$345 million and countingto large corporations, ostensibly to spur job growth. Critics call it the governors slush fund. He takes from us so that he can play with his corporate slush fund and award his friends businesses, said Debra Medina, one of Perrys two challengers for the GOP gubernatorial nomination, at a recent candidates debate. [Texas Observer, 3/11/10] Perrys Office Gave Grant to A&M and Lexicon Pharmaceuticals for Genetic Research Lab. According to the Houston Chronicle, In the summer of 2005, the governor's office announced it was showering $50 million on Texas A&M and The Woodlands-based company now known as Lexicon Pharmaceuticals to create a genetics research lab. It remains one of the two biggest deals involving the Texas Enterprise Fund, a $300 million puddle of money the governor doles out to grease economic development deals. [Houston Chronicle, 7/4/08] Perry Said $50 Million Grant would Bring 5,000 Jobs to Texas. According to the Associated Press, A $50 million grant from the Texas Enterprise Fund will be used to create a biotechnology institute that will bring thousands of jobs to the state and that researchers believe will one day lead to medical breakthroughs, Gov. Rick Perry announced Saturday. The Texas Institute for Genomic Medicine is a partnership between the Texas A&M University System and Lexicon Genetics. This will be a groundbreaking genetic center that will attract millions of new dollars for medical treatment, bring 5,000 new jobs to Texas and lead to the development of lifesaving medical treatments and therapies, Perry said... Within 10 years, Perry said the institute will lead to the creation of 5,000 jobs with an average salary of $60,000. [AP, 7/16/05] Lexicon Eliminated Jobs Instead of Creating them. According to the Houston Chronicle, The university established the nonprofit Texas Institute for Genomic Medicine here, and the company and the Link Strategies LLC Confidential Document 93

institute agreed to create 5,000 jobs between them in 10 years. So far, Lexicon isn't off to a great start. Rather than creating jobs, it's been cutting them. In late May, the company said it eliminated 100 positions, or about 20 percent of its work forceFrom A&M's standpoint, its obligations under the Enterprise Fund grant are being met, he added. The institute created 198 jobs last year and is slated to add another 357 this year. So taxpayer money is being used to create jobs at an institution that's already taxpayer-supported, while $34 million gets poured into a small company that's actually been shrinking its work force all in the name of economic development. [Houston Chronicle, 7/4/08] Several Large Perry Contributors were Lexicon Shareholders. According to the Houston Chronicle, Though the Enterprise Fund has been involved in a number of deals that leave a bad taste in taxpayers' mouths, the Lexicon payout had a particularly pungent political flavor. Several large political contributors to Gov. Rick Perry were Lexicon shareholders, and they might have benefited if the deal boosted Lexicon's stock. The past three years have muted that concern, as Lexicon's shares have swooned, falling to $1.72 as of Thursday from more than $6 three years ago. Lexicon went public eight years ago at $22, and it's pretty much been falling since. [Houston Chronicle, 7/4/08] Three Investors who Owned 16.5% of Lexicon Donated Heavily to Perry. According to the Associated Press, Lexicon investors include Perry donors such as Houston Texans owner Robert McNair, businessman William McMinn and the estate of businessman Gordon Cain and his family. Combined, the three have a 16.5 percent stake in the company, the newspaper said, citing the Securities and Exchange Commission. McNair has given $175,301 to Perry since he became governor. Cain, who died in 2002, contributed $50,000. McMinn, who has given $100,000 to Perry, was one of three businessmen who guaranteed a $1.1 million loan for Perry's campaign when he was elected lieutenant governor in 1998. [AP, 8/8/08] EMERGING TECHNOLOGY FUND This research is ongoing. Texas A&M Received $50 Million Emerging Technology Fund Grant. According to the Austin American-Statesman, The Texas A&M University System will receive $50 million from the Texas Emerging Technology Fund, the largest award given since the fund was created in 2005. The grant will help the system establish an $80 million facility in College Station that will be able to develop and manufacture a wide range of vaccines and medicines to treat illnesses such as cancer, diabetes and influenza. The center also will have the potential to develop drugs to thwart bioterrorist attacks. The plant will be designed so that it can quickly and cost-effectively produce small quantities of critically needed vaccines or medicines. [Austin American-Statesman, 3/24/09 New $50 Grant to A&M Criticized for Being a Repeat of Lexicon. According to the Houston Chronicle, The Texas A&M University System is slated to get $50 million from the state's Emerging Technology Fund for a center meant to bridge the gap between the test tube and clinical trials for such medicines as cancer vaccines, Gov. Rick Perry's office confirmed Friday The $50 million from the Emerging Technology Fund was confirmed Friday by Perry's office, which oversees the state fund. Money is allocated from the fund on the counsel of an advisory committee and with the approval of the governor, lieutenant governor and House speaker The last time Perry gave A&M a grant of this size for biomedicine, $50 million to A&M and Lexicon Genetics, it blew up in a bad way. Is this a Lexicon part deux? [Houston Chronicle, 3/21/09]

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WEALTHY DONORS FUND PERRYS LAVISH LIFESTYLE


Gov. Rick Perry likes to portray himself as a folksy farmer from west Texas, but a closer look at his campaign spending habits portray him as a lavish spender living a lavish lifestyle funded by wealthy donors. Perrys campaign expenditures show his campaign spent tens of thousands of dollars putting Perry up in 5-star hotels and spas across the globe. In Rome, his campaign spent nearly $3,000 so Perry could stay at the Grand Hotel Parco Dei Principi & Spa, a 5-star hotel and spa in the heart of Rome with a sumptuous style surrounded by a stunning botanical garden. In Istanbul, his campaign spent more than $2,200 so he could stay at the Ritz Carlton, featuring exceptional accommodations, world-class cuisine, a nurturing spa and impeccable service. It is unclear what campaign activity took place on the four occasions Perrys campaign paid to have him stay luxury hotels overseas. Perrys campaign also spent thousands putting him up ritzy domestic hotels, resorts and spas, such as The Peninsula Beverly Hills, the Waldorf Astoria in New York, and the Willard Continental in Washington. Of course, the Willard Continental wasnt the only fancy hotel Perry stayed in while visiting Washington. In fact, despite a public hatred of Washington, Perrys campaign has spent more than $300,000 in travel expenses to send Perry there on several occasions to stay at the nicest hotels and eat at the nicest restaurants. The farm kid known as Ricky Perry might be marketed as living proof of his school motto in this tiny community: No dream too tall for a school so small. Perry profile in the Houston Chronicle [10/23/06] Gov. Perry likes to portray himself as a fifth-generation Texan, a rancher and farmer who knows what it's like to scratch a living from this rich, red soil. Perry profile in the Texas Observer [11/3/06]

PERRY STAYS AT THE FINEST HOTELS A close look at Perrys campaign expenditures show a pattern of Perry using campaign funds to stay at some of the finest hotels and resorts around the world. Perrys campaign spent $340,961 on nice hotel chains such as the Four Seasons, Hilton, Intercontinental, Hyatt Regency, and Sofitel. However, these expenditures tell only half the story. In addition to four-star hotel chains, Perrys campaign paid to put Perry up in some of the nicest hotels in the world. For example: Grand Hotel Parco Dei Principi & Spa Rome: In March 2004, Texans for Perry spent $2,832 to put Perry up at the Grand Hotel Parco Dei Principi & Spa in Rome. The 5-star hotel boats: The Parco dei Principi Grand Hotel & SPA is in a privileged location in the exclusive Parioli district, next to the Villa Borghese park and surrounded by a stunning botanical garden: a true oasis in the heart of Rome. The hotel, which was designed by the famous architect Gi Ponti, was built in 1964 and recently got a facelift inspired by the sumptuous and elaborate style of the patrician villas of Romes late-17th-century nobility. [http://www.parcodeiprincipi.com/eng/luxury_rome_hotels.htm] The Westin Excelsior Florence, Italy: In March 2004, Texans for Perry spent $2,738 to put Perry up at the Westin Excelsior Florence, Italy. The hotel boasts: Neighboring the famous Ponte Vecchio, Uffizi Gallery and Pitti Palace, The Westin Excelsior, Florence, combines contemporary accommodations with seven centuries of Florentine history. Located on Piazza Link Strategies LLC Confidential Document 95

Ognissanti, we offer a professional staff dedicated to impeccable service and state-of-the-art business facilities. No wonder we were named to the 2006 and 2007 Cond Nast Traveler Gold Lists. With spectacular views, our hotel is truly a cut above. [http://www.starwoodhotels.com/westin/property/overview/index.html? propertyID=43&language=en_US] The Westin Nagoya Castle Japan: In August 2005, Texans for Perry spent $1,046 to put Perry up at The Westin Nagoya Castle in Japan. The hotel boasts: Midway between Tokyo and Osaka, The Westin Nagoya castle is centrally located in the heart of the center for international trade. At the end of a long day, rejuvenate with a few laps in our indoor heated pool. The 195 guest rooms and suites at The Westin Nagoya Castle are designed to soothe you, with beautiful views of the ancient Nagoya castle or downtown. [http://www.starwoodhotels.com/westin/property/overview/index.html?propertyID=1060] The Ritz Carlton Istanbul: In July 2007, Texans for Perry spent $2,222 to put Perry up at The Ritz Carlton, Istanbul. The hotel boasts: Located at the crossroads of two continents Europe and Asia The Ritz-Carlton, Istanbul is a practice in culture, hospitality and luxury. Featuring exceptional accommodations, world-class cuisine, a nurturing spa and impeccable service, this Istanbul luxury hotels amenities and services provide an unforgettable retreat in the heart of one of the worlds most fascinating cities. The Open Air Spa features two treatment rooms and offers a full wellness program, a wide variety of massage therapies, facials and body treatments. Alternative holistic therapies are also available, and our two jacuzzis and lap pool are the ideal places to cool off after sunbathing. As the sun begins to set you can end the day with cocktails in our stylish Roof Top Bar. [http://www.ritzcarlton.com/en/Properties/Istanbul/Spa/Default.htm] The Peninsula Beverly Hills Beverly Hills, CA: In January 2006, Texans for Perry spent $3,639 to put Perry up at The Peninsula Beverly Hills. The hotel boasts: Resembling a gracious private residence, The Peninsula Beverly Hills offers luxuriously appointed rooms, suites and private villas nestled amid lush gardens for the most discerning of travelers. Various dining venues offers sophistication to casual elegance. [http://www.peninsula.com/beverly_hills/en/default.aspx] Hotel Del Coronado Resort Coronado, CA: In 2006, 2007 and in 2009, Texans for Perry spent a total of $3,052 to put Perry up at the Hotel Del Coronado Resort in Coronado, California. The hotel boasts: Built in 1888, this classic beachfront respite has long been heralded as one of Americas most beautiful beach resorts. A pronouncement underscored by its designation as a National Historic Landmark in 1977. Today, The Del offers guests a unique combination of modern luxury touched with the charm and grace of this fairytale castle. Include its stunning beachfront locale and its easy to see why The Del has been called one of the top ten resorts in the world by USA Today. [http://www.hoteldel.com/] Waldorf Astoria New York: Between 2002 and 2003, Texans for Perry spent $4,374 to put Perry up at the famed Waldorf Astoria in New York. The hotel boasts: The Waldorf Astoria is the embodiment of luxury and splendor - and continues to be one of New York City's most beloved and utilized institutions. A virtual art-deco museum, this extraordinary hotel places guests at a preeminent Midtown address. The Waldorf Astoria is a privileged environment of eminent elegance, and has hosted distinguished visitors from around the world for decades. It's unparalleled luxury and impeccable service indulges the most discriminating of travelers with an exclusive hotel experience. [http://www.hiltonfamilynewyork.com/the-waldorf-astoria.php] The Willard InterContinental Washington, DC: Between February and March 2007, Texans for Perry spent $6,541 to put Perry up in The Willard InterContinental Hotel in Washington, DC. The hotel boasts, Known as the Crown Jewel of Pennsylvania Avenue, the Willard InterContinental has been the center of the social and political life in Washington DC since it first Link Strategies LLC Confidential Document 96

opened in 1818. Located one block from the White House the Willard InterContinental Washington is internationally known as one of the best Washington DC hotels. The Willard's unique blend of contemporary luxury, historic charm and sustainable hospitality subtly reflects the spirit of the city. [http://washington.intercontinental.com/] A CLOSER LOOK AT SOME OF THE FINER PLACES PERRY HAS STAYED ON THE CAMPAIGN DIME:
Grand Hotel Parco Dei Principi, Grand Hotel Parco Dei Principi, Hotel Crescent Court, Hotel Crescent Court, Hotel del Coronado, Hotel Del Coronado, Hotel Del Coronado, Hotel del Coronado, Hotel Jerome, Hotel Monaco, Hotel Monaco, Peninsula Beverly Hills, Peninsula Beverly Hills, Ritz Carlton, Ritz Carlton, The Ritz Carlton Hotel, The Ritz Carlton Hotel, The Ritz Carlton, The Ritz Carlton, The Ritz Carlton, The Ritz Carlton, The Ritz Carlton, The Ritz Carlton, The Ritz Carlton, The Ritz-Carlton Lodge, The Ritz-Carlton Lodge, The RK Group LLC, The RK Group, The RK Group, The RK Group, The RK Group, The San Luis Resort, The Venetian, The Venetian, The Venetian, The Westin Excelsior Florence, The Westin Excelsior Florence, The Westin Nagoyo Castle, W Hotel, Waldorf Astoria Hilton, Waldorf Astoria Hilton, Waldorf Astoria Hilton, Waldorf Astoria Hilton, $717.86 $2,114.48 $4,500.00 $2,335.71 $854.16 $101.82 $1,620.97 $475.46 $581.34 $230.15 $376.71 $1,819.68 $1,819.68 $2,222.85 $61.50 $1,957.54 $136.47 $164.27 $328.54 $430.92 $6.54 $220.43 $407.84 $303.63 $196.00 $635.21 $326.45 $6,998.40 $2,443.00 $568.62 $3,232.04 $445.05 $85.99 $672.91 $221.76 $1,830.09 $908.79 $1,046.30 $1,220.42 $623.00 $823.82 $1,241.37 $665.77 3/18/04 3/16/04 10/04/00 10/05/00 7/30/09 8/21/06 7/29/07 7/30/09 8/05/09 1/27/08 1/29/08 1/06/06 1/06/06 7/11/07 3/05/08 10/24/07 9/29/07 9/19/09 9/19/09 12/02/08 9/19/09 2/15/00 9/17/09 9/17/09 8/28/05 8/30/05 6/09/06 9/21/09 12/16/08 1/18/10 7/18/08 11/15/09 9/07/07 12/09/07 12/07/07 3/19/04 3/19/04 8/03/05 10/29/09 10/09/03 10/09/03 5/10/02 10/09/03 Travel Travel Event Expense Event Expense Lodging FL Gifts for Constituents Lodging Lodging Lodging Lodging Lodging Travel Travel Lodging Lodging Lodging Lodging Lodging Lodging Lodging Business Meeting Event Expense Lodging Lodging Travel Travel Event Expense Event Expense Cataring Event Expense Event Expense Catering Event Expense Lodging travel meal Lodging Lodging Travel Travel Travel Lodging Travel Travel Travel Travel Roma Roma Dallas Dallas Coronado Coronado Coronado Coronado Aspen Washington Washington Beverly Hills Beverly Hills Istanbul Dallas New York New Orleans Arlington Arlington Philadelphia Arlington Rancho Mirage Dallas Dallas Greensboro Greensboro San Antonio San Antonio San Antonio San Antonio San Antonio Galveston Las Vegas Las Vegas Las Vegas Italy Italy Nagoyo New York New York New York New York New York ZZ ZZ TX TX CA CA CA CA CO DC DC CA CA ZZ TX NY LA VA VA PA VA CA TX TX GA GA TX TX TX TX TX TX NV NV NV ZZ ZZ ZZ NY NY NY NY NY

Link Strategies LLC Confidential Document 97

Waldorf Astoria Hilton, Waldorf Astoria Hilton, Waldorf Astoria Hilton, Willard Intercontinental, Willard Intercontinental, Willard Intercontinental, Willard Intercontinental,

$135.00 $295.32 $590.64 $2,235.69 $1,686.00 $1,082.11 $1,537.44

10/09/03 5/10/02 5/11/02 2/27/07 2/27/07 2/27/07 3/23/07

Travel Travel Travel lodging lodging lodging lodging

New York New York New York Washington Washington Washington Washington

NY NY NY DC DC DC DC

PERRY EATS AT THE FINEST RESTAURANTS


Acme Oyster House, Acme Oyster House, Bistro 88, Brac's Steakhouse, Brenner Steakhouse, Brenner's Steakhouse, Cafi Milano, Cafi Milano, Cafi Milano, Carlyle Grand Cafe, Carmelo's Italian Restaurant, Dona Emilia's, Dona Emilia's, McCormick & Schick, McCormick & Schmick, McCormick & Schmick, McCormick & Schmick, Morton's of Chicago, Morton's of Connecticut, Morton's of Connecticut, Penini Ranch Steak House, Perini Ranch Steak House, Perini Ranch Steak House, Perini Ranch Steak House, Perini Ranch Steak House, Perini Ranch Steak House, Perini Ranch Steakhouse, Perini Ranch Steakhouse, Perini Ranch Steakhouse, Perini Ranch Steakhouse, Perini Ranch, Perini Ranch, Perry's Steakhouse & Grill, Perry's Steakhouse & Grill, Prime 112 Restaurant, Rocco's Grill, Rocco's Grill, Ruth's Chris Steak House, Ruth's Chris Steak House, Ruth's Chris Steak House, Ruth's Chris Steak House, Ruth's Chris Steak House, Ruth's Chris Steak House, Ruth's Chris Steak House, $95.51 $98.15 $1,278.44 $216.00 $11,937.34 $8,305.00 $96.58 $200.03 $168.03 $258.18 $343.59 $139.44 $305.09 $80.00 $212.87 $268.84 $108.90 $413.29 $100.00 $79.99 $12,047.49 $11,419.67 $10,778.00 $10,496.91 $9,176.00 $10,496.91 $9,956.00 $262.00 $10,873.00 $61.02 $98.00 $1,640.00 $262.23 $59.50 $314.14 $700.40 $58.00 $174.09 $1,239.15 $673.67 $868.61 $56.65 $1,039.59 $233.45 9/28/07 11/19/04 7/17/09 9/03/09 10/30/06 10/13/09 2/24/07 2/25/07 2/25/07 7/16/09 10/15/04 7/13/05 11/06/05 3/22/05 5/02/04 11/11/09 2/23/04 2/22/04 10/18/05 10/18/05 2/02/05 1/14/04 1/18/07 1/27/06 1/18/08 1/27/06 1/19/10 3/14/09 1/23/09 12/04/00 5/01/00 4/04/00 2/09/09 12/03/08 9/19/07 12/09/05 12/05/05 3/22/03 8/01/08 5/15/07 1/27/09 5/15/07 9/18/09 7/17/09 Business Meeting Business Meeting Business Meeting Business Meeting Event Expense Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Constituent Gifts Century Council Gifts Constituent Gifts Constituent Gifts Constituent Gifts Constituent Gifts Constituent Gifts Constituent Gifts Constituent Gifts Gifts for Constituents Constituent Gifts Constituent Gifts Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting New Orleans New Orleans Austin Carthage Houston Houston Washington Washington Washington Arlington Austin Austin Austin Austin Austin Austin Washington Washington Washington Washington Buffalo Gap Buffalo Gap Buffalo Gap Buffalo Gap Buffalo Gap Buffalo Gap Buffalo Gap Buffalo Gap Buffalo Gap Buffalo Gap Buffalo Gap Buffalo Gap Austin Austin Miami Beach Austin Austin Austin Austin Austin Austin Austin Arlington Dallas LA LA TX TX TX TX DC DC DC VA TX TX TX TX TX TX DC DC DC DC TX TX TX TX TX TX TX TX TX TX TX TX TX TX FL TX TX TX TX TX TX TX VA TX

Link Strategies LLC Confidential Document 98

Ruth's Chris Steak, Sehzade Mehmet Sofrasi, Sparks Steak House, The Backstage Steakhouse, The Capital Grill, Vic & Anthony's Steakhouse, Vic & Anthony's, Zafferano,

$231.24 $244.89 $637.59 $431.80 $613.44 $76.00 $176.00 $382.76

12/03/04 6/03/07 1/23/09 7/18/06 2/23/07 11/11/09 4/05/08 11/12/07

Business Meeting Business Meeting Business Meeting Staff Retreat Business Meeting Business Meeting Business Meeting Business Meeting

Washington Istanbul New York Austin Washington Houston Las Vegas London

DC ZZ NY TX DC TX NV ZZ

AND WHO SAID PERRY DIDNT LIKE WASHINGTON? I know the truth is sometimes hard to recognize when you've been in Washington for 16 years. Perry to Hutchinson during their first debate. [Dallas Morning News, 1/15/10] Deficits. Bailouts. Pork barrel spending. A $12 trillion debt. Washington is broken. Rick Perry 2010 television ad. [http://www.youtube.com/watch?v=8V1Hy_Q44d8&NR=1] I think Texans want a governor who will stand up to Washington and say, No. Rick Perry. [Lubbock Avalanche-Journal, 2/27/10] If Washington continues to thumb their nose at the American people, you know, who knows what might come out of that. Perry on April 15, 2009. [Austin American Statesman, 2/25/10] It's easy to go to Washington and be popular. You just say yes to everything. Perry. [Austin American Statesman, 2/21/10] FOR SOMEONE WHO HATES WASHINGTON, PERRY SPENT MORE THAN $300,000 IN CAMPAIGN MONEY TRAVELING THERE:
Cafi Milano, Cafi Milano, Cafi Milano, California Pizza Kitchen, California Pizza Kitchen, Capital Hilton, Capital Hilton, Capital Hilton, Capital Hilton, Capital Hilton, Capital Hilton, Capital Hilton, Capital Hilton, Capital Hilton, Capital Hilton, Capital Hilton, Capital Hilton, Capital Hilton, Clear Channel Communications, Corner Bakery Caf, Courtyard by Marriott, Courtyard by Marriott, Courtyard by Marriott, Courtyard by Marriott, $96.58 $200.03 $168.03 $109.76 $73.63 $366.40 $139.70 $183.20 $183.20 $183.20 $183.20 $183.20 $732.80 $732.80 $183.20 $183.20 $183.20 $183.20 $2,744.00 $93.50 $684.72 $350.38 $351.13 $350.38 2/24/07 2/25/07 2/25/07 7/18/08 2/24/08 11/03/06 4/30/01 11/02/06 11/02/06 11/02/06 11/02/06 11/02/06 11/03/06 11/03/06 11/02/06 11/02/06 11/02/06 11/03/06 7/01/04 7/03/08 12/03/04 12/03/04 12/03/04 12/03/04 Business Meeting Business Meeting Business Meeting Business Meeting Business Meeting Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Business Meeting Travel Travel Travel Travel Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC

Link Strategies LLC Confidential Document 99

Crowne Plaza, Crowne Plaza, Crowne Plaza, Crowne Plaza, Domino's Pizza, Dupont Art & Framing, ESPN Zone, Eudy Nelson & Associates, Eudy Nelson & Associates, Eudy Nelson & Associates, Hotel Monaco, Hotel Monaco, Hotel Washington, Hotel Washington, Hotel Washington, Hotel Washington, Hotel Washington, Hotel Washington, Hotel Washington, Hyatt Regency Washington DC, Hyatt Regency Washington, Hyatt Regency Washington, Hyatt Regency Washington, Hyatt Regency Washington, Hyatt Regency Washington, Hyatt Regency Washington, Hyatt Regency Washington, Hyatt Regency, I Ricchi, Lola's Barracks, Marriott Hotel, Marriott Hotel, Marriott Hotel, Marriott Hotels, Marriott, Marriott, Marriott, McCormick & Schmick, Moby Dick Airways Ltd., Moby Dick Airways Ltd., Morton's of Chicago, Morton's of Connecticut, Morton's of Connecticut, National Governors Assoc., National Press Club, National Press Club, Old Ebbitt Grill, Omni Hotel Shoreham, Omni Hotel Shoreham, Omni Hotel Shoreham, Omni Hotel Shoreham, Omni Hotel Shoreham,

$432.82 $666.48 $875.79 $432.82 $51.18 $151.33 $60.51 $3,242.61 $10,000.00 $615.00 $230.15 $376.71 $177.48 $385.26 $467.75 $97.24 $177.48 $1,041.51 $350.38 $240.45 $1,637.36 $1,637.36 $1,683.99 $1,637.36 $1,637.36 $71.87 $756.00 $424.41 $726.52 $141.30 $709.07 $638.92 $105.93 $724.80 $69.06 $629.75 $428.24 $108.90 $89,074.00 $89,074.00 $413.29 $100.00 $79.99 $475.00 $300.88 $250.00 $91.69 $1,404.93 $1,460.67 $1,404.93 $468.31 $1,404.93

2/28/05 3/08/05 3/01/05 2/28/05 1/18/05 1/18/05 2/24/07 4/18/00 4/18/00 4/18/00 1/27/08 1/29/08 3/08/06 10/17/05 10/20/05 10/20/05 3/08/06 10/15/05 10/20/05 6/06/02 1/10/01 1/10/01 1/21/01 1/10/01 1/10/01 1/21/01 4/26/01 5/01/00 2/22/08 2/21/09 9/25/03 9/25/03 9/24/03 2/28/01 2/23/04 2/23/04 2/23/04 2/23/04 1/06/06 1/06/06 2/22/04 10/18/05 10/18/05 2/26/05 11/02/06 10/30/06 3/06/06 1/21/05 1/21/05 1/21/05 1/28/05 1/21/05

Travel Travel Travel Travel Travel Event Expense Business Meeting Event Expense Event Expense Event Expense Lodging Lodging Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Expense Business Meeting Business Meeting Travel Travel Travel Travel Travel Travel Travel Business Meeting Airplane Expense Airplane Expense Business Meeting Business Meeting Business Meeting Event Expense Event Expense Event Expense Travel Travel Travel Travel Travel Travel

Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington D.C. Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington

DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC

Link Strategies LLC Confidential Document 100

Omni Hotel Shoreham, Omni Shoreham Hotel, Omni Shoreham Hotel, Omni Shoreham Hotel, Poste Restaurant, Republican National Committee, RNC, Ruth's Chris Steak, Sofitel Hotel, Sofitel Hotel, Sofitel Hotel, Sofitel Hotel, Sofitel Hotel, Sofitel Hotel, Sofitel Lafayette Square, Sofitel Lafayette Square, The Capital Grill, The Caucus Room, The Madison Hotel, The Oceanaire, The Washington Court Hotel, The Washington Court Hotel, Washington Flyer Taxi, White House Writers Group Inc., White House Writers Group Inc., Willard Intercontinental, Willard Intercontinental, Willard Intercontinental, Willard Intercontinental, TOTAL

$1,404.93 $206.10 $206.10 $412.20 $242.50 $40,000.00 $20,000.00 $231.24 $122.25 $184.65 $927.45 $56.88 $64.73 $413.88 $62.95 $927.45 $613.44 $82.50 $245.52 $55.88 $227.85 $493.98 $55.65 $6,591.67 $2,595.83 $2,235.69 $1,686.00 $1,082.11 $1,537.44 $311,653.28

1/21/05 2/10/06 2/10/06 2/11/06 12/02/04 10/25/06 6/11/02 12/03/04 7/18/08 2/22/08 2/24/09 1/18/07 2/24/09 3/12/09 8/06/08 2/24/09 2/23/07 10/18/05 2/08/08 2/25/07 3/18/06 3/19/06 6/11/02 3/25/03 4/10/03 2/27/07 2/27/07 2/27/07 3/23/07

Travel Travel Travel Travel Business Meeting Event Expense Event Expense Business Meeting Business Meeting Business Meeting Lodging lodging Lodging Lodging Business Meeting Lodging Business Meeting Business Meeting Lodging busines meeting Travel Travel Travel Event Expense Event Expense lodging lodging lodging lodging

Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington Washington

DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC DC

Link Strategies LLC Confidential Document 101

RICK NASCAR PERRY DRIVES A MERCEDES BENZ


Rick Perry would like Texans to believe that hes a NASCAR Governor. The truth is, career politician Rick Perry has been driving around in a Mercedes Benz since 2007. This shouldnt come as a surprise to anyone who has followed Perrys extravagant tasteshes currently living in a $1.85 Million rental mansion while the official Governors mansion undergoes renovations, which is costing taxpayers over $9,000 per month. PERRY CAMPAIGN SPONSORING A CHEVROLET IMPALA NASCAR CAR Perry Sponsored NASCAR Star Bobby Labontes No. 71 Chevrolet Impala. According to the Dallas Morning News, Gov. Rick Perry is traveling in fast company. Campaigning in North Texas, the governor this morning unveiled a new political ad that's appearing in an odd place: On NASCAR star Bobby Labonte's No. 71 Chevrolet Impala. Labonte, a Corpus Christi native and loyal Republican, appeared with Perry at Huffines Chevrolet in Lewisville to unveil the Perry messages, on the hood and sides of his race car. [Dallas Morning News, 4/06/10, link] Perry Campiagn Paid $225,000 to Sponsor Labontes Car. According to the Dallas Morning News, The Perry campaign paid $225,000 to sponsor Labonte's car. The governor said he wasn't sure if this was the first time a candidate had bought ads on a NASCAR vehicle -- but it's certainly the first time he's aware of. Labonte joked that he might boost the governor's popularity, or vice versa. [Dallas Morning News, 4/06/10, link]

RICK PERRY LIVES IN A $1.85 MILLION RENTAL MANSION Perry Living in a $9,000-a-Month Rental House After the Governors Mansion was Heavily Damaged by an Arsonist. According to the Austin American-Statesman, The mansion was heavily damaged in June 2008 when an unknown arsonist lobbed a Molotov cocktail onto the front porch. Nobody was injured; Gov. Rick Perry had vacated the mansion for a planned renovation and is living in a $9,000-a-month rental house west of Austin while repairs continue. [Austin American-Statesman, 11/20/09] Perrys Rental Home Listed on the Market for $1.85 Million. According to the Associated Press, The state will pony up $9,900-a-month in rent for at least a year while the Governors Mansion undergoes renovations starting next month. The 6,386 square foot home in a posh west Austin neighborhood has been listed on the market for more than a year, with the most recent asking price $1.85 million. [Associated Press, 1/27/10, link]

2007 2010: PERRY HAD A LEASE AGREEMENT WITH MERCEDES-BENZ 2010: Rick Perry had a Lease Agreement with Mercedes-Benz Financial for Between $10,000 $25,000. According to the personal financial disclosure filed with the Texas Ethics Commission, Rick Perry had a lease agreement with Mercedes-Benz Financial for between $10,000 - $25,000. [Texas Ethics Commission] 2009: Rick Perry had a Lease Agreement with Mercedes-Benz Financial for Between $10,000 $25,000. According to the personal financial disclosure filed with the Texas Ethics Commission, Rick Perry had a lease agreement with Mercedes-Benz Financial for between $10,000 - $25,000. [Texas Ethics Commission] Link Strategies LLC Confidential Document 102

2008: Rick Perry had a Lease Agreement with Mercedes-Benz Financial for Between $10,000 $25,000. According to the personal financial disclosure filed with the Texas Ethics Commission, Rick Perry had a lease agreement with Mercedes-Benz Financial for between $10,000 - $25,000. [Texas Ethics Commission] 2007: Rick Perry had a Lease Agreement with Mercedes-Benz Financial for Between $10,000 $25,000. According to the personal financial disclosure filed with the Texas Ethics Commission, Rick Perry had a lease agreement with Mercedes-Benz Financial for between $10,000 - $25,000. [Texas Ethics Commission]

2002 2006: RICK PERRY HAD A LEASE AGREEMENT WITH TOYOTA 2006: Rick Perry had a Lease Agreement with Toyota Financial for Between $10,000 - $25,000. According to the personal financial disclosure filed with the Texas Ethics Commission, Rick Perry had a lease agreement with Toyota Financial for between $10,000 - $25,000. [Texas Ethics Commission] 2005: Rick Perry had a Lease Agreement with Toyota Financial for Between $10,000 - $25,000. According to the personal financial disclosure filed with the Texas Ethics Commission, Rick Perry had a lease agreement with Toyota Financial for between $10,000 - $25,000. [Texas Ethics Commission] 2004: Rick Perry had a Lease Agreement with Toyota Financial for Between $10,000 - $25,000. According to the personal financial disclosure filed with the Texas Ethics Commission, Rick Perry had a lease agreement with Toyota Financial for between $10,000 - $25,000. [Texas Ethics Commission] 2003: Rick Perry had a Lease Agreement with Toyota Financial for Between $10,000 - $25,000. According to the personal financial disclosure filed with the Texas Ethics Commission, Rick Perry had a lease agreement with Toyota Financial for between $10,000 - $25,000. [Texas Ethics Commission] 2002: Rick Perry had a Lease Agreement with Toyota Financial for Between $10,000 - $25,000. According to the personal financial disclosure filed with the Texas Ethics Commission, Rick Perry had a lease agreement with Toyota Financial for between $10,000 - $25,000. [Texas Ethics Commission]

Link Strategies LLC Confidential Document 103

1997-2001: PERRY DIDNT HAVE LOANS/LEASES THROUGH AN AUTOMOTIVE COMPANY 2001: No Auto Loans through an Automotive Company. [Texas Ethics Commission] 2000: No Auto Loans through an Automotive Company. [Texas Ethics Commission] 1999: No Auto Loans through an Automotive Company. [Texas Ethics Commission] 1998: No Auto Loans through an Automotive Company. [Texas Ethics Commission] 1997: No Auto Loans through an Automotive Company. [Texas Ethics Commission]

Link Strategies LLC Confidential Document 104

STATE AGENCIES UNDER PERRY SPENDING LAVISHLY AT LIQUOR STORES


In a time when Texas families are tightening their budgets and looking for ways to save money, it only makes sense that Texas state agencies follow suit. Since 2008, the Texas Lottery Commission and the Texas Department of Transportation, two agencies who governing commissions are appointed by Rick Perry, spent at least $149,769.39 of taxpayer funds at liquor stores. The Texas Comptrollers Office and the Texas Department of Public Safety also spent money at liquor stores, but their costs were under $6,500 since 2008. The Governor should demand that the agencies under his control cease their reckless spending and begin to take into consideration the current economic climate. The Texas Lottery Commission, whose governing commission is appointed by Rick Perry, has spent $146,469.39 at liquor stores since 2008. TxDOT, whose governing commission is appointed by Rick Perry, spent a total of $3,300 at a liquor store in 2008. The Texas Comptrollers Office spent a total of $5,016.41 at liquor stores from 2008-2010. The Texas Department of Public Safety spent $1,143.90 at liquor stores in 2010.

THE TEXAS LOTTERY COMMISSION The Texas Lottery Commission spent $143,820.35 at liquor stores in 2008. The Texas Lottery Commission spent $174.04 at liquor stores in 2009. The Texas Lottery Commission has spent $2,475 at liquor stores, so far in 2010. The Texas Lottery Commission has spent $146,469.39 at liquor stores since 2008. The Three Commissioners to the Texas Lottery Commission Were Appointed by Rick Perry. According to the Texas Lottery website, Governor Rick Perry appointed Ms. Williamson to the Texas Lottery Commission on October 7, 2008. Governor Perry designated her as Chair of the Commission on March 27, 2009. Governor Rick Perry appointed Mr. Schenck to the Texas Lottery Commission on October 17, 2007. Mr. Krause served as a member of the Behavioral Enforcement Committee for the Texas State Board of Accountancy from 1992 to 1996. Governor Rick Perry appointed Mr. Krause to the Texas Lottery Commission on March 27, 2009. [The Texas Lottery Website, Accessed 4/15/10, link] 2010 The Texas Lottery Commission has spent $2,475 at liquor stores, so far in 2010. 2010: The Texas Lottery Commission Spent $90 at Plaza Liquors INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

Link Strategies LLC Confidential Document 105

2010: The Texas Lottery Commission Spent $2,060 at PTL Lady Love Liquor INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

2010: The Texas Lottery Commission Spent $40 at Gulf State Liquor LLC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

2010: The Texas Lottery Commission Spent $55 at HP Discount Liquor INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

2010: The Texas Lottery Commission Spent $150 at Lucky Liquor INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

Link Strategies LLC Confidential Document 106

2010: The Texas Lottery Commission Spent $40 at Mandola Warehouse Liquors INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

2010: The Texas Lottery Commission Spent $40 at Messinas Liquors INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

2009 The Texas Lottery Commission spent $174.04 at liquor stores in 2009. 2009: The Texas Lottery Commission Spent $88.69 at Kings Liquors INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

2009: The Texas Lottery Commission Spent $85.35 at Messinas Liquors INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link] Link Strategies LLC Confidential Document 107

2008 The Texas Lottery Commission spent $143,820.35 at liquor stores in 2008. 2008: The Texas Lottery Commission Spent $143,234.31 at Fiesta Liquors Inc. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

2008: The Texas Lottery Commission Spent $237.86 at A & N Liquor Inc. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

2008: The Texas Lottery Commission Spent $64.06 at Conroe Liquor Stores INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

Link Strategies LLC Confidential Document 108

2008: The Texas Lottery Commission Spent $284.12 at Thrifty Liquors INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

THE TEXAS DEPARTMENT OF TRANSPORTATION (TxDOT) TxDOT, whose governing commission is appointed by Rick Perry, spent a total of $3,300 at a liquor store in 2008. TxDOT is Governed by a Five-Member Commission Appointed by the Governor and an Executive Director Selected by the Commission. According to the Texas Department of Transportation website, TxDOT is governed by the five-member Texas Transportation Commission and an executive director selected by the commission. Commission members serve overlapping six-year terms and are appointed by the governor with the advice and consent of the Texas Senate. [TxDOT website, Accessed 4/15/10, link] 2008 2008: The Texas Department of Transportation Spent $3,300 at PC Liquor INC A Texas Corporation and Universal LA. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

AGENCIES NOT UNDER THE CONTROL OF PERRY ALSO SPENT TAXPAYER FUNDS ON LIQUOR The Texas Department of Public Safety spent $1,143.90 at liquor stores in 2010. The Texas Comptrollers Office spent a total of $5,016.41 at liquor stores from 2008-2010. THE TEXAS COMPTROLLERS OFFICE Link Strategies LLC Confidential Document 109

The Texas State Comptrollers Office spent $1,685.62 at liquor stores in 2009. The Texas Comptrollers Office spent $3,330.79 at liquor stores in 2010. The Texas Comptrollers Office spent a total of $5,016.41 at liquor stores from 2008-2010. 2010 The Texas Comptrollers Office spent $3,330.79 at liquor stores in 2010. 2010: The Texas Comptroller Spent $3,247.79 at Warehouse Liquor Stores INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

2010: The State Comptroller Spent $83 at Discount Liquor. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

2009 The Texas State Comptrollers Office spent $1,685.62 at liquor stores in 2009. 2009: Texas State Comptroller Spent $122.75 at Hillside Liquor Inc. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

Link Strategies LLC Confidential Document 110

2009: The Texas Comptroller Spent $1,365.21 at OK Liquor. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

2009: The Texas Comptroller Spent $197.66 at Red Colemans East Pike Cut-Rate Liquor INC. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

THE TEXAS DEPARTMENT OF PUBLIC SAFETY The Texas Department of Public Safety spent $1,143.90 at liquor stores in 2010. 2010: The Texas Department of Public Safety Spent $1,143.90 at Specss Liquors. [Texas Comptrollers Website, Window on State Government, Accessed 4/15/10, link]

Link Strategies LLC Confidential Document 111

PERRY DOESNT RESPECT TEXANS RIGHTS


Over the past few months, Perry has been quick to cite the 10th amendment to the constitution, which grants powers to the state over the federal government, when justifying his opposition to some of the Obama administrations initiatives. In the past, Perry has been less eager to cite the rights guaranteed through the constitution when it contradicted his own administrations goals. The most glaring example of this is the Trans-Texas Corridor. Perrys pet-project to create a massive transportation network across the state would have required the government to utilize eminent domain to seize nearly 600,000 acres of private land. The public was appropriately outraged over his plan and 20 counties passed resolutions opposing the plan, which was eventually scrapped. In 2007, Perry decided that he would sidestep the legislatures opposition and sign an executive order to require Texas schoolgirls to receive a vaccination for the sexually transmitted disease called the Human Papillomavirus (HPV). Texans were outraged by Perrys unilateral decision to step between a patient and a doctor, but even more so when it was reported that Perrys former chief of staff was a lobbyist for the company that made the vaccine. TRANS-TEXAS CORRIDOR When our hair is gray, we will be able to tell our grandchildren that we were in a TxDOT meeting room when one of the most extraordinary plans was laid out for the people of Texas. Gov. Perry on his Trans-Texas Corridor vision, December 2004 [Texans for Public Justice, link] TRANS TEXAS CORRIDOR BENEFITS Perry Said Landowners on the Route of the Trans-Texas Corridor Would Receive Proceeds from the Toll Roads. According to US Fed News, Perry also noted that landowners on the eventual route will receive fair compensation and a unique chance to participate in corridor proceeds, much like royalty payments paid to landowners who have oil and gas wells on their property. Perry also pledged that the public will have a thorough opportunity to continue giving their input as the route is determined, environmental factors are considered and the price for driving on the corridor is set. [US Fed News, 3/11/05] Perry Said the Trans-Texas Corridor Would Greatly Expand the Economy of the Next Fifty Years. According to US Fed News, Just as the interstate highway system was an essential element to the growth and prosperity of our economy over the last 50 years, the Trans Texas Corridor will greatly expand the economy of the next fifty years, Perry said. It is truly vital to creating jobs, wealth and opportunity because it will better connect Texas to trading partners, and ensure the reliable movement of people and products in our time-sensitive economy. [US Fed News, 3/11/05] THE DEATH OF THE TRANS TEXAS CORRIDOR October 2009: Plan for the Trans Texas Corridor Officially Rejected. According to Fort Worth StarTelegram, The Texas Department of Transportation has formally pulled the plug on the Trans Texas Corridor, a hotly contested plan to build toll roads, rail lines and utilities across the state, officials said. But the state s once-lofty plan to build $184 billion worth of new statewide infrastructure promises to live on in the governor s race, where the need to reduce gridlock is often pitted against issues such as property rights, the impact of tolls on residents pocketbooks and foreign control of toll projects. State officials have scheduled a news conference for 11 a.m. today in Austin to announce that the department has selected the no action alternative for the proposed first leg of the Trans Texas Corridor from the border region to Dallas-Fort Worth. [Fort Worth Star-Telegram, 10/7/09] Link Strategies LLC Confidential Document 112

Zachry Construction and Cintra of Madrid Were Under Contract to Create the Trans Texas Corridor. According to Fort Worth Star-Telegram, The reason that s being given for the nobuild option is that people don t want it, Texas Transportation Commissioner Bill Meadows of Fort Worth said Tuesday in a phone interview. 'They said, Hell no. What we basically are doing is we are terminating the process. Formally, absolutely, TTC-35 is dead. We are canceling the contract with Zachry. Zachry Construction Co. of San Antonio and Cintra of Madrid have been under contract to create a Trans Texas Corridor master plan and to provide a more detailed development plan for the first Trans Texas Corridor leg along the I-35 corridor. [Fort Worth StarTelegram, 10/7/09] Hutchisons Spokesman Said That the Trans Texas Corridor will not be Officially Dead Until Rick Perry is No Longer Governor and His Political Appointees are No Longer Running TxDOT. According to Fort Worth Star-Telegram, The Trans Texas Corridor will not be officially dead until Rick Perry is no longer governor and his political appointees are no longer running TxDOT, Hutchison campaign spokesman Joe Pounder said in a statement. Texans can t trust Rick Perry when it comes to protecting their land from the government, ceasing to lease our highways to foreign companies or ending the Trans Texas Corridor, he added. [Fort Worth StarTelegram, 10/7/09]

Outcry from Landowners and Others Prompted the Transportation Agency this Year to Scale Back the Network and Drop the Trans-Texas Corridor Name. According to The Houston Chronicle, Perry had championed the Trans-Texas Corridor, an ambitious highway network proposal that included public-private partnerships and tollways. An outcry from landowners and others, however, prompted the transportation agency this year to say it would scale back the network concept and drop the name. Concerns had been fueled by an early, indelible depiction of the concept that showed 1,200-foot-wide corridors of tollways, rail and utility lines. [The Houston Chronicle, 10/7/09] Perrys Spokesman Said The Trans-Texas Corridor was Retired in January 2009. According to the San Antonio Express-News, Perry spokesman Chris Cutrone said Tuesday, The Trans-Texas Corridor was retired in January, and TxDOT's announcement tomorrow is the next step in this process. The project's demise will take the form of a recommendation from TxDOT to the Federal Highway Administration to choose the no action alternative on the TTC-35 environmental study. I don't think I have ever seen a no-build recommendation in a TxDOT environmental impact study. It says a lot about today's Transportation Commission and their responsiveness to the public, state Senate Transportation and Homeland Security Committee Chairman John Carona, R-Dallas, said in a statement. [San Antonio Express-News, 10/7/09] Texas Farm Bureau President Kenneth Dierschke Said the Trans-Texas Corridor was Still Alive as Long as Statues Authorizing Its Construction are Still on the Books. According to Targeted News Service, The announcement of a no action alternative by the Texas Department of Transportation (TxDOT) may effectively terminate one version of Trans-Texas Corridor-35, but Gov. Rick Perry's massive transportation boondoggle still breathes as long as statutes authorizing its construction are on the books, said the leader of the state's largest farm organization. If TTC-35 is really dead, it's good news. But we've heard that before, said Texas Farm Bureau President Kenneth Dierschke. One question lingers on the minds of Texas property owners on the proposed route. Will the same old problem emerge in the future under a new name? [Targeted News Service, 10/7/09] PERRY AND THE TRANS-TEXAS CORRIDOR Perry Sent a Letter to TxDOT in 2002 Requesting They Take Ninety Days to Develop a New Highway PlanLess Than Five Months Later, TxDOT Proposed the Trans-Texas Corridor. According to Texas Monthly, Who initiated the Trans-Texas Corridor plan? Governor Rick Perry. Acting on a promise he made to improve the state's transportation system, Perry sent the commission that oversees the Texas Department of Transportation (TxDOT) a letter in 2002, requesting that it take ninety Link Strategies LLC Confidential Document 113

days to develop a new highway plan. Less than five months later, TxDOT delivered the concept for the Trans-Texas Corridor. [Texas Monthly, 5/2004] Rep. Garnet Coleman Said the Trans-Texas Corridor was Perrys Pet Project. According to the Victoria Advocate, The Houston Democrat said that in informal conversations with other legislators others have indicated to him they are not enamored with the corridor plans. He added many of those same legislators are not willing to go on record because of what might happen to their own proposals. They are fearful that Gov. Rick Perry will take punitive action against their own legislative programs, [Garnet] Coleman said. This is the governor's pet project. This is TxDot's pet project. And that creates concern among the legislators about the legislative progress for their own districts. [Victoria Advocate, 5/6/05] Texas Farm Bureau President Kenneth Dierschke Criticized Perry for Vetoing Legislation That Would have Protected Property Owners When Land is Condemned Under Eminent Domain. According to Targeted News Service, The governor has expressed interest in the passage of Proposition 11, which stops the government from taking private property from one person to give to another for his personal gain. Texas Farm Bureau agrees that Proposition 11 is needed and is working hard for the passage of that constitutional protection, Dierschke said. Dierschke noted, however, that Perry vetoed legislation in the 80th legislative session that would have offered real protection to Texas property owners when land is condemned under eminent domain. And he refused to add reforms to the special session at the end of the 81st legislature. [Targeted News Service, 10/8/09] Texans for Kay Launched an Online Clock Counting the Time Until Rick Perry Answers the Question, Do You Still Support the Trans-Texas Corridor? According to the Transportation Blog, Today, Texans for Kay launched a new online clock counting the time until Rick Perry, himself, answers the question: Do you still support the Trans-Texas Corridor? Last Thursday, Rick Perry dodged the question, refused to answer and only said that he supports "building transportation infrastructure." However, for the thousands of Texans who faced the prospect of losing their homes at the hands of Rick Perry's unprecedented, government land grab, the answer to this question from Rick I asked TxDOT yesterday whether the demise of private contract authority means the TTC, under any name, is now truly dead. [Transportation Blog, 8/11/09] PERRYS FALSE CLAIMS THAT NO TAX DOLLARS SPENT ON THE TTC March 2005: Perry Said No Tax Dollars Would Be spend Up Front for the Construction of the Trans-Texas Corridor. According to US Fed News, The Trans Texas Corridor will allow needed roads to be built faster, and ultimately cheaper, without any tax dollars being expended up front for construction, Perry said. And beyond providing a new method to move people and goods faster, the Trans Texas Corridor is a huge jobs program that will put 140,000 Texans to work as we build the first six segments. [US Fed News, 3/11/05] June 2005: Rick Perry Said the Trans-Texas Corridor Would be Built At No Cost to Taxpayers. According to The Houston Chronicle, Although the company, Cintra-Zachry, and Texas Department of Transportation officials say the loan would be legal and would benefit Texans, critics of the $ 7.2 billion Trans-Texas Corridor project note Gov. Rick Perry said it would be built at no cost to taxpayers. [The Houston Chronicle, 6/24/05] June 2005: Cintra-Zachry Statement Said the Company Planned to Use a Federal Loan from Day One. According to The Houston Chronicle, A Cintra-Zachry statement says the company has planned to use a federal loan from day one and describes such a loan as part of a broader array of financing to overcome gridlock on Texas roadways and get drivers and goods moving again. Cintra-Zachry and TxDOT spokeswoman Gaby Garcia noted that the Texas Transportation Commission approved an order Dec. 16 allowing Trans-Texas Corridor projects to be funded under appropriate circumstances with money provided under the federal Link Strategies LLC Confidential Document 114

Transportation Infrastructure Finance and Innovation Act of 1998. [The Houston Chronicle, 6/24/05] Headline: Critics see loan as broken vow in Central Texas toll corridor project [The Houston Chronicle, 6/24/05]

TRANS-TEXAS CORRIDOR COSTS Perrys Trans-Texas Corridor Costs Estimated Between $145.2 Billion and $183.5 Billion. According to Texas Construction, At the urging of Gov. Rick Perry, the Texas Transportation Commission -- TxDOT's governing body -- has given its blessing to the basic design of the Trans Texas Corridor, a statewide 4,000-mile multi-use transportation system. The corridor will include separate lanes for passenger vehicles and trucks, six rail lines (three in each direction for high-speed passenger rail as well as commuter and freight rail) and a dedicated utility zone for water lines, petroleum pipelines, electricity and data. It is designed to be up to 1,200 ft. wide in certain areas. At today's construction costs, experts estimate the total price of building the corridor between $ 145.2 billion to $ 183.5 billion. [Texas Construction, 9/2002] The Trans-Texas Corridor Cost Over $15 Million from Environmental Studies and Planning Documents. According to The Associated Press State & Local Wire, The Texas Department of Transportation is closing the books on the unpopular Trans-Texas Corridor project, which has already cost the state millions of dollars to gather up plans, hold public meetings and conduct environmental studies. The department has already spent over $15 million on environmental studies and planning documents associated with the I-35 corridor, and the cost will go higher as the cancellation process grinds to a halt, officials said. [The Associated Press State & Local Wire, 10/7/09] TxDOT Spent an Estimated $7 Million to $9 Million on an Advertising Campaign to Promote Toll Roads and the Trans-Texas Corridor. According to the San Antonio Express-News, Texans Uniting for Reform and Freedom, or TURF, contends in its lawsuit that TxDOT officials violated a ban on lobbying and on using their authority for political purposes. The lawsuit was sparked by the agency's estimated $7 million to $9 million Keep Texas Moving campaign to promote toll roads and the proposed highway network, both championed by Perry, who appoints the Transportation Commission. The lawsuit also was fueled by agency efforts to get more state tolling authority from the federal government. Backers of the corridor and tolls say they're necessary in the face of congestion and insufficient gas-tax revenues. Critics have blasted the potential corridor route and the state's partnering with private firms to run toll roads, which lawmakers sought to rein in last year. [San Antonio Express-News, 1/24/08] TRANS-TEXAS CORRIDOR PRIVATIZATION March 11, 2005: Perry Announced that TxDOT and the Cintra-Zachry Consortium Signed a Development Agreement for the Trans-Texas Corridor. According to US Fed News, Gov. Rick Perry today announced that the Texas Department of Transportation (TxDOT) and the Cintra-Zachry consortium have signed a comprehensive development agreement to begin planning for construction of the first segment of the Trans Texas Corridor, which will parallel Interstate 35 from San Antonio to Oklahoma.This development agreement is a significant step toward a better, more reliable transportation system that will move commuters and cargo faster and more safely, and create greater economic opportunities for our families and employers, Perry said. In Texas, we're not waiting on others to lead or innovate, and we're not going to accept a future marred by gridlock and growing pollution problems. [US Fed News, 3/11/05] Spanish-Led Consortium Chosen to Build the Trans-Texas Corridor Seeking a $320 Million LowInterest Federal Loan for the Job. According to The Houston Chronicle, A Spanish-led consortium, chosen by state highway officials to privately develop a toll road through Central Texas and operate it for Link Strategies LLC Confidential Document 115

profit for 50 years, is seeking a $ 320 million low-interest federal loan for part of the job. [The Houston Chronicle, 6/24/05] The Trans Texas Corridor Would have Allowed Private Developers to Build, Own, and Operate Many of the Toll ways that Diverted Traffic from Existing Highways. According to The Bond Buyer, Proposed in 2002 by Gov. Rick Perry as a $150 billion network of rail lines and tollways, the TTC became a symbol to some legislators of what they saw as TxDOT's excessive power. Under the scenarios envisioned by Perry and the late Texas Transportation Commission chairman Ric Williamson, private developers would build, own, and operate many of the tollways that would divert commercial traffic from existing highways between Texas' southern and northern borders. [The Bond Buyer, 1/7/09] TRANS-TEXAS CORRIDOR OPPOSITION AND SCANDALS Several Busloads of Residents from Wharton and Fayette Counties Organized a Protest Rally in Austin to Oppose the Trans-Texas Corridor. According to the Victoria Advocate, Supporters of a bill asking for a moratorium on the Trans-Texas Corridor are doubtful the bill will get out of committee, but are hopeful they can still stop the project in the long run. The supporters of House Bill 3363 were part of the organizers of a protest rally Tuesday on the south steps of the State Capitol building. Several busloads of supporters of HB 3363 from Wharton and Fayette counties were among those at the rally. I don't think it will, said Arnold Rohmberg, a La Grange resident who helped organize the buses from Fayette County. [Victoria Advocate, 5/6/05] 20 Counties Passed Resolutions Opposing the Trans-Texas Corridor. According to the Victoria Advocate, But I also don't think the effort to stop the corridor is going to fall apart, he said. It has been slowly building up and now over 20 counties have passed resolutions opposing the Trans-Texas Corridor. So they are on record and they are people with good memories. [Victoria Advocate, 5/6/05] TxDOT Hired Four Federal Lobbyists and One State Lobbyist to Push for the Trans Texas Corridor Even Though Its Illegal for Agencies to Hire Lobbyists. According to the Bulverde Standard, TURF Attorney Charles Riley showed the court TxDOT hired 4 federal lobbyists (Chad Bradley, Drew Maloney, Garry Mauro, Billy Moore) and one state lobbyist with Alliance for I-69, Gary Bushell, to lobby elected officials and solicit them in selling the public on the controversial Trans Texas Corridor TTC-69 privatized toll project. TURF uncovered detailed logs showing a concerted campaign to lobby politicians, particularly newly elected officials (http://www.texasturf.org/images/stories/pdf/legal/Email_mtgs-with-electeds.pdf), which is a BIG no-no for a state agency that must remain apolitical. Bushell personally lobbied more than two-dozen elected officials in the path of TTC-69 prior to the Town Hall meetings. [Bulverde Standard, 3/26/08] Travis County District Attorneys Office Investigated a Complaint that TxDOT Illegally Lobbied and Promoted Toll Roads. According to the San Antonio Express-News, Also Monday, Assistant District Attorney Beverly Mathews of the Travis County District Attorney's office said the office is investigating a complaint that TxDOT illegally lobbied and promoted toll roads. We have opened an investigation, Mathews said, declining to give details. Terri Hall of Texans Uniting for Reform and Freedom, which filed a civil lawsuit on the issue last year, said it's about time. [San Antonio Express-News, 2/5/08] State Senate Committee Chairman Said TxDOT May Have Broken the Law Due to Their Lobbying Efforts of the Trans-Texas Corridor. According to the San Antonio Express-News, A state Senate committee chairman said Wednesday the Texas Department of Transportation may have stepped over a legal line as it pushes the controversial Trans-Texas Corridor and toll roads. There is a possibility they may well have crossed a legal threshold because of the restrictions that exist in lobbying by state agencies, said Sen. John Carona, Transportation and Homeland Security Committee chairman. The even greater issue is just why they would continue with an agenda that is so unpopular with the public. That is the most distressing thing of all, Link Strategies LLC Confidential Document 116

Carona, R-Dallas, said after an anti-toll activist group released documents obtained from TxDOT in an ongoing lawsuit against agency officials. [San Antonio Express-News, 1/24/08] Opponents of the Trans-Texas Corridor Attended Town Hall Events and Passed out Fliers Calling for the Abolition of TxDOT and the impeachment of Gov. Rick Perry. According to The Eagle, Cummings expressed a fear that many speakers shared about the Trans-Texas Corridor -- that the highway's construction would either run straight through their land or bring unwanted traffic and pollution. Many of the attendees wore stickers and T-shirts proclaiming their opposition to the highway construction, and flyers were passed out calling for the abolition of TxDOT and the impeachment of Gov. Rick Perry. [The Eagle, 3/4/08] TRANS TEXAS CORRIDOR AND EMINENT DOMAIN The Trans-Texas Corridor Would Have Required the Government to Seize Nearly 600,000 Acres of Private Land. According to the Transportation Blog, KBH issued a statement today on the upcoming TxDOT announcement: In another election-driven, hyper-political move, Rick Perry's Texas Department of Transportation (TxDOT) is claiming that they will officially kill the Trans-Texas Corridor (TTC), which would have required the government to seize nearly 600,000 acres of private land and leased our highways to a foreign company. [Transportation Blog, 10/6/09] HPV VACCINE SCANDAL Perry Sidestepped Legislative Opposition and Ordered HPV Vaccination for Schoolgirls. According to the Houston Chronicle, Gov. Rick Perry signed an order today making Texas the first state to require that schoolgirls be vaccinated against the sexually transmitted virus that causes cervical cancer. By issuing an executive order, Perry apparently sidesteps opposition in the Legislature from conservatives and parents' rights groups who fear such a requirement would condone premarital sex and interfere with the way parents raise their children. [Houston Chronicle, 2/2/07] Perry had Ties to HPV Vaccine Company Merck and Received Campaign Donations from Mercks PAC. According to the Houston Chronicle, Merck is bankrolling efforts to pass state laws across the country mandating Gardasil for girls as young as 11 or 12. It doubled its lobbying budget in Texas and has funneled money through Women in Government, an advocacy group made up of female state legislators around the country. Perry has several ties to Merck and Women in Government. One of the drug company's three lobbyists in Texas is Mike Toomey, Perry's former chief of staff. His current chief of staff's mother-in-law, Texas Republican state Rep. Dianne White Delisi, is a state director for Women in Government. Perry also received $6,000 from Merck's political action committee during his re-election campaign. [Houston Chronicle, 2/2/07] Burnt Orange Report: Perry Didnt do this for Texas Girls; He did it for the Special Interest and Lobbyists. According to the Burnt Orange Report, If indeed this decision is not about politics, as Chris Bell claims, then why allow Merck to manage the distribution of the drug? This company, which some on BOR have already pointed out, contains strong ties to Perry's administration. Such strong ties in fact, and as the Houston Chronicle has pointed out, that former chief of staff Mike Toomey is a top lobbyist for the company. Of course this decision comes easy to Perry when Merck deposits a bit of cash in the ole' PAC war chest, right? Perry didn't do this for Texas girls; he did it for the special interest and lobbyists who run state government. It makes his decision hollow. [Burnt Orange Report, 2/7/07] Perry Criticized for Backroom Deals, Burying News on HPV Vaccine. According to the Burnt Orange Report, The HPV controversy is just the latest in a series of moves that have some wondering if the time has come for legal authorities to investigate Mr. Perry's many apparent backroom deals. For example, if the public policy behind these proposed vaccinations is so sound, why try to bury the news? After all, Mr. Perry has not been shy about claiming credit for other self-described bold initiatives to improve women's health. As the respected online political newsletter Quorum Report put it, one consensus is Link Strategies LLC Confidential Document 117

that his method of delivering the news about the Executive Order says pretty much all that needs to be said about the quality of the public policy behind Rick Perry's mandate. Instead, the Governor's move has all the earmarks of the kind of insider deals we have come to expect from him, right down to the involvement of his best friend, former chief of staff, and most trusted adviser, Mike Toomey. Mr. Toomey has long been Merck's chief Texas lobbyist and, since 1996, the executor of Rick Perry's blind trust. So the two old friends are financial partners in a very real sense. And it looks like they may have found another get-rich-quick scheme. [Burnt Orange Report, 2/12/07] Perry Gave Executive Order Requiring All Girls Entering 6th Grade to Receive HPV Vaccine. According to the University Wire, IT'S PROBABLY a safe bet that in the minds of most people, sex education for middle school girls does not include supporting promiscuity. This certainly would not be the expectation for a conservative state like Texas. To the shock of many, though, Governor Rick Perry (RTX) did exactly that on February 2nd, with an executive order requiring all girls entering sixth grade at public schools to have received the Gardasil vaccine. Gardasil immunizes recipients against some forms of HPV (Human Papillomavirus), a sexually transmitted disease that can cause cervical cancer. Perry and other advocates of mandating the vaccine focus on the serious effects of cervical cancer. But they ignore the fact that HPV is transmitted exclusively through sexual contact, and end up imposing an unnecessary burden on families that does nothing to protect their daughters' well-being. [University Wire, 2/15/07] Perrys Former Chief of Staff Was a Lobbyist for Company that Made Gardasil, the HPV Vaccine. According to the University Wire, After the announcement of Perry's executive order, the Houston Chronicle published some rather interesting information on the activities of Merck & Co. Merck is the manufacturer of Gardasil, the only HPV vaccine currently approved by the Food and Drug Administration. Rick Perry's former chief of staff, Mike Toomey, currently works for Merck as one of its three lobbyists in Texas. The governor's current chief of staff also has family ties to a group called Women in Government, which receives funding from Merck. These connections do not prove any wrongdoing, but it is hard not to see them as signs of shady dealings. The Chronicle also reported that Gardasil costs $360, making it the most expensive vaccine ever mandated. Gardasil will be unaffordable for some families, but if the vaccine becomes required by many states, Merck will make billions of dollars. [University Wire, 2/15/07] Perrys HPV Executive Order Had the Stench of Cronyism. According to the Dallas Observer, Perry's approval numbers continued their downward slide, particularly after making national headlines in February 2007 when he signed an executive order requiring girls entering the sixth grade to be vaccinated for HPV, the most common sexually transmitted disease. Some conservatives began to question his commitment to the cause: Here was big government as big brother, mandating personal decisions better left to parent, child and doctor. And the whole matter had the stench of cronyism after the media revealed that Mike Toomey, Perry's former chief of staff, worked as a lobbyist for Merck & Co., the drug manufacturer that sold Gardasil, the brand name of the vaccine. Merck's political action committee had also donated $6,000 to Perry's reelection campaign. [Dallas Observer, 11/19/09] Merck Stood to Make Millions from Perrys Executive Order. According to an editorial in the Austin American Statesman, Perry's executive order directing the Health and Human Services Commission to draw up rules requiring HPV vaccinations carries political, as well as medical, social and religious, baggage. The HPV vaccine, Gardasil, is made by Merck & Co. and its lobbyist is former Perry chief of staff Mike Toomey. Merck contributed $6,000 to Perry and $38,000 to legislative leaders last year, a connection that vaccination opponents have seized upon. Merck stands to make millions of dollars as Gardasil becomes a mandatory vaccination in Texas and billions if other states follow Texas' lead. A three-dose regimen costs $360 and Perry set aside $29 million so uninsured girls and women will have access to the vaccine. [Austin American Statesman, 2/6/07] TEXAS STATE SCHOOLS FOR THE MENTALLY RETARDED

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Texas system of State Schools for the Mentally Retarded has faced tough criticism and serious investigations into abuse and neglect of their delicate residents during Rick Perrys tenure as governor. The allegations that have faced the 13 schools include everything from a fight club-style incident caught on a cell phone video camera, to forced sexual acts and humiliating punishments. Despite being aware of these claims as early as four years ago, Perry did little to address the consistent horrific abuse and neglect that was occurring in the places so many vulnerable Texans call home. Perry Named Glenda Kane to Texas Department of Mental Health and Mental Retardation Board. According to the Corpus Christi Caller-Times, Thirty-five years ago, Glenda Kane was a volunteer at the Austin State School when she left to begin her family. She promised the director she would be back to help. As the newest member of the Texas Department of Mental Health and Mental Retardation board of directors, Kane will keep her promise Gov. Rick Perry announced Kane's appointment to the ninemember state board Wednesday. She will serve until Jan. 21, 2005. Kane is the first person from Corpus Christi to serve on the board since Mary Butt, the wife of supermarket chain founder H.E. Butt. Mary Butt was appointed to the governing board in 1955 and served for 30 years before being named a member emeritus, an honor never before granted to a member of any state board in Texas. [Corpus Christi Caller-Times, 7/25/02] Abuse, Neglect, and Humiliation were Common at Texas State Schools. According to the San Antonio Express-News, Abuse, neglect and humiliation are a common occurrence for hundreds of mentally retarded children and adults living in Texas' state schools, employee disciplinary records show. With disturbing regularity, employees pushed, hit, kicked, knocked down and dragged residents. One of the worst cases occurred in December 2005, when a caretaker at Brenham State School hit or kicked a resident hard enough to crack three ribs and lacerate the person's liver. Workers also frequently neglected their frail charges, in some cases allowing them to eat cigarette butts, scald themselves or be sexually abused by other residents. [San Antonio Express-News, 7/24/07] Investigators Confirmed Nearly 300 Cases of Abuse and Neglect Over Two Years. According to the San Antonio Express-News, Officials with the Department of Aging and Disability Services say outside investigators confirmed nearly 300 cases of abuse and neglect during each of the past two fiscal years. But they maintain that the majority of direct-care workers do a good job. Most of the people who work in these state schools are there because they truly enjoy serving the population that we serve, and they are dedicated to a good life for the residents who live in our state schools, said Cecilia Fedorov, a spokeswoman for the department. [San Antonio Express-News, 7/24/07] Perry Spokeswoman Said the Events Had Been Dealt with Swiftly and Decisively. According to the San Antonio Express-News, A spokeswoman for Gov. Rick Perry, meanwhile, decried the abuses but defended the agency's handling of them. There's no excuse for the reports but these events have been dealt with swiftly and decisively, said spokeswoman Krista Moody. [San Antonio Express-News, 7/24/07] Perry Spokeswoman Said it was Important not to Sensationalize Incidents. According to the Dallas Morning News, Perry spokeswoman Krista Moody said the governor stands by disability services agency Commissioner Addie Horn, who addresses each case decisively and quickly. It's important not to sensationalize these incidents, Ms. Moody said, noting that the Department of Aging and Disability Services didn't become responsible for the state schools until 2004. They should not be portrayed as though they happened yesterday, and no action has been taken. [Dallas Morning News, 7/24/07] More than 800 Employees of State Schools Were Fired or Suspended for Abusing Patients. According to the Associated Press, More than 800 employees at Texas' 13 large facilities for the mentally and developmentally disabled have been suspended or fired for abusing patients since fiscal year 2004, state officials said Tuesday. In response to an open records request from The Associated Press, the Department of Aging and Disability Services said that 239 employees were fired or suspended Link Strategies LLC Confidential Document 119

in fiscal year 2007 for the abuse, neglect or exploitation of residents. There were 200 such disciplinary actions in 2006, 203 in 2005 and 180 in 2004, according to state records. The breakdown by school was unavailable. The 13 state schools and centers combined have about 12,000 full-time employees. [Associated Press, 4/18/08] Hutchison Campaign Manager Criticized Perrys Handling of State Schools. According to the Trail Blazers Blog, Looks like gubernatorial hopeful Kay Bailey Hutchison is getting in on the state school action. In a press release this afternoon, Texans for Kay Campaign Manager Rick Wiley lashed out at Gov. Rick Perry's handling of the state schools for people with disabilities The fight clubs that took place at one of Texas' state schools are a sad chapter in Texas history and further proof of Rick Perry's failed leadership as governor of this state, Wiley says. He goes on to contend that Perry knew the U.S. Justice Department was investigating allegations of abuse in state schools more than four years ago -and has done little since. Since then, the problem has only gotten worse and Perry has done nothing to address it, Wiley said. All Texans deserve better than this appalling failure of leadership, but specifically those who are the most vulnerable among us. [Trail Blazers, 5/12/09] Knight Security Systems Won $12 Million Contract for Video Surveillance in State Schools. According to the Dallas Morning News, Dallas-based Knight Security Systems has won a $12 million contract to install a network of about 3,200 high-definition video surveillance camera systems at 12 state schools for the disabled. The contract makes Knight the state's third largest security firm and means the 35-employee company will hire six people in Dallas and Austin this year, said president Phil Lake. It's the largest single contract in the company's 27-year historyThe video cameras were mandated in a $48 million bill signed last summer by Gov. Rick Perry to improve safety and conditions at state schools for the disabled, said Cecilia Fedorov, a spokeswoman for the Texas Department of Aging and Disability Services, which oversees the state schools. Funding comes from the state supplemental appropriations bill signed in June, she said. [Dallas Morning News, 1/18/10] FELONS WORKED IN SCHOOLS Check Revealed 36 Felons Worked in State Facilities for the Mentally Disabled. According to the Dallas Morning News, FBI fingerprint checks have revealed that 36 felons worked as recently as late last year in state facilities for the mentally disabled, despite past offenses ranging from terroristic threats to second-degree murder. The disclosure that some sex offenders and robbers slipped through previous background checks and worked as caregivers to some of the most vulnerable Texans is alarming, House members said Tuesday. Cecelia Federov, a department spokeswoman, said 23 of the 36 employees with felony convictions have resigned or been terminated. Seven are under review by the agency, which is trying to verify what happened in their criminal cases and determine appropriate personnel action, she said. [Dallas Morning News, 3/24/10] 36 State School Employees Were Arrested for Felonies Ranging from Indecent Exposure to Aggravated Assault, Child Rape and Murder. According to the Houston Chronicle, Criminal fingerprint checks show at least 36 employees continued to work on the state payroll while caring for the mentally disabled - despite being arrested for felonies ranging from indecent exposure to aggravated assault, child rape and murder. Of those 36 with arrests, 17 had felony convictions and the remaining 19 still face trial, according to Texas Department of Aging and Disability Services records released to the Houston Chronicle Monday. The release of the records, first requested six weeks ago, came on the eve of a House committee meeting today in which lawmakers will discuss for the first time what improvements have been made regarding care at the facilities in the wake of last year's shocking fight club incident in Corpus Christi. [Houston Chronicle, 3/23/10] ABILENE STATE SCHOOL Employee at Abilene State School Verbally Abused a Resident. According to the San Antonio Express-News, In 2003, an employee with a documented history of abuse at the Abilene State School Link Strategies LLC Confidential Document 120

verbally abused a resident, repeatedly yelling expletives at him and calling him lazy. He was merely demoted. The verbal abuse seemed to have an impact on the resident, who was overheard saying that the employee was mad at me and now my life is over. [San Antonio Express-News, 7/24/07] Abilene Aide Ignored Resident Who was Later Found Naked in Trash Bin. According to the Dallas Morning News, Documents released by all but three of the 12 state schools operated by the state Department of Aging and Disability Services outline everything from horrific physical violence and neglect to frightening verbal threats, derogatory slurs and pranks. In a 2000 incident at the Abilene State School, an aide ignored a resident who was found hours later in a trash bin, naked. [Dallas Morning News, 7/24/07] Abilene State School Cited for Seven Deficiencies. According to the Abilene Reporter-News, The Abilene State School was cited for seven deficiencies in a recent statewide report on Texas state schools. The report was cited by the U.S. Department of Justice in a 62-page letter to Gov. Rick Perry this week. The deficiencies in federal standards found in Abilene in April by the Centers for Medicare and Medicaid Services included failure to provide treatment, failure to provide consistent client training, failure to review and revise individual program plans, failure to provide a clean environment and failure to provide client health-care services. [Abilene Reporter-News, 12/4/08] 74 Abilene School Employees Were Suspended or Terminated Since 2004 for Abusing, Neglecting or Exploiting Clients. According to the Abilene Reporter-News, Since fiscal year 2004, 74 school employees in Abilene have been suspended or terminated for abusing, neglecting or exploiting clients, according to information provided earlier from the Texas Department of Aging and Disability Services. And statewide, more than 800 employees at the 13 large facilities for the mentally and developmentally disabled have been suspended or fired for abusing patients from the same time period, which was first reported by The Associated Press in April. On May 5, a former Abilene State School employee, Benjamin Kershaw, 30, was found guilty of using a hair dryer to burn the face of a resident on the facility's campus. [Abilene Reporter-News, 12/4/08] Perry Signed Bill to Place Security Cameras in Abilene State School. According to the Abilene Reporter-News, The Abilene State Supported Living Center, formerly the Abilene State School, will soon have about 300 high-definition cameras installed, according to Laura Albrecht, spokeswoman for the Texas Department of Aging and Disabilities. Albrecht said the move is the result of a bill signed into law by Gov. Rick Perry in 2009 to install cameras in 12 facilities in Texas after allegations that some employees at a similar facility in Corpus Christi had a fight club, in which residents were forced to fight one another. The measure provides $12 million for cameras to be placed inside the buildings. According to Albrecht, the cameras will not be placed where they would be seen as intrusive, such as in bedrooms or bathrooms. [Abilene Reporter-News, 1/20/10] AUSTIN STATE SCHOOL Resident Critically Injured when he was Sexually Assaulted by Another Resident at the Austin State School. According to the Austin American-Statesman, The U.S. Department of Justice has launched a formal investigation into possible civil rights violations at 11 of Texas' 13 state schools for mentally disabled people amid allegations of questionable conditions, state officials said FridayThe investigation will include the Austin State School, where last month a man with mental retardation was critically injured when he was sexually assaulted by another resident, police said. [Austin AmericanStatesman, 8/23/08] Austin State School Was Severely Understaffed. According to the Austin American-Statesman, Meanwhile, Austin State School is severely understaffed, Mcafee said. Staffers are so busy that they don't see residents falling down or hurting each other, he said. Some residents wander out when staffers aren't looking, he said. Employees are sometimes injured because they don't have help controlling clients when they become violent, Mcafee added In December 2007, a female resident at Austin State Link Strategies LLC Confidential Document 121

School - who was supposed to receive regular psychological counseling but did not - attacked her sleeping roommate and tore her eyelid, according to documents provided by the Department of Aging and Disability Services before the federal report was issued. [Austin American-Statesman, 12/3/08] Girl Died of Accidental Strangulation at Austin State School in the 1970s. According to a Letter to the Editor by Sue Bumpous in the Austin American-Statesman, Although the recent investigation of the Lubbock State School situation and U.S. Department of Justice report might be new, the situation definitely is not. My sister died of accidental strangulation from neglect at the Austin State School when she was 15, in the early 1970s. She was tied to the toilet by the laces at the back of her nightgown and left there. [Austin American-Statesman, 12/11/08] BRENHAM STATE SCHOOL Nurse Assistant Kicked and Punched Brenham Resident, Fracturing Three Ribs and Puncturing the Residents Liver. According to the Dallas Morning News, Documents released by all but three of the 12 state schools operated by the state Department of Aging and Disability Services outline everything from horrific physical violence and neglect to frightening verbal threats, derogatory slurs and pranksIn one 2006 case at the Brenham State School, a nurse assistant kicked and punched a mentally retarded resident on the bathroom floor, fracturing three ribs and puncturing the resident's liver. [Dallas Morning News, 7/24/07] CORPUS CHRISTI STATE SCHOOL Employees of Corpus Christi State School Forced Residents into Fight Club-Style Battles while Recording with Cell Phone Cameras. According to the Dallas Morning News, Gov. Rick Perry suspended admissions to the Corpus Christi State School on Tuesday after police allegations that profoundly disabled residents had been forced into fight club-style battles by the employees hired to care for them. Authorities say vivid video footage captured on cellphone cameras shows staffers goading young mentally disabled male residents of the institution into physical altercations, then shoving them at each other until fights ensued. The investigation into the 11 current or former state school employees identified in the videos is continuing, and police say it's not clear whether they were betting on the outcome of fights or uploading them to the Internet. While the video indicates some residents were hurt in the fights, none sustained serious injuries. Officials would not say how many residents were involved. [Dallas Morning News, 3/11/09] Perry Aide Said a Security Guard Would Patrol Corpus Christi State School. According to the Corpus Christi Caller-Times, A high-level aide to Gov. Rick Perry said a security guard soon will patrol the Corpus Christi State School and that anyone caught abusing residents will face prosecution. Jay Kimbrough, chief of staff to Perry, said the guard will have authority to do surprise inspections at the facility. One guard will be on duty at all hours, he said. [Corpus Christi Caller-Times, 3/12/09] Perry Ordered Emergency Legislation to Clean up State Schools. According to the Trail Blazers Blog, This session, after two years worth of media reports on conditions in the state schools, Perry ordered emergency legislation to clean up the institutions. His decision coincided with reports of a fight club at the Corpus Christi State School, and followed allegations of widespread institutional abuse. That legislation has passed the Senate and awaits a vote in the House. Gov. Perry said today that the Corpus Christi fight club videos, captured on an employee's cell phone camera, show reprehensible acts.Those that engaged in that conduct will have the heft of our law put upon them, he said. [Trail Blazers, 5/12/09] DENTON STATE SCHOOL

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Denton Facility Was Under Review, Dozens of Families Reported Allegations of Abuse and Neglect. According to the Dallas Morning News, Gov. Rick Perry's office confirmed Wednesday that the Denton facility is under review by the department's civil rights division, and officials at the agency that oversees the state schools said they'd cooperate fully with the investigation. We welcome the scrutiny, said Laura Albrecht, a spokeswoman with the Department of Aging and Disability Services. Randy Spence, superintendent of the Denton State School, directed all calls to the department. The Denton State School, home to 600 people with physical and mental disabilities, has made headlines since 2002, when an employee punched, kicked and slammed a resident to the brink of death while coming down from a drug-induced rage. Since then, dozens of family members have spoken out and reported allegations of abuse and neglect at the facility. [Dallas Morning News, 3/27/08] LUBBOCK STATE SCHOOL Residents at Lubbock State School were Neglected and Abused by Caretakers. According to the Dallas Morning News, As the state grapples with widespread abuse of juvenile prisoners, a lawmaker is calling for an investigation into the Lubbock State School, where federal investigators found profoundly mentally retarded and helpless residents neglected and abused by their caretakers The Lubbock school's failure to protect residents from harm stems from inadequate supervision, the failure to appropriately detect and prevent abuse and neglect, and an inadequate incident management system, the report notes. Consequently, residents are exposed to significant harm. [Dallas Morning News, 3/23/07] More than 17 Residents Died at Lubbock School Since 2005. According to the Dallas Morning News, The Department of Justice's Civil Rights division, which sent investigators to the Lubbock State School in 2005, is still negotiating with state officials to resolve the breaches at that facility. The report the investigators released in December described a severely understaffed facility where residents were improperly restrained and sedated, and given insufficient medical care. Since June 2005, more than 17 residents have died. In one cited case, employees found a woman unresponsive but failed to perform CPR or call for help for a half-hour. Paramedics determined she had been dead for hours because rigor mortis had already set in. Employees had falsified reports to indicate someone had checked on the woman. [Dallas Morning News, 7/24/07] LUFKIN STATE SCHOOL Lufkin State School Aide Struck Resident with Plastic Cup, Causing 1 1/2 -Inch Cut. According to the Houston Chronicle, Abuse, neglect and humiliation are a stark reality for hundreds of mentally retarded children and adults living in Texas' state schools, employee disciplinary records showThe records show instances in which abusive employees were allowed to remain on the job, working with the same vulnerable population. An aide at Lufkin State School who struck a resident on the head with a plastic cup, causing a 1 1/2 -inch cut, was reassigned so he would not have contact with that resident. Employees who slapped, twisted arms and knocked residents to the floor were routinely given short suspensions. [Houston Chronicle, 7/24/07] Employee at Lufkin State School Forced Resident to Walk Around with Sock Stuffed in her Mouth. According to the Dallas Morning News, Hundreds of residents at Texas' state schools for the mentally retarded have suffered serious abuse and neglect at the hands of those paid to watch over them, a Dallas Morning News review shows At the Lufkin State School in 2000, an employee left a plastic thermometer cover in a resident's rectum In 2003, an employee at the Lufkin State School forced a resident to walk around the facility with socks stuffed in her mouth as punishment. [Dallas Morning News, 7/24/07] 10-Year-Old Lufkin Resident Rushed to Hospital After he was Given an Overdose of Insulin. According to the Houston Chronicle, Less than a week after entering the Lufkin State School for the mentally disabled, 10-year-old Miguel Favela was in an ambulance speeding toward Houston, near death Link Strategies LLC Confidential Document 123

from an overdose of insulin given to him by the medical staff. Miguel survived. But his life-threatening ordeal - like others - will resonate in the Legislature as lawmakers contend with fixing or even closing state schools, home to thousands of developmentally disabled adults and children. [Houston Chronicle, 2/10/09] MEXIA STATE SCHOOL 15-Year-Old Died at Mexia State School After Being Improperly Restrained. According to the Houston Chronicle, The state's system for the mentally retarded stopped using a six-point restraint board on its residents after a 15-year-old boy died when three Mexia State School employees improperly restrained him, officials confirmed Tuesday. [Houston Chronicle, 4/4/07] RICHMOND STATE SCHOOL Aide Laughed at Residents Reactions to Eating Hot Jalapeo Peppers and Refused them Water. According to the San Antonio Express-News, At the Richmond State School, an aide in January 2001 fed hot jalapeo peppers to several female residents or allowed them to eat them, and then laughed at their reactions while refusing them water. [San Antonio Express-News, 7/24/07] RIO GRANDE STATE CENTER 10 Deficiencies Found at Rio Grande State Center. According to the Valley Morning Star, Residents at Rio Grande State Center and 12 other state schools for the mentally disabled have been neglected and abused, received substandard medical care, and the conditions at these facilities have violated residents' rights, according to a recent federal investigationAt Rio Grande State Center, an 85-bed residential facility that also includes 55 beds for mental health treatment, federal investigators have found several violations, according to the letter. In a 2007 inspection, the Centers for Medicare and Medicaid Services found 10 deficiencies, including failure to ensure clients' rights were protected, failure to secure nursing services and failure to ensure that allegations of abuse or mistreatment were reported. In a 2008 inspection, CMS found one deficiency. [Valley Morning Star, 12/10/08] SAN ANGELO STATE SCHOOL San Angelo State School Had Repeatedly Violated Federal Standards. According to the Dallas Morning News, And a Medicaid recertification report released last month indicates the San Angelo State School has repeatedly violated federal standards in its care of the mentally retarded. An investigative team that visited the 300-bed facility found everything from rotting food and broken furniture to improper staff restraints, overmedication and underfeeding. [Dallas Morning News, 4/6/07] Employees at San Angelo State School Threw a Resident into a Pool While Wearing a Restraining Jacket. According to the San Antonio Express-News, Abuse, neglect and humiliation are a common occurrence for hundreds of mentally retarded children and adults living in Texas' state schools, employee disciplinary records showIn the summer of 2004, two employees at the San Angelo State School were fired for throwing a resident who was wearing a restraining jacket into a swimming pool. The resident sank to the bottom when the life vest, which had been placed over the restraining jacket, came undone. Two fellow residents managed to pull the victim safely to the side of the pool. Four years earlier at the same school, an employee was given a three-day suspension for hitting a resident on his helmet and in the face and kicking him in the legs. [San Antonio Express-News, 7/24/07] San Angelo Employees Removed Female Residents Shirt, Threw her on a Bed. According to the Dallas Morning News, Hundreds of residents at Texas' state schools for the mentally retarded have suffered serious abuse and neglect at the hands of those paid to watch over them, a Dallas Morning News review shows At the San Angelo State School in 2003, two employees removed the shirt of a Link Strategies LLC Confidential Document 124

female resident and threw her on the bed, slammed her against the wall and taunted her about her past sexual abuse... At the San Angelo State School in 2004, a group of staff members discussed sexual activity in front of residents, encouraging the residents to look at and touch other residents' genitalia. [Dallas Morning News, 7/24/07] San Angelo Resident Beat Up Another Resident at the Urging of a Staff Member. According to the Associated Press, Last summer, a female resident at the San Angelo State School, beat up another female resident at the urging of a staff member. The attacker told investigators she was afraid she would be punished if she refused. [AP, 3/12/09] SAN ANTONIO STATE SCHOOL San Antonio State School Employee Forced a Male Resident to Perform a Sex Act on Another Male Resident. According to the San Antonio Express-News, An employee at the San Antonio State School was fired in December after he forced a male resident with mental retardation to perform a sex act on a male resident who also had mental disabilities, according to a state investigation. The Department of Aging and Disability Services, the agency that oversees Texas' 13 state schools, substantiated the allegations against the employee, who had been hired on a probationary basis in August 2008. [San Antonio Express-News, 3/26/09] TEXAS YOUTH COMMISSION In early 2007, a scandal broke loose involving the Texas Youth Commission and the juvenile lockups that they oversee. The caretakers and guards of the young offenders were sexually assaulting them, taking them out of class and waking them up from late-night-closed-door visits. The events had been happening for years. Many of those committing these acts were hardly punished and their acts covered up by superiors and managers. A Texas Rangers investigation into the abuse resulted in slow reactions and little action by a West Texas District Attorney. When the attorney wouldnt prosecute, Texas Ranger Sgt. Brian Burzynski wrote the Governors office to seek their assistance. Perrys staff received the email regarding sexual abuse at one of the juvenile lockups just a few weeks before the November election in 2006. The staffer, Alfonso Royal, who received the information supposedly did not inform Perry of the graphic reports. When the story broke in February of 2007, Perry claimed to find out via an article in the Dallas Morning News. Not only did Royal not receive any sort of punishment for not making the Governor aware of the situation, but he was promoted. In March of 2008, just over a year after the scandal became public, Royal was promoted to Chief of Staff of the Texas Youth Commission with a salary increase of more than $30,000. The Austin American-Statesman called this appointment odd, and rightly so. A little over a year after hardly acknowledging a large scandal in the agency and spending little to no time helping to solve the crisis, Alfonso Royal found himself looking after the young offenders he once avoided helping. But this appointment was just one of the many Perrys appointments within and surrounding the Texas Youth Commission that were based on friendships, not qualifications and eventually went sour. Perry appointed Jay Kimbrough, his former Deputy Chief of Staff, to help clean up the TYC immediately after the scandal broke, Kimbrough is now serving as his Chief of Staff. Cherie Townsend, a former employee, was appointed by Perry to be the Executive Commissioner of the TYC. In a more recent TYC scandal, Catherine Evans was the Independent Ombudsman of the TYC when she smuggled a knife, cell phone and prescription drugs into one of the facilities. Perry had appointed her to the Chair of the TYC Advisory Board twice and then to the Ombudsman position, which she has now resigned from. Link Strategies LLC Confidential Document 125

Where is the leadership in the state of Texas? Concerned with a re-election bid and not with the frailty of the states youngest offenders? Helping friends climb the ladder of state government with no accountability? Perry should have acted quicker to help the young offenders learn right from wrong. Perry Appointed Gloria Gogi Dickson to the Texas Youth Commission. According to the San Antonio Express-News, San Antonian Gloria "Gogi" Dickson was appointed Tuesday by Gov. Rick Perry to the Texas Youth Commission, which provides services to delinquent young people. Dickson has more than three decades of experience in education, the governor's office said. She owns and is president of Dickson Consulting Group, which provides consulting in educational, environmental and governmental services. She also is an adjunct professor in the University of Texas at San Antonio's education department. [San Antonio Express-News, 5/27/04] Perry Appointed Dr. Juan Sanchez Munoz to the Texas Youth Commission. According to US States News, Gov. Rick Perry has announced the appointment of Dr. Juan Sanchez Munoz of Lubbock to the Texas Youth Commission for a term to expire August 31, 2011. The commission provides services to delinquent youths, ages 10 to 21, through programs and facilities that administer constructive training for rehabilitation. [US States News, 4/26/06] Juvenile Center Run by the Texas Youth Commission Was Investigated. According to the San Antonio Express-News, The Justice Department is investigating allegations of civil rights violations at a juvenile detention center. Authorities will examine conditions and inmate treatment at the Evins Regional Juvenile Center in South Texas, according to a letter sent to Gov. Rick Perry from Wan J. Kim, assistant U.S. attorney general. The letter, sent earlier this month, did not explain what prompted the probe. Officials at the Texas Youth Commission, which runs the center, welcome the investigation, spokesman Tim Savoy told the McAllen Monitor. [San Antonio Express-News, 6/25/06] Perry Appointed Stephen Kurt Fryar to the Texas Youth Commission. According to US States News, Gov. Rick Perry has announced the appointment of Stephen Kurt Fryar of Brownwood to the Texas Youth Commission for a term to expire Aug. 31, 2011. The commission provides services to delinquent youths, ages 10 to 21, through programs and facilities that administer constructive training for rehabilitation. Fryar is vice president of P. F. & E. Oil Company in Brownwood. He is past president of the Brownwood Kiwanis Club and past member of the Brown County United Way. Fryar also formerly served as a member of the Brownwood Area Chamber of Commerce, the Brownwood Independent School District Facilities Committee and the Brownwood Community Advisory Council for the Benefit of the Texas Youth Commission. [US States News, 7/24/06] Senate Voted for Conservator to Take over Texas Youth Commission. According to US States News, The Texas Senate voted tonight to adopt a resolution directing the Legislative Audit Committee to meet and request Governor Rick Perry to immediately appoint a conservator to take over the troubled Texas Youth Commission. The resolution was approved by a unanimous vote of the Senate. Senate Resolution 384 calls on Lt. Governor David Dewhurst to request a joint meeting of the Legislative Audit Committee with House Speaker Tom Craddick to examine the conduct of TYC employees and managers for the purpose of finding gross fiscal mismanagement by the agency, and directs the Legislative Audit Committee upon making that finding to request that a conservator be appointed by the governor. Im outraged that Texas Youth Commission employees sexually abused young students in their custody, said Lt. Governor Dewhurst. But Im equally outraged that managers and supervisors covered up these abuses and allowed child predators working in the correctional system to keep their jobs and to continue to harm children. [US States News, 2/28/07] After Perry Replace Texas Youth Commission Chairman Texas Senate Called for Perry to Appoint an Independent Conservator to Oversee the TYC. According to the Valley Morning Star, The Texas Senate late Wednesday unanimously called for Gov. Rick Perry to appoint an independent conservator to oversee the Texas Youth Commission in light of a sex-abuse scandal. If House leaders agree, a committee of House and Senate members called the Legislative Audit Committee could meet as early as Link Strategies LLC Confidential Document 126

today and recommend to Perry to appoint a conservator, or outside leader of the beleaguered agency. Perry is the only one who has the power to appoint a conservator. Perry will consider all options in bringing the agency under new management, said spokesman Ted Royer Earlier in the day, Perry replaced TYC chairman Pete Alfaro with another board member, Donald Bethel. Some said it wasn't enough. [Valley Morning Star, 3/1/07] Removed Chairman of Texas Youth Commission was Appointed Chairman by Perry in 2004. According to the New York Times, Gov. Rick Perry removed the chairman of the Texas Youth Commission on Wednesday over charges that the agency covered up the sexual abuse of incarcerated juveniles. Mr. Perry also called for the ouster of the acting executive director, the appointment of an independent inspector general and a shake-up throughout the commission, which runs 13 schools housing 3,000 felons under age 21 The dismissed chairman, Pete C. Alfaro, is a former mayor of Baytown who was first named to the commission in 1995 by Gov. George W. Bush and was appointed chairman by Mr. Perry in 2004. Mr. Alfaro did not respond to messages seeking comment. His latest fiveyear term expires in August. Hours after the governor's spokesman said that Mr. Alfaro had been told by phone that he was being replaced by his vice chairman, Donald R. Bethel, a spokesman for the Texas Youth Commission, Tim Savoy, said the agency had received no notice of the action. The board has a meeting scheduled for Tuesday. [New York Times, 3/1/07] Sexual Abuse Reported and Went Unpunished by School Superintendent, Who Went on to Hold a Top Leadership Position. According to the New York Times, On Tuesday, the Senate Criminal Justice Committee disclosed details of long-secret investigations by the commission and the Texas Rangers showing that two supervisors at the West Texas State School in remote Pyote routinely roused boys from their beds for sexual encounters that were reported but went unpunished by the school superintendent, who now has a top leadership position at the commission. The supervisors were allowed to resign without facing criminal charges, but are now under investigation. [New York Times, 3/1/07] Perry Staff Knew of Sexual Abuse, Didnt Act until after the Report Became Public. According to the Houston Chronicle, Gov. Rick Perry's staff learned last fall of a Texas Rangers investigation into allegations of sexual abuse in 2005 at a West Texas state juvenile facility, but the governor took no major action to reform the Texas Youth Commission until after the report became public last week. On Wednesday, Perry removed the agency's board chairman, Pete Alfaro, of Baytown, and appointed Don Bethel, of Lamesa, as Alfaro's replacement. Perry also recommended that at its meeting Tuesday, the board hire Ed Owens, the deputy executive director of the Texas Department of Criminal Justice, as the acting TYC director and set up an inspector general who answers directly to the board. [Houston Chronicle, 3/1/07] Report Showed TYC Supervisor Was Promoted Four Months after Reports of Late-Night ClosedDoor Visits with Young Offenders. According to the Fort Worth Star-Telegram, The Texas Youth Commission supervisor at the center of the sex-abuse scandal plaguing the agency was promoted four months after it was reported that he had taken young offenders from the dormitories for late-night, closed-door visits to his office and three years after being disciplined for having pornography on his state-issued computer. An administrative review of a 2005 Texas Rangers investigation made available this week accuses Ray Brookings, a former assistant superintendent of a TYC school in West Texas, of repeatedly taking young boys for private visits after hours. The review, prepared by TYC officials, also states that John Hernandez, then a TYC school principal, had been seen taking young offenders for closed-door meetings with the lights off and that several correctional officers and offenders complained about the action to no avail. [Fort Worth Star-Telegram, 3/2/07] Perry Named a Former Aide to Special Master to Oversee Investigation of the TYC. According to the Houston Chronicle, Under pressure from the Legislature to put the troubled Texas Youth Commission into conservatorship, Gov. Rick Perry on Friday instead named one of his aides as a special master to oversee an investigation of the agency Perry named his former Deputy Chief of Staff Jay Kimbrough, who has had his own controversial past, as the special master to head an investigation into Link Strategies LLC Confidential Document 127

whether TYC administrators covered up allegations that staff members had sexually abused youthful offenders incarcerated in agency facilities. [Houston Chronicle, 3/3/07] House Leader Questioned Qualifications of Perry Special Master Appointee. According to the Austin American-Statesman, The growing sexual molestation scandal at the Texas Youth Commission took a new turn late Monday as a House leader questioned the qualifications of Gov. Rick Perry's newly appointed special master. House Democratic Caucus Chairman Jim Dunnam of Waco said that Jay Kimbrough, as the state's homeland security director in 2003, improperly aided Republican leaders in trying to track down Democrats who had boycotted a special legislative session on redistricting. [Austin American-Statesman, 3/6/07] Perry, State Senators Were Told of Sexual Abuse Allegations. According to the Dallas Morning News, Aides to key state senators were told of sexual abuse allegations at Texas youth prisons in an email two years ago. Other documents and testimony two years ago by a Texas Youth Commission official described the problem as well. Gov. Rick Perry's office was alerted, too. [Dallas Morning News, 3/7/07] Perry Proposed the TYC be Governed by a Single Full-Time Commissioner. According to US States News, Gov. Rick Perry today proposed that the Texas Youth Commission (TYC) be governed by a single full-time commissioner rather than a part-time, volunteer board of directors. Leading the Texas Youth Commission is a full-time job that demands the attention of a full-time, criminal justice professional, Perry said. A single commissioner would provide better oversight of the agency on a dayto-day basis and would be more accountable to the executive and legislative branches. [US States News, 3/14/07] Senate Committee Approved Bill to Fire TYC Board, Perry Said he Wanted the Existing Board to Remain. According to the Austin American-Statesman, A high-stakes political showdown between the Legislature and Gov. Rick Perry escalated Tuesday as a key Senate committee approved a bill to fire the governing board of the scandal-racked Texas Youth Commission. In a 6-0 vote, after a brief discussion, the Senate Criminal Justice Committee approved a measure, Senate Bill 1921, to abolish the current board and require that Perry appoint a new one. Then senators indicated that they plan to expedite passage of Senate Bill 1921 so it can be voted on as soon as today. Supporters said they want it approved by a two-thirds vote, which would allow the legislation to take effect - and the board to be fired - immediately. Once the Senate approves the measure, as is expected, several House leaders predicted Tuesday evening that the proposal would see wide support and fast passage in the lower chamber as well. Perry has said he wants the existing board to remain in place. [Austin American-Statesman, 3/14/07] Perry Announced that the TYC Board Will Resign. According to the Houston Chronicle, Under pressure from the Legislature, Gov. Rick Perry announced Wednesday that the Texas Youth Commission board will resign amid new criminal allegations involving TYC staff and revelations that the juvenile corrections health care system is in shambles. Perry and the Legislature are battling over how to rebuild an agency with high staff turnover and accusations that corrections officers and administrators have physically and sexually abused youth in their custody. [Houston Chronicle, 3/15/07] Perry Appointee to TYC Board Resigned. According to the Abilene Reporter-News, Steve Fryar of Brownwood is among the Texas Youth Commission board members who resigned Friday. Fryar, vice president of P.F. & E. Oil Co., was appointed to the board in 2002 by Gov. Rick Perry. He did not return multiple messages seeking comment this week. [Abilene Reporter-News, 3/17/07] House Committee Looked into Perrys Authority to Appoint a Special Master for the TYC. According to the Associated Press, A House committee looking into allegations of rampant abuse in youth prisons asked the attorney general's office on Monday to determine whether Gov. Rick Perry had the authority to appoint a special master for the Texas Youth Commission. Lawmakers wanted Perry to Link Strategies LLC Confidential Document 128

appoint a conservator to overhaul the troubled agency, which incarcerates the state's most dangerous, incorrigible or chronic juvenile offenders. Instead, he appointed special master Jay Kimbrough to investigate the problems and directed the commission's six-person board to hire acting executive director Ed Owens to restructure the agency. The problem, according to some members of the House corrections committee, is that a conservator's powers and duties are outlined in state law and a special master's aren't. [AP, 3/20/07] House Committee Initiated Inquiry into Perrys Use of Executive Orders. According to the Austin American-Statesman, A simmering backroom political dispute about whether Gov. Rick Perry had the authority to appoint a special master in the Texas Youth Commission scandal exploded publicly Monday as a House committee initiated an inquiry to answer growing legal questions. The controversy was the latest over whether Perry has overstepped his authority in issuing executive orders. An earlier order, to expedite coal-plant permit reviews, was blocked by a judge, and an order requiring sixth-grade girls to be vaccinated against a virus that can cause cervical cancer is being challenged by lawmakers. The new issue promises to further strain relations between Perry's office and some legislative leaders in both houses. [Austin American-Statesman, 3/20/07] Perry Staffer Received Graphic Investigative Reports Before November Election. According to the Austin American-Statesman, An aide to the governor received detailed investigative reports alleging a sex scandal at a West Texas youth lockup days before the November election, documents show, but Gov. Rick Perry has said he learned only last month, from news reports, about allegations of abuse at the Texas Youth Commission facility. Interviews and documents confirm that one of Perry's aides, Alfonso Royal, was forwarded graphic investigative reports about sexual abuse at the West Texas State School from Texas Ranger Sgt. Brian Burzynski on Oct. 30 or 31, 2006. The documents also indicate that Royal knew in October, just days before Perry was re-elected, about a West Texas district attorney's lack of action in the case. [Austin American-Statesman, 3/23/07] Perry Said Kimbrough Was Doing a Good Job Investigating Reported Abuses. According to the Associated Press, On the juvenile sex abuse allegations, Perry said he believes TYC special master Jay Kimbrough is doing a good job investigating reported abuses. He also repeatedly urged the Legislature to work with his office to pass laws to prevent something similar happening again. Jay Kimbrough is getting the changes made at TYC. I am absolutely satisfied in his progress and hope the Legislature will continue to work with us to put safeguards into place and not spend any more legislative time standing in a circle, pointing to the left and saying, Its his fault. Perry said. [AP, 3/24/07] House Committee Approved Legislation to Demand News, Outside Management for TYC. According to the Austin American-Statesman, In a direct challenge to Gov. Rick Perry, a House committee approved legislation Monday demanding new, outside management to rehabilitate the scandal-wracked Texas Youth Commission. Perry last month named Jay Kimbrough special master to oversee investigations into the scandal and chose veteran prison official Ed Owens as acting executive director. But key senators had voted for a conservator instead, and on Monday, the House Corrections Committee joined that chorus. [Austin American-Statesman, 3/27/07] Kimbrough Was Promoted from Special Master to Conservator. According to the Associated Press, State officials reached a major compromise aimed at fixing the troubled juvenile prison system on Wednesday, putting the agency into a conservatorship for now and allowing a single executive to take it over later. The plan would involve permanently abolishing Texas Youth Commission's board and replacing it with a juvenile prison czar. A much less powerful advisory council would be established as well. Jay Kimbrough has been promoted from special master to conservator, Gov. Rick Perry said. He will serve until the end of the legislative session in May, when officials hope to find a new conservator who eventually will become the agency's new chief. [AP, 3/28/07] Lawmakers Had Protested Perrys Decision to Appoint a Special Master Instead of Conservator. According to the Associated Press, Lawmakers had loudly protested Perry's Link Strategies LLC Confidential Document 129

decision to appoint a special master because that position is not defined in state law. They said that could leave the state vulnerable to arguments by defense attorneys representing clients charged under evidence Kimbrough unearthed. State law, however, gives conservators a wide range of powers, including the authority to hire and fire employees for any reason. Kimbrough said he plans to immediately fire the 111 TYC employees with felony convictions on their records. He said he also will make the superintendents of TYC facilities and other top officials reapply for their jobs The fact of the matter is it's time now to put a conservator in, Perry said when asked why he changed his mind. This is the right thing to do at the right time. [AP, 3/28/07] Democratic Caucus Chairman Said State Leaders Should Have Secured Facilities Faster After Media Reports of Scandal. According to the Houston Chronicle, After the Texas Youth Commission sex and physical abuse scandal broke, Gov. Rick Perry and legislative leaders debated for 16 days the best way to halt the violence in the juvenile corrections system before dispatching the Texas Rangers. During those days, 82 complaints were lodged claiming that TYC youth were victims of excessive force or sexual impropriety by staff and other youths in the system, according to records obtained by the Houston Chronicle under the Public Information Act. House Democratic Caucus Chairman Jim Dunnam was among the legislators who called for immediately securing TYC facilities with Texas Rangers after the media reported the scandal. He said the state's leadership should have reacted faster to protect TYC's incarcerated youths. They (state leaders) should have first and foremost taken immediate action to protect the youth in the facilities from any additional wrongdoing, Dunnam said. [Houston Chronicle, 4/29/07] Perry Signed Overhaul of Texas Youth Commission Bill. According to US States News, Gov. Rick Perry today signed into law Senate Bill 103, an overhaul of the Texas Youth Commission (TYC) that will drastically improve youth and correctional officer safety, the investigation and prosecution of alleged crimes and accountability at the agency. This legislation will change the broken culture at the youth commission so that it can fulfill its mission of rehabilitating troubled youth, Perry said. Because of these reforms, safety will improve for youth offenders and correctional officers, allegations of criminal conduct will be aggressively investigated and prosecuted, and a full-time executive commissioner will provide the leadership and accountability needed at TYC. [US States News, 6/8/07] Perry Appointed Ed Owens as News Conservator of the TYC. According to US States News, Gov. Rick Perry today appointed Ed Owens as Conservator of the Texas Youth Commission (TYC). Owens, a lifelong criminal justice professional with more than three decades of experience, has served as TYC Acting Executive Director since March and authored a long-term rehabilitation plan for the agency. As Acting Executive Director, Ed Owens has been an essential leader in the transformation and rehabilitation of the youth commission, Perry said. There is no one more dedicated or more capable of rebuilding this troubled agency from the ground up and implementing the reforms passed by the legislature. Owens replaces Jay Kimbrough, who led a sweeping investigation that rapidly restored order to the agency since his appointment by Perry earlier this year. Kimbrough pledged to serve as conservator through the recently concluded legislative session, and the governor accepted his resignation effective yesterday. He was recently named deputy chancellor of the Texas A&M University System. [US States News, 6/8/07] State Cancelled Contract with Largest Privately Operated Juvenile Prison Due to a History of Abuse and Neglect. According to the Dallas Morning News, Texas Youth Commission officials will pull the 197 TYC inmates out of a West Texas juvenile justice center today and cancel their contract with the company that runs it, citing deplorable conditions at the state's largest privately operated juvenile prison. The decisive action ... is a clear indication of the positive changes under way at the Texas Youth Commission, Gov. Rick Perry said Monday. I am deeply disappointed that conditions at the facility have deteriorated to this point, but am confident that today's actions will remedy the situation. The Coke County Juvenile Justice Center in Bronte, operated by the Florida-based GEO Group Inc. since 2003, has a history of abuse and neglect, including a 2006 suicide, allegations of sexual assault that were settled out of court, and the 2004 death of a youth whose medical conditions were ignored. As recently Link Strategies LLC Confidential Document 130

as this spring, the prison realized it had hired a registered sex offender as a guard. [Dallas Morning News, 10/2/07] Perry Appointed Former Bush Aide as New Conservator of TYC. According to the Associated Press, Gov. Rick Perry named a former aide to President Bush as the new conservator of the troubled Texas Youth Commission on Wednesday. Richard Nedelkoff, a former Texas criminal justice director under then-governor George W. Bush, is set to take over the agency immediately. Impeccable leadership by conservators of TYC has helped Texas make great strides in righting a very troubled agency, said Perry. Richard's experience and expertise in juvenile and criminal justice make him the right person to finish the job at TYC. [AP, 12/19/07] Perry Adviser Who Received Detailed Reports of Sex Abuse Months Before the Scandal Broke and Didnt Tell the Governor Was Named Chief of Staff of TYC. According to the Associated Press, A senior policy adviser in Gov. Rick Perry's office has been named chief of staff of the troubled Texas Youth Commission, officials said. Alfonso Royal is the Perry aide who got detailed reports on sex abuse in a West Texas youth prison in the fall of 2006, months before news of the scandal broke. Officials in Perry's office have said that Royal didn't keep a copy of the reports and didn't tell the governor about them at that time. Robert Black, a Perry spokesman, said the appointment of Royal, Perry's top criminal justice adviser, will put more representation from the governor's office in the TYC. Governor Perry is well aware of where the buck stops, Black said. Folks shouldn't be surprised that the governor wants someone he knows and trusts on hand in the state agency. Royal will report to new TYC conservator Richard Nedelkoff, Black said. [AP, 3/4/08] Austin American-Statesman Called Perrys Appointment of former Aide to Chief of Staff of the TYC Odd. According to the Austin American-Statesman, Gov. Rick Perry has arranged to have one of his budget aides, Alfonso Royal, named chief of staff of the Texas Youth Commission. It's an odd appointment given that, despite his position on the governor's staff at the time, Royal had little or nothing to do with uncovering last year's scandal at the commission. In late October 2006, Royal was given graphic reports of sexual abuse by two administrators at a commission facility, the West Texas State School in PyoteRecords indicate that over the next month, Royal spent 12 minutes on seven phone calls to the local prosecutor and the Ranger about the case. Just this week, a spokesman for the governor said Royal did all that could be expected, especially given that the two administrators already had left But when the reports of sexual abuse of inmates and other problems at the commission finally broke statewide in February 2007, Perry said the first he knew of the Ranger's frustration in getting the cases prosecuted was when he read a story in The Dallas Morning News The governor, however, is pleased with Royal's performance, said a spokesman. And it's not just talk: Royal's salary has jumped from the $70,000 a year he was paid on the governor's staff to $109,950 a year at the Youth Commission. [Austin American-Statesman, 3/8/08] Perry Removed TYC from Conservatorship and Named Cherie Townsend the Executive Commissioner. According to the Associated Press, Gov. Rick Perry removed the state's troubled youth prison system from conservatorship Tuesday and appointed a new executive commissioner. The Texas Youth Commission was placed in conservatorship in spring 2007 after allegations surfaced of sexual abuse of inmates and a cover-up by agency officials. This has been a long and difficult road for the agency, but the culture at TYC today is substantially different today than it was 18 months ago, Perry said in a statement. Cherie Townsend of Austin, the executive director since Oct. 1, was named its executive commissioner. Townsend has three decades of juvenile justice experience in Texas, Arizona and Nevada. She most recently served as director of the Clark County Juvenile Court Services in Las Vegas and also as director of juvenile court services for the Superior Court of Arizona's Juvenile Court Center in Maricopa County. [AP, 10/14/08] Townsend Was a Former Perry Employee. According to the San Antonio Express-News, Despite lingering troubles, Gov. Rick Perry removed the Texas Youth Commission from conservatorship Tuesday, ending more than 18 months of close state oversight. Perry appointed Link Strategies LLC Confidential Document 131

Cherie Townsend, a former employee, to head the state's juvenile correctional agency. She replaces Richard Nedelkoff, who took over as conservator in December 2007. [San Antonio Express-News, 10/15/08] Former TYC Conservator Returned to Governors Office as Chief of Staff. According to the Dallas Morning News, Former Texas Youth Commission conservator Jay Kimbrough, a longtime adviser to Gov. Rick Perry, will return to the governor's office to serve as chief of staff. It's a sign that Mr. Perry, who faces a likely gubernatorial run against Sen. Kay Bailey Hutchison in 2010, is turning on the heat in advance of the upcoming legislative session. He is a man of integrity with a proven track record and my complete trust, Mr. Perry said in a statement. Jay is a decorated combat veteran, a man of action and sound judgment, and will help lead us through the upcoming session. [Dallas Morning News, 10/17/08] Perry Named Catherine Evans Chair of TYC Advisory Board. According to US States News, Gov. Rick Perry has named Catherine Evans of Dallas chair of the Texas Youth Commission Advisory Board for a term to expire at the pleasure of the governor. He also appointed Scott W. Fisher of Bedford and Matthew J. Hay of Galveston to the board for terms to expire at the pleasure of the governor. Pursuant to Senate Bill 103 of the 80th Legislative Session, the board will advise the executive commissioner of the Texas Youth Commission. The first meeting will be held on December 12. [US States News, 12/10/08] House Kept TYC Under Corrections Committee. According to the Trail Blazers Blog, On another matter, the House kept the Texas Youth Commission under the purview of the Corrections Committee, now headed by Rep. Jerry Madden, R-Richardson. Though some members suspected Gov. Rick Perry's administration influenced a proposed shift of TYC to another panel, Perry chief of staff Jay Kimbrough strongly denied that. We defer to the will of the House, he told my colleague Emily Ramshaw. [Trail Blazers Blog, 1/28/09] Perry Named Will Harrell as TYC Independent Ombudsman. According to States News Service, Gov. Rick Perry has named Will Harrell of Austin the Texas Youth Commission (TYC) Independent Ombudsman for a term to expire Feb. 1, 2011. Pursuant to Senate Bill 103 of the 80th Legislative Session, the independent ombudsman will report on individual facilities and serious problems within the commission; create awareness about the office; and review and evaluate procedures established by the commission to ensure the rights of all children are observed. [States News Service, 2/10/09] Perry Reappointed Townsend as Executive Commissioner of TYC. According to US States News, Gov. Rick Perry has reappointed Cheryln Cherie Townsend of Austin as executive commissioner of the Texas Youth Commission for a term to expire Feb. 1, 2011. The commissioner oversees the various departments of the Texas Youth Commission. Townsend is a member of the National Association of Probation Executives, American Corrections Association and Council of Juvenile Corrections Administrators. She serves on the Texas Juvenile Justice Advisory Board and is a past member of the Communities in Schools Board of Directors in Nevada. Townsend received a bachelor's degree from Rockford College, a master's degree in public affairs from Southern Methodist University and a master of business administration from the University of Texas at Austin. [US States News, 5/4/09] House, Senate Passed Bill to Abolish Texas Youth Commission and the Texas Juvenile Probation Commission and Roll duties into New Entity. According to the Associated Press, The state's juvenile prison system would continue operations for at least another two years under a bill approved by the Texas House and Senate Sunday night. The measure now heads to Gov. Rick Perry for consideration. A state review of the troubled Texas Youth Commission recommended that it and the Texas Juvenile Probation Commission, which handles youths on probation, be abolished and their duties rolled in to a new entity. The approved bill keeps them separate and independent until another review in 2011. TYC is in the process of implementing reforms legislated by lawmakers two years ago after allegations of abuse arose. Supporters of keeping TYC in operation have said it should be given more time to implement reforms. [AP, 6/1/09] Link Strategies LLC Confidential Document 132

Perry Named Fisher Chair of Texas Youth Commission. According to Targeted News Service, Gov. Rick Perry has named Scott Fisher of Bedford chair of the Texas Youth Commission and appointed five members to the commission for terms to expire Sept. 1, 2011. The commission provides services to delinquent youths, ages 10 to 19, through programs and facilities that administer constructive training for rehabilitation. [Targeted News Service, 9/2/09] Perry Named Former TYC Advisory Board Chair as TYC Independent Ombudsman. According to the Associated Press, Gov. Rick Perry has named Catherine Evans of Dallas to be the Texas Youth Commission independent ombudsman. Evans is a past chair of the TYC Advisory Board, a former state district judge and former commissioner of the Texas Juvenile Probation Commission. Her term as ombudsman will expire Feb. 1, 2011. [AP, 9/9/09] Catherine Evans, New TYC Ombudsman, Barred from Entering Lockups After Twice Trying to Smuggle in Weapons, Prescription Drugs and Cash. According to the Associated Press, The new ombudsman for the Texas youth prison system has been barred from entering its lockups under criminal investigation that she twice tried to smuggle in weapons, prescription drugs and cash, which is strictly prohibited. Catherine Evans was appointed to the Texas Youth Commission in September by Gov. Rick Perry. The ombudsman reports on TYC facilities and evaluates them to protect children's rights. TYC spokesman Jim Hurley declined comment on whether Evans may have been trying to stage her own sting operation to test agency security. What kind of weapons Evans allegedly tried to bring in was not immediately available. Carrying weapons and other contraband into a state correctional facility is a thirddegree felony. [AP, 10/23/09] Evans, TYC Ombudsman, Resigned After Felony Indictment for Allegedly Smuggling a Knife into a Teenage Lockup. According to the Houston Chronicle, The independent ombudsman for the Texas Youth Commission resigned Monday after her felony indictment for allegedly smuggling a knife into a teenage lockup. Newly appointed ombudsman Catherine Evans said in a statement that she submitted her resignation. Gov. Rick Perry's office says he has accepted the resignation and said he would appoint a replacement. Perry appointed Evans to be the TYC ombudsman in September. In the Houston County indictment unsealed in Crockett on Monday, Evans is accused of carrying a knife into an East Texas correctional facility. If convicted, the former Dallas state district judge could face two to 10 years in prison. Evans says it was a regrettable mistake that she forgot a Swiss Army knife was in her handbag. [Houston Chronicle, 12/1/09] Perry Named John Moore New TYC Ombudsman After Leaving Position Vacant for Four Months. According to the Dallas Morning News Trail Blazers blog, Gov. Rick Perry just appointed John Moore as the new TYC ombudsman, a position that he left unfilled for four months. Moore, of Denison, has a law enforcement and military background. He retired after 25 years as a U.S. marshal and also had worked as a state trooper and with the Amarillo police department. He replaces Catherine Evans, who resigned in November 2009 after being accused of trying to carry weapons and other contraband into a TYC facility. The ombudsman is charged as a watchdog over TYC following the 2007 sexual assault and abuse scandal that shook the agency, which was placed under a conservatorship until safeguards could be established. [Dallas Morning News, 3/10/10]

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TDEx DATA MINING DATABASE ABUSED BY THE TEXAS GOVERNORS OFFICE


In 2003, the Texas Legislature passed a bill mandating that the Governor direct homeland security in Texas. The bill did not create a homeland security office, but instead instructed the governor to develop a homeland security strategy. In 2004, Steven McCraw was named by Perry to be the Director of Homeland Security in Texas, even though Perry was only given the legislative authority to create a strategy. Approximately six months after signing on to direct homeland security, McCraw directed that the Department of Information Resources send out a request for vendors to provide a solution for local, intra-state, and inter-state sharing of offender and other investigative data. This system eventually became known as the Texas Data Exchange (TDEx). In August 2006, Perry outlined his fiscal 2006 funding priorities for homeland security dollars and directed they be spent on two technology needsan instant electronic fingerprint scanner, and the electronic database known as the Texas Data Exchange (TDEx). By April 2007, more than $3.6 million had been spent on the TDEx project and the database had grown to include millions of records. Homeland Security Director Steve McCraw said that he hoped that the database would eventually include every Texans interaction with the criminal justice system, from traffic stops to open police investigations. The database was also aiming to include Texas drivers license information, and in May 2007, McCraw announced that the database would expand to tap into national records from the FBI, the DEA, the Bureau of Prison Management and the Bureau of Alcohol, Tobacco and Firearms. Due to the expansion of the database, and the requirement that any federal money for intelligence databases be overseen by a criminal justice agency, McCraw unilaterally designated the Texas Department of Information Resources as an agency with law enforcement functions so that they could manage the TDEx database. Surprisingly, the Department of Homeland Security in the Governors office is not even considered a criminal justice agency in the eyes of the Texas Department of Public Safety or the FBI, and yet the Director of this agency was able to bestow law enforcement functions on another agency within the Governors Office. After this information was first written about by The Texas Observer, where they said it was a political opposition researchers dream, legislators, privacy advocates, and people all across Texas became fearful of this extensive, searchable database being housed inside the Governors Office. Legislators took action, and called for hearings in the Committee on State Affairs on April 13, 2007. During this hearing and in news interviews afterwards, statements were made by Homeland Security Director Steve McCraw in an attempt to quell the anger over the program and relieve fears that the Governors Office was in control of a vast information database with little to no oversight. McCraw told the House State Affairs Committee that the TDEx system was secure and that he was the only person in the Governors Office with access to it. McCraw told The Houston Chronicle that the goal of the database was to create a Google search for law enforcement data that is only used by law enforcement personnel.

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McCraw told the House State Affairs Committee that he has top security clearance from the U.S. Justice Department to oversee the database and that no one in Perrys office has ever tapped into the database to mine information for political purposes.

After the hearings, a bipartisan group of legislators attempted to rein in the TDEx program or transfer it from the Governors Office to the Department of Public Safety. Two-thirds of the Texas House voted to remove the management of the TDEx System from Perrys staff and give it entirely to the DPS, but the measure was left out of the final bill that was signed by Perry. Throughout 2007, the Governors office and Steve McCaw fought to keep the TDEx system from moving away from the Governors office, but eventually, on October 10, 2007, Perry signed over control of TDEx to the Department of Public Safety. Right around this same time, a little-known blogger from Wisconsin named John Washburn was filing Texas Public Information Act requests with the Governors office for every email written over a weeks period. After a costly and extended process, Washburn eventually received the emails/documents and posted them online for the public to read. Inside one of these documents is an eye-opening email chain, and an especially alarming message from Sophie Yanez, who was the personal assistant to Homeland Security Director Steve McCraw. The email chain is started off by Debi Gafford, who was the administrative assistant to the general counsel. Gafford forwarded a Texas Public Information Act request to the PIR Coordinators email group in the Governors office. Approximately three hours later, Sophie Yanez replied to the group saying, No information was found on TDEx using an exact name search under Deirdre Page. A few minutes later she sent another email to the same email group responding to a previous chain saying, No information was found on TDEx using an exact name search under Lillian Aguirre Ortiz. At this point, the assistant general counsel Chelsea Thornton responded to just Yanez and asked why the request wasnt sent to DPS to be run through TDEx, and instead done inside the Governors office. Sophie Yanez replied saying that I kept access just to cover [Public Information Requests] This incident was probably just the tip of the iceberg in the violations that occurred in the Governors Office while they were in charge of the TDEx system. Unfortunately, due to the Governors official email retention policy of deleting every email older than 7 days, no other emails have been recovered that deal specifically with TDEx. It will be seemingly impossible to determine just how many times there were significant infractions, if not outright violations of the law.

This alarming episode shows that there are many important questions that need to be answered about the Governors Offices role in the management of TDEx:
In April 2007, Director of Homeland Security Steve McCraw told the House State Affairs Committee that he was the only person in the Governors Office with access to the TDEx system, which he obtained after being designated a law-enforcement agent in his role as head of homeland security in the state. According to emails sent on November 5, 2007, McCraws personal assistant also had access to the TDEx database. How did McCraws personal assistant get access to the TDEx database? Did McCraw know that his personal assistant had access to the TDEx database? If McCraw knew his assistant had access to this database, why did he tell the House State Affairs committee that he was the only person in the Governors Office with access to TDEx?

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Did McCraw give access to TDEx to anyone else in the Governors office? What did McCraw use his personal TDEx access for?

In April 2007, Steve McCraw told the House State Affairs Committee that no one in Perrys office has ever tapped into the TDEx database to mine information for political purposes. According to an email sent by Steve McCraws personal assistant on November 5, 2007, she was kept access [to TDEx] just to cover [Public Information Requests]. In what capacity was McCraws personal assistant using the TDEx system to cover public information requests? How many times did McCraw and his team use the TDEx system to cover public information requests? Was McCraws assistant using the TDEx database to get background information on people who sent public information requests to the Governors office? Was McCraw aware that the TDEx database was being used to cover public information requests?

Homeland Security Director Steve McCraw reported directly to Governor Rick Perry. Did McCraw ever inform Perry that he had given access to the TDEx database to his assistant? Did McCraw brief Perry on why he personally needed access to the TDEx database? Has Perry ever seen or used the TDEx database? Now that its clear that someone in the Governors Office decided to keep access to TDEx after the database was transferred to the Department of Public Safety, how is the Governor ensuring that no one else has kept access to this highly sensitive database?

On November 5, 2007, Sophie Yanez, the personal assistant of Homeland Security Director Steve McCraw, searched two names in the TDEx database within two minutes. How many times did Sophie Yanez search names in the TDEx database prior to this date?

When confronted by Assistant General Counsel Chelsea Thornton, Sophie Yanez indicated that she kept access [to TDEx] just to cover PIRs. In what legal capacity was Sophie Yanez, the personal assistant of Homeland Security Director Steve McCraw, allowed access to search a database that was legally only accessible to law enforcement officials?

On November 5, 2007, Assistant General Counsel Chelsea Thornton from the Texas Governors Office said she would send TDEx requests directly to the DPS. Who in the DPS is responding to these requests for TDEx searches and how many requests has the Office of Governor sent throughout the history of TDEx?

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What legal authority does a non-law enforcement official have to request names to be searched through a database that includes information from FBI, DEA, the Bureau of Prison Management, the ATF, state-wide criminal records, and ongoing criminal investigations? Who else in the Texas Governors Office is sending requests to the DPS to have names searched in the TDEx database?

In July 2009, Steven McCraw was named the new Director of the Texas Department of Public Safety, which currently has control over the TDEx database. Has McCraw continued to allow his access to TDEx to be given to people not authorized to access the database? Does McCraw allow the Texas Governors Office to continue to send Public Information Request searches to his office to be run through the TDEx database? Has McCraw conducted a review of everyone who has access to the TDEx database to determine if anyone in the Governors office still has access? What steps has McCraw taken to ensure that the TDEx database is only used by law enforcement officials? What steps has McCraw taken to ensure that the TDEx database is not used for political purposes?

In 2008, the Perry-appointed Public Safety Commission conducted a $1 million dollar study funded by the consulting firm Deloitte & Touche to recommend a top to bottom shake-up of the Texas Department of Public Safety. The study eventually recommended the consolidation of all agency intelligence and homeland security functions into an Intelligence and Counterterrorism Division of the DPS. The DPS eventually accepted this recommendation and started this organization. Privacy advocates and security experts were extremely skeptical and fearful of this new division because they would be tasked with Counter-Surveillance for the Governors protection detail, the Lieutenant Governor, visiting dignitaries, the Capitol and the Governors Mansion. One security official said that, When you add in the protection function to the criminal investigation function and say that it should be intelligence driven, that basically insists that they do political snooping. Steve McCraw is currently the Director of the Texas Department of Public Safety. What steps is he undertaking to ensure that this department isnt being used for political snooping and political opposition research? Who is auditing and conducting oversight for this new branch of the DPS which could have farreaching effects on the privacy of Texans? Does Governor Perry think its appropriate to have Steve McCraw in charge of not only the TDEx database but also an organization that is tasked with overseeing an intelligence-driven countersurveillance office?

BACKGROUND ON THE TDEx SYSTEM 2003: The Legislature Passed House Bill 9 Mandating That the Governor Direct Homeland Security in This State. According to The Texas Observer, Going into the session, the legal basis for the governor's authority on homeland security was tenuous at best. In 2003, the Lege passed House Bill Link Strategies LLC Confidential Document 137

9 mandating that the governor direct homeland security in this state. It did not create a homeland security office, instead instructing the governor to develop a strategy. The bill conflated two distinct responsibilities: emergency preparedness (including disaster response) and terrorism prevention. The first is undeniably the governor's responsibility. The other arguably is a law enforcement task that should be partitioned from political considerations. [The Texas Observer, 6/15/07] 2003: Acting Director of Homeland Security, Jay Kimbrough, Contacted the FBI in Oklahoma about Tracking Down Democratic Legislators Who Fled the State. According to The Texas Observer, Any concerns that the governor might misuse law enforcement responsibilities were only heightened when his acting director of homeland security in 2003, Jay Kimbrough, contacted the FBI in Oklahoma trying to track down Democratic legislators who fled the state in an effort to halt mid-decade congressional redistricting. [The Texas Observer, 6/15/07]

2004: Steven McCraw Joined Perrys Office. According to The Houston Chronicle, McCraw was a DPS trooper and narcotics agent between 1977 and 1982, when he entered the FBI. After the 9/11 terrorist attacks, McCraw headed a terrorist-tracking task force. He retired in 2004 and joined Perry's office. [The Houston Chronicle, 7/18/09] December 2004: Steve McCraw Named by Perry to Position of Director of Homeland Security. According to The Dallas Morning News, Within two years, police officers and firefighters should be able to communicate with any public safety agency in the state, regardless of what radio frequencies or systems they use, Texas' homeland security director said Tuesday. Public safety agencies have been working since the Sept. 11 attacks to achieve what is called radio inter-operability, mostly at a regional level. But Gov. Rick Perry has made statewide interoperability a priority for his homeland security strategy, said Steve McCraw, the governor's director of homeland security. [The Dallas Morning News, 12/22/04]

June 27, 2005: The Department of Information Resources, at Steve McCraws Behest, Sent Out a Request for Vendors to Provide a Data Solution That Eventually Became TDEx. According to The Texas Observer, Remarkably, in many ways TDEx seems to be an improvement over Texas Homeland Security's first stab at a database run by a private contractor. On June 27, 2005, the Department of Information Resources, at [Steve McCraw]'s behest, sent out a request for offer to vendors that could provide a Solution for Local, Intra-State, and Inter-State Sharing of Offender and Other Investigative Data. DPS was not consulted in the development of the offer request. The resulting contract given to Kentucky-based Appriss Inc. would initially be worth a little more than $759,000. [The Texas Observer, 4/20/07] August 2006: Perry Outlined Fiscal 2006 Funding Priorities for Homeland Security Dollars and Directed That They be Spent on the Texas Data Exchange (TDEx). According to the US States News, In August, Gov. Rick Perry outlined fiscal 2006 funding priorities for homeland security dollars and directed that they be spent on two technology needs that will enhance security of all Texans - a criminal database known as Texas Data Exchange (TDEx) and Live Scan, an instant electronic fingerprint scanner. [States News, 10/13/06] April 2007: More Than $3.6 Million Spent on the TDEx Project Database Included Tens of Millions of Records. According to The Texas Observer, Piece by piece, Gov. Rick Perry's homeland security office is gathering massive amounts of information about Texas residents and merging it to create the most exhaustive centralized database in state history. Warehoused far from Texas on servers housed at a private company in Louisville, Kentucky, the Texas Data Exchange-TDEx to those in the loop-is designed to be an all-encompassing intelligence database. It is supposed to help catch criminals, ferret out terrorist cells, and allow disparate law enforcement agencies to share information. More than $3.6 million has been spent on the project so far, and it already has tens of millions of records. At least Link Strategies LLC Confidential Document 138

7,000 users are presently allowed access to this information, and tens of thousands more are anticipated. [The Texas Observer, 4/20/07] 2007: Texas Legislature Declined to Put Tighter Controls on the Intelligence Computer Database Built at the Insistence of Governor Rick Perrys Office. According to The Houston Chronicle, In the current world of terrorist threats, the Legislature this year expanded police surveillance powers and declined to put tighter controls on an intelligence computer database being built at the insistence of Gov. Rick Perry's office. [The Houston Chronicle, 9/07/07] The Republican House Caucus Chair Frank Corte Said The Governor is Responsible for Public Safety. TDEx is Going to be a Great Tool to Look at Pending Cases. According to The Texas Observer, After its passage, [Frank] Corte [the Republican House Caucus chair] was jubilant about formalizing Perry's control over the law enforcement and intelligence aspects of homeland security. The governor is responsible for public safety," Corte said. "TDEx is going to be a great tool to look at pending cases. [The Texas Observer, 6/15/07]

THE TEXAS DATA EXCHANGE (TDEx): VACUUMING UP INFORMATION ON EVERY TEXAN TDExs Goal was to Vacuum Up Information on Every Texan, Including Criminal Background, and Put it Into a Searchable Database. According to The Texas Observer, TDEx's apparent goal was to vacuum up information on every Texan, starting with those who had come into contact with law enforcement, and put the information into a searchable database. The governor's office had control of the treasure trove of data and granted access to any law enforcement agency that wanted it. [The Texas Observer, 11/2/07] DPS Spokesperson Said There are Strict Rules About How Information is Placed into the System and How it is Accessed. According to The Texas Observer, The program will now be under DPS's Texas Crime Information Center, where, according to a DPS spokesperson, there are strict rules about how information is placed into the system and how it is accessed. [The Texas Observer, 11/2/07] TDEx Database Includes Information on More Than One Million Texans and Records on Standard Criminal Convictions, Drug Investigations, Speeding Tickets and Red-Light Violations. According to The Houston Chronicle, Names of more than 1 million Texans are housed in the database, drawn from records of state, local and, soon, federal law enforcement agencies. The database has information such as intelligence on potential terrorists, standard criminal convictions, drug investigations, speeding tickets and red-light violations. [The Houston Chronicle, 4/20/07] TDEx is a Web-Based Secure Network That Connects More Than 2,200 Law Enforcement Databases, Including Federal Law Enforcement Databases. According to the US States News, TDEx is a web-based secure network that connects more than 2,200 law enforcement databases in the state, including federal law enforcement databases. However, not all law enforcement databases are currently connected to TDEx; using homeland security funding for this project would accelerate the connection of all databases. [States News, 10/13/06] TDEx Computer System Allowed Law Enforcement Agencies to Share Information on Criminals But the Database Also Included Licensed Drivers. According to The Houston Chronicle, Civil rights groups and some legislators put McCraw under the microscope in 2007 because he pushed the creation of the Texas Data Exchange, or TDEx, computer system that allowed law enforcement agencies to share information. But not only suspected criminals were in the system. It also included licensed drivers, and the database was housed by a private company in Kentucky. [The Houston Chronicle, 7/18/09] BIPARTISAN COALITION ATTEMPTED TO REIN IN THE TDEx SYSTEM

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Bipartisan Group of Legislators Attempted to Rein in the TDEx Program or Transfer it from the Governors Office to into the Department of Public Safety. According to The Texas Observer, After the Observer story broke, a bipartisan group of legislators struggled to rein in the program, or at least transfer it from the political office of the governor into DPS, a professional law enforcement agency. [The Texas Observer, 11/2/07] Two-Thirds of the Texas House Voted to Remove Management of the TDEx System from Perrys Staff and Give it Entirely to DPS, But the Measure was Left Out of the Final Bill Signed by Perry. According to The Houston Chronicle, Two-thirds of the House voted to remove management of the computer from Perry's staff and give it entirely to DPS, but the measure was not part of the final border security law, Senate Bill 11, signed by the governor. Civil libertarians remain concerned that the database will be misused, particularly if managed by a political office such as a governor's. [The Houston Chronicle, 9/07/07]

Rep. Richard Raymond Said There Were Security Breaches, Losses of Data, And Non-Law Enforcement Individuals Who Had Access to the TDEx Database. According to US States News, Rep. [Richard] Raymond noted that during the past 16 months there were apparently some security breaches and there was also loss of data. We are waiting to hear back from the Governor's Office of Homeland Security, in order to find out exactly how often there were security breaches, what happened to the data that was lost, who were the non-enforcement individuals that have had access to the data base, how many people are on the Governor's Terrorist Watch List and what is the criteria for being put on that list, said Rep. Raymond. [US States News, 4/17/07] Rep. Raymond Said They Needed to Find Out How Many Non-Law Enforcement Government Employees in Gov. Perrys Office Had Access to the TDEx Database and What Type of Information They Accessed. According to US States News, We need to find out how many non-law enforcement government employees in Gov. Perry's Office and non-law enforcement, non-government employees had access to this information, who they were and what type of information they accessed, said Rep. Raymond. [US States News, 4/17/07]

Rep. Raymond Wanted to Know the Purpose of the Governors Terrorist Watch List and Why There Were Millions of People on the List. According to US States News, I want to know the purpose of the Governor's Terrorist Watch list. We need some further explanation why this watch list is in the millions and I would like to know all the types of information they are gathering on the people who are being put on the list, said Rep. Raymond. [US States News, 4/17/07] Rep. Raymond is a Member of the Defense Affairs and State-Federal Relations Committee and Called on Gov. Perry to Come Before His Committee to Explain Why They Invaded the Privacy of Millions of Texans. According to US States News, Rep. Raymond is a member of the Defense Affairs and State-Federal Relations committee, which has oversight on the Governor's Office of Homeland Security. Today he will be calling on the office of Governor Rick Perry and his Homeland Security Director Steve McCraw to come before this committee and explain why they have invaded the privacy of millions of Texans. [US States News, 4/17/07]

Democratic Rep. Lon Burnam Said of the New Database, The Over-Reach Were Seeing Here is Phenomenal. According to The Houston Chronicle, I do not take lightly the issue of backpack nuclear bombs. So we need to do a better job, said state Rep. Lon Burnam, D-Fort Worth, an opponent of the new database. But the over-reach we're seeing here is phenomenal. [The Houston Chronicle, 9/07/07] Rep. Richard Raymond Introduced Legislation That Would Forbid the Governor from Contracting with Private Entities to Create Dabatases Similar to TDEx. According to The Texas Observer, [Richard Raymond] asked [Tom Craddick] if he would be recognized the following morning for permission to introduce legislation that would immediately remove this database from the governor's office. The next day Raymond filed House Bill 4108, relating to the operation of the Texas Data Link Strategies LLC Confidential Document 140

Exchange (TDEx) or any other similar comprehensive intelligence database. The bill moves TDEx to the Department of Public Safety, giving DPS sole authority to compile intelligence on Texans, and forbids the governor from contracting with private entities to create similar databases. [The Texas Observer, 5/04/07] April 12, 2007: Speaker of the House Tom Craddick Didnt Know about the Governors TDEx Database Saying Until It was Reported by the Observer. According to The Texas Observer, On April 12, the Observer posted The Governor's Database on the Web. The story detailed how Gov. Rick Perry, through his Office of Homeland security, is compiling a massive database on Texans. A little more than an hour later, Laredo Democratic Rep. Richard Raymond approached the back microphone of the House chamber for a parliamentary inquiry: Is the chair aware of the new information that has just been brought forth that the governor apparently has an extensive database of thousands of Texans with personal information in his office that he is compiling? We are not aware of that Mr. Raymond, Speaker Tom Craddick replied. [The Texas Observer, 5/4/07] TDEx MOVES TO THE DEPARTMENT OF PUBLIC SAFETY A Bipartisan Coalition of More Than 100 House Members Concerned About Sensitive LawEnforcement Information Being Under the Control of Political Office Shifted TDEx to the DPS. According to The Dallas Morning News, Earlier versions had the database known as the Texas Data Exchange, or TDEx - which was originally controlled by the security czar, Steve McCraw - under the Texas Rangers but still managed by a division of Mr. Perry's office. It was shifted to the DPS last week by a bipartisan coalition of more than 100 House members concerned about sensitive lawenforcement information being under the control of a political office. [The Dallas Morning News, 5/8/07] Republican Chairman David Swinford Allowed Bill HB4018 to Move Forward -- Bill Would Move the TDEx Database Out of the Governors Office into it into the Texas Department of Public Safety. According to US States News, Rep. Richard Raymond (Laredo) responds to Chairman David Swinford's amendment to immediately move Governor Rick Perry's Texas Data Exchange (TDEx) database out of his office and into the Texas Department of Public Safety. Chairman Swinford informed me yesterday that he was going to accept my bill, HB 4108, as an amendment to his bill HB 13, which addresses Homeland Security issues. I feel this is a step in the right direction and I'm glad the Chairman recognized our concerns, said Rep. Raymond. The bottom line is we want to build a data base for law enforcement purposes that protects the homeland, but also protects the privacy rights of Texans who should not be on a Terrorist Watch List. [US States News, 4/17/07] Rep. Raymonds Bill Designated the Texas Department of Public Safety as the Only State Agency or State Governmental Entity That is Authorized to Develop, Maintain, Operate, and Control Access to the TDEx database. According to US States News, Rep. Raymond's bill designates the Texas Department of Public Safety as the only state agency or state governmental entity that is authorized to develop, maintain, operate, and control access to the Texas Data Exchange or any other similar comprehensive intelligence database. It requires that all data collected by Gov. Perry's Office be transferred to DPS. I'm committed to following through with this until the very end. Texans deserve the right to know that their rights are going to be protected and their privacy will not be invaded. These are some of our most fundamental rights, said Rep. Raymond. [US States News, 4/17/07]

Original Bill to Reorganize TDEx Would Have Allowed the Governors Office to Retain Control of Its Project Management and Funding. According to The Texas Observer, It took three revisions, but Swinford finally arrived at a bill he thought could pass. It moves TDEx to the Texas Rangers. That's an odd choice. The division at DPS most adept at handling databases is Criminal Law Enforcement. Asked why the Rangers, Swinford had a quip prepared: I believe in God and the Texas Rangers, and God wasn't available. The bill leaves the governor's office in charge of project management and funding for the database. This means that the governor's state Office of Homeland security continues to have Link Strategies LLC Confidential Document 141

access to and control over the administration of TDEx, notes Houston Democratic Rep. Jessica Farrar, who voted against the bill in the State Affairs Committee. [The Texas Observer, 5/4/07] 2007: The Governors Office and Homeland Security Director Steve McCraw Fought the Final Changes to TDEx. According to The Texas Observer, The governor's office and its controversial Homeland Security Director, Steve McCraw, fought the changes. In the waning days of the session, the authoritarian wing of the Republican Party managed to rescue TDEx. The Legislature adjourned with the program untouched. [The Texas Observer, 11/2/07]

OCTOBER 10, 2007: Governor Perrys Office Signed Over Control of the Texas Data Exchange (TDEx) to the Department of Public Safety. According to The Texas Observer, A QUIET VICTORY On October 10, the governor's office quietly signed over all control of the Texas Data Exchange, or TDEx, to the Department of Public Safety. As Observer readers might recall, we first exposed the program this past April (see The Governor's Database, April 20). [The Texas Observer, 11/2/07] The October Agreement Ceding Control of TDEx was Signed by Brian Newby, Perrys Chief of Staff NOT by the Director of Homeland Security According to The Texas Observer, Now, for unknown reasons, Gov. Rick Perry's office has decided it doesn't want the hot potato after all. Interestingly, the October agreement ceding control of TDEx was not signed by McCraw but by Brian Newby, the governor's chief of staff. [The Texas Observer, 11/2/07]

PERRYS OFFICE CLAIMS THE TDEx SYSTEM IS ONLY FOR LAW ENFORCEMENT AGENCIES Perrys Spokeswoman Katherine Cesinger Said the TDEx System is Meant to be Nothing More Than a Centralized System to Allow Law Enforcement Agencies Across Texas to Share Data. According to The Houston Chronicle, Perry's director of homeland security, Steve McCraw - the driving force behind the Texas Data Exchange, or TDEx, computer - declined to be interviewed for this story. Perry spokeswoman Katherine Cesinger said the computer is meant to be nothing more than a centralized system to allow law enforcement agencies across Texas to share data that already is being kept by individual police and sheriff's departments. [The Houston Chronicle, 9/07/07] FEDERAL MONEY FOR INTELLIGENCE DATABASES REQUIRES CRIMNAL JUSTICE OVERSIGHT Federal Money for Intelligence Databases Comes with the Requirements That They be Overseen by a Criminal Justice Agency The Governors Office of Homeland Security Does Not Exist in This Capacity in the Eyes of DPS or the FBI. According to The Texas Observer, Federal money for intelligence databases comes with requirements that they be overseen by a criminal justice agency. The governor's office of Homeland security is not a criminal justice agency in the eyes of DPS or the FBI. More importantly, neither the office of Homeland security nor its director exists in statute. Perry and McCraw have created TDEx and all their Homeland security activities out of legislative authorization for a strategic plan. [The Texas Observer, 5/04/07] Steve McCraw Unilaterally Designated the Texas Department of Information Resources as an Agency with Law Enforcement Functions so That They Could Manage TDEx. According to The Texas Observer, The information department, which handles the state's computer needs, originally was supposed to monitor how well Appriss did the job, but that arrangement quickly ran into a problem. Under federal law-relevant because federal money was being used-the contract had to be overseen by a criminal justice agency. So McCraw simply designated the department as one. I am writing to confirm the Texas Department of Information Resources (DIR) is an agency with law enforcement functions for the purpose of TDEx, he wrote to Larry Olson, the department's chief technology officer. [The Texas Observer, 4/20/07] TDEx is a Central State Repository for Sharing Across Jurisdictional Lines and is Available for Law Enforcement and Criminal Justice Purposes. According to the Texas Department of Public Link Strategies LLC Confidential Document 142

Safety website, TDEx is a system that compiles law enforcement incident records and other nonintelligence criminal justice information into a central state repository for sharing across jurisdictional lines. The information is available for law enforcement and criminal justice purposes. The greatest value of TDEx is being realized in the wealth of information it brings to criminal investigations. Data pertaining to incidents, suspects, booking and incarceration records, and other law. [TXDPS.State.TX.Us, Accessed 4/07/10, link] STEVE MCCRAW- CREATOR OF THE TDEx DATABASE Steven McCraw Joined Perrys Office in 2004. According to The Houston Chronicle, McCraw was a DPS trooper and narcotics agent between 1977 and 1982, when he entered the FBI. After the 9/11 terrorist attacks, McCraw headed a terrorist-tracking task force. He retired in 2004 and joined Perry's office. [The Houston Chronicle, 7/18/09] McCraws Virtual Fence with Cameras Along the Border with Mexico Resulted in Far Fewer Arrests Than Expected. According to The Houston Chronicle, McCraw has made anti-terrorism and anti-gang activities a priority of his work as Perry's homeland security director. Part of that effort was a "virtual fence" with cameras along the border with Mexico to catch smugglers and illegal aliens. The program resulted in far fewer arrests than expected. [The Houston Chronicle, 7/18/09] Director of Homeland Security Steve McCraw Said That TDEx Would Make Texans Safer Because They Arm Law Enforcement Agencies with the Ability to Have Complete, Accurate and Rapid Data on Criminals. According to the US States News, By establishing these priorities for use of increasingly scarce homeland security dollars, we are ensuring that Texans get the greatest protection for their money, [Steve] McCraw said. These technologies make Texas safer because they arm all Texas law enforcement agencies with the ability to have complete, accurate and rapid data on criminals - whether they be murderers, rapists, drug dealers, kidnappers or suspected terrorists. [States News, 10/13/06] McCraw Said TDEx was Important Because The Nations Greatest Need is in the Intelligence Arena. According to the US States News, In addition Texas sought and received a deadline extension while it worked with federal homeland security officials on how the MOUs should be constructed for best use of these dollars. Despite prioritizing spending of federal dollars on TDEx and Live Scan, local law enforcement agencies have always had the option of choosing whether to use their federal dollars for these programs or not, and we made that clear in the letter we sent local officials, McCraw added. Some communities may opt instead to purchase things like generators, automobiles, trailers, fire trucks - all legitimate expenditures under federal law - and that's their choice. But in our post 9-1-1 environment, most experts have agreed that the nation's greatest need is in the intelligence arena. These funding priorities address that concern. [States News, 10/13/06]

TDEx System is Managed by Personnel Under Steve McCraw in the Governors Division of Emergency Management. According to The Houston Chronicle, The computer is physically located at DPS but is managed by personnel under McCraw in the governor's division of emergency management. [The Houston Chronicle, 9/07/07] DPS Director Col. Thomas Davis Said Responsibility for the Database Belonged to Steve McCraw and the Governors Office, Claimed to Have Little Knowledge of Its Contents. According to The Texas Observer, DPS Director Col. Thomas Davis said responsibility for the database belonged to [Steve McCraw] and the governor's office, and claimed to have little knowledge of its contents. [The Texas Observer, 5/04/07] HEADLINE: Homeland Insecurity [The Texas Observer, 5/4/07]

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Steve McCraw Hoped the TDEx Database Would Include Every Texans Interaction with the Criminal Justice System, From Traffic Stops to Open Police Investigations. According to The Texas Observer, The plan also mentioned, obliquely, a new database called TDEx [see The Governor's Database, April 20, 2007]. It was to be a pointer index capability for all law enforcement agencies in Texas, so that the law enforcement community can quickly locate the law enforcement data they need. In fact, McCraw hoped the database would include every Texan's interaction with the criminal justice system from traffic stops to open police investigations. All of this would be accessible by the governor. It was a political opposition researcher's dream. [The Texas Observer, 6/15/07] Steve McCraw Wrote a Letter to Rep. Rick Noriega on Perrys Stationery After Noriega Began Questioning How Perry was Spending Border Security Money. According to The Texas Observer, The legislation ran into trouble almost immediately. The Observer published its expose on TDEx in April, and legislators responded by forcing language into the bill moving the database to the Department of Public Safety. Houston Democratic Rep. Rick Noriega and others began questioning how Perry was spending border security money and who-McCraw or DPS-had command and control. The homeland security director didn't do himself any favors when, on Perry's stationery, he sent out a letter belittling Noriega. McCraw wrote: Since it is your position that our border does not pose a terrorist threat, and because of that position you believe it is unnecessary to expand resources in protecting our border, I will make myself available to you or your staff immediately to provide a detailed briefing on why this mistaken position can cost lives. Noriega happens to be a lieutenant colonel in the Texas Army National Guard who has served in Afghanistan and on the border. [The Texas Observer, 6/15/07] Legislators Requested Information from Steve McCraw, Director of Texas Homeland Security, During a Hearing of the House Committee on State Affairs. According to US States News, Rep. Raymond and other legislators have requested this information from Steve McCraw, Director of Texas Homeland Security. They are still awaiting for a response to these requests, which were made last Friday, during a hearing of the House Committee on State Affairs. [US States News, 4/17/07] Steve McCraw Designed the States Department of Information Technology as a Criminal Justice Agency so it Could Receive Federal Funds. According to The Texas Observer, That set the stage for McCraw. Houston Democratic Rep. Rick Noriega, who is also a lieutenant colonel in the Army National Guard, asked McCraw under what authority he designated the state's Department of Information Technology as a criminal justice agency so it could receive federal funds, as the Observer reported. McCraw replied: Frankly, I shouldn't be a criminal justice agency myself. [The Texas Observer, 5/04/07] Steve McCraw Reported Directly to Governor Rick Perry. According to The Dallas Morning News, The Homeland Security Division of the governor's office has pieced together a mammoth database that contains information on more than 1 million Texans, covering everything from traffic tickets to more serious run-ins with police. The operation has been overseen for the last two years by Steve McCraw, who reports directly to Gov. Rick Perry. He is not a certified police officer, although he has an extensive law enforcement background. [The Dallas Morning News, 4/14/07] During Hearings, McCraw was Asked if There was Information on Any Legislators in the Database He Said He Didnt Know But Could Find Out. According to The Texas Observer, During the hearing, Raymond asked McCraw if there was information on any legislators in the database. McCraw said he didn't know but could find out-apparently missing the irony that this is exactly what those who disagree with the governor fear his staff will do. [The Texas Observer, 5/4/07] Steve McCraw Wrote a Letter in December 2005 to Key Lawmakers Saying That the DPS was Officially Designated as the Project Manager in Charge of Information and Its Security. According to The Dallas Morning News, Lawmakers said Friday that are concerned about a civilian in a political office having control over so much sensitive information on individuals. Several said they'll seek to move control of the database from the governor's office, and others want to fold the Division of Homeland Link Strategies LLC Confidential Document 144

Security into the Department of Public Safety. In response, the governor's office said the program has been based in and operated by the DPS - the state's premier law-enforcement agency. Mr. McCraw gave a December 2005 letter to key lawmakers that states that the DPS was officially designated as the project manager in charge of information and its security. [The Dallas Morning News, 4/14/07] Director of DPS told Legislators That the TDEx Project is Run by Steve McCraw and That it was Given Back to the Governors Office at Their Request. According to The Dallas Morning News, But in testimony before the House State Affairs Committee on Friday, the director of DPS told legislators that the project is run by Mr. McCraw. For a very short time - a week or a month DPS might have been kinda in charge of that project. It was given back to Mr. McCraw and the governor's office at their request, Col. Tommy Davis said. [The Dallas Morning News, 4/14/07]

April 2007: Steve McCraw Told The House State Affairs Committee That the TDEx System is Secure and That He is the Only Person in the Governors Office with Access to it. According to The Dallas Morning News, Mr. McCraw told the [House State Affairs] committee that the system is secure. He is the only person in the governor's office with access to it, which he obtained after being designated a law-enforcement agent in his role as head of homeland security in the state, he said. [The Dallas Morning News, 4/14/07] McCraw Said That the TDEx Database is Not Just About Terrorism Prevention. Its About Stopping Kidnappers and Rapists. According to The Dallas Morning News, In the post-9/11 world, police agencies must be able to easily share information, Mr. McCraw said. And he hopes that eventually, open cases, investigations and information from police sources might make it into the database. This is not just about terrorism prevention. It's about stopping kidnappers and rapists, he said. [The Dallas Morning News, 4/14/07] McCraw Said In an Ideal World, What You Want is a Google Search for Law Enforcement Data... That is Only Used by Law Enforcement Personnel. According to The Houston Chronicle, In an ideal world, what you want is a Google search for law enforcement data ... that is only used by law enforcement personnel, Steve McCraw, director of Perry's homeland security office, explained in an interview. [The Houston Chronicle, 4/14/07] McCraw Said That in May 2007, TDEx Would Expand to Tap into National Records from the FBI, The DEA, the Bureau of Prison Management, and the ATF. According to The Houston Chronicle, Records in the database come from the DPS, the Texas Rangers and at least 62 local police departments, including Houston and Dallas, but not yet San Antonio, McCraw said. TDEx is also poised for a major expansion by the end of May, when it also will start tapping into national records from the FBI, the Drug Enforcement Administration, the Bureau of Prison Management, and the Bureau of Alcohol, Tobacco and Firearms, McCraw said. [The Houston Chronicle, 4/14/07] April 2007: McCraw Insisted That No One in Perrys Office Has Ever Tapped into the TDEx Database to Mine Information for Political Purposes. According to The Houston Chronicle, While McCraw agrees he's not a law enforcement officer, he insisted he has top security clearance from the U.S. Justice Department to oversee the database. No one in Perry's office has ever tapped into the database to mine information for political purposes, McCraw insisted. [The Houston Chronicle, 4/14/07] HEADLINE: Governor's database concerns lawmakers; They fear the collected records could become a political tool [The Houston Chronicle, 4/14/07]

STEVEN MCCRAW MOVED TO TOP SPOT AT DPS BACK IN CHARGE OF TDEx 2007: Senate Chief of Staff Speculated That Perrys Ambition was to Replace the DPS Director Col. Davis with Steve McCraw. According to The Texas Observer, Kent Mawyer, chief of DPS' criminal law enforcement division, followed. McCraw, Mawyer, and current DPS Assistant Director David Link Strategies LLC Confidential Document 145

McEathron have a long history together. All three graduated from the DPS service training school in 1977. While Mawyer and McEathron scaled the hierarchy at DPS, McCraw, an El Paso native, left the agency in 1983 to join the FBI as a special agent. In 20 years he rose to the rank of deputy assistant director of intelligence. According to at least one Senate chief of staff, there is speculation that Perry's ambition is to replace Col. Davis with McCraw. [The Texas Observer, 5/4/07] November 2008: Critics Feared That Perry Would Push Steve McCraw into the Top Spot at DPS to Regain Control of the TDEx Database. According to The Texas Observer, To critics, the plan contains echoes of Perry's various attempts to add major homeland security functions to the state government. In 2007, the Observer discovered that Perry's Homeland Security Office was developing an intelligence database, the Texas Data Exchange (TDEx), which held personal information on thousands of Texans but had little oversight from law enforcement. Although DPS eventually took control of TDEx, the agency higher-ups who fought to control the database have since left. The fear among critics is that Perry may fill the power vacuum with allies who share his views on TDEx and other questionable intelligence ventures. In particular, speculation abounds that Steve McCraw, the governor's homeland security director and a major advocate of TDEx, may get the nod for the top spot at DPS. [The Texas Observer, 11/28/08] July 2009: Former Homeland Security Director Steven McCraw Named the New Head of the Texas Department of Public Safety. According to The Houston Chronicle, Gov. Rick Perry's top aide on homeland security and disaster relief Friday was named the new head of the Texas Department of Public Safety. Steven McCraw, 55, has drawn concerns from civil libertarians in the past for promoting antiterrorism and crime databases that include the names of all licensed drivers in the state, but he also has been praised for overseeing the state's disaster preparedness operations in connection with Hurricanes Rita and Ike. [The Houston Chronicle, 7/18/09] 2008: RECOMMENDATIONS FOR REORGANIZATION OF DPS RAISED CONCERNS ABOUT POLITICAL SNOOPING UNDER THE GUISE OF PUBLIC SAFETY Rep. Richard Raymond of Laredo Introduced Legislation to Take the TDEx Database Away from Governor Perry Lawmakers Were Afraid He Would Misuse it for Political Purposes. According to the Houston Chronicle, If you've had a traffic ticket recently, you likely are in the privately run database of criminals and potential terrorists being kept by Gov. Rick Perry's office. The database is intended to centralize information for police agencies, but some state lawmakers are afraid it can be misused for political purposes if the governor's office controls it instead of the Texas Department of Public Safety. Rep. Richard Raymond, D-Laredo, who has introduced legislation to take the database away from the governor, called it invasive. [Houston Chronicle, 4/14/07, link] Immigration, Border, and National Security Policy Director for the Texas ACLU Said, How Can We be Sure That We will Never have a Governor who will Misuse This Power?" According to The Texas Observer, Civil libertarians are not assuaged by this kind of answer. Criminal intelligence data should be in the hands of a professional law enforcement agency that has distance from the political pressures on elected officials, says Rebecca Bernhardt, immigration, border and national security policy director for the Texas ACLU. How can we be sure that we will never have a governor who will misuse this power? [The Texas Observer, 4/20/07] Study Conducted on How to Remake the Texas Department of Public Safety Recommended the Creation of a Special Operations Group That Some Feared Might Spy on Protest Groups or Political Enemies. According to The Texas Observer, Gov. Rick Perry has long been eager to remake the Texas Department of Public Safety. And for almost $1 million - the cost of a study conducted for the Perry-appointed Public Safety Commission - the governor may now have the blueprints to make it happen. On Halloween, the consulting firm Deloitte & Touche released the results of a 10-week report that recommends a top-tobottom shakeup of the agency, the first such overhaul since 1957. It's more than a study, says Scott Henson, a criminal justice expert who runs gritsforbreakfast.blogspot.com. Link Strategies LLC Confidential Document 146

They're going to use it as their template to reorganize the agency. While nearly everyone agrees that DPS is overdue for an overhaul, some aspects of the plan raise privacy and civil liberties concerns including a special operations group that some fear might get into the business of spying on protest groups or political enemies. [The Texas Observer, 11/28/08] Another Recommendation Called for the Consolidation of All Agency Intelligence and Homeland Security Functions Into an Intelligence and counterterrorism Division. According to The Texas Observer, One recommendation calls for the consolidation of all agency intelligence and homeland security functions into an intelligence and counterterrorism division, which would report directly to a newly created deputy director of law enforcement. The division would have a broad mandate to lead the Department's intelligence-led policing, counterterrorism, and homeland security efforts against largescale criminal conspiracies and other threats to the State of Texas, the report says. [The Texas Observer, 11/28/08] The Department of Public Safety Now Has a Intelligence and Counterterrorism Division. [TXDPS.State.TX.Us, Accessed 4/08/10, link]

Recommendations Include a Special Operations Group Tasked with Conducting CounterSurveillance for the Governors Protection Detail, the Lieutenant Governor, Visiting Dignitaries, the Capitol, and the Governors Mansion. According to The Texas Observer, Within the intelligence division, Deloitte recommends the formation of a special operations group, tasked with being the eyes and ears of the intelligence and counterterrorism division. And whom exactly would the special ops see and hear? The report refers to possible terrorists and violent criminal gangs but also suggests the unit conduct counter- surveillance for the governors protection detail, the lieutenant governor, visiting dignitaries, the Capitol and the Governor's Mansion. The protection of these potential targets should be intelligence driven, the report reads. [The Texas Observer, 11/28/08] Criminal Justice Expert Warned That When You Add the Protection Function to the Criminal Investigation Function, That Basically Insists That They do Political Snooping. According to The Texas Observer, It's more than a study, says Scott Henson, a criminal justice expert who runs gritsforbreakfast.blogspot.com. They're going to use it as their template to reorganize the agency. But Henson worries about the potential for a new special operations group whose functions might include spying on political foes. When you add in the protection function to the criminal investigation function and say that it should be intelligence driven, Henson said, that basically insists that they do political snooping. [The Texas Observer, 11/28/08]

HEADLINE: Governor's office stokes intelligence gathering in state; Some call such work misguided; others say it's just counterterrorism [The Houston Chronicle, 9/07/07] TEXAS GOVERNORS OFFICE USES TDEx TO RUN BACKGROUND CHECKS ON TEXAS PUBLIC INFORMATION ACT REQUESTERS Texas Public Information Request Sent by Deirdre Page Asked the Governors Office to Send Her All Information Concerning Herself in the TDEx Database. [Documents Acquired from Texas Public Information Act Request from John Washburn, Accessed on 4/6/10, link]

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November 5, 2007: Sophie Yanez in the Texas Governors Office Used the TDEx System to Search for Information on Public Information Act Requester Lillian Aguirre Ortiz. [Documents Acquired from Texas Public Information Act Request from John Washburn, Accessed on 4/6/10, link]

November 5, 2007: Sophie Yanez in the Texas Governors Office Used the TDEx System to Search for Information on Public Information Act Requester Deidre Page. According to an email acquired from a Freedom of Information Request sent by John Washburn, Sophie Yanez sent an email on Link Strategies LLC Confidential Document 148

November 5, 2007 that said No information was found on TDEx using an exact name search under Deirdre. [Documents Acquired from Texas Public Information Act Request from John Washburn, Accessed on 4/6/10, link]

Sophie Yanez Works in the Homeland Security Division of the Texas Governors Office. [Documents Acquired from Texas Public Information Act Request from John Washburn, Accessed on 4/6/10, link]

Sophie Yanez is Steve McCraws Assistant. [Documents Acquired from Texas Public Information Act Request from John Washburn, Accessed on 4/6/10, link]

Assistant General Counsel Chelsea Thornton at the Office of the Governor Questioned Why the Requester Wasnt Sent to DPS to be Run Through TDEx. [Documents Acquired from Texas Public Information Act Request from John Washburn, Accessed on 4/6/10, link] Link Strategies LLC Confidential Document 149

Sophie Yanez Admited That She Kept Access to TDEx to Cover PIRs. According to an email written by Office of the Governor staffer Sophie Yanez wrote, You are correct, it does reside at DPS. Did I goof? I kept access to cover PIRs, should I no longer do that? [Documents Acquired from Texas Public Information Act Request from John Washburn, Accessed on 4/6/10, link]

Assistant General Counsel Chelsea Thornton Told Sophie Yanez to Get Rid of Her TDEx Access and Said in the Future She Would Send Requests Directly to DPS. [Documents Acquired from Texas Public Information Act Request from John Washburn, Accessed on 4/6/10, link]

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The TDEx Grant to DPS was Awarded on November 2, 2007 and Accepted on November 5, 2007. [Documents Acquired from Texas Public Information Act Request from John Washburn, Accessed on 4/6/10, link]

COMPANY HIRED TO MANAGE TDEx HIRED LOBBYISTS WHO WERE PERRY DONORS TDEx System Kept by the Private Company Apriss Inc. on a Computer in Kentucky. According to The Houston Chronicle, The database is actually kept by a private company, Apriss Inc., on a computer in Kentucky. We continue to be deeply concerned about the governor's office having a hand Link Strategies LLC Confidential Document 151

in TDEx and the database being outside the state of Texas, said Rebecca Bernhardt of the ACLU of Texas. [The Houston Chronicle, 9/07/07] Director of Homeland Security Steve McCraw Said If We Meet Federal Standards, It Doesnt Matter Where the Database is. According to The Texas Observer, [Steve] McCraw downplayed concerns that the TDEx database, which contains information on millions of Texans, is housed in Kentucky, even though the original plan was to keep it in Texas. If we meet [federal standards], it doesn't matter where the database is, McCraw said. [The Texas Observer, 5/4/07] Texas DPS Began Negotiations with the Kentucky State Police to Make Them a Supervisory Criminal Justice Agency for Site Security of the Appriss Facilities in KentuckyNo Agreement Formalized. According to The Texas Observer, In hope of providing some form of monitoring over the Appriss facilities, Texas DPS authorities began discussions with the Kentucky State Police to make them a supervisory criminal justice agency for site security. No agreement was formalized. In a recent interview, McCraw insists that there are sufficient safeguards and it's no longer necessary. In today's world, where the warehouse is doesn't matter, as long as it's in complete compliance with all the security protocol and ... you have the ability to audit at any time," he says. [The Texas Observer, 4/20/07]

As Late as October 2006, Appriss Had Not Given Texas Authorities Fingerprints or Background Checks of Employees Handling the Data. According to The Texas Observer, As late as October 2006, more than a year after Appriss signed its contract and after receiving sensitive data from the Texas Rangers and the state Highway Patrol, Appriss had not given Texas authorities fingerprints or background checks of all its employees handling the data, according to e-mails obtained by the Observer. There were also questions about the security of the company hired to shred documents for Appriss. (McCraw says all background checks have since been completed.) [The Texas Observer, 4/20/07] APPRISS INC. LOBBYISTS ARE PERRYS FRIENDS AND DONORS Andrea McWilliams and Dean R. McWilliams were the principal lobbyists for Appriss Inc. from 20012010. During this time they netted between $650,000 and $1.37 Million dollars (Its not possible to get an exact amount due to Texas Ethics Commission reporting rules). In 2005, Andrea McWilliams was one of the top grossing lobbyists in Texas and the McWilliams firm is considered to be one of the top lobbying firms in the state. Dean McWilliams Contributed $7,000 to Perrys Campiagn Committees. [Texas Ethics Commission, link]
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March 10, 2010: Andrea McWilliams Attended a Birthday Party for Philanthropist Steve Hicks and Rick Perry Had Her Picture Taken with Anita Perry. According to Austin360.com, Last night, however, the riders met up with celebrants for Hicks 60th birthday, shared with Gov. Rick Perry, also newly 60. Solidly Republican, the crowd at the Four Seasons Hotel dressed in Western touches, nothing too starchy or over the top. [Austin360.com, 3/10/10, link]

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Perry Gave Andrea McWilliams a Signed Picture of Himself Presenting Her with a Pen from a Bill Signing Picture Included Perrys Signature with a Heart Above It. [McWilliamsAndAssociates.com, Accessed 4/07/10, link]

2005: The Dallas Morning News Ranked Andrea McWilliams as One of Texas Top Grossing Lobbyists. According to the Rotary Club of Austin, In 2005 the Dallas Morning News ranked McWilliams as one of the Texas top grossing lobbyists, While Texans for Public Justice recognized her as the top female Texas lobbyist on their elite Million Dol-lar Lobbyists list. Capitol Inside, the insiders news source of the Texas Legislature, has listed McWilliams as one of the top ten Impact Players in the industry. [Rotary Club of Austin, 7/14/09, link] LOBBYISTS HIRED BY APPRISS INC. 2001: Appriss Inc. Hired Lobbyists Andrea and Dean R. McWilliams for Less Than $10,000 Each and Lobbyist Mary Ann Choate for $50,000 - $99,999. [Texas Ethics Commission, link] Link Strategies LLC Confidential Document 153

2002: Appriss Inc. Hired Lobbyists Andrea and Dean R. McWilliams for Between $50,000 $99,999 Each. [Texas Ethics Commission, link]

2003: Appriss Inc. Hired Lobbyists Andrea and Dean R. McWilliams for Between $50,000 - $99,999 Each and Lobbyist Jim Terrell for Less Than $10,000. [Texas Ethics Commission, link]

2004: Appriss, Inc. Hired Lobbyist Andrea McWilliams for Between $50,000 - $99,999 and Lobbyist Dean R. McWilliams for Between $25,000 and $49,999. [Texas Ethics Commission, link]

2005: Appriss, Inc. Hired Lobbyists Andrea and Dean R. McWilliams for Between $25,000 and $49,999 and Lobbyists Daniel Brookhart Mays and Robert Nathan for Less Than $10,000. [Texas Ethics Commission, link]

2006: Appriss, Inc. Hired Lobbyists Andrea and Dean R. McWilliams for Between $25,000 and $49,999 and Daniel Brookhart Mays for Less than $10,000. [Texas Ethics Commission, link]

2007: Appriss, Inc. Hired Lobbyists Andrea and Dean R. McWilliams for Between $25,000 and $49,999 and Daniel Brookhart Mays and Robert Nathan for Less Than $10,000. [Texas Ethics Commission, link]

2008: Appriss, Inc. Hired Lobbyists Andrea and Dean R. McWilliams for Between $25,000 and $49,999 and Lobbyists Alysha N. Hernandez, Daniel Brookhart Mays, and Robert Nathan for Less Than $10,000. [Texas Ethics Commission, link]

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2009: Appriss, Inc. Hired Lobbyists Andrea and Dean R. McWilliams for Between $50,000 and $99,999 and Lobbyists Alysha N. Hernandez and Daniel Brookhart Mays for Less Than $10,000. [Texas Ethics Commission, link]

2010: Appriss, Inc. Hired Lobbyists Andrea and Dean R. McWilliams for Between $50,000 and $99,999 and Lobbyists Alysha N. Hernandez and Daniel Brookhart Mays for Less Than $10,000. [Texas Ethics Commission, link]

OTHER A DPS Official was Able to Access TDEx Using His Sons Email Account Governors Office Retaliated by Cutting His Access But DPS Complained and Got Him Reinstated. According to The Texas Observer, As a test, a DPS official was able to access TDEx using his son's e-mail account. The governor's office cut him off in retaliation, but when DPS complained, reinstated him. [The Texas Observer, 4/20/07] NORTHRUP GRUMANS PRECURSOR DATABASE TO TDEx TRACKED KATRINA CRIMINALS Precursor of TDEx was a Database Managed by Northrop Grumman That Launched After Hurricane Katrina to Track the Influx of Louisiana Criminals That Never materialized. According to The Texas Observer, At one point, Noriega turned his attention to a precursor of TDEx, the ill-fated Northrop Grumman database that was launched after Hurricane Katrina to track a massive influx of Louisiana criminals that never materialized. [The Texas Observer, 5/4/07] Steve McCraw was the Driving Force Behind the Katrina Criminal Database Saying I Pushed It and Pushed It Hard. According to The Texas Observer, Documents obtained by the Observer indicate that McCraw was the driving force behind the database. While it never functioned, McCraw managed to wheedle sensitive criminal data out of the DPS for the project. Northrop Grumman was never in my bailiwick, McCraw claimed. It was always in the DPS criminal division. He did admit, though, I pushed it and pushed it hard. [The Texas Observer, 5/4/07] McCraw Acknowledged There Were Security Violations During the Katrina Criminal Database Project. According to The Texas Observer, McCraw acknowledged security violations during the course of the project, but he insisted that once it was shut down, the sensitive data were destroyed. McCraw promised to provide Noriega proof to that effect. [The Texas Observer, 5/4/07] DPS Gave Northrop Grumman Sensitive Criminal Information and it was Found on a Secure Server in the State Database. According to The Texas Observer, Mawyer acknowledged that DPS had given Northrop Grumman Corp. sensitive criminal information and that to his knowledge, it had not been destroyed. The mystery of what happened to the information, which includes open case files and possibly polygraph data in violation of state law, only thickened when McCraw sent Noriega a letter on April 18 confirming the data had not been destroyed, but was sitting on a secure server in the state database. The letter raises a number of

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questions, including: What types of data were included, has it been copied, who had access to it, and why did McCraw delay its destruction? [The Texas Observer, 5/4/07] Northrop Gruman Database Cost $1.4 Million and Included Information from Texas Criminal Records, Louisiana Criminal Records, Prison Records, and Privately Held Data. According to The Texas Observer, While TDEx was getting under way, on August 29, 2005, Hurricane Katrina hit New Orleans. As Texas cities filled with Louisiana refugees, panic over the possible arrival of a criminal element from New Orleans seems to have gripped some Texas authorities. McCraw proposed a separate database that would group traffic law enforcement information, DPS criminal law enforcement reporting, the Texas Rangers database, consumer records amassed by a scandal-ridden private data company called ChoicePoint Inc., prison records from Appriss, and criminal information from the Louisiana State Police. (There are differing accounts of whether polygraph information, the inclusion of which if not redacted could have violated state law, was also provided. McCraw says no.) A private vendor was to create a global search capability for all the unstructured data. This new database would then be made available to analysts at the Texas Fusion Center, a crisis management bunker operated by the governor's Division of Emergency Management. McCraw rushed through a contract with Northrop Grumman Corp. for a database project to last until October 2006 at a cost of $1.4 million in federal homeland security funds. [The Texas Observer, 4/20/07] 1974: TEXAS DEPARTMENT OF PUBLIC TRANSPORTATION ABANDONED INTELIGENCE GATHERING AFTER SCANDALS ROCKED AGENCY 1974: Governor Dolph Briscoe Put a Halt to a Department of Public Safety Program That Appeared to Lack Safeguards Against an Invasion of Privacy. According to The Houston Chronicle, The DPS at the time was building a massive computer intelligence database on Texas citizens that would be shared among law enforcement agencies. Gov. Dolph Briscoe put a halt to it, saying it appeared to lack safeguards against an invasion of privacy. All of that occurred in 1974 and embarrassed the DPS nationally. The agency destroyed the intelligence files and apologized to the Dallas church. The scandal is all but forgotten, but some civil libertarians now fear it could be repeated. [The Houston Chronicle, 9/07/07] Commercial Airline Pilot Investigated as a Potential Terrorist Because He Testified Before a Government Agency Against the Construction of a Nuclear Power Plant. According to The Houston Chronicle, After a commercial airline pilot testified before a government agency against the construction of a nuclear power plant, the Texas Department of Public Safety intelligence division investigated him as a potential terrorist who might fly his passenger-loaded airplane into a nuclear site. [The Houston Chronicle, 9/07/07] The First Unitarian Church of Dallas Hosted Talks by a Gay Rights Group and was Labeled by DPS as a Sponsor of Radical Left Groups. According to The Houston Chronicle, The First Unitarian Church of Dallas hosted talks by a gay rights group and was labeled by DPS intelligence as a sponsor of radical left groups. [The Houston Chronicle, 9/07/07] Former State Senator A.R. Babe Schwartz Led the Investigation into DPS Intelligence Gathering and Said They Have a Vast Repertoire of Records on Citizens. According to The Houston Chronicle, Then-state Sen. A.R. Babe Schwartz, D-Galveston, led the investigation into DPS intelligence gathering. In a recent interview, Schwartz said Pomeroy's case was far from the only one. They have a vast repertoire of records on citizens, Schwartz said. They collected pure hearsay. They collected accounts from people who wanted to defame other people. [The Houston Chronicle, 9/07/07]

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Perrys Record of Opposing Transparency and Fighting Back Against Open Records Requests
Rick Perry has a long record of not being responsive to open records requests, and there is an alarming trend where his administration has actively worked to reduce government transparency. From deleting emails after seven days, to denying requests and circumventing the law, to keeping documents secret, Perrys priorities have consistently been to hide his administrations actions. DELETING EMAIL The Governors office under Rick Perry has maintained the email policy of his predecessor, George W. Bush. This stringent policy causes every email to be deleted after seven days and it requires employees to print or save any email dealing with state business, so they arent deleted. Perry has been criticized for this position and many vital records have been lost or deleted over the years. In Late 2007, a computer software consultant from Wisconsin, John Washburn, tried to stop this process of deletion by writing a computer program that requested all of the Governors office emails every four days. This would essentially make all his emails public, since no record that has been requested can be destroyed. Perrys office fought back hard, charging Washburn $142 for each day of records. The Travis County District Attorney ruled against Washburn in a lawsuit, essentially allowing Perry to continue deleting vital information. Perry continues to hide information from the public. By using a personal email account, instead of a state account, and claiming he only uses the email for personal use, not state business, Perry avoids an open records requirement on his own email. Political Activist John Washburn Programmed Computer to Request Perry Email Records. According to the Fort Worth Star-Telegram, Advocates of open government were aghast to learn that Gov. Rick Perry requires his staff to destroy e-mail records after seven days. This week, political activist John Washburn decided to do something about it. The Milwaukee-based software consultant programmed his computer to automatically spit out two requests a week for all government e-mail generated by Perry staffers. He hasn't gotten a single e-mail yet, but Washburn has already achieved a victory of sorts. Under state law, records aren't supposed to be destroyed once somebody has asked for them. In other words, Washburn has singlehandedly brought the electronic shredders to a grinding halt. I've kind of put a stick in the spokes of the wheel, said Washburn, whose fight for election records in Wisconsin made him a believer in open government. The whole point of public records is to make those ongoing transactions and government policy decisions more transparent to the public. If they're gone, by definition, that's about as opaque as it gets. [Fort Worth Star-Telegram, 11/10/07] Four Days of Emails in Governors Perrys Office Included More Than 8,000 Emails. According to the Dallas Morning News, To hear the governor's office tell it, John Washburn is a guy who has heaved a mighty wrench more than 3,000 miles and is gumming up their work. Mr. Washburn, a 45-year-old computer software tester from Wisconsin, wouldn't disagree. He just believes the mechanism needed some strong gum. Mr. Washburn learned three months ago from a blog that the governor's office automatically destroys virtually all of its e-mails every seven days, a period he found to be obnoxiously short. So Mr. Washburn decided to single-handedly force the office to keep the messages longer. He developed a computer program that automatically, every four days, asks for all e-mails to and from staffers in Gov. Rick Perry's office - because documents sought under state open-records laws must be retained. He just received the first batch - covering four days in early November 2007. It includes more than 8,000 e-mails and would fill more than 20,000 printed pages. He promptly posted them on the Internet last week. [Dallas Morning News, 1/27/08] Link Strategies LLC Confidential Document 157

The Full List of Files Acquired by John Washburn Can be Downloaded Here. [Box.net, Accessed 4/7/10]

Perrys Office Didnt See Reason to Change Email Deletion Policy Created Under Gov. Bush. According to the Fort Worth Star-Telegram, The White House has been ordered to preserve e-mails over fears that vital records have been destroyed, but an electronic purge policy approved years ago by George W. Bush is still in effect at the Texas governor's office, officials said Tuesday. And Bush's successor in Texas, Gov. Rick Perry, sees no reason not to retain it indefinitely. We kept Bush's policy. This started under him as far as we know, Perry spokesman Robert Black said. I wouldn't see why there needs to be a change. Critics say the Bush-era policy of deleting office e-mail once a week undermines the principles of government openness. Black stressed that steps are being taken to ensure that important public records are printed or saved electronically, but he said the governor's e-mail policies adhere to state sunshine laws and cut down on electronic clutter. [Fort Worth Star-Telegram, 11/14/07] Perry Put Responsibility of Email Policy on Bush But a Federal Judge Ordered the White House Under Bush to End This Policy and Preserve Backup Tapes of E-mails. According to the Fort Worth Star-Telegram, Just because a government policy is inherited doesn't mean it's a good one. Gov. Rick Perry's office has put responsibility for the practice of deleting e-mails automatically after seven days on his predecessor, George W. Bush, but that's hardly an excuse for continuing to erase public records in the name of sound-byte management. Bush took his crabbed view of government openness with him to Washington, after all. And last week, a federal judge ordered the White House to preserve backup tapes of e-mails that were improperly deleted. [Fort Worth Star-Telegram, 11/23/07] Perrys Office Charged Washburn $142 for Each Day of Email Records. According to the Fort Worth Star-Telegram, Texas Gov. Rick Perry, under fire for his frequent purging of office e-mail, has agreed to give an open-government advocate a batch of electronic records that might otherwise have landed on the electronic ash heap of history. For a price. Perry's office wants to charge citizen activist John Washburn $142 for each day's worth of e-mail messages he asked for in his first request, according to a bill sent last week. At that rate, Washburn, a software consultant based in Milwaukee, has calculated that he would have to cough up $2,982 for what he has requested so far -- three weeks' worth of e-mail messages from the governor's staff computers. [Fort Worth Star-Telegram, 11/27/07] Perrys Office Charged Washburn $350 a Week to Comply with Open Records Requests. According to the Austin American-Statesman, Six weeks after making a formal request for Gov. Rick Perry's e-mails, John Washburn is mired in the details of the Public Information Act, which is supposed to make his request possible. Joseph Larsen, a Houston attorney representing Washburn, said it could be weeks more before his client learns whether Perry's office intends to honor his requests. I think the governor's office is stonewalling, Larsen said. I really think that this is an abuse of the Public Information Act. Washburn, a public information advocate, is awaiting a decision from the attorney general's Open Records Division on whether Perry's office is allowed to charge him more than $350 a week to comply with his requests. The payment issue is the latest in several legal skirmishes that began shortly after the Wisconsin man made his first formal request Nov. 6. [Austin American-Statesman, 12/18/07] Requested Emails Showed Candid Conversations Among Governors Office Employees Including References to Long Liquid Lunches. According to the Fort Worth Star-Telegram, It's not necessarily the kind of language Texans might expect to be floating around the governor's office, but racist, vindictive and long liquid lunches are among the phrases that top aides and allies of Gov. Rick Perry used to describe current and former state officials, newly released e-mail records reveal. The emails were among several hundred state records that were saved from the electronic shredders after citizen activist John Washburn fought to get them. The Milwaukee man's battles with Perry, whose office usually destroys its e-mail weekly, have helped sparked debate about government secrecy. A top Perry aide acknowledged that the e-mails were very candid and open but wouldn't discuss the specifics of them other than to say they would have been deleted if Washburn hadn't filed an official request for them. Washburn is still fighting for more documents under the state's loophole-ridden open-records law. Link Strategies LLC Confidential Document 158

He says many of the accompanying documents he asked for from Perry's office weren't provided, and several records he did get refer to e-mail messages that once existed but now seem to be missing. In addition, Perry's office is declining to release some records until Attorney General Greg Abbott decides whether the law requires their disclosure, records indicate. [Fort Worth Star-Telegram, 1/24/08] Emails Revealed Raw Exchanges Among Top Aides, Including References to a Planned Gift of Cowboy Boots and a Hat to a Visiting Arab Sheikh.. According to the Fort Worth Star-Telegram, Like laundry dumped on the front lawn, hundreds of internal e-mails from Gov. Rick Perry's office spilled out into the open Thursday, but the long-serving Republican offered no apologies for some of the raw exchanges among top aides and allies. The e-mail records, which had been slated for destruction until a citizen activist stepped in, touch on everything from Perry's advocacy of presidential hopeful Rudy Giuliani to a planned gift -- cowboy boots and a hat, of course -- for a visiting Arab sheikh. [Fort Worth Star-Telegram, 1/25/08] District Attorney Declined to Pursue Complaint Regarding Perrys Office Deleting Emails. According to the Associated Press, The Travis County district attorney's office has declined to pursue a complaint regarding Gov. Rick Perry's policy of deleting e-mails every seven days despite an attorney's assertion that the policy insures that valuable public information is lost. Open records attorney Joe Larsen, who argues that the e-mail deletion policy is in violation of Texas public information laws, said he'll next take the complaint and request for an injunction to Attorney General Greg Abbott for review. In a letter to Larsen on Tuesday, Greg Cantrell, assistant district attorney in the office's Public Integrity Unit, said the office will not move forward with an injunction against Perry based on our review of information we received from the Governor's Office. Larsen complained that the prosecutors appeared to have accepted everything the governor's office told them with no independent investigation [AP, 4/16/08] Travis County District Attorney Said He Wouldnt Grant Injunction on Perry Deleting Email. According to the Dallas Morning News, The Travis County district attorney won't try to stop Gov. Rick Perry's office from deleting e-mail after seven days. Open records advocates think someone should. The seven-day period is much shorter than the time Texas agencies must retain paper correspondence, which, depending on its nature, must be kept from one to three years. The Freedom of Information Foundation of Texas asked the Travis County district attorney for an injunction on behalf of Wisconsin software consultant John Washburn, who last fall wrote a computer program to automatically request email generated by Perry staffers. Under the Texas Public Information Act, records cannot be destroyed once somebody requests them. [Dallas Morning News, 6/3/08] Email Policy Required Employees to Print Any Emails Dealing with Government Business. According to the Dallas Morning News, Since this issue arose last year, the governor's office has maintained that staffers may delete e-mail from inboxes, but messages dealing with government business is printed and filed. But government transparency advocates worry that some information may slip through the cracks. There's simply no way that all the e-mails are being printed and filed, Mr. Larsen said. In addition to your daily work activity, you have to make sure you're printing out your e-mails so that it doesn't get deleted. Mr. Larsen also noted that Texas law requires electronic information to be kept electronically for the full retention period. It's easier to search. It's cheaper to store. And you don't use an additional resource by having to print it out and put it in a file, he said. Because the Travis district attorney declined pursuing an injunction in this case, Mr. Larsen filed a complaint with Attorney General Greg Abbott, asking him to take action against the governor's office. [Dallas Morning News, 6/3/08] Perrys Office Took Advantage of Attorney Generals Ruling on Email. According to the Burnt Orange Report, Emails from a governmental body are generally considered public information, but the Texas Attorney General's opinions have not kept up with technology. The Attorney General has ruled that emails dealing with personal activities are not public information. Governor Perry's office has taken advantage of the Attorney General's ruling, and open government advocates are upset about it. Perry's office has a procedure where his and his staffer's emails are destroyed after seven days. The seven-day period is arbitrary, and it is much shorter than the one to three year period required by law for paper Link Strategies LLC Confidential Document 159

correspondence. Dallas Morning News reported earlier this month: Since this issue arose last year, the governor's office has maintained that staffers may delete e-mail from in boxes, but messages dealing with government business is printed and filed. But government transparency advocates worry that some information may slip through the cracks. There's simply no way that all the e-mails are being printed and filed, Mr. Larsen said. In addition to your daily work activity, you have to make sure you're printing out your emails so that it doesn't get deleted. Rick Perry's contention that he is printing emails to conform to FOIA requirements seems to be a crock of you-know-what. Public information retention requirements shouldn't change because the information is kept in different mediums. A policy of deleting emails every seven days will inevitably destroy public information. Retention requirements depend, instead, upon subject matter. State Libraries, which are charged with retention, have different retention policies for different subject matters. State Libraries have never had a policy that requires them to purge their shelves or electronic files after seven days. [Burnt Orange Report, 6/28/08] Perry Fought to Keep Itinerary and Public Appearances Secret. According to the Dallas Morning News, Perry has fought to keep his itinerary of upcoming meetings and appearances from public review. No e-mail he has written has been made public because he only uses a personal e-mail account, which he says is not used for state business. His executive staff keeps a schedule that destroys most of the emails it generates every seven days. [Dallas Morning News, 10/13/09] Dallas Morning News Reporter Steve Mcgonigle Questioned Why the Perry Administration Deleted Email That Were Dubbed Transitory. [Documents Acquired from Texas Public Information Act Request from John Washburn, Accessed on 4/6/10, link]

DENYING REQUESTS Houston Chronicle Sued Perry Over Release of Documents. According to original lawsuit posted on Scrib, Hearst Newspapers sued Rick Perry regarding the release of records the Houston Chronicle requested through an open records request. Read the full suit here. [Scribd, 10/27/09] Perry Refused to Release Documents Reviewed Hours Before Execution of Cameron Todd Willingham. According to the Dallas Morning News, Gov. Rick Perry's refusal to release documents he reviewed in the hours before the Cameron Todd Willingham execution is the latest fight he's waged over records kept in his office. Many believe he is the most secretive modern-day governor Texas has seen From what we have seen, this governor seems to be much more inclined to make decisions and conduct business in the dark than in the light of day compared to previous governors, said Keith Elkins, executive director of the Freedom of Information Foundation of Texas, which fights for open government Elkins said that Perry's latest decision to withhold memos that helped form his opinion on an execution carried out five years ago is a telling example. Texas leads the nation in the number of executions. I think everyone would want to know that the decisions to execute someone are being based on the best information possible, he said. It is an irreversible decision, and to simply throw up the stone walls and say, I'm not releasing information on what I'm basing my decisions on, I don't see how that's in the best interest of any taxpayer, Elkins said. [Dallas Morning News, 10/13/09]

Link Strategies LLC Confidential Document 160

Office Records Showed Perry Received Report Questioning Whether Arson Was Involved in Fire Two Hours Before Convict Was to Be Executed. According to the Dallas Morning News, Perry's office records show that two hours before the execution he received a report from explosives and fire expert Gerald Hurst that pointedly questioned whether arson was involved in the fire that killed Willingham's three small children. While his office has declined to release the files, Perry last month told The Dallas Morning News that the records showed clear and compelling, overwhelming evidence that he was in fact the murderer of his children. Castle said the facts of the case, along with a decade of court appeals, and the decision by the attorney general's office and the 5th U.S. Circuit Court of Appeals that the Hurst report was simply an opinion about the fire affected the governor's decision to allow the execution to go forward. The Willingham case has drawn national interest and is becoming a political thorn for Perry. GOP rival Kay Bailey Hutchison's campaign on Monday accused him of trying to cover up a critical investigation. [Dallas Morning News, 10/13/09]

Newspaper Publishers Sued DPS Over Refusing to Release Travel Records of Perrys Security Detail. According to the Austin American-Statesman, The publishers of the Austin American-Statesman, the San Antonio Express-News and the Houston Chronicle have sued the Texas Department of Public Safety, claiming that the agency has violated open records law by refusing to release copies of travel vouchers submitted by Gov. Rick Perry's security detail. Members of the security detail are entitled to be reimbursed for out-of-pocket expenses incurred during trips, including those made out of state, and must claim those payments by submitting vouchers itemizing the expenses. [Austin American-Statesman, 12/1/07] District Judge Ruled DPS Must Release Travel Information about Perrys Security Detail. According to the Austin American-Statesman, The Department of Public Safety must release travel information about Gov. Rick Perry's security detail that had been requested under the state's open records law, state District Judge Scott Jenkins ruled Friday. DPS spokeswoman Tela Mange said Friday afternoon that the agency had not decided whether to appeal. Two newspaper companies sued DPS over the agency's refusal to release vouchers that detail the travel expenses for the troopers who accompany Perry and his family on trips, including trips that are not official state business. The documents were requested last year under the state's Public Information Act by reporters from the Austin American-Statesman, owned by Cox Enterprises, as well as the Houston Chronicle and San Antonio Express-News, both of which are owned by Hearst Newspapers LLC. DPS argued that releasing the documents would compromise the safety of the governor, his family and others who travel with them because it could provide details to someone trying to harm them. [Austin American-Statesman, 8/2/08]

Blogger Claimed Perrys Office Provided Him an Incomplete TPIA. According to the Bicycle Sports Shop blog, So I started my Monday at the Office of Perrys General Counsel. Once again they seemed stunned that a constituent would hand deliver such a thing. Again, they tried to get me to mail it, or email it. Again I had to insist they take it and give me a dated receipt to prove it. Come on Perry! This is something your constituents can legally doThe reason for this second request was due to the fact that there are a substantial number of records missing from the Call Logs that they provided. The only reason I noticed this was because the Governors office threw a smokescreen challenging my numbers when the Press descended upon them. I went back and scrutinized every single email, and calls, when I noticed that 7 of the opposition emails were regarding another bill entirely, 1 opposition email was counted 4 times, and 1 was actually a proponent. That brought their total of opposing emails down to a whopping 38! That is when I discovered the break in the numeric chronology on their call logs. [Bicycle Sports Shop, 7/27/09] Perry Signed Bill to Seal Concealed Handgun Permit Holders Names, Charge More for Open Records Requests Awaited His Signature. According to the Houston Chronicle, Texas lawmakers dealt open government advocates major defeats this spring, shuttering government records long open to the public. About 400 bills were filed affecting the public's right to know. Among the trend limiting access Link Strategies LLC Confidential Document 161

were bills that seal the identities of concealed handgun owners, limit disclosure of home addresses for attorneys and judges, hike charges for records requests and restrict contents of search warrant affidavits For the first time since the 1995 passage of Texas' concealed handgun license law, the identity of more than 258,000 current permit holders are now sealed by law. House Bill 991 went into immediate effect with Gov. Rick Perry's signature in May Another public information law on Perry's desk stems from voluminous record requests by parents of two Central Texas school districts. It allows any government agency to charge for staff time that exceeds 36 hours, but it exempts news reporters from the extra charges. [Houston Chronicle, 6/5/07] Assistant General Counsel for Gov. Perry Said That Any Emails That Include a Sender or Receiver Email Address That Isnt Governmental Could Be Exempted from TPIAs. [Documents Acquired from Texas Public Information Act Request from John Washburn, Accessed on 4/6/10, link]

BUDGET SECRECY In early 2003, after receiving information from the Comptroller that projected revenues would drop, instead of adjusting the budget he had been working on, Perry gave the Legislature a budget full of zeros, putting the burden on the legislature to reorganize government and cut spending. To make things worse, when local newspapers requested his previous budget working papers under open records laws, Perry denied their requests. Shortly after, Attorney General Greg Abbott ruled that the papers were public and should be open to the public. But Perry didnt accept this ruling, he had his friends in the Legislature try to do him a favor and pass a law that would protect preliminary budget papers from the public. This attempt also failed, and the records remained public. THE INFORMATION IN THIS TOP PORTION DOES NOT CORRESPOND TO THE BOLD BULLETS BELOW. CAN YOU GO THROUGH AND MAKE SURE THAT THE BULLET REFERENCES THE ZERO BUDGET AND THEN ALSO JUST PUT THEM IN ORDER FROM EARLIEST TO LATEST Not really sure what you meant by this. The first two bullets below mention the zero budget. And did you want the order of the bullets reversed? SorryDidnt really understand what you meant. Perry Opposed Releasing State Budget Draft. According to the Associated Press, Gov. Rick Perry is opposing attempts to release to the public drafts of the state budget proposal his office was working on before he came up with his "zero" budget in January. Responding to requests from The Associated Link Strategies LLC Confidential Document 162

Press, the San Antonio Express-News and the Austin American-Statesman, the governor's office stated in a letter dated Monday that draft budget copies and other related materials should be kept private as allowed under the Texas Public Information Act. Disclosing the documents would discourage the frank exchange of information among government staff and agencies, Perry's office contends. The governor is seeking a decision on the matter from Attorney General Greg Abbott, whose office has 45 days to make a ruling. [AP, 2/4/03] Perry Offered a Budget Full of Zeroes and Told Lawmakers to Start from Scratch. According to the Houston Chronicle, Perry abandoned his first budget before completing it when Comptroller Carole Keeton Strayhorn lowered her revenue estimate. Instead he offered a budget full of zeros and told lawmakers to start from scratch. [Houston Chronicle, 5/31/03] Perry Didnt Want to Release Budget Papers, Said they were Working Papers that the Public had No Right to See. According to the Houston Chronicle, Attorney General Greg Abbott ruled that the original budget documents, requested by the press, must be made available to the public. Perry had argued they were working papers the public had no right to see. [Houston Chronicle, 5/31/03] Abbott Ruled Perry Must Release Budget Drafts to the Public. According to the Associated Press, Texas Attorney General Greg Abbotts office ruled Tuesday that Gov. Rick Perry must release to the public drafts of the state budget his office was working on before he came up with his zero-based budget. Assistant Attorney General June Harden wrote in a four-page opinion that Texas law requires that the documents be disclosed. Responding to requests from The Associated Press, the San Antonio Express-News and the Austin American-Statesman, the governor's office stated in a February letter that draft budget copies and other related materials should be kept private because of exceptions in the Texas Public Information Act. [AP, 4/8/03] State Representative Attempted to Make Budget Papers Secret After Perry Had Tried and Failed. According to the Austin American-Statesman, Another attempt to block the public from seeing how its tax money is to be spent failed when a bill to keep secret the governor's budget documents was derailed. It was the third time budgetary secrecy was defeated this year, and it was a victory for the people of Texas. State Rep. David Swinford, R-Amarillo, withdrew his bill to make budget documents secret after it was greeted with widespread derision from Orange to El Paso, and all points in between Swinford, chairman of the House Government Reform Committee, was attempting to do a favor for Gov. Rick Perry, who tried earlier this year to have his budget papers exempted from the open records law. The Austin American-Statesman and other news agencies sued to have the documents released, and Attorney General Greg Abbott ruled that those papers are part of the public record. Now that the governor has failed a third time, he should give up his misguided efforts to keep the public from knowing how its tax dollars are being spent. Secrecy in state budget matters is simply wrong. The budget belongs to the people of Texas: It's their money the government is spending. [Austin American-Statesman, 7/14/03] Perry Was the Man Behind Certain Language in Senate Bill to Restrict Public Information Regarding the State Budget. According to the Houston Chronicle, Gov. Rick Perry should support more openness in state government, and not more secrecy, if he truly wants to serve the public's best interests. That's a sign of great leadership. Instead, open government advocates say, Perry is the man behind certain language added in the House to Senate Bill 1952 that would restrict public information. Kathy Walt, the governor's spokesperson, would only confirm that the governor supports the measure. The government efficiency bill, sponsored in the House by state Rep. David Swinford, R-Dumas, would clamp down on public information of almost any sort concerning the preparation of the state's budget. This terrible provision in SB 1952, which is expected to be in conference committee as early as today, would keep the public in the dark about state budget matters by exempting from the Public Information Act the contents of any budgetary working papers collected, assembled or maintained by the governor, lieutenant Link Strategies LLC Confidential Document 163

governor, comptroller, speaker of the House, the Legislative Budget Board, etc. [Houston Chronicle, 5/30/03] Bill Would Have Closed Governors Budget Working Papers from Public View. According to the Dallas Morning News, GOP-backed measures moving through the Legislature combine to give the governor's office, with its constitutionally limited duties, the most unprecedented infusion of power seen in a century. While some call the measures an unwarranted, sweeping power shift, others said the bills give the governor added authority that naturally flows from streamlining and limiting government - movements prompted by a $ 9.9 billion budget shortfall The bills would close the governor's budget working papers from public view, which Gov. Rick Perry had hoped to do until he was overridden last month by an attorney general's open-records opinion. [Dallas Morning News, 5/3/03] Swinford Withdrew Budget Secrecy Legislation that Perry Pushed for. According to the Fort Worth Star-Telegram, Legislation that would have allowed the governor's office to keep its budget working papers secret got derailed Thursday in the House of Representatives. Rep. David Swinford, the Dumas Republican who sponsored the bill, removed it from consideration after several House colleagues from both parties expressed opposition. The withdrawal is a setback for Gov. Rick Perry, who had pushed for the bill during a meeting with Republican lawmakers earlier Thursday. It would have been close, Swinford said of a potential vote on the legislation, House Bill 54. He declined to say whether he will reintroduce the bill or whether it was gone for good. The legislation would have allowed the governor's office to keep working papers and drafts related to its state budget proposals secret. It would also block from public scrutiny budgetary working papers generated by a separate agency, the Legislative Budget Board. [Fort Worth StarTelegram, 7/11/03]

Perry Attempted to Keep State Budget Document Drafts Secret. According to the Associated Press, A bill that would exempt certain budget papers from the governor's office from public information requirements was approved by a House committee on Tuesday. Gov. Rick Perry's attempt to keep secret the documents that his office and legislators use to draft a state budget were part of his call of the special session. The measure next goes to the House for a full vote. The governor's records became a point of contention between Perry's office, the media and public records advocates when he refused to disclose to news organizations, including The Associated Press, the working papers behind his proposed 2004-05 state budget. The documents were eventually released after state Attorney General Greg Abbott's office ruled they were public record. [Associated Press, 7/8/03] Perry Lost Open Records Fight After Attorney General Greg Abbott Ruled the Budget Information Should be Publicly Available. According to the Austin American-Statesman, Gov. Rick Perry lost an open records fight this year when he tried to maintain that the working papers he used to estimate his state budget proposal were secret. After the Austin American-Statesman, The Associated Press and the San Antonio Express-News filed open records requests for those papers, Attorney General Greg Abbott ruled that budget information indeed belongs to the public. It stands to reason that information used to prepare a budget spending the public's tax money shouldn't be secret. [Austin American-Statesman, 5/30/03]

OTHER Perry Signed Law Requiring Elected or Appointed Government Officials to Complete Open Records Training Course. According to the Fort Worth Star Telegram, On Monday, Gov. Rick Perry signed a new law that requires every elected or appointed government official in Texas to complete a training course on open records and open meetings laws. The law, sponsored by state Sen. Jeff Wentworth, R-San Antonio, in the Senate and state Rep. Todd Baxter, R-Austin, in the House, will take effect Jan. 1. All newly elected or appointed government officials must take the class within 90 days of Link Strategies LLC Confidential Document 164

taking office. Current officials are expected to take the class as soon as possible. [Fort Worth Star Telegram, 5/29/05] FOIAs RETURNED 2008 SCHEDULES Complete 2008 Schedule Letter Regarding Schedules January 2008 February 2008 March 2008 April 2008 May 2008 June 2008 July 2008 August 2008 September 2008 October 2008 November 2008 December 2008

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PERRYS PERSONAL WEALTH TIED TO PUBLIC SERVICE & QUESTIONABLE BUSINESS DEALS
For the last 25 years Rick Perry has been a career politician, and hes cashed over $2 million dollars in government checks. Along with his taxpayer salary, if Perry were to retire at the end of his current term, he would receive $74,750-a-year in pension for the rest of his life. Public service has certainly been a financial windfall for Perry, but thats not the only way hes become a millionaire. Hes also gotten rich off real estate land deals, many say due to inside information and his political connections. According to a 2009 report by the Associated Press, Perry has made about $2 million in pretax profits from buying and selling real estate since 1991. Perrys adjusted gross income over the last 18 years was approximately $4.3 million. Also in 2009, Perrys blind trusts value was estimated by his spokeswoman at just under $900,000. Its clear that Perry has gotten rich while in public service, but a large portion of this money came from questionable land and stock sales. Some of Perrys questionable deals include: In 1993, Perry purchased a 9.3 acre tract of land, and then less than two years later sold it to computer magnate Michael Dell for nearly four times what he paid for it. The land was recommended to Perry by real estate investor Tim Timmerman because it separated Dells property from the only available sewage line. In 2008, Perry appointed Timmerman to the Lower Colorado River Authority. On January 24, 1996, Rick Perry was in San Antonio to speak at a luncheon sponsored by the Texas Public Policy Foundation, a group founded by Kinetic Concepts, Inc. founder James Leininger. On the same day, Perry purchased 2,800 shares of Kinetic Concepts stock. Also on this same day, a California investment group began buying 2.2 million shares in the company, significantly boosting the stocks value. Not long after Perry purchased the stock, he sold it for a $38,000 profit. Significant questions were raised after this episode and reporters began to question whether Leininger passed on inside information to Perry, which would have been a felony. Perry responded to the criticism by saying that he had no knowledge of his brokers transactions. A week later, as if to insulate himself from Perrys possible crime, Perrys broker reminded him that he had been ordered to make the KCI stock purchase. Perry then changed his story and said, I may have called and said sell something thats not performing and buy some more KCI stock. After Perrys admission that he ordered the stock purchase, Leininger continued to deny that he had passed on any insider information. In 2001, as if to reward Leiningers silence, or perhaps to reward him for hundreds of thousands of campaign contributions, Perry appointed him to the Texas Board of Health. In 1996, Rick Perry purchased a piece of land that was recommended to him by a long-time Austin Developer, and one of his close friends, Gary Bradley. About two and a half years later, the Texas legislature began to debate bill HB 1704, which the Austin American-Statesman said would undermine Austins managed-growth plans because it allowed projects to be developed under less strict environmental rules. During this process, Perry claimed that the legislation would have no affect on the price of his land, and that he had not lobbied on behalf of the bill. The Austin American-Statesman disagreed with Perrys assessment of his land value, saying, HB 1704 made Perry's land more valuable by boosting the development potential for surrounding parcels. The newspaper also reported that Perrys staff met with city of Austin Link Strategies LLC Confidential Document 166

staffers to discuss the legislation. The legislation eventually passed, and six days later, Perrys blind trust sold his property for a $239,000 profit. In 2001, Rick Perry bought a piece of land from his long-time friend and Republican State Senator Troy Fraser for $313,762. Troy later acknowledged that he had purchased the land with the intention of selling it to Perry. Immediately after purchasing the land, Perry protested the property tax bill, arguing that the land was worth $100,000 less than the appraised value. The protest was filed on the governors behalf by Colleen McHugh, who at the time was Perrys chair of the Texas Public Safety Commission. During the negotiations McHugh hired Perrys former chief of staff Barry McBee as a lobbyist, and three days later, the reappraisal was approved. In 2007, Perry sold the land for $1.14 Million, for a profit of $823,766significantly more than appraised price of $310,000. Also in 2007, the value of the land was re-appraised at $600,000, which was almost double the amount it was appraised during the six prior years. In 2009, the property was re-appraised again, and the value increased to $937,000. The significant reduction in appraised value of this land while owned by Gov. Perry helped save him at least $14,000 in taxes. Perrys sale of this land also helped him to surpass the milliondollar mark in annual income for the first time. Perry Made Most of his Wealth Buying and Selling Real Estate, Earning About $2 Million in Pretax Profits Since 1991. According to the Associated Press, The West Texas ranch boy won a state House seat in 1984 and has never yet lost an election. A former Texas A&M yell leader and Air Force pilot, Perry was elected agriculture commissioner in 1990 and then lieutenant governor in 1998. He took over as governor in 2000 when Gov. George W. Bush became president, and finishing his second term has gone on to become the longest serving governor in Texas history. When he first entered the Legislature, the Haskell County native was still working on the family ranch, farming cotton and ranching cattle. But he's made most of his wealth buying and selling real estate earning him about $2 million in pretax profits since 1991, records and interviews show. [AP, 9/26/09] Perry Reported Adjusted Growth Income of $4.3 Million over the last 18 Years. According to the Associated Press, They show the blind trust fund has produced at least $600,000 in income since 1997, before taxes and management fees. Another investment partnership that Perry owns with his father, the J.R. Perry Co., has generated income of about $42,000 since 1991. All told, Perry reported adjusted gross income of $4.3 million, paid $851,000 in federal taxes and gave at least $104,000 to charity in the last 18 years, according to the records. [AP, 9/26/09] PERRYS STATE SALARY AND PENSION Although a large portion of Perrys wealth has come from real estate and land deals, he has also lived off the taxpayers dollar for 25 years. His years as a State Legislator and as Lt. Governor didnt provide large paychecks, but provided Perry with per diem reimbursements and an extra $316.01 for every days he served as acting governor while George W. Bush campaigned out of the state. His salary has grown from a part time paycheck as a legislator to $150,000 a year as Governor and he can expect at least $74,750 in pension after retirement. Perry Would Collect at Least $74,750 a Year if he Retired at the End of his Current Term. According to the Associated Press, If he retired at the end of his current term with 26 years of service, Perry, 59, would be eligible to collect at least $74,750 a year for the rest of his life. [AP, 9/26/09] 1998: Perry Made $79,250 a Year Since as Agriculture Commissioner. According to the Fort Worth Star-Telegram, But Perry, who has earned a $79,250 a year salary since taking over at the Agriculture Link Strategies LLC Confidential Document 167

Commission in 1991, attributes his money to his love of land and a lucky deal with a then-relatively obscure computer maker named Michael Dell. [Fort Worth Star-Telegram, 1/31/98] 2002: Perry Made $115,345 a Year as Governor. According to the San Antonio Express-News, When Perry was a state representative from the rural West Texas town of Haskell from 1985 to 1991, he earned the post's $ 7,200 per year plus per diem reimbursements. The pay was the same through 1999 and 2000, when he served as lieutenant governor. Once Perry became governor, he began drawing a salary of $ 115,345. [San Antonio Express-News, 10/21/02] 2007: Perry Declined Raise from $115,000 to $150,000. According to the Fort Worth Star-Telegram, Gov. Rick Perry, annual salary would rise from $115,345 to $150,000, or 30 percent: Will decline the raise. We asked them [lawmakers] to give the governor an opt-out provision, and they did that, said spokesman Robert Black, who pointed out that Perry also declined a raise approved in 2005. [Fort Worth Star-Telegram, 6/8/07] Perry Declined Raise, Said He Didnt Need the Money. According to the State Net Capitol Journal, The budget approved by Texas lawmakers last month includes healthy pay raises for the state's eight top officials. But Gov. Rick Perry (R) said he'll decline the increase -- which would boost his salary from about $115,000 to $150,000 -- because he doesn't need the money. [State Net Capitol Journal, 6/11/07] Perry Gave Raise the Legislature Approved to Charity. According to the San Antonio Express-News, As Ratcliffe has reported, tax returns showed Perry made more than $1 million on a land deal in 2007, then lost more than $800,000 in his blind trust in 2008. In 2000, Perry's return showed he'd given just $484 to charity. He's since upped that considerably, donating nearly $38,000 in his last return (mostly because he gave away a raise that the Legislature approved). [San Antonio Express-News, 3/14/10]

Perry Made $85,000 a Year as Ag Commission, and Part-Time Salary of $7,200 as Legislator and Lieutenant Governor, Made $150,000 as Governor. According to the Associated Press, He just manages to fall into these deals over the years, said Houston accountant Bob Martin, who helped analyze 18 years' worth of Perry's tax returns for the AP. It looks like his net worth increased while he was in office, in the relative scheme of things, on a small salary. Perry made about $85,000 a year as agriculture commissioner and currently draws $150,000 annually as governor, but as a legislator and lieutenant governor, he was making a part-time salary of just $7,200. [AP, 9/26/09] Perry Was Entitled to Daily Expense Payments as a Legislator and Increased Take-Home Pay as Lt. Gov. by Filling in for Gov. Bush. According to the Associated Press, He also was entitled to daily expense payments during legislative sessions and later, as lieutenant governor in 1999 and 2000, Perry boosted his take-home pay by filling in for then-Gov. Bush, who was spending a lot of time outside Texas running for president. [AP, 9/26/09] Perry Received extra $316.01 in Pay While Bush Campaigned Out-of-State. According to the San Antonio Express-News, Within days, Bush said he would decline his $316.01 gubernatorial daily salary while campaigning out-of-state. On those days, state law provides that Lt. Gov. Rick Perry become acting governor and be paid at the governor's rate. [San Antonio Express-News, 11/14/99] Perry was Elevated to Acting Governor When Bush was Outside of Texas for an Entire Day. According to the Associated Press, When Bush is outside of Texas for an entire day, Lt. Gov. Rick Perry is elevated under state law to acting governor and is paid an additional salary of $ 316.01 a day. [AP, 7/13/99]

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San Antonio Express-News: Perry Gets to Live the Life of the Rich and Famous. According to the San Antonio Express-News, On the dollars of taxpayers and wealthy donors, Gov. Rick Perry reared amid the cotton fields of West Texas gets to live the life of the rich and famous, traveling the world meeting captains of industry, sports stars and royalty. [San Antonio Express-News, 7/26/09] PERRY COLLECTED CRP PAYMENTS FROM THE DEPARTMENT OF AGRICULTURE The Conservation Reserve Program (CRP) is a Program for Landowners Which Gives Them Annual Rental Payments for 10 to 15 Years. According to the United States Department of Agriculture, The Conservation Reserve Program (CRP) is a voluntary program for agricultural landowners. Through CRP, you can receive annual rental payments and cost-share assistance to establish long-term, resource conserving covers on eligible farmland. The Commodity Credit Corporation (CCC) makes annual rental payments based on the agriculture rental value of the land, and it provides cost-share assistance for up to 50 percent of the participant's costs in establishing approved conservation practices. Participants enroll in CRP contracts for 10 to 15 years. [usda.gov, Accessed 4/6/10, link] 1995: Perry Received a CRP Payment from the U.S. Department of Agriculture ASCS Washington D.C. [Texas Personal Financial Disclosure, Texas Ethics Commission, Accessed 4/6/10] 1994: Perry Received a CRP Payment from the U.S. Department of Agriculture ASCS Washington D.C. [Texas Personal Financial Disclosure, Texas Ethics Commission, Accessed 4/6/10] 1993: Perry Received a CRP Payment from the U.S. Department of Agriculture ASCS Washington D.C. [Texas Personal Financial Disclosure, Texas Ethics Commission, Accessed 4/6/10] 1992: Perry Received a CRP Payment from the U.S. Department of Agriculture ASCS Washington D.C. [Texas Personal Financial Disclosure, Texas Ethics Commission, Accessed 4/6/10] PERRYS BLIND TRUST, WEALTH AND LAND DEALS Perrys salary is small in comparison to some of the large land and real estate deals he has made money off of in his lifetime. He has made hundreds of thousands of dollars buying specific plots of land based on tips and deals from wealthy developers and businessmen. Many of these deals had questionable timing, coming just days after a crucial piece of legislation passed or on the same day he spoke with a CEO of a company. But Perry maintains that there is no conflict of interest regarding his investments because they are held in a blind trust. The blind trust allows him to transfer large investments into the trust and put them in the hands of an investor. From that point he has no say in whether the assets are sold or what new assets are purchased. His blind trust has come into question and many wonder if he really has no say in the transactions that have earned him millions. Many continue to question this process that is popular among top Texas politicians to shield their assets from public scrutiny. In 2009, Perry spokeswoman Allison Castle placed the value of Perrys blind trust at $896,000. Thanks to Land Deals and Investments Perry Passed Millionaire Line. According to the Associated Press, Gov. Rick Perry never had much money growing up, and he has spent most of his adult life in public office, drawing a part-time salary as a legislator and relatively modest earnings in statewide office for the last quarter century. But thanks to his investments and a series of private land deals, some that took advantage of his political connections, Perry has squeaked over the millionaire line, records examined by The Associated Press show. Perry's Democratic opponents have suggested in the past that Perry traded on his power and influence to turn a buck. [AP, 9/26/09] PERRYS FIRST PROFITABLE LAND DEAL ASSISTED BY PERRY APPOINTEE

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Perry Sold 9.3-Acre Tract to Michael Dell for Four Times What He Paid. According to the Associated Press, Perry once sold a 9.3-acre tract to computer magnate Michael Dell for nearly four times what he paid for it, with influential Texas lobbyist Mike Toomey representing Perry at the sale. The west Austin property sold for $465,000 in 1995 and gave the Dell estate badly needed access to an adjacent municipal sewage district. [AP, 9/26/09] Perrys Land was Sold Less than Two Years After it was Purchased, Parcel in Question Separated Michael Dells Mansion from the Nearest Sewer Line. According to the San Antonio Express-News, In 1993, while living in a 1,600-square-foot home in Austin on Exposition Boulevard, the Perrys purchased a 9.3-acre lot of raw land in the prestigious West Lake Hills area. Perry and Sullivan have said that Perry -- then Texas' agriculture commissioner -- hoped to build a family homestead there. Instead, his family stayed in their existing house. He sold the property to Michael Dell less than two years later for $ 465,000 -- a 281 percent increase from his purchase price. It turned out that Perry's parcel was the only thing standing between the sprawling hilltop mansion Dell was building and the nearest sewer lines. [San Antonio ExpressNews, 10/21/02]

Commerce Properties President Tim Timmerman Helped Perry Make $343,000 Profit on Strategic Dell Parcel. According to Texans for Public Justice, The Real Estate industrys fastest-growing major client, Commerce Properties of Pflugerville, has interests in Governor Perry and the gambling industry. President Tim Timmerman once served on the board of an insurance company with future Governor Rick Perry. Timmerman helped Perry make $343,000 in the early 1990s, the Dallas Morning News reported, by telling him about a strategic land parcel between billionaire Michael Dells lot and a local sewage line. [Texans for Public Justice, April 2006] February 2008: Perry Appointed Tim Timmerman to the Lower Colorado River Authority. According to the Office of the Governors website, Gov. Rick Perry named Becky Armendariz Klein of San Antonio as presiding officer of the Lower Colorado River Authority (LCRA) of Directors. He also appointed Tim Timmerman of Austin as a board member. The board oversees activities of the LCRA, which delivers electricity, manages water supply and protects the quality of water for the lower Colorado River and its tributaries. Timmerman is a real estate investor and developer, and owner of Commerce Texas Properties Inc. He is also a certified public accountant and licensed real estate broker. He developed the Star Ranch Community and Golf Course, located north of Austin, and is a member of Good Shepherd Episcopal Church of Austin. Timmerman earned a bachelors degree from Texas A&M University and a masters degree from the University of Texas at Austin. He replaces Ray Wilkerson of Austin. His term expires Feb. 1, 2013. [Governor.State.TX.Us, 2/12/08, link] The Texas Racing Commission Approved the Sale of Austin Jockey Club Shares to a Timmerman-Owned Company. According to Texans for Public Justice, Seeking a controversial racetrack permit from gubernatorial appointees to the Texas Racing Commission, the Austin Jockey Club (AJC) upgraded its bloodline last Junerecruiting new partners with close ties to the governor. In June, Racing Commissioners approved AJCs sale of shares to new owners. The largest of these, Tack Development, Ltd., bought 10 percent of AJC. Austin realtor Tim Timmerman, who controls Tack Development, is a major landowner in Pflugerville, where AJC wants to build its track. A decade ago, Timmerman and Rick Perry respectively served on the board and advisory board of insurer Citizens, Inc. [Texans for Public Justice, 12/13/04, link] Texas Department of Transportation Paid $304 Million to Purchase Right of Way Space for the Texas 130 Toll Road, Land Included 2,500 to 3,000 Acres Owned by the Timmerman Family. According to the Corridor News Blog, They lost more than their land to make room for Texas 130. People along the 49-mile route gave up their homes, the fruit trees they had nursed from seedlings, the shaded spot where kids had buried family pets. They gave up part of themselves. The state Department of Transportation cannot make up for the sweat and memories Link Strategies LLC Confidential Document 170

as it doles out the $304 million set aside to purchase right of way for the ambitious $1.5 billion toll road. With final offers made for about two-thirds of the 400 or so pieces of land needed, the department says it is paying each owner a fair price. * TIMMERMAN FAMILY, Holdings: Between 2,500 and 3,000 acres, Locale: Pflugerville, Hutto, History: The Timmerman family has been in the area since the community's inception. Tim Timmerman oversees development of the holdings. Development: Star Ranch, Forest Creek Estates [Corridor News Blog, 2/14/05, link] QUESTIONS SURROUND PERRYS PROFITABLE LAND SALE AND BENEFICIAL LEGISLATION In 1996, Rick Perry purchased a piece of land that was recommended to him by a long-time Austin Developer, and one of his close friends, Gary Bradley. About two and a half years later, the Texas legislature began to debate bill HB 1704, which the Austin American-Statesman said would undermine Austins managed-growth plans because it allowed projects to be developed under less strict environmental rules. During this process, Perry claimed that the legislation would have no affect on the price of his land, and that he had not lobbied on behalf of the bill. The Austin American-Statesman disagreed with Perrys assessment of his land value, saying, HB 1704 made Perry's land more valuable by boosting the development potential for surrounding parcels. The newspaper also reported that Perrys staff met with city of Austin staffers to discuss the legislation. The legislation eventually passed, and six days later, Perrys blind trust sold his property for a $239,000 profit. Over the last 10 years, Perry has continued his relationship with developer Gary Bradley, even after Bradley was forced to file for bankruptcy and the judge declared that Bradley had fraudulently shuffled his money through a network of friends and companies to keep it from his creditors. As recently as April 2009, Bradley was still saying that he was best friends with R.P. He also sent a fax to the Governors office in 2009, which was acquired from a freedom of information request by The Houston Chronicle that indicated he had spoken with Anita Perry and that he will be pursuing the hotel office project next to the mansion once restoration begins in earnest. 1999: Perry Made $239,000 Profit on a Land Sale After Acting on a Tip from Austin Developer Gary Bradley. According to the Associated Press, A little more than a year later, Perry snapped up 60 acres southwest of Austin, after acting on a tip from flamboyant developer Gary Bradley, whose real estate empire fell into bankruptcy in 2002. The property was sold two and a half years later at a $239,000 profit. Perry has also bought and sold houses and raw land for various gains since he won statewide office in 1990. [AP, 9/26/09] Perry Bought Controversial Land from Developer John Lloyd Whose Company Purchased it Two Weeks Earlier from Gary Bradley. According to the Austin American-Statesman, The one that has drawn the most scrutiny began on Nov. 7, 1996, when Perry, then serving as agriculture commissioner, bought 60 acres in southwest Travis County from a company operated by developer John Lloyd. That company purchased the land two weeks earlier from a firm controlled by developer Gary Bradley. Perry has said Bradley tipped him about the land, which Perry bought for $290,000. [Austin American-Statesman, 10/3/02] 2005: John Lloyd Owns Approximately 3,000 Acres Along the Texas 130 Corridor, State Government Attempted to Purchase the Land or Acquire Through Other Means. According to the Corridor News Blog, To speed up the process, the state turned over management, but not the cost, of right-of-way acquisition to Lone Star Infrastructure. The state retains some control by holding the purse strings and reviewing all appraisals and offers. Only the state has the authority to condemn land. The government's powers of eminent domain work pretty much the same whether a landowner has 1 acre or thousands, which developers John Lloyd and Tim Timmerman each hold along the route. Top landowners along the Texas 130 corridor, JOHN LLOYD, Holdings: About 3,000 acres, Locale: Hutto, Pflugerville, Manor, Del Valle, History: Lloyd has developed land along the corridor since the late 1980s. Development: Wild Horse Ranch, Hutto Link Strategies LLC Confidential Document 171

Exchange, Hutto Square, Hutto Park, Hutto Highlands, Interport South [Corridor News Blog, 2/14/05, link] 1999: Perrys Blind Trust Sold Land at 86% Increase After Beneficial Legislation Passed. According to the San Antonio Express-News, Critics question the timing of another land sale, that of 60 acres in southwest Austin that Perry bought from a developer in November 1996, again with the intention of building a homestead. Two years later, he moved the land into the blind trust, signaling that it could be sold. The trustee sold the land in May 1999 for $ 525,000, an 86 percent increase over Perry's purchase price. The sale came just after the Legislature passed House Bill 1704, a victory for developers in a longrunning dispute with the city of Austin over municipal regulation of the land. Sanchez's camp says the value of the 60 acres was boosted by that legislation, which passed while Perry held the powerful lieutenant governor's post. [San Antonio Express-News, 10/21/02] Perrys Trustee Sold the Property Six Days After the Beneficial Legislation was Passed. According to The Houston Chronicle, Perry transferred the land to his blind trust in 1998, shortly after he was elected lieutenant governor and shortly before the beginning of the 1999 legislative session, during which the Austin developers won approval of a bill easing environmental restrictions in the area. The bill, which Bush signed six days before Perry's trustee sold the property to adjacent landowners for $525,000, raised the value of the land by allowing more development on it. [The Houston Chronicle, 4/19/02, link] Tony Sanchez Told Reporters That He Didnt Believe Perrys Explanation That His Trustees Land Sale was Coincidentally After Then-Gov. George W. Bush Signed a Law That Raised Land Values in the Area. According to The Houston Chronicle, Democratic gubernatorial nominee Tony Sanchez said Thursday that Gov. Rick Perry is "not known as a truthful person," implying he thinks Perry lied about his profit on an Austin land sale. Sanchez said he doesn't believe Perry's explanation that his trustee's sale of the property for a $235,000 profit in May 1999 occurred only coincidentally after then-Gov. George W. Bush signed a law that raised land values in the area. I do not believe that, Sanchez told reporters. Look, Rick Perry is not known as a truthful person, and I think he knew all along what he was doing and what the trust was doing. [The Houston Chronicle, 4/19/02, link]

Austin American-Statesman: HB 1704 Undermined Austins Managed-Growth Plans Because it Allowed Projects to be Developed Under Less Strict Environmental Rules. According to the Austin American-Statesman, HB 1704, a new version of a development law that was inadvertently repealed last session, won overwhelming support in the Senate last week. The lobby team wrapped their opposition to the bill around the governor's theme of local control. No sale. If HB 1704 becomes law, it would undermine Austin's managed-growth plans because it allows projects to be developed under older and less strict environmental rules. City officials had hoped that a local agreement between developers and environmentalists over where and how the city will grow would stop the Legislature from reinstating the bill. The truce in the Austin growth wars didn't make an impression on legislators, and a gubernatorial veto is highly unlikely. [Austin American-Statesman, 5/2/99] Perry Campaign Said HB1704 Had No Effect on Perry Land Value-- The Austin AmericanStatesman Disagreed Saying the Law Boosted Development Potential for Surrounding Parcels. According to the Austin American-Statesman, Perry's campaign argues that HB 1704 had no effect on the land's value because state law concerning local permits for development were the same in 1996 when he bought the parcel as it was in 1999 when his blind trust sold it. HB 1704, according to the Perry campaign, merely re-enacted provisions inadvertently scuttled in a 1997 measure. Lawmakers effectively reinstituted a 1987 provision barring local governments from altering the permit process on projects already under way. But HB 1704 made Perry's land more valuable by boosting the development potential for surrounding parcels. [Austin AmericanStatesman, 10/3/02] Link Strategies LLC Confidential Document 172

Perry Said He Didnt Lobby for House Bill 1704, Which Boosted the Value of a 60-Acre Tract He Owned. According to the Austin American-Statesman, By limiting Austin's regulatory power, two bills that the city hopes to block and a third that Gov. George W. Bush signed into law Tuesday would increase the value of southwest Travis County land owned by Lt. Gov. Rick Perry. Perry's 60-acre tract, which he bought in November 1996 for $290,000, is in the process of being sold to Austin lawyer Geoffrey Weisbart. The lieutenant governor, who put the land into a blind trust along with his other assets before the session started, says he hasn't been involved in the sale and didn't lobby for any of the bills House Bill 1704, which has been signed by the governor, will exempt some building projects from the city's most recent environmental rules. [Austin American-Statesman, 5/12/99] Perrys Staff Met with City of Austin Staffers to Discuss House Bill 1704. According to the Austin American-Statesman, But Perry's staff has met in recent months with Austin's staff to discuss House Bill 1704, a 1999 law that allows developers to dust off their old projects and build them under defunct water-quality rules. Bradley's investors claim that under the law, some of their land could be built with 30 percent to 35 percent impervious cover -- more than double the percentage allowed by the city's SOS ordinance. [Austin American-Statesman, 3/23/00] Perry Insisted He Did Nothing Unethical and Could Have Made More Money if He Didnt Sell the Property. According to the Austin American-Statesman, Despite the numbers, Perry insists he did not make a windfall profit on the land and did nothing unethical on the legislation that affected it. Actually, on that piece of property, I could have made substantially more money had I held it, said Perry, who has insisted he did not know his blind trust was selling the land. [Austin American-Statesman, 10/3/02]

Developer Gary Bradley Pushed for Southwest Austin Development, Said He and Perry had Discussed Negotiations. According to the Austin American-Statesman, Behind the walls of a remodeled castle on West 11th Street, Circle C developer Gary Bradley has been negotiating a truce with the City of Austin. But when Bradley negotiates, he brings more than charm and skilled lawyers to the table. He constantly reminds Austin that the Texas Legislature has singled out his land for favorable treatment. And that he and his investors have influence with some legislators, including Lt. Gov. Rick Perry, a Republican who might become governor in nine months. Bradley has not threatened to use his influence with legislators to affect the proposed truce with the city, said Casey L. Dobson, a lawyer who has been negotiating for the city. But Bradley has told Dobson that he and Perry have discussed the negotiations. Bradley, Dobson said, has been very blunt in saying that, absent an agreement, we're going to continue to be warring in the courts and in the Legislature. That's why we're trying to get a deal. The agreement would allow Bradley to develop 3,088 acres in and near the Circle C neighborhood in Southwest Austin and Hays County. [Austin American-Statesman, 3/23/00] Perry Spokesman Said Perry Knew Only About the Bradley Negotiations from News Accounts. According to the Austin American-Statesman, Perry is familiar with land development in Southwest Austin because he has owned land there, as do some of his top campaign contributors. In 1996, Perry bought a 60-acre tract on Bear Creek for $290,000. He intended to use it as a weekend getaway for his family, and placed it along with all his assets in a blind trust shortly after being elected in 1998. Last May, it was sold to Geoffrey Weisbart and Diane Senterfitt, who later sold the development rights for the land to the City of Austin as part of a conservation program Ray Sullivan, a spokesman for Perry, said the lieutenant governor would not comment on the Bradley negotiations and knows only what he has read in news accounts. He has not been involved in those dealings or those negotiations, Sullivan said. [Austin American-Statesman, 3/23/00] Bradley Repeatedly Mentioned Perry in Negotiations, Said Perry would Advocate for Him. According to the Austin American-Statesman, In negotiations between the city and the developers, Bradley repeatedly mentioned that Perry was his friend and would advocate for his side in the battle. [Austin American-Statesman, 10/3/02] Link Strategies LLC Confidential Document 173

Owner and Partners in Southwest Austin Development Deal were Large Perry Donors. According to the Austin American-Statesman, J. Grant Gomez, a Bradley partner in the deal, is one of Perry's largest contributors, donating $25,000 to Perry's campaign in the first half of 1998. James D. Gressett, who owns some of the land and has a contract to buy more, also donated $25,000 to Perry's campaign in 1998. Bradley donated $1,000 in 1997. [Austin AmericanStatesman, 3/23/00]

2002: Gary Bradley Gave Perrys Campaign $23,000 and Six Months Later Filed for Bankruptcy. According to a letter to the editor by Erin Foster in the Austin American-Statesman, Texas Ethics Commission campaign filings show that Circle C Ranch Developer Gary Bradley has contributed $23,000 to the The Texans for Rick Perry campaign and $5,000 to Texans for Greg Abbott campaign. Yet six months later, Bradley claims he is broke and files for bankruptcy protection. If Bradley is successful in his bid for bankruptcy, then the seven-year old debt of $73 million he owes the FDIC and the $4 million in back taxes he owes the Internal Revenue Service will essentially be forgiven. These debts were incurred and due years prior to Bradley's generous campaign contributions. So how can he claim bankruptcy? [Austin American-Statesman, 11/11/02] Federal Bankruptcy Judge Declared That Bradley Fraudulently Shuffled His Money Through a Network of Friends and Companies to Keep it From His Creditors. According to The Houston Chronicle, Many thought the Bradley saga that had stretched back to the 1970s had come to an end in 2004, when a federal bankruptcy judge declared that Bradley had fraudulently shuffled his money through a network of friends and companies, keeping it beyond the reach of his creditors. But the bankruptcy covered assets at the time of the filing, not those acquired afterward. Bradley is not under any obligation to report his current status, and I have no knowledge of what he has been up to, said Ron Ingalls, a lawyer who represented creditors' interests in the bankruptcy. [The Houston Chronicle, 9/13/09, link]

2009: Gary Bradley Proposed Piping Water from the Lee County Area to Supply Development Along the Texas 130 and Interstate 35 Corridor Areas Where He Had Development Interests. According to the Austin American-Statesman, Gary Bradley, the developer who remade parts of Austin only to see his empire fall into bankruptcy and then tried to hide his assets from creditors, appears to be back in the deal-making game. Bradley's pitch, made to a variety of public officials in closed-door meetings, involves the piping of water from the Lee County area, about 60 miles east of Austin, to supply development along Texas 130 and the Interstate 35 corridor areas where he himself has had development interests. He tells the officials he has no personal stake in a water pipeline deal that he's working only as a public servant with time on his hands. [Austin American-Statesman, 9/13/09] Braldey Told Lower Colorado River Authority Board Member Linda Raun That Rick Perrys Legislative Director Would be the Driver Behind the Water Project. According to The Houston Chronicle, During a meeting in late April at the Four Seasons, Bradley told Lower Colorado River Authority board member Linda Raun that he wanted to do the deal in part because of the black side of his heart revenge, according to Raun's notes. Raun's notes also suggest how hungry he is to again be a player. He told her Ken Armbrister, the legislative director for Gov. Rick Perry, would be the driver behind such a project. Bradley told Raun that he was best friends with R.P. [The Houston Chronicle, 9/13/09, link] Bradley Faxed The Texas Governors Office and Assured Perry That During His Meetings With Officials on Water Issues, I Have Been on My Best Behavior. According to The Houston Chronicle, But he has kept Jay Kimbrough, Perry's former chief of staff, abreast of his water activities by fax, according to documents obtained through a second public information request to the governor's office. In one fax to Perry's office in December, Bradley assured Perry that during his meetings with officials on water issues, I have been on my best behavior. [The Houston Chronicle, 9/13/09, link] Link Strategies LLC Confidential Document 174

Bradley Said He Spoke with Anita Perry and That He will be Pursuing the Hotel Office Project Next to the Mansion Once Restoration Begins in Earnest. According to The Houston Chronicle, Water is not the only kind of development he is apparently eyeing. In the same fax, he says, I have mentioned it to Anita (Perry, the governor's wife) but I wanted to let you know that we will be pursuing the hotel office project next to the Mansion once restoration begins in earnest. [The Houston Chronicle, 9/13/09, link]

PERRY CA$HED IN ON PROPERTY OWNED BY A CLOSE FRIEND AND REPUBLICAN STATE SENATOR, QUESTIONS SURROUND PERRYS PROTEST OF THE PROPERTY TAX BILL In 2001, Rick Perry bought a piece of land from his long-time friend and Republican State Senator Troy Fraser for $313,762. Troy later acknowledged that he had purchased the land with the intention of selling it to Perry. Immediately after purchasing the land, Perry protested the property tax bill, arguing that the land was worth $100,000 less than the appraised value. The protest was filed on the governors behalf by Colleen McHugh, who at the time was Perrys chair of the Texas Public Safety Commission. During the negotiations McHugh hired Perrys former chief of staff Barry McBee as a lobbyist, and three days later, the reappraisal was approved. In 2007, Perry sold the land for $1.14 Million, for a profit of $823,766. This land sale helped Perry to surpass the million-dollar mark in annual income for the first time. Also in 2007, the value of the land was re-appraised at $600,000, which was almost double the amount it was appraised for the six prior years while owned by Perry. This significant reduction in appraised value under Perry helped save him at least $14,000 in taxes. Perry Paid Troy Fraser $313,762 for Lakefront Property. According to the Texas Observer, When Perry received his first property-tax assessment for this prestigious address, the lion in the Governor's Mansion shook his majestic mane and issued a roar of protest. The Burnet Central Appraisal District had pegged the lot's value at $414,700 for tax purposes. After Perry protested, the district slashed its appraisal to $313,762, the price the governor said he paid to Fraser. [Texas Observer, 5/29/09] Fraser Said He Bought the Properties with the Intent of Selling One to Perry. According to the Associated Press, Fraser said he bought two tracts of land along the lake with the intention of selling Perry one of them. He said the governor had wanted to build a house there but got an offer in 2007 he couldn't refuse. I think somebody offered him a lot of money, Fraser said. He sold it right at the top of the market. [AP, 8/10/09]

2007: Perry Sold the Lakefront Property He Acquired in 2001 from Republican State Senator Troy Fraser for $1.14 Million. According to the Associated Press, Perry's biggest real estate pay day came in 2007, when he sold two-thirds of an acre of lakefront property he had acquired in 2001 from his friend Troy Fraser, a Republican state senator who owns a nearby tract in Horseshoe Bay in central Texas. Perry sold the property in March 2007 for $1.14 million for a profit of $823,766, tax records show. That helped produce the highest annual income Perry and his wife Anita have ever reported about $1.1 million in adjusted gross income, according to their 2007 tax return. [AP, 9/26/09] Perrys Land Deal with Troy Fraser Helped Him Surpass the Million-Dollar Mark in Annual Income for the First Time. According to the Texas Watchdog Blog, This time, he examined Gov. Rick Perry's tax return and found the guv had surpassed the million-dollar mark in annual income for the first time. Root asked for, and received, Perry's tax return from the Perry reelection campaign. Check out the story here in the Fort Worth Star-Telegram. One key part of the story that got our attention: Perry has no problem doing personal business with folks he does legislative business with too. The .68-acre lakefront tract cost Perry $314,770 in 2001, records show. He bought it from his friend Troy Fraser, a Republican state senator who owns a nearby Link Strategies LLC Confidential Document 175

tract in Horseshoe Bay, a lake resort town near Marble Falls in Central Texas. Perry sold the property in March 2007 for $1.14 million - a gain of $823,766 - his tax records show. [Texas Watchdog Blog, 8/11/09, link] Perry and Fraser were Good Friends and Perry Boosted Fraser to Chair a Special Senate Subcommittee in the Two Years before the Land Deal. According to the Texas Observer, Burnet District Appraiser Tammy Ribera says that a sales price is widely regarded as the best indicator of a property's value- provided the sale is arm's-length. The term usually means a deal made by two parties with no special ties with one another - financial, familial, political - and no incentive to stray from market value The arm that separated Perry from Sen. Fraser was stubby at best. The two politicians have been friends since they were high-schoolers, when they met through Future Farmers of America. When Fraser made his successful first run for the state House in 1988, he did so at the prompting of then Democratic Rep. Rick Perry. During the two years preceding their land deal, then-Lt. Gov. Perry tapped Fraser to chair a special Senate Subcommittee on Technology and Business Growth- increasing the political clout of Fraser, who now chairs the Senate Business and Commerce Committee. [Texas Observer, 5/29/09] Perry Named Fraser to Redistricting Committee. According to the Dallas Morning News, The actual redistricting can't begin until the new census numbers are received in March 2001. But both the Texas Senate and House will hold hearings before that. Republican Lt. Gov. Rick Perry recently announced the committee that will handle the remapping chores in the upper chamber. Mr. Perry named co-chairmen of the panel: a Republican, Troy Fraser of Horseshoe Bay, and a Democrat, Mario Gallegos of Houston. Republicans hold a 6-5 majority on the panel. [Dallas Morning News, 2/6/00]

Perry Protested Property Tax Bill on Lakefront Property-- Protest Filed by Perrys Chair of the Texas Public Safety Commission. According to the Texas Observer, According to Burnet appraisal district Chief Appraiser Stan Hemphill, attorney Colleen McHugh of the defense firm Bracewell & Patterson (now Bracewell & Giuliani) filed a protest on the governor's behalf in November 2001. At the time, McHugh was Perry's chair of the Texas Public Safety Commission. The protest argued that Perry's lot was worth $100,000 less than the appraised value. [Texas Observer, 5/29/09] Perrys Former Chief of Staff Barry McBee Hired as a Lobbyist by the Firm Protesting Perrys Tax Bill Days Later the Reappraisal was Approved. According to the Texas Observer, In December 2001, days after Bracewell announced it had recruited Perry Chief of Staff Barry McBee as a lobbyist, the district agreed to reappraise Perry's lakefront lot at the stated purchase price. That first year, the devaluation lowered Perry's tax bill from $8,418 to $6,308. [Texas Observer, 5/29/09] Perry Saved More Than $14,000 by Having His Property Reappraised. According to the Texas Observer, Over its six-year life, the lower appraisal kept more than $14,000 in the governor's pocket that he otherwise would have payed as taxes to local government entities. (More than 60 percent of the district's tax money goes to the Marble Falls Independent School District.) [Texas Observer, 5/29/09] Lakefront Property Appraisal Increased Immediately After Perry Sold the Land, Value Increased from $310,000 in 2006 to Over $930,000 in 2009. [Burnet Central Appraisal District, Accessed 3/8/10, link]

Link Strategies LLC Confidential Document 176

OTHER LAND DEALS 1995: Perrys Earned $347,028 from Sale of 8.75 Acres of Land in Travis County. According to the Associated Press, Since 1991, the Perrys have reported earning $688,600 in capital gains from various investments. The biggest chunk, $347,028, came in 1995, mostly from the sale of 8.75 acres of land in Travis County. [AP, 3/29/02] Perry Sold House Near Scenic Mount Bonnell for a Profit of Nearly $500,000 Perry also bought and sold a piece of land in southwest Travis County, which had been put in his blind trust in 1998, for a $235,000 profit in May 1999 and a house Perry and his wife, Anita, built near scenic Mount Bonnell for a profit of nearly $500,000 in February 2001. 2002: SUMMARY OF REAL ESTATE DEALS FROM THE DALLAS MORNING NEWS 2002: Perry Made $1 Million in Pre-Tax Profits in 1990s and Early 2000s. According to the Dallas Morning News, Gov. Rick Perry made more than $ 1 million in pre-tax profits over the last decade in Austin-area real estate deals highlighted here. [Dallas Morning News, 9/22/02]

Ln ad 29 acres raw land near Lake Travis House, central Austin 9.3 acres, west of Austin 60 acres, southwest Austin House, west Austin

B gt ou h Oct. 1991 July 1992 Aug. 1993 Nov. 1996 1997

P id a $55,200 $172,000 $122,000 $286,000 $435,000

S old Jan. 1994 Feb. 1997 Mar. 1995 May 1999 Feb. 2001

P rice $125,000 $209,000 $465,000 $525,000 $940,000

P rofit $69,800 $37,000 $343,000 $239,000 $505,000

PERRYS PROFITS FROM KINETIC CONCEPTS STOCK PURCHASE RAISE QUESTIONS On January 24, 1996, Rick Perry was in San Antonio to speak at a luncheon sponsored by the Texas Public Policy Foundation, a group founded by Kinetic Concepts, Inc. founder James Leininger. On the same day, Perry purchased 2,800 shares of Kinetic Concepts stock. Also on this same day, a California investment group began buying 2.2 million shares in the company, significantly boosting the stocks value. Not long after Perry purchased the stock, he sold it for a $38,000 profit. Significant questions were raised after this episode and reporters began to question whether Leininger passed on inside information to Perry, which would have been a felony. Perry responded to the criticism by saying that he had no knowledge of his brokers transactions. A week later, as if to insulate himself from Perrys possible crime, Perrys broker reminded him that he had been ordered to make the KCI stock purchase. Perry then changed his story and said, I may have called and said sell something Link Strategies LLC Confidential Document 177

thats not performing and buy some more KCI stock. After Perrys admission that he ordered the stock purchase, Leininger continued to deny that he had passed on any insider information. In 2001, Perry Appointed Leininger to the Texas Board of Health. Its not clear if Perry was rewarding Leininger for protecting him during this episode, or if it was due to the hundreds of thousands of dollars in campaign contributions Leininger had showered on him over the years. Perry Earned $38,000 Profit After Selling Shares of Kinetic Concepts, Inc, a Company Founded by James Leininger. According to the Associated Press, Buying land low and selling it high isn't the only way Perry has pushed his income above his salary. He turned a $38,000 profit in 1996 after selling shares of Kinetic Concepts, Inc., the hospital equipment company founded by wealthy Republican donor James Leininger. [AP, 9/26/09] Perry Said His Stock Purchase on the Same Day That a California Investment Group Purchased 2.2 Million Shares was a Coincidence. According to the Dallas Morning News, Mr. Perry said it was a coincidence that 2,800 shares of stock in a hospital equipment company, Kinetic Concepts Inc., were purchased on his behalf on the same day a California investment group began buying 2.2 million shares in the company, boosting the stock's value. [Dallas Morning News, 5/15/98] Perry Bought 2,800 Share of Kinetic Concepts on the Same Day He Spoke with the Kinetic Concepts CEO James Leiniger. According to the Dallas Morning News, On Jan. 24, 1996, Mr. Perry was in San Antonio to speak at a luncheon sponsored by the Texas Public Policy Foundation, a group founded by Mr. Leininger. The same day, 2,800 shares of Kinetic Concepts stock at about $ 10.40 a share were purchased, according to Mr. Perry's personal financial statement. Mr. Perry and Mr. Leininger both said they did not discuss the company or its stock at the luncheon Mr. Leininger, whose family was selling 6 million shares of stock in a public offering, said he did not know that San Francisco investors Richard Blum and Jerald Weintraub were preparing to buy 2.2 million shares. He said that if he had known, it would have been illegal to pass on inside information. [Dallas Morning News, 5/15/98]

Perry Denied Receiving Inside Information and Said That He Had No Knowledge of His Brokers Transactions. According to the Texans for Public Justice, Perry denied receiving inside information, a potential felony. I certainly didnt talk to him about the stock price or anything like that, he told the Dallas Morning News. Perry also said he had no knowledge of his brokers transactions. I could tell you I have plenty of time every day to watch the stock market and make stock choices, but that is a managed account, he told the Morning News. [Texans for Public Justice, 1/26/99, link] A Week Later Perry Reversed Himself and Said His Broker Reminded Him That He Had Ordered the KCI Stock Purchase. According to the Texans for Public Justice, But a week later Perry re-versed himself, telling the Houston Chronicle that his broker had reminded him that Perry himself had ordered the KCI stock purchase. I may have called and said sell something thats not performing and buy some more KCI stock. It was a stock that was going up at the time, Perry then said. He also stated that he began investing in KCI in 1994 against the ad-vice of his broker because he knew the Leiningers. [Texans for Public Justice, 1/26/99, link]

Perry Appointed former Kinetic Concepts CEO to Texas Board of Health. According to the Dallas Morning News, Gov. Rick Perry announced Tuesday the appointment of Raymond R. Hannigan of San Antonio and Dr. Amanullah Khan of Dallas to the Texas Board of Health. Mr. Hannigan is the former president and chief executive officer of Kinetic Concepts, a hospital bed company in San Antonio founded by James Leininger, an advocate of school vouchers and a major Perry campaign contributor. [Dallas Morning News, 8/8/01] Leininger and Family Gave $86,000 to Perry from 1991-1998. According to the Dallas Morning News, According to campaign finance reports filed with the Texas Ethics Commission, Mr. Leininger and his Link Strategies LLC Confidential Document 178

family have contributed at least $ 86,000 to Mr. Perry since 1991, when he took office as agriculture commissioner. Until this year's political race, Mr. Leininger, his brother Peter and the Perry campaign were partners in a $ 475,000 airplane. When we started the campaign, we realized we were going to have to have access to it, said Mr. Perry. Partnering with anybody wasn't going to work at all, so we [the campaign] bought the airplane outright from the other partners. [Dallas Morning News, 5/15/98] 1999: In the 1998 Cycle, Leininger and His Family Contributed $97,047 to Perrys Campaign Committee. According to the Texans for Public Justice, Insiders expect Perry, who has always counted on Leininger to answer his financial needs, to advance Leiningers right-wing agenda. In the 1998 election cycle, Leininger and his family showered Perry with $97,047 in direct cash contributions. [Texans for Public Justice, 1/26/99, link] 1998: Leininger Backed a $1.1 Million Last-Minute Loan to the Perry Campaign. According to the Texans for Public Justice, Leininger was also one of three high-rollers who backed a $1.1 million lastminute loan to the Perry campaign. This loan financed a huge media buy that ensured Perrys victory. According to reports Perry filed with the Texas Ethics Commission, Leininger joined fellow school voucher advo-cate Jimmy Mansour and toxic titan William McMinn (Sterling Chemical Co.) in guaranteeing the $1.1 million loan to the Perry Campaign on October 26. The loan was made by Hartland Bank of Austin. Hartland is owned by David Hartman, a former GOP party official and a voucher advocate. [Texans for Public Justice, 1/26/99, link] Leininger and His Brother Purchased a $475,000 Airplane that was Partly Owned by Perrys Political Committee. According to the Houston Chronicle, Leininger also has personal financial ties to some of the state's most influential Republicans. Agriculture Commissioner Rick Perry, who is running for lieutenant governor, earned more than $ 25,000 last year trading in stock issued by Leininger's company, Kinetic Concepts Inc. Leininger and his brother, Peter, also bought a $ 475,000 airplane that was partly owned by Perry's political committee. Leininger, his family and his company's political committee so far this year have donated $ 62,500 to Perry's campaign. [Houston Chronicle, 9/21/97] 2000 2010: James Leininger Contributed $264,873 to Perrys Campaign Committee. [Texas Ethics Commission, link]
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A Strategist for Tony Sanchez Said That If Rick Perry Were a Baseball Team, Leininger Would be the Owner. According to Texas Monthly, If Rick Perry were a baseball team, Leininger would be the owner, says George Shipley, a Sanchez campaign strategist. When he calls, Rick Perry jumps and shuffles. As of mid-October Kronberg's prediction had yet to be validated: The Perry-Leininger connection had not become a major issue in the campaign. [Texas Monthly, 11/2002, link] 2006: Texas Employee Retirement System Owned 80,000 Shares of Stock in Kinetic Concepts--Stock Price Tumbled Resulting in a $1.5 Million Loss. According to the Burnt Orange Report, Link Strategies LLC Confidential Document 179

Yesterday, a San Antonio jury ruled against Kinetic Concepts, Inc. (KCI), a medical device company owned by notorious Republican millionaire and voucher-proponent James Leininger. Leininger lost $221 million as a result of the lawsuit, and in addition, KCI's tumbling stock value resulted in a $1.5 million loss in retirement money for the Texas Employee Retirement System (ERS). ERS currently owns 80,000 shares of stock in KCI. [Burnt Orange Report, 8/04/06, link] Three Texas Employee Retirement System Board Members Appointed by the Texas Governor. According to the TERS website, Three board members are appointed, one each by the Governor, Speaker of the House, and the Chief Justice of the Texas Supreme Court and three are elected by ERS members and retirees. [TERS website, Accessed 3/08/10, link]

PERRYS BLIND TRUST Current Trustee: Jeffrey L. Nash, 101 Westlake Dr. Austin TX 78746 [Personal Financial Disclosure] Perry Spokeswoman Said Perrys Blind Trust was Worth $896,000. According to the Associated Press, Spokeswoman Allison Castle said she did not have a figure for Perry's net worth, but she said his blind trust worth about $896,000. Perry also owns a home in College Station valued at $243,900 this year. The real estate investments they have been involved with have been fully disclosed and reported, Castle said. They own one home with a mortgage that is approximately the same value as the house. The governor and first lady both work, have a mortgage and are paying off student loans for one child while putting another through college. [AP, 9/26/09] Perrys Blind Trust Lost $567,529 in 2008. According to Texas Politics, Gov. Rick Perry's spokeswoman Allison Castle today informed us that the current value of Perry's blind trust as of Monday was $896,201.96 You'll recall, we have previously reported on how Perry's income tax return for 2008 showed he had capital losses in the trust last year of $567,529. [Texas Politics, 8/26/09]

Perry Used Blind Trust to Shield Himself from Conflicts of Interest. According to the Associated Press, Perry put the profits from the sale into his blind trust, an instrument politicians use to shield themselves from conflicts between public actions and private wealth. Though Perry knows what has gone into the trust, including proceeds from land sales, aides say he has no control over what's done with the assets once they're deposited into it. [AP, 9/26/09] Blind Trust was a Source of Mystery and Controversy. According to the Houston Chronicle, Perry's blind trust has been a source of mystery and controversy since it was created in 1996 as opponents prepared to raise questions about real estate and stock deals involving lobbyists and people who regularly seek political influence. [Houston Chronicle, 8/19/09] 1998: Perrys Stockbroker was Tommy Orr. According to the Dallas Morning News, Lieutenant governor candidate Rick Perry said the $38,000 he made on stock in a campaign contributor's company was the result of good investment, not special treatment. Mr. Perry, a Republican, said a Houston stockbroker manages his portfolio and makes decisions on when to buy and sell stocks In an interview, Mr. Perry said he had no knowledge of any of the transactions. He said they were all handled by a Houston stockbroker, Tommy Orr, who manages his stock portfolio. [Dallas Morning News, 5/15/98] Perry Appointed Orr to School Land Board. According to US States News, Gov. Rick Perry, R-Texas, announced the following appointment: Gov. Rick Perry has appointed Thomas Tommy Orr of Houston to the School Land Board for a term to expire Aug. 29, 2011. The board supervises the management, leasing, and sale of public school land. [US States News, 11/25/09] Perry Spokesman Said He Had No Contact with Trustee Tommy Orr on Property Sold. According to the Houston Chronicle, Perry bought the undeveloped 60 acres from developer Link Strategies LLC Confidential Document 180

John Lloyd in 1996, after another developer, Gary Bradley, whom Perry described as a friend, had directed him to the property. Perry transferred the land to his blind trust in 1998, shortly after he was elected lieutenant governor and shortly before the beginning of the 1999 legislative session, during which the Austin developers won approval of a bill easing environmental restrictions in the area. The bill, which Bush signed six days before Perry's trustee sold the property to adjacent landowners for $525,000, raised the value of the land by allowing more development on it. Sullivan said Perry had no contact with the trustee, Tommy Orr of Houston, a former college friend of the governor's, on the sale. [Houston Chronicle, 4/19/02] PERRYSTRUSTEES FOR HIS BLIND TRUST Current Trustee: Jeffrey L. Nash, 101 Westlake Dr. Austin TX 78746 [Personal Financial Disclosure] Jeff Nash was President of Treaty Oak Bank in Austin. According to the Austin American-Statesman, Texas banks won't escape the recession unscathed, but they probably won't take as bad a beating as their counterparts nationwide The bigger challenge comes from the fact that federal interest rates are hovering at historic lows, Carpenter said. To offset that, many of the state's small and midsize community banks are still working hard to make loans, Carpenter said. No bank wants to take on too much risk to do it these days, and they're certainly not throwing money around freely, but several Texas banking executives said they have capital to lend but are wanting for appropriate borrowers. Borrowers are looking for the bottom out there, said Jeff Nash, president of Treaty Oak Bank in Austin. And I think the bankers are, too. [Austin American-Statesman, 2/22/09] Treat Oak Bank Gross Loan Production Increased $10 Million in Fourth Quarter. According to the Austin American-Statesman, Treaty Oak's gross loan production increased $10 million in the fourth quarter, a significant number for this little bank, Nash said. Lending activity has dropped off since then, Nash said, but the bank moved ahead with plans to raise more growth capital when the federal government started offering funds to reignite credit markets. Treaty Oak turned over preferred stock to the U.S. Treasury Department in exchange for $3.3 million. It's one of 13 Texas banks to tap into federal money through the Troubled Asset Relief Program, or TARP. [Austin American-Statesman, 2/22/09]

Perry Trustees Bank Received $3.3 Million in TARP Funds. According to the Austin Business Journal, Treaty Oak Bancorp Inc. is getting $3.3 million through the U.S. Treasury's Troubled Asset Relief Program's capital purchase initiative. Austin-based Treaty Oak, the holding company of Treaty Oak Bank, issued 3,268 shares of Series B preferred stock and 163 shares of its Series C preferred stock after exercising the warrants by the Treasury. Proceeds from the stock sale as an additional capital contribution to Treaty Oak's wholly-owned subsidiary Treaty Oak Bank. The TARP Capital Purchase Program is a voluntary program that allows selected financial institutions to help support the economic development of communities in which participating banks operate. We are very pleased the Treasury Department determined our organization an attractive investment opportunity, said Jeffrey Nash, president and CEO of Treaty Oak Bancorp and Treaty Oak Bank. Our bank continues to grow requiring additional capital. We had not initially anticipated participating in the CPP Program but given our appetite for capital and the attractive terms of this issuance it was an easy decision for our board of directors when Treasury informed us they had selected our bank. [Austin Business Journal, 1/16/09] Nash Was Approached by Bill McLellan to Start Treaty Oak Bank. According to the Austin Business Journal, After being away from banking for 13 years, Jeff Nash had said there was no way he would get back into the business when his friend, Bill McLellan, approached him to start Treaty Oak Bank. Now the CEO of Treaty Oak, Nash says he has no regrets. What I love about banking is it gives a broad perspective about all types of business, from real estate to startups, Nash says. I've become more of a consultant in this role. [Austin Business Journal, 10/23/06]

Link Strategies LLC Confidential Document 181

Nash Got Into Backing Straight from College. According to the Austin Business Journal, Q: How did you get into banking? A: Nash didn't come from a family of bankers or anything like that. In fact, his father spent a lot of time in the trucking industry, and Nash says his family didn't have much money when he was growing up. He broke into banking straight out of college, working for Texas Commerce Bank and eventually advancing to executive vice president of Allied Bank North Austin. Later in his career, in the early 1990s, the banking industry began consolidating. It was at that time that Nash left banking. The business became standardized at that time, Nash says. It was no longer what it used to be. I like to call myself an escaped banker. But not for long. Nash returned to the industry with the founding of Treaty Oak Bank. Nash likes to brag that everyone on his team comes from diverse backgrounds. That experience of being on the other side of the table gives them a unique understanding of what business owners go through, Nash says. [Austin Business Journal, 10/23/06] Nash Saw Giving back to the Community as a Responsibility. According to the Austin Business Journal, Q: You're involved in a lot of community activities. What drives you to be involved? A: Nash, a native Austinite and University of Texas alum, was honored recently with a research grant for his work at the American Heart Association. Nash has also served as campaign co-chair for United Way and as vice chair for the Austin chamber. As if that doesn't keep him busy enough, Nash also serves as a trustee at the SafePlace Foundation and served for 18 years on the board and executive committee of the Star of Texas Fair and Rodeo. Nash says he's involved because that's just how he was raised. Both of my parents were very active in giving back to the community, Nash says. Because I've been so fortunate, it's my responsibility to share and give back to the community. [Austin Business Journal, 10/23/06] FORMER TRUSTEES In Perrys 2005 Personal Financial Disclosure (for the 2004 cycle), Perry listed both Craig Hester and Jeffrey Nash as trustees of the Perry Blind Trust, citing the new trust under Jeffrey Nash, created on 12/30/04, as the successor of the previous trust created on 9/13/96. The listing of the trustee was not required on prior filings. In all of the following years only Jeffrey Nash was listed as a trustee. [Personal Financial Disclosure]

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Craig Hester, 1301 S. Mopac Expressway, #350 Austin, TX 78746 [Personal Financial Disclosure] Craig Hester Was President of Craig Hester Capital Management. According to the Austin AmericanStatesman, Memphis-based Morgan Keegan Inc., one of the biggest investment firms in the Southeast, on Wednesday announced its purchase of a majority interest in Craig Hester Capital Management, one of Austin's largest capital advisory companies. Craig Hester Capital Management, founded in 1989, manages $375 million for wealthy individuals, endowment funds and institutions, primarily in Texas. Some of its 120 clients include St. Edward's University Endowment Fund and the Capitol Area Council of Boy Scouts of America Company founder Craig Hester, 47, said he will continue as president and the present staff will remain in its offices at 100 Congress. [Austin American-Statesman, 10/30/97] Hester Managed Perrys Income and Property. According to the Associated Press, Many of Perry's assets are in a blind trust, started in 1996. That means someone else - in this case Craig Hester manages his income and property for him without discussing the decision-making with him. Perry's blind trust is worth less than $750,000, his financial team said. The blind trust is voluntary and can be revoked at any time. [AP, 4/17/02]

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Hester Began Administering Perrys Blink Trust in 1999. According to the San Antonio ExpressNews, Perry's trustee, Craig Hester, said nothing new has been placed in the trust since he began administering it in 1999. The governor has released tax forms and financial statements dating back more than a decade. [San Antonio Express-News, 10/22/02] Trustee of Perrys Blind Trust Appointed by Perry Chief Justice Appointee. According to the Houston Chronicle, Gov. Rick Perry used to get a lot of bad stories on his financial dealings with lobbyists and people with an interest in legislation. Those stories went away when he created a blind trust. The trustee and defender of Perrys' financial integrity in his 2002 campaign was Austin investment banker I. Craig Hester. Perry in 2004 named Wallace Jefferson as chief justice of the Texas Supreme Court. Then in 2005, Hester resigned as Perry's trustee so Jefferson could appoint Hester to the $23 billion Texas Employees Retirement System board. [Houston Chronicle, 7/19/07] Hester Served on UTIMCO Board. According to the Austin American-Statesman, Craig Hester is an Austin money manager who has served on the UTIMCO board and is currently a trustee of the Employees Retirement System, the $24 billion pension fund for state employees. [Austin AmericanStatesman, 4/25/08] OTHER WEALTH AND INCOME 2009: Perry Owned Home in College Station. According to the Associated Press, Perry also owns a home in College Station valued at $243,900 this year They own one home with a mortgage that is approximately the same value as the house. [AP, 9/26/09] J.R. PERRY CO. A Portion of Perrys Income Came from the J.R. Perry Co. According to the Associated Press, The rest of the couple's income came from various investments managed in a blind trust and from the J.R. Perry Co., a farming, oil and gas business the governor runs with his father. [AP, 3/29/02] Perrys Main Assets not Contained in Blind Trust were Lakefront Land and the J.R. Perry Co. According to the Associated Press, His main assets that are not in the blind trust are .68 acres of land at Horseshoe Bay and the J.R. Perry Co., a family business that deals in oil wells in West Texas. [AP, 4/17/02] 2009: J.R. Perry Co. Generated Income of $42,000 Since 1991. According to the Associated Press, They show the blind trust fund has produced at least $600,000 in income since 1997, before taxes and management fees. Another investment partnership that Perry owns with his father, the J.R. Perry Co., has generated income of about $42,000 since 1991. All told, Perry reported adjusted gross income of $4.3 million, paid $851,000 in federal taxes and gave at least $104,000 to charity in the last 18 years, according to the records. [AP, 9/26/09] 1991: Perry Received Between $5,000 - $9,999 in Oil Royalties from J.R. Perry & Co.. [Texas Personal Financial Disclosure, Texas Ethics Commission, Accessed 4/6/10] 1991: Perry Received Between $500 - $4,999 in Oil Royalties from Vista Energy. [Texas Personal Financial Disclosure, Texas Ethics Commission, Accessed 4/6/10] 1991: Perry Received Between $500 - $4,999 in Oil Royalties from Wilcox & Son. [Texas Personal Financial Disclosure, Texas Ethics Commission, Accessed 4/6/10] 1991: Perry Dissolved His Partnership in J.R. Perry Farms with No Net Gain or Loss. [Texas Personal Financial Disclosure, Texas Ethics Commission, Accessed 4/6/10] Link Strategies LLC Confidential Document 184

HASKELL NATIONAL BANK 1997: Perry Was Bank Director of Haskell National Bank. According to the Austin AmericanStatesman, Perry's most recent financial disclosure statement, filed May 2, lists his state job and a directorship at the Haskell National Bank in Haskell, his hometown, as his sources of occupational income. His wife, Anita Perry, is a consultant and account executive for MEM Hubble Communications Inc. of Austin, a firm that represents political and business clients of various stripes. [Austin AmericanStatesman, 6/11/97] Bank Director, Haskell National Bank. [1996 Personal Financial Disclosure] 1997: Perry Sold Shares of Haskell National Bank. According to the San Antonio Express-News, According to the couple's tax returns over the past decade, Mrs. Perry, 50, earned about $ 50,000 annually for work as an account executive for Hubble Communications public relations from 1995 through part of 1997. Later that year she was director of client services for the Perryman Group, an economic analysis firm, and earned about $ 21,000. That same year, Perry, once a board member at the Haskell National Bank, sold his 1,000 shares in the bank for $ 8,000. [San Antonio Express-News, 10/21/02] STOCK WEALTH 1998: Perry Amassed as Much as $1.5 Million in Stocks. According to the Fort Worth Star-Telegram, Perry, 47, owns a $ 380,000 Austin home, holds title to 60 acres of prime south Travis County real estate worth nearly $ 300,000 and has amassed as much as $ 1.5 million in stocks, according to public records and his own estimates. When he was first elected to the House of Representatives in 1985 Perry had no more than 100 shares of stock in his hometown Haskell National Bank. [Fort Worth StarTelegram, 1/31/98] 1996: Perry Owned 106,000 Shares of Stock in 29 Different Companies. According to the Fort Worth Star-Telegram, By 1996, he owned as much as 106,000 shares of stock in 29 different companies. His total debt stands at about $ 500,000 on two pieces of property. [Fort Worth Star-Telegram, 1/31/98] ANITA PERRYS INCOME Anita Perry has worked as the Director of Outreach and Development for the Texas Association Against Sexual Abuse since 2003, earning $65,000 a year. In the pas she has worked for The Perryman Group, and Hubble Communications Inc. [Personal Financial Disclosure] Anita Perry Made $50,000 Working for Hubble Communications from 95 through Part of 97. According to the San Antonio Express-News, According to the couple's tax returns over the past decade, Mrs. Perry, 50, earned about $ 50,000 annually for work as an account executive for Hubble Communications public relations from 1995 through part of 1997. Later that year she was director of client services for the Perryman Group, an economic analysis firm, and earned about $ 21,000. [San Antonio Express-News, 10/21/02] 2003: Anita Perry Said, I See My Role as an Advocate for Womens and Childrens Health Issues. According to The Dallas Morning News, During the next four years, Mrs. Perry said, she and her husband, Gov. Rick Perry, have a lot of work to do. Her to-do list is long and includes raising awareness about domestic violence, immunizations, the state's nursing shortage and other health care issues. I have so many things I want to talk about, the former nurse said. Mrs. Perry plans to travel the state, visiting shelters and discussing her lifelong passion. I see my role as an advocate for women's and children's health issues, she said. [The Dallas Morning News, 1/19/03] Link Strategies LLC Confidential Document 185

Anita Perry Starred in One of Perrys Campaign Commercials, Said As a Wife, Mother and Nurse, I Know Rick Perry Understands How Critical Health Care is to Families. According to The Dallas Morning News, Although Mrs. Perry now shies from politics and policy, she joined the fray last fall. The governor's campaign dubbed her its secret weapon and aired a TV ad starring the first lady. As a wife, mother and nurse, I know Rick Perry understands how critical health care is to families, Mrs. Perry said in the commercial. Now, as the Legislature considers cuts to children's health care and Medicaid, she will not speculate on the possible impact, adding that she trusts skilled legislators to do their jobs. But it is a concern, she said. I'm interested just like every other Texan. [The Dallas Morning News, 1/19/03] Anita Perry Worked for Two Public Affairs Firms Whose Client Lists Included Pharmaceutical Companies and Health Care Providers. According to the Austin American-Statesman, [Anita] Perry has been a registered nurse, including working with sexual assault victims, as well as an Austin consultant. Before becoming first lady, she worked for two public affairs firms whose client lists included pharmaceutical companies and health care providers. In 2000, while Rick Perry was lieutenant governor, almost half of the family's $138,115 income came from Anita Perry's consulting work. [Austin AmericanStatesman, 11/7/03] Anita Perry Worked for Economist Ray Perryman Whose Clients Included Philp Morris, American Airlines, Dell Inc., and Other Firms with High Dollar Interest in Legislation. According to the Austin American-Statesman, She got $66,000 in 2000 as a consultant for economist Ray Perryman, for whom she had worked since 1997. Perryman's clients included Philip Morris, American Airlines, Dell Inc. and other firms with high-dollar interest in legislation. Before that, Anita Perry had worked for Austin political consultant Bill Miller. [Austin American-Statesman, 11/7/03] Anita Perry Reported $87 in Income from Working as an Extra on the Television Show Walker, Texas Ranger. According to the Austin American-Statesman, On their most recent income tax filing, the Perrys reported income of $119,079 in 2002. Most came from the governor's state salary of $104,156. Some came from investments, and Anita Perry reported $87 earned as an extra on the television show Walker, Texas Ranger. [Austin American-Statesman, 11/7/03] 2003: Anita Perry was a $5,000-a-Month Consultant for the Austin-Based Texas Association Against Sexual Assault. According to the Cox News Service, Perry goes to work on Monday as a $5,000-a-month consultant for the Austin-based Texas Association Against Sexual Assault. She will be involved in fund-raising, organizing and helping the association spread its message. The first lady said she misses working. And she noted that with son Griffin at Vanderbilt University and high-school daughter Sydney headed to college in 2005, the first family could use the money. [Cox News Service, 11/6/03] Anita Perry Made $65,000 a Year as a Consultant to the Texas Association Against Sexual Assault. According to the Associated Press, Anita Perry helped boost the family's income during the lieutenant governor years, making about $67,000 as a salaried employee for The Perryman Group, a business consulting firm based in Waco Anita Perry now works as a $65,000 a year consultant to the Texas Association Against Sexual Assault. [AP, 9/26/09]

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PERRY USES HIS OFFICE TO REWARD CAMPAIGN DONORS & FRIENDS


Throughout Perrys 10 years as Governor, he has raised millions of dollars for his campaign committee from people and organizations who had business in front of the state. This glaring conflict of interest started early in his administration. From 1997 to 2001, Texas Department of Transportation contractors contributed nearly $240,000 to Perry and were later awarded almost $1 billion on contracts from the state. Other companies that contributed to Perry and were eventually awarded contracts include: United Health Group Inc., which was awarded a contract to coordinate care for the Texas Health and Human Service Commission and contributed $28,000 to Perrys campaign committee; The Aetna Insurance Company, which was awarded a contract to administer Teachers medical accounts and contributed $15,000 to Perrys campaign committee; and Zachry Construction and Williams Brothers Construction, who were awarded contracts to operate large portions of the Trans-Texas Corridor project and contributed $354,450 to Perrys campaign committee. Throughout Perrys administration, its also become common knowledge that in order to get appointed to a position by the Governor, you must contribute to his campaign committee. In just five years, from January 2000 to December 2005, Perrys campaign received nearly $3.9 million from 330 appointees or their family members. The Houston Chronicle reported that Perry may be the biggest beneficiary in Lone Star history of campaign cash for appointments. Another one of Perrys fundraising tools has been his personal slush fund to attract businesses to the state, the Texas Enterprise Fund. Perry has awarded hundreds of millions of dollars of grants to businesses, with questionable results, while receiving hundreds of thousands in campaign contributions from the companies and their employees. In 2004, Perry awarded the Texas Energy Center a $3.6 million grant. That same month, the director of the Texas Energy Center contributed $1,000 to Perry. In 2006, Perry awarded Torchmark, an insurance company, a $2 million grant. Six months later the Torchmark CEO contributed $2,500 to Perry. In August 2007, Perry awarded a $22 million grant to a web hosting company called Rackspace. Just three months later, the Rackspace US Inc. PAC contributed $10,000 to his campaign committee. STATE CONTRACTS GIVEN TO DONORS This research is ongoing. From 1997-2001 TxDOT Contractors Contributed $239,750 to Perry, Later awarded Almost $1 Billion in Contracts. According to Texans for Public Justice, From mid-1997 to mid-2001, TxDOT contractors contributed $239,750 to Perry. During Perrys first nine months in the Governors Mansion his administration awarded almost $1 billion in contracts to these same TxDOT contributors. [Texans for Public Justice, 1/7/09, link]

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[Texans for Public Justice, 10/24/01, link]

[Texans for Public Justice, 10/24/01, link] Link Strategies LLC Confidential Document 188

Perry Raised 63% of His Trans-Texas Corridor Money From Two Highway Tycoons. According to Texans for Public Justice, The favorite candidate of TTC contractors was Lieutenant Governor David Dewhurst, followed by Governor Perry. The governor collected 63 percent of his TTC-related money from just two highway tycoons: Zachry Constructions H.B. Zachry ($125,000 to Perry) and James Pitcock of Williams Brothers Construction ($100,000). [Texans for Public Justice, 1/7/09, link] Perry Raised $354,450 from Recipients of Trans Texas Corridor Contracts. [Texans for Public Justice, 1/7/09, link]

Texas Health and Human Service Commission Terminated a Contract with United Healths Evercare Program to Coordinate Care for More Than 74,000 Elderly and Disabled Medicaid Clients. According to The Associated Press State & Local Wire, The state Health and Human Service Commission's latest adventure in government privatization will mercifully end May 31, when it terminates its contract with United Healths Evercare program. The program, which sought to coordinate care for more than 74,000 elderly and disabled North Texas Medicaid clients, produced more than 1,300 complaints and was assessed more than $1 million in fines by the state for inadequate staffing and other bureaucratic sins in its first 11 months. [The Associated Press State & Local Wire, 4/6/09] Perry Accepted $28,000 from United Health Group Inc. Political Fund. [Texas Ethics Commission, link]
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Perry Approved Medical Accounts for Teachers that Included a $42 Annual Management Fee for Each Account. According to the San Antonio Express-News, Time's up for state leaders to find a way to keep Texas teachers' health care stipends intact. Today is the start date for the controversial program that puts school employees' state stipends into pretax medical accounts. The accounts include an annual management fee that could deduct as much as $42 from the $500 stipend teachers can use for medical expenses. Until now, the stipend went directly to employees to spend as they saw fit. Just three weeks ago, Gov. Rick Perry asked the Legislature to pay $18 million to cover the cost of the administrative health care fee, but when the Legislative Budget Board met last week it did not discuss the proposed transfer for educators. [Fort Worth Star Telegram, 9/1/04] The Aetna Insurance Company Contracted to Administer the Teachers Accounts Company Could Collect Up to $21 Million. According to the San Antonio Express-News, The Aetna insurance company, which will administer the program, will charge employees $2.50 a month plus an additional $1 a month for an optional debit card. Aetna could collect up to $21 million. Black said the governor is talking with members of the Legislative Budget Board and hopes members will meet and approve paying the administrative fees soon. Teachers shouldn't see a reduction in their stipend until mid-month, Black said. The governor's opinion is this was an unintended consequence of the legislation and until we can get back in legislative session and remedy this, we need to pay the fees, Black said. The governor is optimistic that can happen. [Fort Worth Star Telegram, 9/1/04] Perry Accepted $15,000 in Campaign Contributions from The Aetna Insurance Company PAC. [Texas Ethics Commission, link]

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Perry Asked the Legislative Budget Board to Transfer $18 Million from the Teacher retirement System to Pay Administrative Fees on Health Care Reimbursements Accounts for Teachers. According to the Fort Worth Star Telegram, The governor also asked the Legislative Budget Board to transfer $18 million from funds already allocated to the Teacher Retirement System of Texas, allowing TRS to pay administrative fees on health care reimbursement accounts set up for Texas teachers. [Fort Worth Star Telegram, 8/21/04]

Perry Raised $120,000 from Hurricaine Clean-Up Firm Awarded Hurricaine Ike Contracts Weeks Before Contributions. According to Texas Politics, Perry's report indicates that the only money he raised in the tropical get-away was $55,000 from three executives of Ashbritt Environmental Inc., a Pompano, Fla., company. The company also donated $65,000 to the Republican Governor's Association, then chaired by Perry. Weeks later, local Texas governments would give Ashbritt millions of dollars in contracts to clean up after Hurricane Ike. [Texas Politics, 7/26/09] Ashbritt Donated $38,500 In-Kind Expenditure to RGA for Private Air Travel While Perry Was Chair. According to RGA expenditures, Ashbritt donated $38,500 in private air travel to the RGA while Perry was chair. The contributions came in two waves. One in-kind contribution was for $3,500 on Febrary 15, 2008. The other contribution was for $35,000 on July 1, 2008. [RGA 2008 expenditures, IRS] Ashbritt Also Contributed $15,000 for Perrys Inaugural Celebration. According to the AP, Dallas-based TXU is a $15,000 donor for the celebration, which comes about 14 months after Perry issued an executive order to fast-track the permitting process for new coal-fired power plants. Florida-based AshBritt Inc., also a $15,000 donor, is a debris-removal company that has sought government contracts following hurricanes and ice storms that hit Texas. [Associated Press, 1/13/07] Ashbritt Katrina Contracts Underwent Investigation. According to the Guardian, Contracts signed so far include more than 15 that exceed $ 100m, including five of $ 500m or more, mostly for debris removal along the Gulf coast devastated by the hurricane four weeks ago. Congressional investigators are looking into a $ 568m contract awarded to AshBritt, a Florida company that was a client of the former lobbying firm of Haley Barbour, the governor of Mississippi. [Guardian, 9/27/05]

APPOINTMENTS GIVEN TO DONORS Perry May be the Biggest Beneficiary in Lone Star History of Campaign Cash for Appointments. According to the Houston Chronicle, As reported by the Chronicle's Matt Stiles, current Gov. Rick Perry didn't pioneer the practice of taking large campaign cash gifts from appointees, but he may be the biggest beneficiary in Lone Star history. Since becoming governor in 2000, Perry has received nearly $5 million in donations from appointees. According to a 2006 study by the watchdog group Texans for Public Justice, anecdotal evidence suggests that the biggest patronage plums have been appointments of Parks and Wildlife commissioners and university regents. These appointments channel the twin Texas obsessions of hunting and football. And in fact, Parks and Wildlife Commission appointee Thomas Friedkin was Perry's biggest single donor at $418,304. Of the top ten contributors, five are regents at the University of Texas, Texas A&M or Texas Tech. [Houston Chronicle, 5/9/09] Link Strategies LLC Confidential Document 190

Unseemly gifts contributions to Gov. Perry from his appointees create appearance of trade-offs headline in the Houston Chronicle [5/9/09] Donor Gave Perry $25,000 6 Days Before Being Named to the Texas Tech Board. According to the Houston Chronicle, Compounding the appearance of a quid pro quo between appointments and donors, some gave money shortly before or after they were selected by the governor. El Paso banker Rick Francis made a $25,000 contribution six days before being named to the Texas Tech board, bringing his Perry gift total to $180,000. [Houston Chronicle, 5/9/09] Employers of Appointees Gave $4 Million to Perry in 5 Years. According to the Houston Chronicle, The governor has also received large contributions from sources affiliated with the employers of the appointees. According to the Texans for Public Justice study, in his first five years in office Perry's campaign took in nearly $4 million from that category of donor. [Houston Chronicle, 5/9/09] From December 2002 Februrary 2006, Perry Took $3.9 Million from Appointees; Average of $3,769 Per Appointee. According to Texans for Public Justice, Texas Governor Rick Perry tapped 1,027 appointees 1,123 times to serve on 235 state agencies, boards and commissions between December 5, 2002 and February 22, 2006 (some appointees were appointed multiple times). Between January 2000 and December 2005 Perry's campaign received a total of $3,870,324 from 330 of these appointees (32 percent) or their family members. In this way the Perry campaign raked in an average of $3,769 per gubernatorial appointee. During the same period the governor's campaign took in another $3,103,928 from sources affiliated with the employers of these appointees. [http://info.tpj.org/page_view.jsp?pageid=979]

Perry Raised Big Inaugural Cash from Appointees. According to the Dallas Morning News, Executives of several companies that are inaugural donors have been appointed by Mr. Perry to coveted boards and commissions. Peter Holt of San Antonio is an appointee to the Texas Parks and Wildlife Commission. His company, Holt CAT, has given $50,000 to the inauguration. Irving investor and hotel owner Robert Rowling, whose TRT Holdings is a $10,000 donor, was appointed by Mr. Perry to the University of Texas Board of Regents. Frank Miller of Irving, whose real-estate company JPI is a $10,000 donor, is a Texas Tech regent. Having chosen wrong in November's race for governor, at least one inaugural donor is putting his money on the winning side on Tuesday. Dallas dental-clinic operator David Alameel supported one of Mr. Perry's challengers, Carole Keeton Strayhorn, with $300,000 in contributions. When the Republican governor and lieutenant governor are sworn in on Tuesday, Mr. Alameel will be among the day's biggest financial benefactors - $50,000. [Dallas Morning News, 1/13/07] Perry Named Enron Official to PUC Days After Taking $20,000 from Ken Lay. According to the Austin American Statesman, In 2001, Perry dismissed as coincidence his naming an Enron official to the Public Utility Commission only days after then Enron chairman Ken Lay donated $20,000. [Austin American Statesman, 8/10/06] Krugh Appointed to Commission; Perry Took $100,000 from Krughs Employer Month Earlier. According to the Chronicle, John Krugh, corporate counsel for Perry Homes, led a task force that crafted the legislation for the Texas Association of Builders. Krugh was appointed one of four builder representatives on the Residential Construction Commission in September 2003 by Gov. Rick Perry, who had received $100,000 in contributions less than a month earlier from Bob Perry. [Houston Chronicle, 12/18/08] 43% of Appointees to 10 Most Powerful Boards Were Major Campaign Donors to Perry. According to the Dallas Morning News, Indeed, 43 percent of appointees to the 10 most powerful state boards have been major campaign contributors to Mr. Perry, state records show. [Dallas Morning News, 8/7/06] Link Strategies LLC Confidential Document 191

El Pasoans Appointed to Powerful Boards Gave Heavily to Perry. According to the El Paso Times, El Pasoans appointed to powerful state boards and agencies by Republican Gov. Rick Perry have contributed more than $500,000 to his campaigns during the past five years. The El Paso appointee who contributed the most to Perry was J. Robert Brown, president of Desert Eagle Distributing Co. Brown gave Perry $129,513. He was appointed to the Texas Parks and Wildlife Commission in November 2003 and previously was on the Texas Tech University System Board of Regents. Coming in second and third in appointee contributions from El Paso were Paul Foster, president of Western Refining, and Rick Francis, chairman and CEO of Prime Capital Management and Francis Properties. Foster gave Perry $112,224. He was appointed to the Texas Higher Education Coordinating Board, which oversees public universities, in July 2004. Foster could not be reached for comment because he is climbing Mount Everest, an aide said. Francis gave Perry about $110,000. The governor placed Francis on the Texas Tech University Board of Regents in November 2003. [El Paso Times, 4/15/06] Top Perry Donors Received Plum Contracts, Appointments to Coveted Boards. According to the Dallas Morning News, A handful of super-rich political contributors, giving at least $25,000 a year, will put at least $10 million into Gov. Rick Perry's re-election treasury forming an elite fundraising corps that the campaign calls the Century Council. In exchange, donors who pledge to give at least $100,000 get invitations to private luncheons with the governor. And many are beneficiaries of government business, plum appointments and other state largesse. Three Century Council members have lucrative contracts to help build Mr. Perry's multibillion-dollar toll-road initiative. The state has deposited millions in investment funds operated by three other top-tier givers. And 16 are Perry appointees to coveted boards, including the Parks and Wildlife Commission and state university regent boards. A Perry campaign spokesman says the donors get no special treatment. His biggest contributor, Houston homebuilder Bob Perry (no relation), has given more than $700,000 since Rick Perry became governor. In 2003, the Legislature created a state agency to resolve construction disputes between homebuilders and consumers. The governor appointed the Houston homebuilder's corporate counsel to the agency's governing board. .Appointment to university and agency boards is a traditional way that governors have rewarded donors. In Mr. Perry's case, three members of the Century Council have been appointed to the Parks and Wildlife Commission, including Houston auto-wholesaler Tom Friedkin. Mr. Friedkin not only has contributed $200,000 to Mr. Perry's re-election, he loaned his private plane to fly the governor on a political trip in March to speak to a national Republican group meeting in Tennessee. [Dallas Morning News, 8/17/06] 330 Perry Appointees or their Families Contributed More than $3.8 Million to His Campaigns. According to the Texas Observer, In each four-year term, a Texas governor will appoint several hundred people to serve on various state agencies, commissions, and boards-everything from powerful policysetting positions at the Public Utilities Commission and the Texas Commission on Environmental Quality to such obscure bureaucratic outposts as the Advisory Committee on Rock Crushers and Quarries. To get appointed, it helps if you're an expert in the area that board or commission covers. During Gov. Rick Perry's tenure, however, it also helps if you donate to his campaign. In the past three years, Perry has appointed 1,027 individuals; 330 of the appointees, or their families, have contributed more than $3.8 million since 2000 to his campaigns for governor. Those numbers come courtesy of a new report from the watchdog group Texans for Public Justice. The question is: How are those people selected and appointed? asked Andrew Wheat, research director at Texans for Public Justice and contributing writer for the Observer. I think it's pretty clear that with gubernatorial appointments in Texas, not just with Governor Perry, but with past governors, there has been a significant political and financial component involved. [Texas Observer, 4/7/06] Perry Accepted $5 Million In Campaign Donations from His Appointees. According to the Associated Press, Gov. Rick Perry has accepted nearly $5 million in political campaign donations from people he has appointed to state boards and commissions since taking office in 2000, according to a newspaper review of campaign finance records. The Houston Chronicle reported Monday that nearly half the donations came from appointees who serve as higher education regents, including more than Link Strategies LLC Confidential Document 192

$840,000 from those at the University of Texas System. In some cases, Perry's appointees gave money in the weeks before or after being selected. [AP, 5/4/09] Perry Put Key Allies and Stop Staffers in Some of the Most Important Jobs in State Government. According to the Austin American-Statesman, Gov. Rick Perry has in many ways dispelled the notion that governor of Texas is an inherently weak office. During nine years as governor, he has put key allies and top staffers in some of the most important jobs in state government, he has sought significant change in state policy through executive orders, and he has pushed for new programs that give his administration considerable authority. In a recent interview, he likened himself to a CEO. The chief executive officer of a corporate entity should have a very clear vision of where they want to go and be able to implement that vision, Perry said. That's what elections are about. [Austin AmericanStatesman, 2/10/10] RICHARD SCOTT APPOINTED BY PERRY TO THE LOWER COLORADO RIVER AUTHORITY BOARD, COMPANY AWARDED CONTRACTS BY PERRY Richard Scott Houston $10,000 contribution on February 24, 2010 Richard Scott has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Richard Scott is the Co-Owner of Trans Global Solutions, a Railroad Transportation Company. According to the Lower Colorado River Authority (LCRA) website, Richard Dick Scott of Wimberley is co-owner of Trans-Global Solutions Inc., a railroad transportation company. He is a member of Delta Sigma Pi and the Boys and Girls Country Executive Committee. He is also a volunteer contributor for the Hays County FFA and 4H clubs and a member of the Houston Livestock Show Lifetime Committee. [LCRA.org, Accessed on February 27, 2010, link] August 2004: Trans Global Solutions Awarded $510,000 in Grants by Rick Perry Under the Texas Texas Emissions Reduction Program. According to the Environmental Insider News, While his colleagues were sweating bullets at a lengthy agenda in Austin, TCEQ Commissioner R. B. Ralph Marquez was sharing a stage in Houston with Governor Rick Perry as he announced the winners of over $80.89 million in grants under the Texas Emissions Reduction Program (TERP). Three entities won grants to install auxiliary power unit idle reduction systems manufactured by EcoTrans Technologies LLC, Jacksonville, FL. This technology, as described by the U.S. Department of Energy, consists of a compact unit mounted on a skid which includes an EPA-emissions certified 48-horsepower, 4-cylinder, turbocharged diesel engine. Moreover, there is a substantial reduction in noise levels in neighborhoods located nearby freight terminals and large rail yards. Grants went to - $ 442,000 to Trans Global Solutions, Houston. $ 68,000 to Trans Global Solutions, Beaumont. [Environmental Insider News, 8/2/04, link]

February 2009: Scott Appointed to the Lower Colorado River Authority Board by Governor Rick Perry. According to the Lower Colorado River Authority (LCRA) website, The LCRA Board of Directors is composed of 15 members appointed to six-year terms by the governor and confirmed by the Texas Senate. The Board meets regularly to set strategic corporate direction for the general manager and staff, to approve projects and large expenditures, and to review progress on major activities and issues. For more information, see Board agendas Scott received a bachelors degree from Lamar University. Gov. Rick Perry appointed him to the Board in 2009 for a term that expires in 2015. [LCRA.org, Accessed on February 27, 2010, link] [Governor.state.tx.us, 2/6/09, link] William F. Scott, Chief Executive of Trans-Global Solutions, Appointed in 2003 by Gov. Rick Perry to the Jefferson & Orange County Pilot Commission. According to My San Antonio News, Some Link Strategies LLC Confidential Document 193

fear preferential treatment may be extended to Scott, who is chief executive of Trans-Global Solutions and was appointed by Gov. Rick Perry in 2003 to the Jefferson & Orange County Pilot Commission. [My San Antonio News, 6/17/08, link] 2008: Mason County Residents Angry with William F. Scott for a Plan to Divert 6.5 Million Gallons of River Water to Pump 40 Million Gallons of Groundwater Into Reservoirs on His Ranch. According to My San Antonio News, New friction over water in the parched Hill Country has Mason County residents upset by a ranch owner's plan to create two reservoirs on the James River and to top them off using a well. Even in non-drought years, development-driven demand for groundwater in the region has pitted old-timers against newcomers and prompted a scramble for surface water rights. In Mason County, William F. Scott wants to divert 6.5 million gallons of river water and to pump 40 million gallons of groundwater annually into reservoirs he wants to build for personal and livestock use on his Star S Ranch. [My San Antonio News, 6/17/08, link] November 2006: Scotts Plan to Divert Water Approved by the Lower Colorado River Authority. According to My San Antonio News, A Mason County property owner's bid to divert water from the James River to reservoirs there cleared its first hurdle Wednesday, but more obstacles lie ahead for the plan opposed by downstream residents. At an Austin meeting Wednesday, the Lower Colorado River Authority board approved selling 19 million gallons of water annually for 10 years to Star S Ranch, owned by Houston businessman William F. Scott. [My San Antonio News, 11/15/06, link] LCRA Board Approved Selling 19 Million Gallons of Water Annually for 10 Years to Star S Ranch, Owned by William F. Scott. According to the San Antonio Express-News, A Mason County property owner's bid to divert water from the James River to reservoirs there cleared its first hurdle Wednesday, but more obstacles lie ahead for the plan opposed by downstream residents. At an Austin meeting Wednesday, the Lower Colorado River Authority board approved selling 19 million gallons of water annually for 10 years to Star S Ranch, owned by Houston businessman William F. Scott. [San Antonio Express-News, 11/16/06] Scotts Permit Required to be Approved by the Texas Commission on Environmental Quality. According to My San Antonio News, The board directed staff to take a very active role in the permit request to the TCEQ, said Lower Colorado River Authority spokesman Robert Cullick after the meeting. They said they wanted to make sure the LCRA protected all of the interests of the river. Scott recently withdrew from the state environmental commission his request for permits to build the dams. But after Wednesday's meeting, project critic Scott Zesch said, Now we expect him to go back to the TCEQ and reapply for a permit."That's where the real fight will occur, Zesch said. [My San Antonio News, 11/15/06, link] Scotts Permit Required to be Approved by the Texas Parks & Wildlife Department. According to the San Antonio Express-News, Scott wants to build two dams on the river to impound the water intended for irrigation, recreation and domestic uses. That would require approvals by the Texas Commission on Environmental Quality and the Texas Parks & Wildlife Department. [San Antonio Express-News, 11/16/06]

STEVE HICKS APPOINTED BY PERRY TO THE UNIVERSITY OF TEXAS BOARD OF REGENTS Steve Hicks Austin $25,000 contribution on February 24, 2010 Steve Hicks has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link]

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February 2009: Steve Hicks was Appointed by Rick Perry to Become a Member of the University of Texas System Board of Regents. According to The University of Texas website, R. Steven Steve Hicks, Austin, Texas, was appointed to a term on The University of Texas System Board of Regents by Governor Rick Perry in February 2009. His term expires February 1, 2011. Regent Hicks was confirmed by the State Senate on April 1, 2009, and he took the oath of office on April 2, 2009. Regent Hicks chairs the Audit, Compliance, and Management Review Committee. In addition, he serves on the Facilities Planning and Construction Committee as well as the Student, Faculty, and Staff Campus Life Committee. [Utsystem.edu, link] Hicks Owns and is the Executive Chairman of Capstar Partners, LLC, a Private Investment Firm. According to The University of Texas website, Regent Hicks owns and serves as Executive Chairman of Capstar Partners, LLC, a private investment firm. Capstar Partners is the controlling shareholder in DMX, Inc., a company engaged in the provision of business media services, including video, music and scent technologies; Andrew Harper, a high-end travel publishing and services firm; and Harden Healthcare, a company engaged in the skilled nursing, home health, and related fields. Capstar Partners is the largest investor in CPO Commerce, an e-commerce company that partners with consumer product manufacturers to sell non-standard inventory. [Utsystem.edu, link] MICKEY LONG APPOINTED BY PERRY TO THE TEXAS TECH BOARD OF REGENTS Mickey Long Midland $25,000 contribution on February 24, 2010 Mickey Long has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] February 2009: Mickey Long was Appointed by Perry to the Board of Regents of the Texas Tech University System. According to TexasTech.edu, Mr. Mickey Long of Midland was appointed to the Board of Regents of the Texas Tech University System on February 6, 2009. Mr. Long is currently a member of the Audit Committee and serves as vice chair of the Board of Trustees of the Carr Scholarship Foundation. His term expires on January 31, 2015. [TexasTech.edu, Accessed February 26, 2010, link] Mickey Long is President of Westex/WLP Well Service, L.P. in Midland. According to TexasTech.edu, Mickey L. Long is president of Westex/WLP Well Service, L.P. in Midland. Mr. Long received his Bachelors of Science degree from Angelo State University in 1976. [TexasTech.edu, Accessed February 26, 2010, link] NASRUDDIN RUPANI APPOINTED BY PERRY TO THE STATE HEALTH SERVICES COUNCIL Nasruddin Rupani Sugarland $10,000 contribution on February 24, 2010 Nasruddin Rupani has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Nasruddin Rupani is a U.S. Citizen of Pakistani Origin, Founded the Rupani Foundation to Reduce Poverty within Mountain Communities. According to the RupaniFoundation.org, Founded in 2006 by Mr. Nasruddin Rupani, a U.S. citizen of Pakistani origin and a renowned industrialist in the global Gems and Jewelry industry, the Rupani Foundation aims to reduce poverty and promote social entrepreneurship within Mountain communities. Motivated by the Islamic ethics of philanthropy and the ethos of corporate social responsibility, the Rupani family has resolved to invest their time, knowledge and resources toward this end. The Foundation's objective is to create economic opportunities, Link Strategies LLC Confidential Document 195

knowledgeable leadership, and 'aristocracies of merit' for the marginalized communities, particularly women and youth. The first significant area of endeavor is to assist the Mountain communities in the Northern Areas of Pakistan, Afghanistan, Tajikistan, and the surrounding regions. [RupaniFoundation.org, Accessed February 27, 2010, link] Rupani is the Founder of World Gold and Diamonds, Inc., a Jewelry Retailer, Wholesaler, and Distributor in the United States. According to CachCapital.com, Mr. Rupani is also the founder of World Gold and Diamonds, Inc., one of the most prestigious and highly successful jewelry retailer, wholesaler and distributor in the United States. His experience in retailing and wholesaling gives CACH a unique perspective on marketing, sales and distribution. Mr. Rupani received his education at New York University. [CachCapital.com, Accessed February 27, 2010, link] Rupnai is the Chairman for Cach Capital Management, LLC. According to CachCapital.com, Mr. Rupani was recently appointed to Chairman for CACH and has been a stakeholder in the company since its founding in July 2006. He brings a wealth of knowledge and global business expertise to the firm, and helps CACH secure capital for its project companies. [CachCapital.com, Accessed February 27, 2010, link] Rupani is a Board Member of One World Bank and Pakistan Association of Greater Houston, and President of U.S. Insurance Funding Inc. According to the Texas Department of State Health Services website, Nasruddin Rupani of Sugar Land is president of Worlds Gold and Diamonds. He is chairman of the IbnSina and Rupani Foundation boards, a board member of One World Bank, and Pakistan Association of Greater Houston, and president of U.S. Insurance Funding Inc. He is a volunteer coordinator for the Aga Khan Foundation, and director of the Houston-Karachi Sister City Association, and the Gem and Jewelry Development Corporation. He was also district coordinator for FOCUS Humanitarian Assistance. Rupani received a bachelors degree from New York University. His term will expire Feb. 1, 2015. [DSHS.State.TX.US, Accessed on February 27, 2010, link] April 6, 2009: Perry Appointed Rupani to be a Member of the State Health Services Council. According to the Texas State Senate website, Rupanis appointment to be a member of the State Health Services Council will expire on in February 2015. [Senate.State.TX.US, 4/6/09, link] ROBERT STILLWELL APPOINTED BY PERRY TO THE UNIVERSITY OF TEXAS BOARD OF REGENTS Robert Stillwell Houston $10,000 contribution on February 24, 2010 Robert Stillwell has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Robert Stillwell is a Lead Director at EXCO Resources, Inc. General Counsel of BP Capital LP, Mesa Water, Inc. and Other Petroleum Businesses. According to Forbes.com, Robert L. Stillwell became one of our directors in October 2005. Mr. Stillwell has served as the General Counsel of BP Capital LP, Mesa Water, Inc. and affiliated companies engaged in the petroleum business since 2001. Mr. Stillwell was a lawyer and Senior Partner at Baker Botts LLP in Houston, Texas from 1969 to 2001. He also served as a director of Mesa Petroleum Co. and Pioneer Natural Resources Company from 1969 to 2001. [Forbes.com, Accessed on February 27, 2010, link] February 2009: Rick Perry Appointed Robert Stillwell to the UT Board Of Regents.. Gov. Rick Perry has appointed four members to the University of Texas System Board of Regents. R. Steven Steve Hicks of Austin is chairman of Capstar Partners LLC. James R. Huffines of Austin is central/south Texas Chair of PlainsCapital Bank and senior executive vice president of PlainsCapital Link Strategies LLC Confidential Document 196

Corporation. William Gene Powell of San Antonio is co-founder and CEO of Bitterblue Inc. and AirStrip Technologies. Robert L. Stillwell of Houston is general counsel for BP Capital LLC. (Gov. Rick Perry, Gov. Perry Appoints Four to University of Texas System Board of Regents, Appointment, 2/12/09, link] Stillwell was One of Two Lawyers Assigned to Help T. Boone Pickens Create His First Corporation, Mesa Petroleum. According to Law.com, Robert L. Stillwell still remembers the first time he met T. Boone Pickens. It was 1963, and Stillwell was a junior associate and one of just a handful of lawyers who made up the corporate department at Baker Botts in Houston. Pickens had been referred to the firm by some friends in the oil business in Midland, Stillwell recalls, and was looking to form his first corporation, Mesa Petroleum. Stillwell was one of the two lawyers assigned to make Pickens' deal happen. [Law.com, 5/18/09, link] Stillwell on the Front Line of the Legal Deals Involving Pickens and Mesas Takeover Activities, Shareholder Rights Activism. According to Law.com, In the 1960s, Stillwell says he worked with Pickens on smaller acquisitions; beginning in the early '80s and lasting through the early '90s, there were the major oil and gas company takeovers that catapulted Pickens into the earnings stratosphere and into popular culture as an oilman for the ages. Mesa and Pickens were at the forefront of takeover activities, shareholder rights activism, Stillwell says, and Stillwell was on the front lines of these legal deals. One of those early deals was Mesa's acquisition of the Hugoton Production Co. in 1969. [Law.com, 5/18/09, link]

BRENDA PEJOVICH APPOINTED BY PERRY TO THE TEXAS HIGHER EDUCATION COORDINATING BOARD Brenda Pejovich Dallas $10,000 contribution on February 24, 2010 Brenda Pejovich has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Brenda Pejovich has Contributed Over $75,000 to Republicans Running for Federal Elections Since 2000. [CampaignMoney.com, Accessed February 27, 2010, link]

1999: Pejovichs Company, Brenda Pejovich & Associates, Acquired by National Staffing Firm Accounting Principals Inc. According to the Dallas Business Journal, National staffing firm Accounting Principals Inc. has nearly quadrupled its Metroplex operations by acquiring a 13-year-old Dallas company, Brenda Pejovich & Associates. Terms of the deal were not disclosed. It was time to take the next step, said owner Brenda Pejovich, who is now managing partner for the Dallas office of Accounting Principals. Either we were going to grow by acquisition or by merging with another firm. [Dallas Business Journal, 4/9/99, link] Brenda Pejovich is a Board Member of the Conservative Texas Public Policy Foundation. [SourceWatch.org, Accessed February 27, 2010, link] November 2007: Brenda Pejovich was Appointed to the Texas Higher Education Coordinating Board by Governor Rick Perry. According to the Texas Higher Education Coordinating Board website, Link Strategies LLC Confidential Document 197

Brenda Pejovich of Dallas, Texas, was appointed to a six-year term on the Texas Higher Education Coordinating Board by Governor Rick Perry on November 7, 2007. Ms. Pejovich serves as Chair for the Committee on Agency Operations and Vice-Chair for the DEPARTMENT OF TRANSPORTATION APPOINTMENTS Dallas Physician Robert Gunby Who Chairs the Texas Medical Associations PAC, Turned Down a Perry Appointment to the State Board of Health, Said Perry Put the Concerns of Business Over the Needs of Doctors. According to The Houston Chronicle, Robert Gunby, a Dallas physician who chairs the TEXPAC board, even turned down a Perry appointment to the State Board of Health because of his differences with the governor over health-care matters. I am utterly convinced that our state needs new health-care leadership, Gunby said in remarks prepared for the TMA's winter conference earlier this year. Our governor has been, at best, ambivalent or indifferent toward our circumstances, he added. Gunby also accused Perry of putting the concerns of business interests, who are major contributors to the governor, over the needs of doctors, many of whom are having trouble keeping their practices open because of overdue insurance payments. [The Houston Chronicle, 7/15/02] Perry Appointed Dr. Steven Berkowitz to the Health Care Information Council. According to The Associated Press State & Local Wire, Gov. Rick Perry announced several appointments Monday, including naming Dr. Steven Berkowitz to the Health Care Information Council. Berkowitz, chief medical officer at St. David's Healthcare Partnership in Austin, will join a council that collects and provides data on the performance of hospitals and health maintenance organizations in Texas. [The Associated Press State & Local Wire, 9/23/02] Patricia L. Starck was Appointed in 2002 to the Texas Statewide Health Coordinating Council. According to the Columbus Ledger-Enquirer, Georgia Southwestern State University alumna Patricia L. Starck will be featured as the Griffin Bell Distinguished Lecture Series speaker at 11 a.m. Wednesday in the university's Fine Arts Theatre, Americus. The lecture is free and open to the public. Starck is the John P. McGovern Distinguished Professor and has been dean of the School of Nursing at the University of Texas Health Science Center in Houston since 1984. She received an associate degree in nursing from Georgia Southwestern and earned her baccalaureate and master's degrees in rehabilitative nursing from Emory University and her doctor of science degree in nursing from the University of AlabamaBirmingham in community/mental health nursing. She has been in university administration more than 25 years and has held national appointments to work on health care reform. She was appointed by Gov. Rick Perry in 2002 to the Texas Statewide Health Coordinating Council, which is responsible for producing the Texas State Health Plan. [Columbus Ledger-Enquirer, 2/18/03] Patricia L. Starck Contributed $750 to Perrys Campaign Committee. [Texas Ethics Commission, link]
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September 2003: Perry Chose Four New Appointees for the Texas State Board of Medical Examiners. According to The Houston Chronicle, A public relations professional from Conroe and a computer company executive from Bellaire are among four new appointees to the Texas State Board of Medical Examiners, the state agency charged with regulating health care professionals. Gov. Rick Perry on Wednesday announced the appointments of Melinda Fredricks of Conroe and Timothy Turner of Bellaire. The 19-member board, which licenses and disciplines physicians, is made up of 12 physicians and seven non-physicians. [The Houston Chronicle, 9/11/03] Tim Turner, VP of Business Development at Global PTM Appointed by Perry to the Texas State Board of Medical Examiners. According to The Houston Chronicle, It seemed the one place as a Link Strategies LLC Confidential Document 198

citizen I could make a difference was the board of medical examiners, she said. I just want to help the medical system improve in the state of Texas. I want to be fair and discipline the (doctors) who truly need it and clear the names of those who don't. Turner is vice president of business development at Global PTM, an information technology consulting firm. He is a member of the State Bar of Texas and the Greater Southwest Houston Chamber of Commerce. He has a bachelor's degree from the University of Texas at Austin. [The Houston Chronicle, 9/11/03] Tim Turner Contributed $1,350 to Perrys Campaign Committee. [Texas Ethics Commission, link]
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HEADLINE: Two non-physicians join new appointees on examiners board [The Houston Chronicle, 9/11/03]

Perry Appointed Dr. Amanullah Khan, President of the Cancer Center Associates of Dallas to the Texas State Board of Medical Examiners. According to The Houston Chronicle, In addition, Perry appointed two doctors new to the board, Dr. Amanullah Khan, president of the Cancer Center Associates of Dallas and McKinney, and Dr. Keith Miller, a family physician from Center Perry reappointed Dr. Lee Anderson, founder of Retina Consultants in Fort Worth, who serves as chairman of the state medical board, as well as Dr. Larry Price of Belton, a senior staff cardiologist at Scott and White Clinic. [The Houston Chronicle, 9/11/03] Dr. Amanullah Kahn Contributed $17,775 to Perrys Campaign Committee. [Texas Ethics Commission, link]
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Perry Appointed Dr. Keith Miller, a Family Physician, to the Texas State Board of Medical Examiners. According to The Houston Chronicle, In addition, Perry appointed two doctors new to the board, Dr. Amanullah Khan, president of the Cancer Center Associates of Dallas and McKinney, and Dr. Keith Miller, a family physician from Center Perry reappointed Dr. Lee Anderson, founder of Retina Consultants in Fort Worth, who serves as chairman of the state medical board, as well as Dr. Larry Price of Belton, a senior staff cardiologist at Scott and White Clinic. [The Houston Chronicle, 9/11/03] Dr. Keith Miller Contributed $10,500 to Perrys Campaign Committee. [Texas Ethics Commission, link]

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Perry Re-Appointed Dr. Lee Anderson, a Founder of Retina Consultants in Fort Worth, to the Texas State Board of Medical Examiners. According to The Houston Chronicle, In addition, Perry appointed two doctors new to the board, Dr. Amanullah Khan, president of the Cancer Center Associates of Dallas and McKinney, and Dr. Keith Miller, a family physician from Center Perry reappointed Dr. Lee Anderson, founder of Retina Consultants in Fort Worth, who serves as chairman of the state medical board, as well as Dr. Larry Price of Belton, a senior staff cardiologist at Scott and White Clinic. [The Houston Chronicle, 9/11/03] Dr. Lee Anderson Contributed $1,650 to Perrys Campaign Committee. [Texas Ethics Commission, link]
Dt ae A on mu t Ls at 0 -O t-0 8 c 8 $ 5 .0 Anderson 20 0 1 -Jun-0 7 2 $ 5 .0 Anderson 20 0 0 -Nov-0 7 5 $ 5 .0 Anderson 10 0 0 -Ma 0 $ ,0 0 0 Anderson 4 y-0 1 0 .0 Fs ir t L ee L ee L ee L S ee . Cy it Fort W orth Fort W orth Fort W orth Fort W orth Sa e tt T X T X T X T X Z ip 712 60 719 60 719 60 719 60 E p yr m lo e R etinaC onsulta P.A. nts B E est fforts Oc p t n c u a io O phtha olog lm ist Physic n ia XX XX

Michael Brimberry, Former Systems Manager at Austins Seton Healthcare Network, Appointed by Rick Perry to the Texas State Board of Pharmacy. According to the Austin Business Journal, Michael Brimberry, pharmacy information systems manager for Austin's Seton Healthcare Network, was appointed president of the Texas State Board of Pharmacy, Gov. Rick Perry's office said Tuesday. The Austin-based board oversees the licensing and regulation of Texas pharmacists and pharmacies. Brimberry's term as president is unlimited. His appointment must be confirmed by the Texas Senate. Brimberry is the first gubernatorially appointed president of the pharmacy board. In the past, board members have elected the president from within their ranks. He has served on the pharmacy board since December 2001. [Austin Business Journal, 2/7/06] Michael Brimberry Contributed $300 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a A on mu t C n ib to o tr u r 5 /2 0 /6 0 2 $ 5 0 B berry, Mike 2 .0 rim 6 0 02 /3 /2 0 $ 5 0 B berry, Mike 2 .0 rim 1 /7 0 6 $ 5 .0 B berry, Mike 1 /2 0 2 0 0 rim C ity S te ta Austin TX Austin TX C r Pa TX eda rk E p yr m lo e Oc p t n c u a io

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Perry Appointed Insurance Commissioner Mike Geeslin. According to The Dallas Morning News, Ben Gonzalez, a spokesman for the Department of Insurance, said the commissioner has a Dec. 28 deadline to decide whether the agency will start writing rules to limit or ban discretionary clauses. If [Insurance Commissioner Mike] Geeslin opts not to begin rule-making, insurers will retain their unrestricted right to determine benefits. Consumer advocates see Geeslin, an appointee of Republican Gov. Rick Perry, as leaning toward the industry in his decisions. Health care and insurance, including car and homeowners, are expected to be major topics in next year's state campaigns. [The Dallas Morning News, 12/17/09] Perry Appointed Gerry Evenwel to the Correctional Managed Health Care Committee to Help Develop a Managed Care Plan for Texas Prison Inmates. According to the US State News, Gov. Link Strategies LLC Confidential Document 200

Rick Perry has appointed Gerry Evenwel of Mt. Pleasant to the Correctional Managed Health Care Committee for a term to expire Feb. 1, 2015. The committee develops a managed healthcare plan for Texas prison inmates. Evenwel is retired director of benefits for Pilgrim's Pride. He is a member of the Mount Pleasant Lions Club, Mount Pleasant/Titus Chamber of Commerce, Northeast Texas ToastMasters and Friends of the Mt. Pleasant Library. Evenwel received a bachelor's degree from Franklin and Marshall College. [US State News, 5/4/09] October 2006: Perry Formed the Texas Health Care System Integrity Authority (THCSIA) to Help Establish an Electronic Medical Records System and Help Consumers Shop for Health Insurance. According to the US States News, Ultimately, our goal is to improve patient safety and provide consumers with better care at a price more Texas families and small businesses can afford, Perry said. The members of this partnership will assist in creating a more efficient and effective health care system in Texas by constructing the framework for the Texas Health Care System Integrity Authority. In October, Gov. Perry issued an executive order that will lead to the creation of a new public-private collaborative, the THCSIA, in order to further efforts to create a secure electronic medical records system, arm consumers with the ability to comparison shop for health care and provide a more robust health insurance market for small employers. [US States News, 12/1106] Perry Appointed Fred Sinclair Brinkley Jr. to THCSIA --- Brinkley was the Vice President for Medco Health Solutions, Inc. According to the US States News, Fred Sinclair Brinkley Jr. of Austin is vice president of professional affairs for Medco Health Solutions, Inc. He is a member of the Capitol Area Pharmaceutical Association, the Texas Pharmacy Association, the American Pharmacists Association, and the Texas and American Society of Health-System Pharmacists. Brinkley is also a member of the Academy of Managed Care Pharmacy and the American Society for Pharmacy Law. He previously served as chairman of the University of Texas Pharmaceutical Foundation and president of the University of Texas' College of Pharmacy Alumni Association. Brinkley received a bachelor's degree in pharmacy and a master of business administration from the University of Texas at Austin. [US States News, 12/1106] Medco Health PAC Contributed $9,500 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 1 /2 /2 0 1 9 04 1 /9 0 5 1 /2 0 1 /1 /2 0 0 2 06 A on mu t C n ib to o tr u r $ ,0 0 0 ME C H AL HPAC 2 0 .0 DO E T , $ ,5 0 0 Medc H 2 0 .0 o ealth PAC , $ ,0 0 0 Medc H 5 0 .0 o ealth PAC , C ity Mill Va lley Mill Va lley Mill Va lley S te ta C A C A C A

Perry Appointed Kim A. Caldwell to THCSIA Caldwell was the Senior Director for Corporate Reimbursement in the Federal Government Affairs Division of Abbott. According to the US States News, Kim A. Caldwell of McKinney is a registered pharmacist and is senior director for corporate reimbursement in the federal government affairs division of Abbott. He is vice president and former president of the Texas State Board of Pharmacy. He is a member of the Texas Pharmacy Association, the American Pharmaceutical Association and the National Association of Boards of Pharmacy. Caldwell is also a member of the American Society of Health-System Pharmacists and the Academy of Managed Care Pharmacy. Prior to joining Abbott, Caldwell served as one of four division directors leading the creation and operations of Medicare Part D within the Centers for Medicare and Medicaid Services. He has broad knowledge relating to pharmacy and healthcare. He previously owned an independent pharmacy, lead managed care and PBM pharmacy functions, and served as privacy officer and head of clinical programs for an E-Prescribing organization. He is former president of Athens Independent School District and the Athens Municipal Water Authority. Caldwell received a bachelor's degree in pharmacy from Southwestern Oklahoma State University. [US States News, 12/1106] Abbott Laboratories PAC Contributed $3,500 to Perrys Campaign Committee. [Texas Ethics Commission, link] Link Strategies LLC Confidential Document 201

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Perry Appointed Gary E. Goldstein, M.D. to THCSIA Goldstein was the CEO of the Western Region of Humana, Inc. According to the US States News, Gary E. Goldstein, M.D., of Austin is CEO of the western region of Humana, Inc. He is a member of the American Medical Association and the American Association of Insurance Plans. He serves on the board of the Ronald McDonald House, the National Jewish Hospital, Zachary Scott Theatre, Austin Lyric Opera and the Greater Austin Chamber of Commerce. Goldstein received a bachelor's degree and medical degree from George Washington University. [US States News, 12/1106] Humana Inc Texas PAC Contributed $27,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 1 /8 0 0 2 /2 0 1 /1 /2 0 2 0 02 1 /1 /2 0 1 2 03 1 /2 /2 0 0 6 02 1 /4 0 1 0 /2 0 1 /2 /2 0 0 0 04 1 /1 /2 0 1 7 06 A on mu t $ ,5 0 0 2 0 .0 $ ,0 0 0 1 0 .0 $ ,0 0 0 1 0 .0 $ ,5 0 0 2 0 .0 $ ,0 0 0 5 0 .0 $ ,0 0 0 5 0 .0 $ 0 0 .0 1 ,0 0 0 C n ib to o tr u r H a IncT sPa um na exa c H a Texa PAC um na s H a Texa PAC um na s H a Texa PAC um na s H a Texa PAC um na s H a Texa PAC um na s , H a Texa PAC um na s , C ity Austin L ouisville L ouisville Austin Austin W shing a ton W shing a ton S te ta T X KY KY T X T X D C D C

Perry Appointed Sing N. Lim to THCSIA Lim was the Regional Manager of the Wal-Mart Pharmacy Division. According to the US States News, Sing N. Lim of Sugar Land is a regional manager of Wal-Mart Pharmacy Division. He serves on the board of the Texas Federation of Drug Stores and is a member of the employer advisory panel for the University of Texas School of Pharmacy. Lim received a bachelor's degree in pharmacy from the University of Texas at Austin. [US States News, 12/1106] Wal-Mart PAC and the Owner of Wal-Mart, John Walton, Contributed $110,250 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 9 9 06 /1 /2 0 9 0 01 /2 /2 0 9 8 02 /1 /2 0 1 /1 /2 0 1 7 05 9 6 08 /1 /2 0 9 2 04 /2 /2 0 2 9 00 /2 /2 0 8 9 02 /2 /2 0 8 5 04 /2 /2 0 A on mu t $ 5 .0 20 0 $ ,0 0 0 5 0 .0 $ ,0 0 0 5 0 .0 $ 0 0 .0 1 ,0 0 0 $ 0 0 .0 1 ,0 0 0 $ ,0 0 0 5 0 .0 $ 5 0 .0 2 ,0 0 0 $ 5 0 .0 2 ,0 0 0 $ 5 0 .0 2 ,0 0 0 C n ib to o tr u r Allen, B rent W l-m rt S a a tores Inc W -PAC . AL W -PAC AL W lPa a c, W lPa a c, W -PAC AL , W lton, John a W lton, John a W lton, John a C ity Mc Kinney Austin B entonville B entonville B entonville B entonville B entonville B entonville B entonville S te ta Oc p t n c u a io T X W l-Ma a rt T X AR AR AR AR AR AR AR W l-Ma a rt E p yr m lo e S tore Ma g na er

XX XX O wner

Perry Appointed Blue Cross and Blue Shield President Darren Rodgers to THCSIA. According to the US States News, J. Darren Rodgers of Dallas is senior vice president of Blue Cross Blue Shield of Texas. He is a certified health insurance executive of America's Health Insurance Plans and a member of the International Society of Certified Employee Benefits. Rodgers serves on the board of the Texas Health Institute and is a member of the Health Information Technology Advisory Committee. He is president of the Caring for Children Foundation of Texas and is a former chairman of Walk for Diabetes. Rodgers received a bachelor's degree in psychology from the University of Georgia, a master of arts Link Strategies LLC Confidential Document 202

from Duke University and a master of business administration from Tulane University. [US States News, 12/1106] Blue Cross Blue Shield Contributed $11,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
Dt ae 7 8 05 /2 /2 0 8 0 00 /3 /2 0 9 7 02 /1 /2 0 8 5 07 /1 /2 0 1 /2 /2 0 1 1 08 1 /1 /2 0 1 5 05 A on mu t $ 0 .0 50 0 $ ,0 0 0 1 0 .0 $ ,5 0 0 2 0 .0 $ ,0 0 0 1 0 .0 $ ,0 0 0 1 0 .0 $ ,0 0 0 5 0 .0 C nr u r o t ib to B C lue rossB S lue hield of T sPAC exa , B C lue rossB S lue hield of T sS te PAC exa ta B C lue rossB S lue hield of T sS te PAC exa ta B C lue rossB S lue hield of T sS te PAC exa ta , B C lue rossB S lue hield of T sS te PAC exa ta , B C lue rossB S lue hield of T sS te PAC exa ta , Cy it D lla a s D lla a s D lla a s D lla a s D lla a s D lla a s Sa t te T X T X T X T X T X T X

Perry Appointed Attorney Athur Troilo III to THCSIA. According to the US States News, Arthur Troilo III of Austin is an attorney in private practice. A former assistant attorney general for the State of Texas with the Consumer Protection Division, he is a member of the College of the State Bar of Texas, the Austin Apartment Association and the District of Columbia, San Antonio, Austin and Williamson County Bar associations. Troilo formerly served as a board member of Big Brothers Big Sisters and currently volunteers for Meals on Wheels, the Westlake Youth Basketball Association, the South Austin League Sports Association and the Boy Scouts of America. Troilo received a bachelor's degree in fine arts from the University of Texas at Austin and a law degree from the University of Houston. [US States News, 12/1106] Davidson & Troilo and Arthur Troilo Contributed $5,450 to Perrys Campaign Committee. [Texas Ethics Commission, link]
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D te a 1 /9 0 3 0 /2 0 1 /1 /2 0 0 8 06 1 /1 /2 0 0 9 05 1 /3 /2 0 0 1 08 9 /2 0 /9 0 1 1 /4 0 2 0 /2 0 1 /1 /2 0 1 0 04 1 /5 0 2 1 /2 0

Perry Appointed 8th Largest Campaign Donor to Economic Development Corporation and the Higher Education Coordinating Board. According to Texans for Public Justice, Western Refining President Paul L. Foster is the governors second-largest travel donor ($56,638 in Perry travel donations) and ranks No. 8 among Perrys overall campaign contributors. Governor Perry has appointed this big donor to the Economic Development Corporation and the Higher Education Coordinating Board. Foster flew a five-member gubernatorial entourage to a fundraiser in Center, Texas in February 2006 and then shuttled them on to Washington to discuss border security issues with U.S. Homeland Security Secretary Michael Chertoff. [Texans for Public Justice, April 2007] Perry Appointed Don Bethel to Texas Youth Commission Board. According to Texans for Public Justice, HUD found former board chair Don Bethel, who left the board in 2001, had also violated ethics rules when he received a brokers fee for a project that was awarded tax credits from TDHCA. In 2003, Bethel was appointed to the scandal-ridden Texas Youth Commission. As the scandal was uncovered during the 2007 legislative session, Gov. Perry named Bethel to temporarily head the TYC board before the board was dissolved. [Texans for Public Justice, 7/5/07] Link Strategies LLC Confidential Document 203

TEACHERS RETIREMENT SYSTEMS INVESTMENTS/SPENDING TIED TO DONORS This research is ongoing. TEXAS ENTERPRISE FUND INVESTMENTS/SPENDING TIED TO DONORS This research is ongoing. Perrys Texas Enterprise Fund Handed Out $35 Million in Taxpayer Money to Banking Donors Responsible for Financial Collapse. According to Texans for Public Justice, Perrys Texas Enterprise Fund handed out millions in state dollars to Countrywide Financial ($20 million in 2004) and Washington Mutual ($15 million in 2005). Countrywide gave Perry $7,000 in campaign cash from 2003 2008, and Washington Mutual gave Perry $32,500 in campaign cash during that same time period ($25,000 of that was to the RGA during Perrys time as the chair). According to TPJ, Recently, however, the attorneys general of seven states, including Texas, announced an $8 billion deal to settle charges that Countrywide (now owned by Bank of America) misled borrowers and made loans that customers could not afford.6 As the nations No. 1 mortgage lender, Countrywide aggressively laid the groundwork for the current job-killing crisis. Drowning in bad mortgage debt, Washington Mutual (WaMu) claimed another title last month when federal regulators seized it in the largest U.S. bank failure in history. [http://info.tpj.org/watchyourassets/creditcrisis/; 10/13/08] Perry Took $667,000 in Campaign Contributions from Leading Players in the 2008 Credit Crisis. According to Texans for Public Justice, Since Governor Perry persuaded the 2003 legislature to create the Texas Enterprise Fund, the governors campaign has collected $267,125 from key players in the current credit crisis. And after Perry took the helm of the Texas Governors Association this year, that group has raked in $400,000 in corporate checks from key credit-crisis companies. This can leave the impression that Governor Perry is criticizing the excesses of those who attended a wild party in which he himself enthusiastically participated. [http://info.tpj.org/watchyourassets/creditcrisis/; 10/13/08]

May 2005: JPMorganChase (Formerly Washington Mutual) Awarded a $15 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Washington Mutural PAC Contributed $8,500 to Perrys Campaign Committee. [Texas Ethics Commission, link]
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December 2004: Bank of America (Formerly Countrywide Financial) Awarded a $20 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Countrywide Financial Corp. PAC Contributed $7,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 1 /1 /2 0 1 1 03 A on mu t Nm a e $ ,0 0 0 C 7 0 .0 ountrywide Fina l C ncia orp. PAC C ity W shing a ton S te ta D C Z ip 206 00

Link Strategies LLC Confidential Document 204

February 2004: Vought Awarded a $35 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Vought Aircraft PAC Contributed $8,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 1 /2 /2 0 0 5 02 1 /3 0 2 2 /2 0 1 /1 /2 0 0 6 03 1 /2 /2 0 1 0 03 9 1 06 /1 /2 0 A on mu t $ 0 .0 50 0 $ ,5 0 0 4 0 .0 $ ,0 0 0 1 0 .0 $ ,0 0 0 1 0 .0 $ ,0 0 0 1 0 .0 Nm a e Voug Airc PAC ht raft Voug Airc PAC ht raft Voug Airc PAC ht raft Voug Airc PAC ht raft Voug Airc PAC ht raft C ity D lla a s D lla a s D lla a s D lla a s D lla a s S te ta T X T X T X T X T X Z ip 725 56 725 56 725 97 5 6 -5 0 725 97 5 6 -5 0 725 97 5 6 -5 0

May 2004: UTHSC, MDA, and GEMS Awarded a $25 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

UTHSC Employees Contributed $6,951 to Perrys Campaign Committee. [Texas Ethics Commission, link]
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March 2004: Texas Energy Center Awarded a $3.6 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

March 2004: The Texas Energy Center Director Contributed $1,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a A ou t m n Ls Nm at a e 3 2 0 4 $ ,0 0 0 Olig /1 /2 0 1 0 .0 ney F tN m irs a e R on C ity Katy S te ta TX Z ip 744 14 7 9 -6 1 E p e m loy r Texas E nerg C y enter O c p tion cu a D irector

June 2003: Texas Instruments Awarded a $50 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Link Strategies LLC Confidential Document 205

Texas Instruments PAC Contributed Over $32,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
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July 2004: Home Depot Awarded a $8.5 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Home Depot PAC Contributed $10,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 1 /1 /2 0 1 7 05 8 9 08 /1 /2 0 A on mu t Ls Nm at a e $ ,0 0 0 H e D 5 0 .0 om epot PAC $ ,0 0 0 H e D 5 0 .0 om epot PAC C ity W shing a ton W shing a ton S te ta D C D C Z ip 201 00 201 00

August 2005: Huntsman Awarded a $2.75 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Huntsman LLC PAC Contributed $1,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 9 4 06 /1 /2 0 A on mu t Ls N m at a e $ ,0 0 0 H 1 0 .0 untsm n L CPAC a L C ity T W he oodla nds S te ta TX Z ip 730 78

November 2005: Raytheon Awarded a $1 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Raytheon Texas PAC Contributed $8,500 to Perrys Campaign Committee. [Texas Ethics Commission, link]
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Link Strategies LLC Confidential Document 206

August 2007: Rackspace, a Web Hosting Company, Awarded a $22 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

November 2007: Rackspace US Inc. PAC Contributed $10,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a A on mu t Ls Nm at a e 1 /2 /2 0 $ 0 0 .0 R c 1 7 0 7 1 ,0 0 0 a kspa U Inc PAC ce S . C ity S n Antonio a S te ta T X Z ip 729 82

2007: Rackspace Managed Hosting Hired Lobbyist Christopher S. Shields for Between $50,000 $100,000. [Texas Ethics Commission, link]

Christopher Shields Contributed $17,250 to Perrys Campaign Committee. [Texas Ethics Commission, link]
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February 2007: Fidelity Global Brokerage Awarded a $8.5 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Fidelity SW Good Government PAC Contributed $3,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 8 /2 0 /3 0 0 1 /1 /2 0 2 0 04 A on mu t Ls Nm at a e $ ,0 0 0 FidelityS G 1 0 .0 W ood G overnm PAC ent $ ,0 0 0 FidelityS G 2 0 .0 W ood G overnm PAC ent C ity Irving W estla ke S te ta Z ip T X 709 53 T X 722 13 6 6 -8 0

January 2006: Sanderson Farms Awarded a $500,000 TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Sanderson Farms Chairman and CEO Contributed $115,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
Dt ae 2 -Oc 2 1 t-0 0 -Nov-0 3 3 3 -Jun-0 0 6 0 -Apr-0 1 8 2 -Jun-0 4 9 A on mu t $ 0 0 .0 1 ,0 0 0 $ ,0 0 0 5 0 .0 $ 5 0 .0 2 ,0 0 0 $ 5 0 .0 2 ,0 0 0 $ 0 0 .0 5 ,0 0 0 Ls N m at a e S ndersonJr. a S ndersonJr. a S ndersonJr. a S ndersonJr. a S ndersonJr. a Fs ir t Joe Joe Joe Joe Joe C ity L aurel L aurel L aurel L aurel L aurel S te ta MS MS MS MS MS Z ip E p yr m lo e 341 98 9 4 -0 8 341 98 9 4 -0 8 3 4 1 9 8S ndersonFa s 9 4 -0 8 a rm 3 4 1 9 8S ndersonFa s 9 4 -0 8 a rm 3 4 1 9 8S ndersonFa s 9 4 -0 8 a rm O c p tio cu a n C irm & E ha an C O C irm &C O ha an E C irm &C O ha an E C irm &C O ha an E

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May 2007: Lockheed Martin Awarded a $5.48 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Lockheed Martin Employees PAC Contributed $18,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
Dt ae 8 /2 0 /3 0 0 9 /2 0 /5 0 0 6 9 02 /2 /2 0 1 /1 /2 0 1 7 04 1 0 06 /1 /2 0 1 0 06 /1 /2 0 A on mu t $ ,0 0 0 1 0 .0 $ ,0 0 0 1 0 .0 $ ,0 0 0 5 0 .0 $ ,0 0 0 1 0 .0 $ ,0 0 0 5 0 .0 $ ,0 0 0 5 0 .0 Ls N m at a e L kheedMa E ployees' PAC oc rtin m L kheedMa E ployees' PAC oc rtin m L kheedMa E ployees' PAC oc rtin m L kheedMa E ployees' PAC oc rtin m L kheedMa E ployees' PAC oc rtin m L kheedMa E ployees' PAC oc rtin m Cy it Arling ton Arling ton Arling ton Arling ton Arling ton Arling ton Sa e tt Z ip VA 222 20 VA 222 20 VA 222 12 2 0 -4 0 VA 222 20 VA 222 20 VA 222 20

March 2006: Torchmark Awarded a $2 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

September 2006: Torchmark CEO Mark McAndrew Contributed $2,500 to Perrys Campaign Committee. [Texas Ethics Commission, link]
Dt ae 9 1 06 /2 /2 0 A on mu t Ls Nm at a e $ ,5 0 0 Mc 2 0 .0 Andrew Nm a e Ma rk C ity S te ta Mc Kinney T X Z ip E p yr m lo e 7 0 1 T hm rk 5 7 orc a Oc p t n c u a io C eo

Hewlitt Packer Awarded a TEF Grant (Unknown Amount). [Office of the Governor, Accessed 3/05/10, link]

Hewlett Packard Company PAC Contributed $17,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 9 /2 0 /9 0 2 1 /2 0 2 0 /2 0 1 /1 /2 0 1 7 05 9 3 02 /1 /2 0 1 /1 /2 0 1 8 03 1 /1 /2 0 1 7 04 1 /7 0 8 0 /2 0 A on mu t $ 0 .0 50 0 $ 0 .0 50 0 $ ,0 0 0 5 0 .0 $ ,0 0 0 1 0 .0 $ ,5 0 0 2 0 .0 $ ,5 0 0 2 0 .0 $ ,0 0 0 5 0 .0 Ls N m at a e H ewlett Pac rd C pa PAC ka om ny H ewlett Pac rd C pa PAC ka om ny H ewlett Pac rd C pa PAC ka om ny H ewlett-Pac rd C panyPAC ka om H ewlett-Pac rd C panyPAC ka om H ewlett-Pac rd C panyPAC ka om H ewlett-Pac rd C panyPAC ka om C ity Pa Alto lo Austin Pa Alto lo Pa Alto lo Pa Alto lo Pa Alto lo Pa Alto lo S te ta Z ip C A 944 30 TX 779 85 C A 934 12 4 0 -1 1 C A 934 40 C A 934 40 C A 934 12 4 0 -1 1 C A 934 12 4 0 -1 1

December 2008: Caterpillar Inc. Awarded a $8.5 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Holt Caterpillar Chairman Peter Holt Contributed Over $387,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]

Link Strategies LLC Confidential Document 208

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Ls Nm at a e H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt H olt

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June 2008: KLN Steel Products Awarded a $900,000 TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

KLN Steel Products President David Ladensohn Contributed $1,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a A ou t m n Ls at 3 -Jan-0 $ ,0 0 0 Ladensohn 0 4 1 0 .0 Fs ir t D vid a C ity S te ta S n Antonio a TX Z ip E p y m lo er 7 2 2 7 4KL S 8 1 -1 4 N teel Products O c p tio cu a n President

August 2009: McLane Advanced Tech. Awarded a $1 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

McLane Group CEO Drayton McClane Jr. Contributed Over $206,000 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 1 -Jun-0 7 0 0 -Nov 2 4 -0 1 -Feb-0 9 2 1 -Jun-0 0 2 1 -Jul-0 9 1 1 -Nov 5 6 -0 2 -S 0 ep-0 4 2 -Feb-0 2 6 2 -Feb-0 2 6 0 -D -0 8 ec 6 3 -Jun-0 0 3 1 -D -0 1 ec 4 3 -Jun-0 0 6 1 -O t-0 5 c 7 0 -Ma 8 3 r-0 A on mu t $ 4 .0 20 0 $ ,1 6 0 3 2 .0 $ ,5 0 0 3 0 .0 $ 1 0 .0 2 ,5 0 0 $ 5 0 .0 2 ,0 0 0 $ ,0 0 0 1 0 .0 $ ,5 0 0 2 0 .0 $ ,0 0 0 5 0 .0 $ ,0 0 0 5 0 .0 $ 5 0 .0 1 ,0 0 0 $ 5 0 .0 2 ,0 0 0 $ 5 0 .0 2 ,0 0 0 $ 5 0 .0 2 ,0 0 0 $ 5 0 .0 2 ,0 0 0 $ 5 0 .0 2 ,0 0 0 Ls at Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Mc a Jr. L ne Fs ir t D yton ra D yton ra D yton ra D yton ra D yton ra D yton ra D yton ra D yton ra D yton ra D yton ra D yton ra D yton ra D yton ra D yton ra D yton ra C ity T ple em T ple em T ple em T ple em T ple em T ple em T ple em T ple em T ple em T ple em T ple em T ple em T ple em T ple em T ple em S t ta e T X T X T X T X T X T X T X T X T X T X T X T X T X T X T X Z ip 753 60 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 753 59 6 0 -0 4 E p yr m lo e O c p tio cu a n XX XX C irm n ha a P r oe up s S enirsfor C ouv onvention event expense event expense

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McLane Advanced Technologies is the Parent Company for Classic Foods, Lone Star Plastics, M-C McLane International, Hometown Favorites, and the Houston Astros Baseball Team. According to the McLane Advanced Technologies website, Founded by Drayton Link Strategies LLC Confidential Document 209

McLane, Jr. in 1992, The McLane Group is a holding company comprised of McLane Advanced Technologies (MAT) and five other enterprises that demonstrate a tradition of excellence and innovation begun more than a century ago. Classic Foods, Lone Star Plastics, Inc, M-C McLane International, Hometown Favorites, Houston Astros Baseball Team, Accessed 3/8/10, link] Nationwide Mutual Insurance Awarded a $2.5 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Nationwide Texas Political Participation PAC Contributed Over $28,500 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 2 -Oct-0 0 4 1 -D 4 0 ec-0 1 -Apr-0 0 2 1 -S 8 ep-0 0 3 -Oct-0 1 5 1 -D 8 1 ec-0 1 -S 6 ep-0 9 0 -S 7 ep-0 6 A on mu t $ ,0 0 0 1 0 .0 $ ,5 0 0 1 0 .0 $ ,5 0 0 2 0 .0 $ ,0 0 0 3 0 .0 $ 0 .0 50 0 $ ,0 0 0 5 0 .0 $ ,0 0 0 5 0 .0 $ 0 0 .0 1 ,0 0 0 Ls at Na tionwide Texas Politica Pa ipation l rtic Na tionwide Texas Politica Pa ipation l rtic Na tionwide Texas Politica Pa ipation l rtic Na tionwide Texas Politica Pa ipation l rtic Na tionwide Texas Politica Pa ipation PAC l rtic Na tionwide Texas Politica Pa ipation PAC l rtic Na tionwide Texas Politica Pa ipation PAC l rtic Na tionwide Texas Politica Pa ipation PAC l rtic C ity C olum bus C olum bus C olum bus C olum bus C olum bus C olum bus C olum bus C olum bus S te ta OH OH OH OH OH OH OH OH Z ip 425 31 425 31 425 20 3 1 -2 2 425 31 425 31 425 31 425 31 425 31

February 2010: Allstate Insurance Awarded a $1.1 Million TEF Grant. [Office of the Governor, Accessed 3/05/10, link]

Allstate Insurance Company PAC Contributed $3,500 to Perrys Campaign Committee. [Texas Ethics Commission, link]
D te a 0 -D -0 8 ec 0 1 -D -0 0 ec 4 A on mu t Ls at $ ,0 0 0 Allsta InsC Pa 1 0 .0 te o c $ ,5 0 0 Allsta Insura e C PAC 2 0 .0 te nc o. C ity Northbrook Northbrook S te ta IL IL Z ip 602 06 602 06

TEXAS EMERGING TECHNOLOGY FUND TIED TO DONORS This research is ongoing. EXECUTIVE ORDERS BENEFITED DONORS This research is ongoing. FAST TRACKING ORDERS TIED TO CONTRIBUTIONS Perry Took $100,000 from Coal Interests Following Ordering the Fast-Tracking of New Coal Plants. According to San Antonio Express News, Gov. Rick Perry's efforts to help TXU Corp. build a new fleet of coal-fired power plants has given his opponents a high-profile environmental issue to hammer at, particularly in the Dallas-Fort Worth area and other communities of North and East Texas worried about air pollution from the plants. The issue has prompted debate and intense media coverage in cities such as Dallas, where the Dallas Morning News recently reported that those who stand to benefit from the proposed coal plants have donated more than $100,000 to Perry's campaign since he ordered the fast tracking. But the governor's camp has remained unapologetic about its support of coal, Link Strategies LLC Confidential Document 210

maintaining that the state's booming population requires more energy from all sources -- including coal. [San Antonio Express News, 11/3/06] Perry Took $2,000 from TXU Executive on the Day He Issued Executive Order Streamlining TXU Plant Permits. According to Electric Utility Week, TXU did not make campaign contributions to Texas Governor Rick Perry, a Republican, or delay increases in retail electricity prices to secure his support for the utility's plan to build coal and lignite plants, or to encourage Perry to streamline the regulatory process for reviewing new plants and issuing air permits, TXU said last week. Perry's executive order and support for TXU's plan are part of a secret deal that the governor and TXU made last fall, said Tom Smith, director of the Texas office of Public Citizen. Under that alleged pact, Smith said, TXU agreed to phase in gas-price-related increases in its default electric rates in exchange for Perry's support for TXU's then-nascent plan to build several coal plants, and for an executive order expediting the permitting process. Former TXU Chairman Erle Nye gave Perry a $2,000 campaign contribution the same day the executive order was issued, and another $25,000 this past April, Smith said. Also, Smith said TXU's political action committee gave Perry's campaign a $5,000 contribution a few weeks after the executive order. [Electric Utility Week, 9/25/06] Perry By Far the Largest Recipient of TXU Money Perry Took $404,100 from TXU from 1998 Through 2006. According to Texans for Public Justice, By far the largest recipient of TXU money was Governor Rick Perry, who received $104,000 from TXU sources in the 2006 election cycle. TXU donors have given Perry $404,100 since his 1998 lieutenant governor campaign. Perry issued an executive order in October 2005 to fast-track environmental hearings on TXUs proposed new coal plants. Reaching a preliminary finding that state agencies are not subject to gubernatorial orders, a state district judge last month ordered the state officials conducting the coal plant hearings to ignore Perrys order. [http://info.tpj.org/page_view.jsp? pageid=1147&pubid=903; 3/1/07]

TXU Gave Perry $15,000 for Inaugural, Sought Fast-Track Approval 11 New Coal-Fired Power Plants. According to the Dallas Morning News, Among the donors are companies whose executives have won plum appointments by Mr. Perry as university regents and to commissions dealing with everything from highways to hunting leases. Dallas-based TXU Corp., which sought Mr. Perry's assistance to speed construction of 11 new coal-fired power plants, is a $15,000 donor. An effort to stop the fast-tracking permits is expected to be a hot issue between the governor and critics in the Legislature. [Dallas Morning News, 1/13/07] Perry Took $50,000 from TXU and Accelerated Approval of New Power Plants. According to the Dallas Morning News, After hurricanes Katrina and Rita rocked energy markets, Mr. Perry won concessions from TXU Energy and other companies to help consumers being hit with the largest rate hikes ever. Weeks later, Mr. Perry directed state agencies to accelerate approval of new power plants, possibly saving developers hundreds of millions of dollars. The order dovetailed with TXU's plans to become a major developer of coal plants. In early November, TXU announced a new growth strategy. At its core is a multibillion-dollar bet that the company can become a leading generator of power from coal plants. The company filed a permit for one major Texas project in July and hopes it will become one of the state's first new coal plants in more than a decade. A total of seven coal plants are on the drawing board, including another TXU project. The governor's office and TXU dismissed arguments that contributions to Mr. Perry's campaigns played a role. TXU's political action committees and executives contributed more than $50,000 to Mr. Perry in the year ended June 30. [Dallas Morning News, 12/11/05] PERRYS ACTIONS ON BEHALF OF DONORS PERRY SOUGHT ETHANOL WAIVER ON BEHALF OF BIG DONORS

Link Strategies LLC Confidential Document 211

Perry Donors Bo Pilgrim and Jim Schwertner Successfully Lobbied Perry to Support Ethanol Waiver. According to the Texas Observer, Schweriner, a Rick Perry supporter, believed that he could get the governor's backing on the waiver. Before going to the governor, Schwertner called Bo Pilgrim to see if the chicken magnate would be willing to join him. Despite the long-standing enmity between chicken producers and beef producers, Pilgrim quickly agreed they had a mutual interest. They also had dout In 2007, according to filings at the Texas Ethics Commission, Pilgrim gave Perry's campaign a total of $35,500. In May 2008, he gave another $25,000. In 2008, Schwertner gave Perry a total of $9,000. On March 25, the two men met with Perry in his office. According to Schwertner, Perry quickly understood the issue and told them, Yeah, I'll hdp you. This isn't good for Texas. Less than a week later, on March 31, the Houston Chronicle's R.G. Ratdiffe reported that Pilgrim also gave $100,000 to the Republican Governors Association, which Perry chairs. Ethanol boosters immediately latched onto Ratcliffe's stories, contending that Perry and Pilgrim were involved in a quid pro quo. Rick Tolman, the CEO of the National Corn Growers Association, said in a statement, This is how politics often works. In June, Pilgrim provided Perry with $9,179 worth of air travel to Washington, where the governor hdd a news conference at the National Press Club to publicize his effort to get a waiver from the federal mandates. [Texas Observer, 2/6/09] Perry Sent Letter to EPA to Seek Ethanol Waiver. According to the Texas Observer, On April 25, Perry sent a letter to Stephen L. Johnson, then the administrator of the Environmental Protection Agency, seeking a waiver from the ethanol mandates. (The EPA manages the provisions of the Clean Air Act, which Congress amended in die 2007 energy bill to include mandates on the amount of renewable fuel that must be consumed.) In his letter, Perry asked the EPA to cut the mandated amount of ethanol to be used in Texas in half. He said the rising cost of corn had led to a negative impact on the Texas economy of $1.17 billion. The waiver, he said, will provide Texans much needed relief at the grocery store and it will ensure that the livestock industry in Texas is able to continue providing a significant source of food products for our nation. [Texas Observer, 2/6/09] In early August 2008, the EPA officially denied Perry's request to opt out of the federal ethanol mandates. In a statement, Johnson said that the ethanol requirements are strengthening our nation's energy security and supporting American farming communities. And, he added, they are not causing severe harm to the economy or the environment. [Texas Observer, 2/6/09]

Perry Had Some Prodding on Renewable Fuel Mandates from Big Donors. According to a column from San Antonio Express-News editor Heather Draper, With prices of both soaring, I was glad to see Gov. Rick Perry weigh in on the debate over the federal government's renewable fuel mandates, which he says are hurting the state's livestock industries. I was somewhat less enthused on Wednesday to read that Perry had some prodding on the issue in the form of a $100,000 donation to the Republican Governors Association from Lonnie Bo Pilgrim, CEO of chicken producer Pilgrim's Pride Corp. Perry spokeswoman Allison Castle said the governor's office has been studying the ethanol issue for "a long time" - long before Pilgrim made his donation. Skeptics might question Perry's motivation, given the hefty donation from a chicken producer and the fact that it's an election year. But special interests aside, it's still the right thing to do. [San Antonio Express-News, 7/3/08] PERRY TOOK CAMPAIGN CASH FROM INTERESTS WITH STAKE IN TOLL ROADS Perry Took $1.2 Million from Donors With Stake in Toll Roads. According to the San Antonio Express News, Charles Lawrence has donated nearly a quarter of a million dollars to Gov. Rick Perry over the past six years, by far the largest amount of anyone with a vested interest in the governor's controversial Trans-Texas Corridor. Lawrence is chairman of Kirby Corp., a Houston-based transportation company operating the nation's largest fleet of inland tank barges and towing vessels. His donations, totaling nearly $229,000, make him the largest contributor to Perry of anyone with a strong interest in transportation in general and the Trans-Texas Corridor in particular, according to a database analysis by the San Antonio Express-News. Perry, a Republican, received upward of $1.2 Link Strategies LLC Confidential Document 212

million over the past six years from individuals or political action committees that, like Lawrence, have a stake in the proposed $7 billion system of toll roads and rail lines Perry has championed. [San Antonio Express News, 11/4/06] Donors with stake in toll roads gave Perry $1.2 million. headline in San Antonio Express News [11/4/06]

Firm That Stood to Profit on Delinquent Tolls Gave Perry $125,000 Over Past 6 Years. According to the San Antonio Express News, Campaign donors and recipients contacted for this story said donations to public officials had no effect, in their view, on government contracts or public policy. There is not a quid pro quo, said Joe Householder, a spokesman for the San Antonio-based debt collection firm Linebarger Goggan Blair & Sampson LLP. That firm or individuals associated with it have given Perry at least $125,000 over the past six years, putting them fourth among Perry donors with transportation-related interests. The firm would stand to profit if the Trans-Texas Corridor was constructed and it was selected to collect delinquent tolls. [San Antonio Express News, 11/4/06] Construction Company Got State Toll Road Contract, Gave Perry $10,000 for Inaugural. According to the Dallas Morning News, This time, according to a list released by the inaugural committee, AT&T is the biggest contributor at $100,000, followed by five donors at $50,000 each and 16 individuals and corporations at $25,000. Dannenbaum Engineering, a Houston construction company that has a state contract as part of Mr. Perry's toll road initiative, is a $10,000 donor. [Dallas Morning News, 1/13/07] PERRY FLOATED EXPANDED GAMBLING FOR BIG GAMBLING DONORS Perry Raised $100,000 from Gambling Interests in Single Day; Floated Controversial Plan to Bring Slot Machines to Horse Tracks. According to the Star Telegram, Gov. Rick Perry raised $3.2 million during the first six months of this year, including $100,000 on a single day from gambling interests, his most recent campaign finance report shows. But the largest single contribution came Feb. 11, when the Maxxam Texas political action committee contributed $50,000, according to the report, which covers the first six months of 2004. Operated by Houstonian Charles Hurwitz, Maxxam Inc. pushed for the expansion of gambling during the most recent legislative session on school finance. During the recent special session, Perry floated a controversial plan that would have brought thousands of slot machines to Texas horse-racing tracks. [Star Telegram, 7/16/04] Law Firm Got $250,000 State Contract to Draft Legislation Legalizing Video Lottery. According to the Houston Chronicle, A Las Vegas law firm that represents some of the nation's largest manufacturers of video lottery terminals received a $ 250,000 contract from the Texas Lottery Commission to draft legislation for legalizing video lottery in Texas. A proposed state constitutional amendment to legalize video lottery - a form of slot machine - failed in the Texas House in the recent special legislative session. But both Gov. Rick Perry and Lt. Gov. David Dewhurst have indicated they would like to revive the issue if there is another special session on school finance. The firm so far has submitted a bill to the state of $ 176,743. The maximum it can be paid is $ 250,000. Lionel, Sawyer and Collins lists five companies on its client list that manufacture video lottery terminals, including the largest VLT maker, International Game Technology. The lawyers who handled the Texas account, Anthony Cabot and Daniel Reaser, could not be reached for comment. [Houston Chronicle, 5/20/04] Perry Took Nearly $800,000 from Gambling Interests in 2008 Campaign Cycle. According to Texans for Public Justice, With Republicans controlling every statewide office, some of the top recipients of gambling money were Lieutenant Governor David Dewhurst ($851,350), Governor Rick Perry ($793,356), Comptroller Susan Combs ($157,800) and Attorney General Greg Abbott ($155,174), whose office assisted in the Aces Wired bust. Once viewed as a conservative gambling foe, Governor Perry endorsed installing slot machines at race tracks and Indian reservations in 2004 and then let the proposal die. Among Perrys recent gambling contributors is Sheldon Adelson, founder of Las Vegas Sands Corp. Perry reported that the casino kingpin paid $1,856 for a Perry campaign event in early Link Strategies LLC Confidential Document 213

December 2007. On New Years Eve that month, Governor Perry received three $5,000 checks from Adelson, his daughter Shelley and Adelson assistant Yasmin Lukatz. [http://info.tpj.org/Lobby_Watch/0319-09_gambling08contrib.html; 3/19/09] PERRY OFFERED ADDITIONAL FAVORS FOR BIG DONORS Perry Took $235,000 from Contractors Who Landed $1 Billion in State Contracts. According to Texans for Public Justice, In recent years Governor Rick Perry raked in $235,133 from highway contractors that landed almost $1 billion in state contracts in the past nine months. Its enough patronage to make a conservative tax and spend. Most states have the authority to prevent chronically late contractors from bidding on new jobs. But two lobby groups that Pitcock once headed helped prevent Texas from adopting this policy in 1996 and 1997. [http://info.tpj.org/Lobby_Watch/perryroads.html; 10/24/01] Perry Pushed Housing Legislation Sought by Biggest Donor; Legislature Abolished It. According to the Dallas Morning News, One of Perry's most reliable donors, Houston homebuilder Bob Perry (no relation), led the latest list of contributors with $200,000. The governor pushed lawmakers to create a housing agency sought by Bob Perry, but opposition from homeowners who complained it was designed to protect builders prompted the Legislature to abolish it. His biggest Dallas donors were oilman T. Boone Pickens, who gave $100,000, and energy pipeline executive Ray Davis, who provided $50,000. [Dallas Morning News, 1/22/10] Airport Security Firm Gave Perry $25,000 for Inaugural. According to the Dallas Morning News, Florida-based AshBritt Inc., a debris-removal company with strong Republican ties that has sought government contracts following hurricanes on the Gulf Coast and ice storms in Texas, has given $15,000 [for Perrys inaugural]. International RAM Associates, which assists in airport security in Texas and 15 other states, is a $25,000 donor. [Dallas Morning News, 1/13/07] Perry Took $1.2 Million in Campaign Cash While Waiting to Sign or Veto Bills; Law Changed. According to the Austin American Statesman, The Legislature banned campaign donations to a governor during the 20-day period he can sign or veto bills after a legislative session. That change was prompted when Perry took $1.2 million after the 2001 session as he vetoed or signed hundreds of bills, including a provision that would have allowed doctors to sue the insurance industry for faster payment. [Austin American Statesman, 8/10/06] PERRY PUNISHED HUTCHISON SUPPORTERS, DEMANDED LOYALTY Perry Used Boards and Appointments to Reward Political Supporters and Punish Opponents. According to the Houston Chronicle, The replacement by Perry of public university regents who supported Hutchison's bid only spotlights how the longest-serving governor in Texas history has used his tenure to reward political supporters and punish opponents in handing out prestigious positions on state boards and commissions. His wide practice of allowing holdovers to overstay their terms, sometimes by years, not only deprives the state Senate of its role in confirming appointments but allows Perry to oust them if they get out of line politically. [Houston Chronicle, 2/14/10] Perry Appointee Assumed all Appointees were Perry Supporters, Or they wouldnt Be Appointed to Begin With. According to the Texas Observer, Not far behind on the donor-appointee list is Robert B. Rowling, chairman of Omni hotels and the fourth-richest man in Texas. Rowling said that he sees no connection between his campaign donations of $207,262 to Perry and his appointment to the University of Texas System Board of Regents. I'm sure if you looked at all of the appointments, they're all supporters of [Perry] or they wouldn't be appointed to begin with, he said. It's a nonpaid position and all we do is work our rears off. And besides, Rowling noted, I already had great football tickets before he appointed me. Other UT regents who contributed to Perry's campaign are James Huffmes ($122,180) and Scott Caven ($15,498). [Texas Observer, 4/7/06] Link Strategies LLC Confidential Document 214

Perry on Appointments: I Do Want People to Be Loyal from a Political Standpoint. According to Politics Daily, One of Hutchison's strongest criticisms of Perry has been that he runs state government like a clubhouse of cronies, appointing donors and forcing out any who grow an independent streak, like the two former Texas Tech regents who've said they were pressured to resign after making public statements supportive of Hutchison. Though he's denied pressuring anybody, to the charge that he brooks no political dissent from appointees, he says that's right, he sure doesn't: I hope the people I've bestowed one of the most precious things a governor has, an appointment, I expect them to make good decisions. I don't think anybody who works for me considers me a micromanager...but I do want people to be loyal from a political standpoint. I would be disappointed if someone I appointed decided to endorse a political opponent and would consider them a distraction to the other loyal members. I look at a little bigger picture. [Politics Daily, 2/26/10] Former Regents Said Perry Pressured them to Resign after Supporting Hutchison. According to the Austin American-Statesman Postcards Blog, Two former Texas Tech University System regents said Friday that people with close connections to Gov. Rick Perry pressured them to resign after their support for Perrys political rival U.S. Sen. Kay Bailey Hutchison became public. One of the former regents, Windy Sitton, said that a fellow regent, Scott Dueser, told her last year that the governors office said for Sitton to cease and desist supporting Kay Bailey immediately or resign from the board. She said she did neither. And Mark Griffin, a Lubbock businessman whom Perry appointed to the board of regents in 2005, said he got the resignation call from former Perry chief of staff Brian Newby after he praised Hutchison at an August campaign rally. [Austin American-Statesman, 9/4/09] Newby Told Griffin that the Governor Expects Loyalty out of his Appointees. According to the Austin American-Statesman Postcards Blog, Griffin said Newby told him that the governor expects loyalty out of his appointees and if you cant be loyal, its probably not best to be on the team. Newby also said, The governor is not going to ask you to resign, but he would accept your resignation if you offered it, according to Griffin. [Austin American-Statesman, 9/4/09]

Griffin Was Asked to Resign Because of His Support for Hutchison. According to the Lubbock Avalanche-Journal, Texas Tech regent Mark Griffin was asked to resign his position from the university system's Board of Regents last week because of his support for U.S. Sen. Kay Bailey Hutchison's campaign for governor, The Avalanche-Journal has learned from multiple sources. Lubbock businessman Griffin was appointed to the board in 2005 by Gov. Rick Perry, who will face Hutchison in next year's Republican primary. [Lubbock Avalanche-Journal, 9/4/09] Perry Pressured Regents Members to Resign for Supporting Hutchison. According to the Austin American-Statesman, The bottom line is there is nothing wrong with gubernatorial input devoid of threats, retribution and in-your-face politics. The latter seems to be what happened in the case of two former Tech regents who spoke to the American-Statesman's Embry and Corrie MacLaggan about Perry's pressure on them stemming from their support of Sen. Kay Bailey Hutchison's campaign to defeat Perry in next year's GOP gubernatorial primary. [Austin American-Statesman, 9/13/09] Political Retribution Suggested After Another U.T. Regent with Hutchison Connections Abruptly Resigned. According to the Breckenridge American, Back in February, it was suggested that their was political retribution behind another resignation at U.T. Robert Rowling's abrupt resignation from the U.T. system where he had been a Perry appointee, was questioned with fingers pointed at Gov. Perry. Rowling had headed a fund-raiser event for U.S. Sen. Hutchison before she formally announced her candidacy. Due to these two abrupt resignations, there has been accusations flying against Perry's meddling in universities. The Dallas Morning news is quoted as saying, Perry's treating universities like they are his playground. The San Antonio Express-News said, Perry's meddling is hurting higher education. [Breckenridge American, 9/29/09]

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Former Regents Said Perry Meddled By Demanding Loyalty. According to the Austin AmericanStatesman, U.S. Sen. Kay Bailey Hutchison is again accusing Gov. Rick Perry of promoting cronyism in the state's colleges and universities. Former Texas Tech regent Windy Sitton and ex-Texas A&M University President Ray Bowen have said Perry meddled by demanding that regents and others he appointed be loyal to him. [Austin American-Statesman, 2/22/10] REGENTS APPOINTEES WERE LARGE PERRY DONORS Perry has Collected Almost $6.1 from the 155 People Who He Appointed to be Non-Student Regents, Since Becoming Governor in Late 2000. Acording to a report from the Texans for Public Justice, Austin: Rick Perry has collected almost $6.1 million from the 155 people whom he has appointed to be non-student regents since becoming governor in late 2000. Over the past decade, 97 regent appointees gave to Perrys campaignor 63 percent of Perrys regent appointees. Regents contributed both before and after their appointments. [TPJ.org, 4/7/10, link]

Average Perry-Appointed Regent Overseeing a Public University Contributed $39,251 to Perry. Acording to a report from the Texans for Public Justice, The average Perry-appointed regent overseeing a public university contributed $39,251 to the campaign of the Regent-In-Chief. [TPJ.org, 4/7/10, link] Regents at the University of Texas and A&M University Contributed, on Average, Nearly $100,000 to Perry. Acording to a report from the Texans for Public Justice, Regents at the elite University of Texas and A&M University contributed average amounts approaching $100,000. [TPJ.org, 4/7/10, link] Perrys Top Regent Contributors According to Texans for Public Justice: [TPJ.org, 4/7/10, link, click here to download the complete file of all Perry Contributions from Regent Appointees]

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Perrys Education Appointees Gave an Average of $10,616 apiece to his Campaign. According to Texans for Public Justice, Education appointees were Governor Perrys most-generous appointees, contributing an average of $10,616 apiece. Governor Perrys No. 1 donor appointee was Texas Tech Regent Larry Anders, the head of Plano-based life insurer Summit Alliance Companies. Anders gave Perry $220,304, moving 61 percent of it prior to his 2005 appointment. Six other Education appointees made six-figure contributions to Governor Perry: UT Regents Robert Rowling ($207,262) and James Huffines ($122,180); Texas Tech Regents J. Frank Miller ($175,000) and L.F. Rick Francis ($107,500); Texas Board of Education Chair Geraldine Tincy Miller ($139,00); and A&M Regent Erle Nye ($131,000). [Texans for Public Justice, April 2006] Two Education Board Appointees from El Paso Were High Dollar Perry Donors. According to the El Paso Times, Coming in second and third in appointee contributions from El Paso were Paul Foster, president of Western Refining, and Rick Francis, chairman and CEO of Prime Capital Management and Francis Properties. Foster gave Perry $112,224. He was appointed to the Texas Higher Education Coordinating Board, which oversees public universities, in July 2004. Foster could not be reached for Link Strategies LLC Confidential Document 217

comment because he is climbing Mount Everest, an aide said. Francis gave Perry about $110,000. The governor placed Francis on the Texas Tech University Board of Regents in November 2003. [El Paso Times, 4/15/06] Two UT System Board of Regents Members Donated Heavily to Perry after Receiving Appointments. According to the University Wire, When it comes to guessing who Gov. Rick Perry will appoint to the UT System Board of Regents, it's usually instructive to just follow the money. UT's Board of Regents, none of whom are compensated, set policies, rules and now tuition rates for the more than 160,000 students who attend UT System schools. More importantly, three regents are appointed each year to serve on the board that oversees the $20 billion in investments for the UT System. Most importantly, they are political appointees by the governor, and Gov. Perry has showed a fondness for businesspeople, especially those who give him wads of campaign contributions Money has greased the governor's past selections, both before and after regents get appointed. When Gov. Perry appointed Rita Clements to a second term as a regent in April 2001, it took her husband, former governor William Clements Jr., less than two months to deliver the governor's campaign war chest a $100,000 check. Less than a year after his appointment as regent, Robert Rowling cut the governor's campaign two $50,000 checks on the same day. [University Wire, 4/26/07] Two of Three New UT System Regents Appointees Donated More than $200,000 to Perry Prior to Appointment. According to the University Wire, Two of the three newly appointed University of Texas System regents donated more than $200,000 to Texas Gov. Rick Perry's campaign group prior to their appointment, according to Texas Ethics Commission campaign finance reports New Regent Paul Foster, president and CEO of Western Refining Co., has donated $281,239 to Texans for Rick Perry since 2001. He contributed $144,015 to the group in 2006 alone, including two $25,000 donations in one day, according to finance reports. New Regent James Dannenbaum, chair of the Dannenbaum Engineering Corp., has donated $247,500 to Texans for Rick Perry since 2000. [University Wire, 10/23/07] Campaign Donations From Regents Were Not a New Trend. According to the University Wire, Financial support of Perry from regents is not a new trend. The Daily Texan reported in March 2006 that seven of 10 regents at that time had donated to Perry's campaign. Regent Robert Rowling donated more than $100,000 to Texans for Rick Perry before he was appointed in July 2004 and has donated more than $127,000 since his appointment Regent John Barnhill, who donated thousands to both Perry and former Texas Comptroller Carole Keeton Strayhorn, told The Daily Texan that he wanted to be loyal to the man who appointed him. You don't get appointed to the Board of Regents without supporting the guy who put you there, and I have a lot of respect for him, he said. [University Wire, 10/23/07] Perry Appointed James Dannenbaum to the UT System Board of Regents, Despite Legal Troubles and Missing Public Funds. According to the Texas Observer, In October, Gov. Rick Perry appointed three new regents to the University of Texas System Board of Regents. The prestigious posts usually go to loyal party members who have donated generously to the governor. One of the new regents is James Dannenbaum, president of Houston-based Dannenbaum Engineering, who has stuffed Perry's campaign purse with $247,500 since 2000. That's business as usual. What's new is that Dannenbaum's company is embroiled in a border scandal that involves a $21 million bridge that doesn't exist, Mexican shell companies, and pending legal troubles. The story begins in 1991 when South Texas voters approved $21 million in bonds for the construction of an international bridge to connect the Port of Brownsville to Matamoras, Mexico. The Brownsville Navigation District tapped Dannenbaum Engineering to manage and engineer the job. Although the firm received $15.4 million, the bridge was never built. Presently, $9.2 million of the $15.4 million simply can't be accounted for, according to the 2005 findings of a special investigator appointed by the navigation district. The investigator traced the sum to three Mexican shell companies with ties to Dannenbaum principal Louis H. Jones. The only products from the 17 subcontractors hired by Dannenbaum were 49 black binders with a few sheets inside Regarding legal issues, the governor is not aware of any criminal investigation into Mr. Dannenbaum or his company, Link Strategies LLC Confidential Document 218

says Krista Moody, a spokesperson for Perry. The governor believes Dannenbaum will serve as a good steward of the people of Texas with integrity and character. [Texas Observer, 11/2/07] Perry Accepted $5 Million In Campaign Donations from His Appointees. According to the Associated Press, Gov. Rick Perry has accepted nearly $5 million in political campaign donations from people he has appointed to state boards and commissions since taking office in 2000, according to a newspaper review of campaign finance records. The Houston Chronicle reported Monday that nearly half the donations came from appointees who serve as higher education regents, including more than $840,000 from those at the University of Texas System. In some cases, Perry's appointees gave money in the weeks before or after being selected. [AP, 5/4/09] About Half of University Regents Gave Perry at Least $1,000 and 13 Gave at Least $100,000. According to the Austin American-Statesman First Reading Blog, About half of the current university regents in the state have given Perry at least $1,000 over the years. Of that group, 18 have given him at least $50,000, and 13 have given at least $100,000. [Austin American-Statesman, 12/10/09] Perry Big-Dollar Supporter Gave Perry $100,000 in June and Was Appointed to Board of Regents in August. According to the Austin American-Statesman First Reading Blog, Tax consultant Brint Ryan, a big-dollar supporter of former Comptroller Carole Keeton Strayhorn in the last campaign, gave Perry $100,000 in June. In August, Perry named him to the University of North Texas System Board of Regents. [Austin American-Statesman, 12/10/09] Tilman Fertitta Gave Perry $50,000 in June and Was Appointed to Board of Regents in August. According to the Austin American-Statesman First Reading Blog, Tilman Fertitta is the chairman and CEO of Landrys Restaurants Inc., which includes a number of restaurant chains and the Golden Nugget hotel and casino. According to Ethics Commission filings, Landrys has nine registered lobbyists in Texas. Fertitta has given Perry more than $220,000 in campaign contributions over the years, according to Statesman data guru Kate Alexander. In June, he gave Perry $50,000. In August, Perry appointed him to the University of Houston System Board of Regents. [Austin American-Statesman, 12/10/09]

PERRY MEDDLED IN REGENTS OPERATIONS TSU Board of Regents Chairwoman Belinda Griffin Resigned after Scandal and Financial Problems Plagued the University. According to the Austin American-Statesman, The chairwoman of Texas Southern University's board of regents formally resigned Tuesday as the Senate considered Gov. Rick Perry's request to remove her from the panel. Chairwoman Belinda Griffin's resignation came four days after she wrote Perry on behalf of the entire board, saying all would resign when he named a replacement board. The school has been plagued by scandal and financial problems. Perry rejected that offer, saying he wanted her immediate resignation. [Austin American-Statesman, 5/2/07] Texas A&M President Resigned After Receiving Low Marks from the ChancellorFormer Perry Chief of Staff. According to the Dallas Morning News, Elsa Murano, president of Texas A&M University, said Sunday that she was resigning - after just 17 months on the job, and one day before A&M System regents were expected to discuss her leadership of the College Station campus Murano's resignation comes days after public release of a very critical performance review. System Chancellor Mike McKinney gave her low marks in several areas, including decision making, integrity and being a team player The Austin American-Statesman reported Saturday that working behind the scenes in the rift is the influence of Gov. Rick Perry. Perry is a Texas A&M graduate who appointed the nine regents who supervise the A&M System campuses. The newspaper noted that McKinney is a former Perry chief of staff [Dallas Morning News, 6/15/09] A&M Chancellor Pushed A&M President Murano Out. According to the Dallas Morning News Education Front Blog, Next, look at the A&M situation. Even if Perry's not calling the shots on the Link Strategies LLC Confidential Document 219

removal of A&M President Elsa Murano, his pals showed up and trouble happened. His biggest pal in this is Mike McKinney, the Aggie chancellor who once served Perry as chief of staff. He's the guy who evidently pushed Murano out, which has let to rampant speculation that Perry himself wants the job. He's naturally denying that, and I tend to think Perry much rather be governor. But, whether he wants the Aggie job or not, he's seen as the big-heavy in this drill. And he's risking alienating some within Aggieland, which is the former A&M yell leader's natural constituency. [Dallas Morning News, 6/23/09] Perrys Meddling Cost A&M Greatly. According to the Eagle, Perry just can't seem to keep his hands off A&M. His meddling has cost the school greatly and it needs to stop. It is one of the great universities in the country, not his personal play toy. [Eagle, 9/11/09] Perry Overstepped by Playing Politics with University Regents. According to the Dallas Morning News, Perry has exhibited strong leadership and relishes rough-and-tumble politics. But increasingly, he tussles with the Legislature and leaders of his own party - even meddling when it suits him. Perry has overstepped by playing politics with university regents and by letting his former chief of staff push out the president of Texas A&M. Perhaps the governor's most brazen move was the Saturday night massacre of the Forensic Science Commission as it prepared to discuss disputed evidence that led to the execution of Cameron Todd Willingham. [Dallas Morning News, 2/14/10] PERRYS MONEY FROM WASHINGTON This research is ongoing. Perry took $2,678,753.08 from Donors in Washington, D.C. and Virginia. [Texas Ethics Commission] Perry Took Four Times More DC Cash Than Hutchinson. According to the Abilene Reporter-News, Republican Gov. Rick Perry regularly rails against Washington, D.C., but when it comes to campaign cash, he has raised far more than rival Kay Bailey Hutchison from the nation's capital, The Dallas Morning News reported Monday. Perry has collected $2.7 million from Washington since becoming governor -- four times more than Hutchison's $670,000 from Washington during the same period, a Morning News analysis found. Perry has been able to raise far more than Hutchison overall because federal campaigns have limits on individual donations, while Texas state campaigns do not. A slightly higher percentage of Hutchison's campaign money has come from Washington. The money has come from political communities, lobbyists, individuals and interest groups. [Abilene Reporter-News, 4/28/09] Perry takes big bucks from beltway headline in the Abilene Reporter-News [4/28/09] Perry Took Thousands of Dollars from Washington, DC Tobacco Interests. According to the Dallas Morning News, Although Perry has targeted Hutchison as part of Washington, he collected more money from D.C. than the senator did. Contributors inside the Beltway gave the governor $37,500, half of that from tobacco interests. Hutchison collected $19,900 from Washington, including railroad and airline interests. [Dallas Morning News, 1/22/10] PERRYS MONEY FROM BIG POLLUTERS Perry has Raised $408,256 in Campaign Contributions from Industrial Polluters in Houston That were Pressuring Texas Officials to Reduce Restrictions on Their Emissions. According to Texans for Public Justice, Pressured by industrial polluters that have given Governor Perry $408,256, Texas officials are considering gutting their own plan to stop Houston from flunking federal air-quality standards. Instead, they want to substitute an industry air plan based on a ludicrous premise. Because Houston has some of the nations filthiest air, the federal government forced Texas in 2000 to adopt a cleanup plan to make the Houston area meet U.S. air-quality standards. Masquerading as the Greater Houston Link Strategies LLC Confidential Document 220

Partnerships Business Coalition for Clean Air Appeal Group, polluters that account for about 56 percent of Houstons smog-producing nitrogen oxides (NOx) sued the state last year. Alleging that junk science marred the state plan, the polluter plaintiffs demanded fewer restrictions on their emissions. [Texans for Public Justice, 5/29/02, link]

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PERRYS APPOINTEE$ GIVE BACK FOR MONEY CANNON FUNDRAISING EFFORT


On February 24th, 2010, Rick Perry called on his supporters to contribute to his campaign for a Money Cannon fundraising effort. The effort raised more than $1.3 million in 24 hours. From this money, $90,000 was contributed by people Perry appointed to various state agencies. It shouldnt come as a surprise that Rick Perry is using his appointment power to raise campaign funds, but Perry has recently been walking a fine line between business as usual and pay for play politics. Just this week, Perry told Politics Daily that I do want people to be loyal from a political standpoint. I would be disappointed'' if someone "I appointed decided to endorse a political opponent'' and would "consider them a distraction to the other loyal members. "I hope the people I've bestowed one of the most precious things a governor has, an appointment, I expect them to make good decisions," he said. "I don't think anybody who works for me considers me a micromanager...but I do want people to be loyal from a political standpoint. I would be disappointed'' if someone "I appointed decided to endorse a political opponent'' and would "consider them a distraction to the other loyal members. I look at a little bigger picture.'' - Rick Perry [Politics Daily, 2/26/10, link]

Perrys Appointees Give Back: Richard Scott ($10,000 contribution) Scott was appointed by Perry to the Lower Colorado River Authority Board. His company was awarded $510,000 in state grants by Perry in 2004. Steve Hicks ($25,000 contribution) Hicks was appointed by Perry to the University of Texas Board of Regents. Mickey Long ($25,000 contribution) Long was appointed by Perry to the Texas Tech Board of Regents. Nasruddin Rupani ($10,000 contribution) Rupani was appointed by Perry to the State Health Services Council. Robert Stillwell ($10,000 contribution) Stillwell was appointed by Perry to the University of Texas Board of Regents. Brenda Pejovich ($10,000 contribution) Pejovich was appointed by Perry to the Texas Higher Education Coordinating Board.

PERRY APPOINTEES GIVE BACK


Richard Scott Appointed by Perry to the Lower Colorado River Authority Board, Company Awarded Contracts by Perry Richard Scott Houston $10,000 contribution on February 24, 2010 Link Strategies LLC Confidential Document 222

Richard Scott has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Richard Scott is the Co-Owner of Trans Global Solutions, a Railroad Transportation Company. According to the Lower Colorado River Authority (LCRA) website, Richard Dick Scott of Wimberley is co-owner of Trans-Global Solutions Inc., a railroad transportation company. He is a member of Delta Sigma Pi and the Boys and Girls Country Executive Committee. He is also a volunteer contributor for the Hays County FFA and 4H clubs and a member of the Houston Livestock Show Lifetime Committee. [LCRA.org, Accessed on February 27, 2010, link] August 2004: Trans Global Solutions Awarded $510,000 in Grants by Rick Perry Under the Texas Texas Emissions Reduction Program. According to the Environmental Insider News, While his colleagues were sweating bullets at a lengthy agenda in Austin, TCEQ Commissioner R. B. Ralph Marquez was sharing a stage in Houston with Governor Rick Perry as he announced the winners of over $80.89 million in grants under the Texas Emissions Reduction Program (TERP). Three entities won grants to install auxiliary power unit idle reduction systems manufactured by EcoTrans Technologies LLC, Jacksonville, FL. This technology, as described by the U.S. Department of Energy, consists of a compact unit mounted on a skid which includes an EPA-emissions certified 48-horsepower, 4-cylinder, turbocharged diesel engine. Moreover, there is a substantial reduction in noise levels in neighborhoods located nearby freight terminals and large rail yards. Grants went to - $ 442,000 to Trans Global Solutions, Houston. $ 68,000 to Trans Global Solutions, Beaumont. [Environmental Insider News, 8/2/04, link]

February 2009: Scott Appointed to the Lower Colorado River Authority Board by Governor Rick Perry. According to the Lower Colorado River Authority (LCRA) website, The LCRA Board of Directors is composed of 15 members appointed to six-year terms by the governor and confirmed by the Texas Senate. The Board meets regularly to set strategic corporate direction for the general manager and staff, to approve projects and large expenditures, and to review progress on major activities and issues. For more information, see Board agendas Scott received a bachelors degree from Lamar University. Gov. Rick Perry appointed him to the Board in 2009 for a term that expires in 2015. [LCRA.org, Accessed on February 27, 2010, link] [Governor.state.tx.us, 2/6/09, link] William F. Scott, Chief Executive of Trans-Global Solutions, Appointed in 2003 by Gov. Rick Perry to the Jefferson & Orange County Pilot Commission. According to My San Antonio News, Some fear preferential treatment may be extended to Scott, who is chief executive of Trans-Global Solutions and was appointed by Gov. Rick Perry in 2003 to the Jefferson & Orange County Pilot Commission. [My San Antonio News, 6/17/08, link] 2008: Mason County Residents Angry with William F. Scott for a Plan to Divert 6.5 Million Gallons of River Water to Pump 40 Million Gallons of Groundwater Into Reservoirs on His Ranch. According to My San Antonio News, New friction over water in the parched Hill Country has Mason County residents upset by a ranch owner's plan to create two reservoirs on the James River and to top them off using a well. Even in non-drought years, development-driven demand for groundwater in the region has pitted old-timers against newcomers and prompted a scramble for surface water rights. In Mason County, William F. Scott wants to divert 6.5 million gallons of river water and to pump 40 million gallons of groundwater annually into reservoirs he wants to build for personal and livestock use on his Star S Ranch. [My San Antonio News, 6/17/08, link]

Steve Hicks Appointed by Perry to the University of Texas Board of Regents Steve Hicks Austin $25,000 contribution on February 24, 2010 Link Strategies LLC Confidential Document 223

Steve Hicks has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] February 2009: Steve Hicks was Appointed by Rick Perry to Become a Member of the University of Texas System Board of Regents. According to The University of Texas website, R. Steven Steve Hicks, Austin, Texas, was appointed to a term on The University of Texas System Board of Regents by Governor Rick Perry in February 2009. His term expires February 1, 2011. Regent Hicks was confirmed by the State Senate on April 1, 2009, and he took the oath of office on April 2, 2009. Regent Hicks chairs the Audit, Compliance, and Management Review Committee. In addition, he serves on the Facilities Planning and Construction Committee as well as the Student, Faculty, and Staff Campus Life Committee. [Utsystem.edu, link] Hicks Owns and is the Executive Chairman of Capstar Partners, LLC, a Private Investment Firm. According to The University of Texas website, Regent Hicks owns and serves as Executive Chairman of Capstar Partners, LLC, a private investment firm. Capstar Partners is the controlling shareholder in DMX, Inc., a company engaged in the provision of business media services, including video, music and scent technologies; Andrew Harper, a high-end travel publishing and services firm; and Harden Healthcare, a company engaged in the skilled nursing, home health, and related fields. Capstar Partners is the largest investor in CPO Commerce, an e-commerce company that partners with consumer product manufacturers to sell non-standard inventory. [Utsystem.edu, link] Mickey Long Appointed by Perry to the Texas Tech Board of Regents Mickey Long Midland $25,000 contribution on February 24, 2010 Mickey Long has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] February 2009: Mickey Long was Appointed by Perry to the Board of Regents of the Texas Tech University System. According to TexasTech.edu, Mr. Mickey Long of Midland was appointed to the Board of Regents of the Texas Tech University System on February 6, 2009. Mr. Long is currently a member of the Audit Committee and serves as vice chair of the Board of Trustees of the Carr Scholarship Foundation. His term expires on January 31, 2015. [TexasTech.edu, Accessed February 26, 2010, link] Mickey Long is President of Westex/WLP Well Service, L.P. in Midland. According to TexasTech.edu, Mickey L. Long is president of Westex/WLP Well Service, L.P. in Midland. Mr. Long received his Bachelors of Science degree from Angelo State University in 1976. [TexasTech.edu, Accessed February 26, 2010, link] Nasruddin Rupani Appointed by Perry to the State Health Services Council Nasruddin Rupani Sugarland $10,000 contribution on February 24, 2010 Nasruddin Rupani has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Nasruddin Rupani is a U.S. Citizen of Pakistani Origin, Founded the Rupani Foundation to Reduce Poverty within Mountain Communities. According to the RupaniFoundation.org, Founded in 2006 by Mr. Nasruddin Rupani, a U.S. citizen of Pakistani origin and a renowned industrialist in the global Gems and Jewelry industry, the Rupani Foundation aims to reduce poverty and promote social Link Strategies LLC Confidential Document 224

entrepreneurship within Mountain communities. Motivated by the Islamic ethics of philanthropy and the ethos of corporate social responsibility, the Rupani family has resolved to invest their time, knowledge and resources toward this end. The Foundation's objective is to create economic opportunities, knowledgeable leadership, and 'aristocracies of merit' for the marginalized communities, particularly women and youth. The first significant area of endeavor is to assist the Mountain communities in the Northern Areas of Pakistan, Afghanistan, Tajikistan, and the surrounding regions. [RupaniFoundation.org, Accessed February 27, 2010, link] Rupani is the Founder of World Gold and Diamonds, Inc., a Jewelry Retailer, Wholesaler, and Distributor in the United States. According to CachCapital.com, Mr. Rupani is also the founder of World Gold and Diamonds, Inc., one of the most prestigious and highly successful jewelry retailer, wholesaler and distributor in the United States. His experience in retailing and wholesaling gives CACH a unique perspective on marketing, sales and distribution. Mr. Rupani received his education at New York University. [CachCapital.com, Accessed February 27, 2010, link] Rupnai is the Chairman for Cach Capital Management, LLC. According to CachCapital.com, Mr. Rupani was recently appointed to Chairman for CACH and has been a stakeholder in the company since its founding in July 2006. He brings a wealth of knowledge and global business expertise to the firm, and helps CACH secure capital for its project companies. [CachCapital.com, Accessed February 27, 2010, link] Rupani is a Board Member of One World Bank and Pakistan Association of Greater Houston, and President of U.S. Insurance Funding Inc. According to the Texas Department of State Health Services website, Nasruddin Rupani of Sugar Land is president of Worlds Gold and Diamonds. He is chairman of the IbnSina and Rupani Foundation boards, a board member of One World Bank, and Pakistan Association of Greater Houston, and president of U.S. Insurance Funding Inc. He is a volunteer coordinator for the Aga Khan Foundation, and director of the Houston-Karachi Sister City Association, and the Gem and Jewelry Development Corporation. He was also district coordinator for FOCUS Humanitarian Assistance. Rupani received a bachelors degree from New York University. His term will expire Feb. 1, 2015. [DSHS.State.TX.US, Accessed on February 27, 2010, link] April 6, 2009: Perry Appointed Rupani to be a Member of the State Health Services Council. According to the Texas State Senate website, Rupanis appointment to be a member of the State Health Services Council will expire on in February 2015. [Senate.State.TX.US, 4/6/09, link] Robert Stillwell Appointed by Perry to the University of Texas Board of Regents Robert Stillwell Houston $10,000 contribution on February 24, 2010 Robert Stillwell has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Robert Stillwell is a Lead Director at EXCO Resources, Inc. General Counsel of BP Capital LP, Mesa Water, Inc. and Other Petroleum Businesses. According to Forbes.com, Robert L. Stillwell became one of our directors in October 2005. Mr. Stillwell has served as the General Counsel of BP Capital LP, Mesa Water, Inc. and affiliated companies engaged in the petroleum business since 2001. Mr. Stillwell was a lawyer and Senior Partner at Baker Botts LLP in Houston, Texas from 1969 to 2001. He also served as a director of Mesa Petroleum Co. and Pioneer Natural Resources Company from 1969 to 2001. [Forbes.com, Accessed on February 27, 2010, link] February 2009: Rick Perry Appointed Robert Stillwell to the UT Board Of Regents.. Gov. Rick Perry has appointed four members to the University of Texas System Board of Regents. R. Steven Link Strategies LLC Confidential Document 225

Steve Hicks of Austin is chairman of Capstar Partners LLC. James R. Huffines of Austin is central/south Texas Chair of PlainsCapital Bank and senior executive vice president of PlainsCapital Corporation. William Gene Powell of San Antonio is co-founder and CEO of Bitterblue Inc. and AirStrip Technologies. Robert L. Stillwell of Houston is general counsel for BP Capital LLC. (Gov. Rick Perry, Gov. Perry Appoints Four to University of Texas System Board of Regents, Appointment, 2/12/09, link] Stillwell was One of Two Lawyers Assigned to Help T. Boone Pickens Create His First Corporation, Mesa Petroleum. According to Law.com, Robert L. Stillwell still remembers the first time he met T. Boone Pickens. It was 1963, and Stillwell was a junior associate and one of just a handful of lawyers who made up the corporate department at Baker Botts in Houston. Pickens had been referred to the firm by some friends in the oil business in Midland, Stillwell recalls, and was looking to form his first corporation, Mesa Petroleum. Stillwell was one of the two lawyers assigned to make Pickens' deal happen. [Law.com, 5/18/09, link] Stillwell on the Front Line of the Legal Deals Involving Pickens and Mesas Takeover Activities, Shareholder Rights Activism. According to Law.com, In the 1960s, Stillwell says he worked with Pickens on smaller acquisitions; beginning in the early '80s and lasting through the early '90s, there were the major oil and gas company takeovers that catapulted Pickens into the earnings stratosphere and into popular culture as an oilman for the ages. Mesa and Pickens were at the forefront of takeover activities, shareholder rights activism, Stillwell says, and Stillwell was on the front lines of these legal deals. One of those early deals was Mesa's acquisition of the Hugoton Production Co. in 1969. [Law.com, 5/18/09, link]

Brenda Pejovich Appointed by Perry to the Texas Higher Education Coordinating Board Brenda Pejovich Dallas $10,000 contribution on February 24, 2010 Brenda Pejovich has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Brenda Pejovich has Contributed Over $75,000 to Republicans Running for Federal Elections Since 2000. [CampaignMoney.com, Accessed February 27, 2010, link]

1999: Pejovichs Company, Brenda Pejovich & Associates, Acquired by National Staffing Firm Accounting Principals Inc. According to the Dallas Business Journal, National staffing firm Accounting Principals Inc. has nearly quadrupled its Metroplex operations by acquiring a 13-year-old Dallas company, Brenda Pejovich & Associates. Terms of the deal were not disclosed. It was time to take the next step, said owner Brenda Pejovich, who is now managing partner for the Dallas office of Accounting Principals. Either we were going to grow by acquisition or by merging with another firm. [Dallas Business Journal, 4/9/99, link] Brenda Pejovich is a Board Member of the Conservative Texas Public Policy Foundation. [SourceWatch.org, Accessed February 27, 2010, link]

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November 2007: Brenda Pejovich was Appointed to the Texas Higher Education Coordinating Board by Governor Rick Perry. According to the Texas Higher Education Coordinating Board website, Brenda Pejovich of Dallas, Texas, was appointed to a six-year term on the Texas Higher Education Coordinating Board by Governor Rick Perry on November 7, 2007. Ms. Pejovich serves as Chair for the Committee on Agency Operations and Vice-Chair for the OTHER PERRY MONEY CANNON DONORS Donors with Questionable Backgrounds: Patrick Cox ($23,500 contribution) Hundreds of people online have accused Coxs company, Tax Masters Inc., of fraud. Maximus PAC ($10,000 contribution) Virginia-based Maximums Inc. partnered with Accenture on the failed privatization efforts of the Texas Health and Human Services Commission. Maximus Inc. has also been at the center of an alleged quid-pro quo scandal in Illinois due to contributions given to indicted ex-Governor Rod Blagojevich and state contracts awarded to the company. Albert Huddleston ($30,000) Huddleston contributed $100,000 to the Swift Boat Veterans and POWS for Truth Organization.

Billionaires for Perry: Jeffrey Hildebrand ($50,000 contribution) Hildebrands net worth was $1 Billion in 2007. Kelcy Warren ($10,000 contribution) Warrens net worth was $1.3 Billion in 2009. In 2008, Perry invited lawmakers to attend an over-night retreat at a resort owned by Warren. Lee Bass ($50,000 contribution) Bass net worth was $2 Billion in 2009. Bass companies spend hundreds of thousands of dollars every year lobbying Texas politicians.

Other Significant Contributions: Rod Lewis ($50,000 contribution) In 2007, Lewis Energy Group constructed a $500,000 pipeline under the Rio Grande from Mexico to Texas. The U.S. Secretary of State and the U.S. Secretary of Defense were required to recommend and approve the construction of the pipeline. Dillon Water Resources LP ($25,000 contribution) Dillon Water Resources LP is involved in a partnership whose purpose was to drill for water in Northern Bexar County and sell the water to the City of San Antonio. Nancy Richards ($20,000 contribution) Nancy Richards is the largest private sector contractor for the U.S. Department of Housing and Urban Development. Mark Mays ($10,000 contribution) Mays is the President/CEO of Clear Channel Communications. George Ryan ($100,000 contribution) Ryan is a former lobbyist and a founder, CEO, and Managing Principal at Ryan & Co., a firm that specializes in lowering tax burdens for clients. Gary Petersen ($10,000 contribution) Petersen contributed $2,400 to the Bill White for Texas Senate Campaign. Link Strategies LLC Confidential Document 227

PERRYS DONORS WITH QUESTIONABLE BACKGROUNDS


Patrick Cox Company Cox Owns Accused of Fraud by Hundreds of People Online Patrick Cox Houston $23,500 contribution on February 24, 2010 Patrick Cox has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Patrick Cox, Founder of Tax Masters, Inc. Accused of Defrauding People with Outstanding Taxes. According to RipoffReport.com, Tax Masters, Inc, Houston, TX. Beware of Tax Masters. I sought their assistance, after seeing their ad on TV with founder Patrick Cox, with some outstanding taxes I wished to payoff. I called them and asked them some questions about their services and cost. At that time I decided to use their service and gave my credit card number for the deposit. They immediately deducted $700 from my account. [RipoffReport.com, 7/27/08, link] Over 300 Complaints Filed Against Tax Masters, Inc. in the Better Business BureauRated an F. According to ComplaintsBoard.com, I went home on Thursday and did a BBB search on Tax Masters and found that this company has a lot of complants. http://houston.bbb.org/Find-BusinessReviews/ There are over 300 complaints on Tax Masters and they have an F rating with the Better Business Bureau. I also want to state at this time that there was no mention of any money that I put down on Monday was for somebody telling me yes you need to get your taxes done. I don't need to pay anybody to tell me that. I already knew that and was wanting to get it done. But do to the incompetency and lack of communication of this company I am wanting to find somebody else to do my taxes. As far as I know that money was taken out of my account immediately before they received the fax. The fax was to be torn up when the fax department called me to let me know they received the fax. [ComplaintsBoard.com, 7/21/09, link] Tax Masters, Inc. Rated a Buyer Beware! by the Complaints Board. [ComplaintsBoard.com, link] NOTE: There are hundreds of complaints online regarding Tax Masters, Inc. Maximus PAC Maximus Inc. Awarded Texas State Contracts, Relationship with Indicted Governor Rod Blagojevich, Sued Numerous Times Maximus PAC Reston $10,000 contribution on February 24, 2010 Maximus Inc. Works with the Government to Develop and Manage Health and Human Service Programs. According to the Maximus Inc. website, At MAXIMUS we are driven by a common purpose to improve the lives of those we serve in the areas of health care, child welfare, employment, and education. For nearly three decades, together with government partners, we have developed and managed innovative health and human service programs that have transformed lives and strengthened communities. [Maximus.com, Accessed February 28, 2010, link] Maximus Inc. Operates Privatized Welfare Systems and was Founded in 1975. According to AFSCME.org, Maximus Inc. and Accenture Ltd. are the major corporations that operate privatized welfare systems. Below are descriptions of the companies and their track records in running welfare and other programs. Maximus was founded in 1975. For its first 15 years, the company grew slowly but surely and took on larger contracts throughout the 1990s. Projects have Link Strategies LLC Confidential Document 228

covered information technology consulting, welfare-to-work training programs, benefit and reimbursement processing, child support collections, and "revenue maximization" (helping governments enhance their cash flow). [AFSCME.org, Accessed on February 28, 2010, link] Maximus Inc. Worked with Accenture in the Failed Texas Health and Human Services Commission Program. According to CRN.com, Government systems integrator Maximus Inc. said Thursday that it has initiated an arbitration process to resolve disputes arising under a subcontract with outsourcer Accenture for work on a Texas Health and Human Services Commission program that has come under fire from state lawmakers. Maximus claims that Accenture unilaterally redefined the scope of the work on a contract to automate welfare eligibility assessment and enrollment services in the state, and that it's no longer profitable for Maximus to continue working on the deal. [CRN.com, 12/22/06, link] 2007: Maximus Initiated Arbitration Against Accenture LLP for Allegedly Breaching Their Subcontract. According to the Texas Health and Human Services Commission, In 2007 MAXIMUS initiated arbitration against Accenture LLP. MAXIMUS serves as a subcontractor in support of Accentures prime contract with the Texas Health and Human Services Commission for integrated eligibility services. MAXIMUS alleges that Accenture has breached their subcontract and seeks damages to be proved at the arbitration. Accenture has denied MAXIMUS claims and asserted counterclaims. [Texas Health and Human Services Commission, Accessed on February 28, 2010, link]

Maximus Inc. Contributed $25,000 to Gov. Rod Blagohevichs Campaign Fund and Had Contracts with Dozens of Illinois State AgenciesQuestions Raised Over Quality of Work. According to The Pantagraph, Were glad to hear the state says it has saved more than $5.3 million by reducing its fleet of cars over the past two fiscal years. But the public has yet to see the proof. And the governors office wont release the study that supposedly caused this savings. There are reasons to be skeptical of the savings reported by reducing the states fleet of 13,000 vehicles by 1,600: - The study was started three years ago by Maximus Inc., a Virginia-based firm that has contributed $25,500 to Gov. Rod Blagojevichs campaign fund and has contracts with a dozen state agencies. [The Pantagraph, 7/1/06, link] 2004: Maximus Inc. Sued by the Estate of a Woman Who Died When She fell Out of the Window of an Apartment Leased by the Company. According to the Texas Health and Human Services Commission, In 2004 MAXIMUS was sued by the estate of a deceased woman who died when she fell out of the window of an apartment leased by the Company. The plaintiff alleged negligence resulting in damages to be proved at trial. [Texas Health and Human Services Commission, Accessed on February 28, 2010, link] 2005: Maximus Sued by a Former Subcontractor for Allegedly Improperly Terminating a Contract. According to the Texas Health and Human Services Commission, In 2005 MAXIMUS was sued by a former subcontractor that alleged its agreement with MAXIMUS had been improperly terminated. Among other things, the subcontractor alleged breach of contract, unjust enrichment and bad faith and seeks damages to be proved at trial. [Texas Health and Human Services Commission, Accessed on February 28, 2010, link] 2007: Maximus Sued by the Ontario Ministry of Community and Social services for Alleged Breaches of Contract. According to the Texas Health and Human Services Commission, In 2007 Themis Program Management and Consulting Limited (Themis) and MAXIMUS were sued by the Ontario Ministry of Community and Social Services which alleged breach of contract. Themis is an indirect/wholly-owned subsidiary of MAXIMUS that had contracted with the Ministry to provide software and services in support of the Ministrys child support case management system. MAXIMUS signed the contract with the Ministry as a guarantor. [Texas Health and Human Services Commission, Accessed on February 28, 2010, link]

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2007: Maximius Sued by a Former Subcontractor for Breach of Contract. According to the Texas Health and Human Services Commission, In 2007, MAXIMUS was sued by a former subcontractor for breach of contract. MAXIMUS terminated the subcontractor when the relevant portion of the MAXIMUS prime contract was terminated. [Texas Health and Human Services Commission, Accessed on February 28, 2010, link] 2004: Maximum, Inc. hired lobbyist Frances Kurio for less than $10,000. According to the Texas Ethics Commission, Maximum, Inc. is located at 1356 Beverly Road McLean, VA 22101. [Texas Ethics Commission, link] 2004: Maximum, Inc. hired lobbyist Jack Roberts for between $50,000 and $100,000. According to the Texas Ethics Commission, Maximum, Inc. is located at 1356 Beverly Road McLean, VA 22101. [Texas Ethics Commission, link] 2003: Maximum, Inc. hired lobbyist Frances Kurio for less than $10,000. According to the Texas Ethics Commission, Maximum, Inc. is located at 1356 Beverly Road McLean, VA 22101. [Texas Ethics Commission, link] 2003: Maximum, Inc. hired lobbyist Jack Roberts for between $50,000 and $100,000. According to the Texas Ethics Commission, Maximum, Inc. is located at 1356 Beverly Road McLean, VA 22101. [Texas Ethics Commission, link] 2002: Maximum, Inc. hired lobbyist Frances Kurio for less than $10,000. According to the Texas Ethics Commission, Maximum, Inc. is located at 1356 Beverly Road McLean, VA 22101. [Texas Ethics Commission, link] 2002: Maximum, Inc. hired lobbyist Jack Roberts for between $50,000 and $100,000. According to the Texas Ethics Commission, Maximum, Inc. is located at 1356 Beverly Road McLean, VA 22101. [Texas Ethics Commission, link] 2001: Maximum, Inc. hired lobbyist Jack Roberts for between $50,000 and $100,000. According to the Texas Ethics Commission, Maximum, Inc. is located at 1356 Beverly Road McLean, VA 22101. [Texas Ethics Commission, link] 2001: Maximum, Inc. hired lobbyist Frances Kurio for less than $10,000. According to the Texas Ethics Commission, Maximum, Inc. is located at 1356 Beverly Road McLean, VA 22101. [Texas Ethics Commission, link]

BILLIONAIRES FOR PERRY


Jeffrey Hildebrand Net Worth of $1 Billion Jeffrey Hildebrand Houston $50,000 contribution on February 24, 2010 Jeffrey Hildebrand has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] 2007: Jeffrey Hildebrand was number #891 on Forbes List of Billionaires with a Net Worth of $1 Billion dollars. [Forbes.com, 3/8/07, link] Jeffrey Hildebrand is a Former Exxon Geologist who Controls Over 10 Million Barrels of Oil in Reserves. According to Forbes.com, Former Exxon geologist founded Hilcorp Energy with partner Link Strategies LLC Confidential Document 230

Thomas Hook 1989; bought former Goldman Sachs banker out in 2003 for $500 million. Produced 2.9 million barrels of oil in 2005. Owns 9.2 million barrels of proven Gulf Coast reserves, 3.4 million in South Louisiana. [Forbes.com, 3/8/07, link] Kelcy Warren Net Worth $1.3 Billion, Perry Invited Lawmakers to Overnight at a Warren-Owned Resort Kelcy Warren Dallas $10,000 contribution on February 24, 2010 Kelcy Warren has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] 2009: Forbes Ranks Kelcy Warren Among the Top 400 Richest Americans, Net Worth Estimated at $1.3 Billion. [Forbes.com, 9/30/09, link] Kelcy Warren is the CEO and Chairman of the Board of Energy Transfer Partners L.P. According to Forbes.com, Mr. Warren is the sole Chief Executive Officer and Chairman of the Board of our General Partner and has served in that capacity since August 2007. Prior to that, Mr. Warren had served as the Co-Chief Executive Officer and Co-Chairman of the Board of our General Partner since the combination of the midstream and intrastate transportation and storage operations of ETC OLP and the retail propane operations of HOLP in January 2004. Prior to the combination of the operations of ETC OLP and HOLP, Mr. Warren served as President of the general partner of ET Company I, Ltd., having served in that capacity since 1996. From 1996 to 2000, he served as a director of Crosstex Energy, Inc. From 1993 to 1996, he served as President, Chief Operating Officer and a Director of Cornerstone Natural Gas, Inc. Mr. Warren has more than 25 years of business experience in the energy industry. [Forbes.com, Accessed February 27, 2010, link] Energy Transfer Partners, Co-Founded by Warren, Operates More than 17,000 Miles of Natural gas Pipelines Across the U.S. According to Forbes.com, Spent summers working with dad as welder's assistant on Sun Pipeline in Texas. Studied at U. of Texas, Arlington. Cofounded natural gas pipeline firm Energy Transfer Partners with Ray C. Davis 1995; bought struggling gas assets and linked them into efficient system. Today company operates more than 17,000 miles of natural gas pipelines spanning Colorado, Utah, Arizona, New Mexico, Texas, Louisiana and Alabama. Also runs gas processing and storage facilities. Shares flat since last summer despite plunge in natural gas prices. Today is chief executive. Guitarist; cofounder of Music Road Records. [Forbes.com, 9/30/09, link]

Warren Owns the Forth Most Expensive Home in Dallas, Worth Over $28 Million. According to the Dallas Dirt Magazine, Get ready for major financial house porn: the D Magazine print product is out with the lowdown of who owns Dallas 100 most expensive homes. (I kind of gave you a tease about this a few months ago, suggesting we send these people thank-you notes for paying the highest property taxes in Dallas County.) Well, as you can probably guess, that list is already outdated. Number four on the list, the $28,742,300 home of software titan Lawrence Lacerte at 5323 Park Lane, is wrong. Last Tuesday the home changed hands from Lacerte to Kelsey Warren and that Dallas County appraisal is not too far off from the homes confidential selling price. The buyer, Kelsey Warren, took out a $14,000,000 loan, paid cash for the rest. On a $14,000,000 home mortgage, the monthly payments are about $103,000 per month, not counting taxes and insurance. [Dallas Dirt Magazine, 6/22/09, link] 2007: Warren Purchased a Bankrupt Resort Called The Ultimate Hideout, Near Big Bend National Park for $13.5 Million. According to KiiiTV, A federal judge has approved the sale of a bankrupt resort in West Texas to a Dallas businessman for 13-point-five (M) million dollars. The approved bid came from Kelcy Warren, co-founder of Energy Transfer Partners LP, a natural gas and Link Strategies LLC Confidential Document 231

propane distributor. Warren agreed to keep Lajitas, The Ultimate Hideout open for now. But he wouldn't say what his long-term plans were for the 25,000-acre resort, which features a golf course, luxury hotel and restaurants. Located near Big Bend National Park, the resort owes between 18million and 20 million (M) dollars to creditors. [KiiiTV, 12/8/07, link] 2008: Perry Invited a Dozen Lawmakers from Both Parties to Join Him for an Overnight Trip to The Ultimate Hideout. According to My San Antonio News, Gov. Rick Perry is inviting up to a dozen lawmakers from both parties to join him for an overnight trip to Lajitas in the Big Bend area this weekend. It's the first time in just over four years as governor that he's planned such a trip with a group of probably this size, said Perry spokeswoman Kathy Walt. She described it as a chance for Perry and lawmakers to talk about issues without distractions. When you put Democrats and Republicans together to talk about real issues, sure there's value there, Gallego said. A Lajitas Web site touts the luxurious resort as the ultimate hideout. [My San Antonio News, 2/15/08, link] Warren was a Member of a Partnership with Lehman Brothers. According to the Dallas Business Journal, Ray C. Davis, John W. McReynolds and Kelcy Warren want no part of Lehman Bros. Merchant Banking Partners IV LP. The three executives associated with Dallas Energy Transfer Partners allege in a lawsuit in Dallas District Court that the private-equity partnership tried to get them to answer so-called capital calls last fall, even though the partnership cannot possibly achieve its fundamental objective. The Lehman Bros. partnership was set up in 2007 to invest in middle-market companies with enterprise values between $75 million and $750 million, according to court records. All three men were investors in the partnership. [Dallas Business Journal, 3/6/09, link] Lee Bass Net Worth of $2 Billion, Company Spends Hundreds of Thousands Every Year on Lobbying in Texas Lee Bass Fort Worth $50,000 contribution on February 24, 2010 2009: Lee Bass is #334 on Forbes List of Billionaires with a Net Worth of $2 Billion dollars. [Forbes.com, 3/11/09, link] Lee Bass was a Bush Pioneer Who Helped Raise Over a $100,000. According to Texans for Public Justice, Lee Bass is a Bush Pioneer. [Texans for Public Justice, July 2000, link] 1997: Lee Bass was appointed by George W. Bush to be Chair of the Texas Parks and Wildlife Department. [Texans for Public Justice, July 2000, link] 1998: Texas Parks and Wildlife Privatized Wildlife by Granting Permits That Allowed Land Owners to Trap and Breed Wild Deer. According to Texans for Public Justice, In a controversial 98 move, the agency privatized wildlife by granting permits that allow landowners to trap and breed wild deer that they can sell on the hoof to hunters who lease their land. [Texans for Public Justice, July 2000, link]

During Hurricane Katrina, Bass Enterprises had an Oil Storage Tank Near New Orleans Leak 90,000 Barrels into a Containment Pond. According to Forbes.com, Family's Bass Enterprises hit hard by Katrina: oil storage tank near New Orleans leaked 90,000 barrels into containment pond. But gains from oil boom more than make up for it. Drilling in the western states, Gulf of Mexico and internationally. [Forbes.com, 2006, link] Yale University Returned a $20 Million Grant from Lee Bass Because He Wanted to Have Control Over Who Yale Hired to Teach Western Civilization Courses. According to an article in the National Review written by William F. Buckley, Jr., What happened is that a wealthy young alumnus of Yale Link Strategies LLC Confidential Document 232

University, having heard a cri de coeur from Yale's provost about the neglect of Western Civilization courses, came forward with a gift of $20 million. The idea was to hire three or four professors well equipped to teach various aspects of Western Civilization and perhaps lightly to refashion the curriculum in such a way as to put a corporate imprimatur on the whole arrangement. Mr. Lee Bass of Fort Worth does not give out information, but one gathers that he then advised Yale that he should be consulted on whom the money was going to be spent on. For instance, feeling as he did on the question, he would not want to learn that a Marxist had been hired to teach the experiences of Greece and Rome or, for that matter, those of Elizabethan England and the Continent. A couple of hectic months went by and finally Yale announced that it was returning the gift to Mr. Bass -- on the grounds that a university can't demean itself by agreeing to consult an outsider on the qualifications of its faculty. [National Review, 4/17/95] Lee Bass has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] 2001 Bass Enterprise Production Co. Lobbyists: [Texas Ethics Commission, link]

2002 Bass Enterprise Production Co. Lobbyists: [Texas Ethics Commission, link]

2003 Bass Enterprise Production Co. Lobbyists: [Texas Ethics Commission, link]

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2004 Bass Enterprise Production Co. Lobbyists: [Texas Ethics Commission, link]

2004 Lee M. Bass Inc. Lobbyists: [Texas Ethics Commission, link]

2005 Bass Enterprise Production Co. Lobbyists: [Texas Ethics Commission, link]

Lee M. Bass Inc. Lobbyists: [Texas Ethics Commission, link]

2006 Bass Enterprise Production Co. Lobbyists: [Texas Ethics Commission, link]

2006 Lee M. Bass Inc. Lobbyists: [Texas Ethics Commission, link] 2007 Lee M. Bass Inc. Lobbyists: [Texas Ethics Commission, link]

2008 Lee M. Bass Inc. Lobbyists: [Texas Ethics Commission, link]

2009 Lee M. Bass Inc. Lobbyists: [Texas Ethics Commission, link]

2010 Lee M. Bass Inc. Lobbyists: [Texas Ethics Commission, link] Link Strategies LLC Confidential Document 234

OTHER SIGNIFICANT CONTRIBUTIONS/ POSSIBLE RED FLAGS


Rod Lewis Constructed an Oil Pipeline from Mexico into Texas Rod Lewis San Antonio $50,000 contribution on February 24, 2010 Rod Lewis has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Rod Lewis is the founder of the Lewis Energy Group. According to LewisEnergy.com, Mr. Lewis founded the Company in 1983 and has been actively involved in the oil and gas industry in the Webb County area since 1978. Mr. Lewis was the sole founder of the Company, learning the industry from the ground up. He gained his reputation as a drilling, completion and pipeline entrepreneur through hands-on experience. [LewisEnergy.com, Accessed February 26, 2010, link] Lewis Spent $500,000 and Laid an Oil Pipeline from Mexico, Under the Rio Grande, into Texas. According to Forbes.com, Obstacles abounded in Mexico. There was no pipeline to get Pemex's gas to market, so he spent $500,000 to lay pipe under the Rio Grande to Texas. But before he could move the gas, he had to find it--which required gaining access to drill sites. [Forbes.com, 9/1/08, link] 2007: U.S. Secretary of State and U.S. Secretary of Defense Recommended Approving the Lewis Energy Group Permit to Build a Pipeline from Mexico into the U.S. According to a document posted on the Federal Emergency Regulatory Commission website, By letter dated 2007, the Secretary of State, and by letter dated 2007, the Secretary of Defense, favorably recommended that the Permit be granted. The Federal Energy Regulatory Commission finds that the issuance of a Permit is appropriate and consistent with the public interest. [FERC.gov, Accessed on February 27, 2010, link]

Lewis is the Only American Allowed to Drill in Mexico. According to Forbes.com, Texas wildcatter Rod Lewis is the only gringo allowed to drill in Mexico. Tough way to earn a buck. Rodney Lewis has drilled eight wells in northern Mexico. Five found natural gas. One unexpectedly hit high-quality light crude oil, enough to produce 100 barrels a day. When he relayed the news to state-owned Petrleos Mexicanos, for which he's drilling the wells, Pemex bureaucrats told him his contract was to find natural gas, not oil, and ordered him to plug that well. [Forbes.com, 9/1/08, link] 2004: Lewis Signed a $350 Million Contract with Pemex to Drill on 80,000 Acres Near the TexasMexico Border. According to Forbes.com, Four years ago Lewis and his San Antonio firm, Lewis Energy, signed a 15-year contract with Pemex to drill on 80,000 acres near the border. Lewis is merely providing a service; he cannot claim any ownership of or royalty on the oil and gas he finds there. He also has to front all the capital for drilling wells, laying pipelines and doing seismic imaging. If he completes the entire scope of work in the contract, he could collect $350 million in payments from Pemex. [Forbes.com, 9/1/08, link] Perry Said Texas Companies Were Ready to Join Mexican Companies to Open up the Mexican Energy Sector. According to the South American Business Information, Rick Perry, governor of Texas state, does not disguise the interest in the opening of the energy sector in Mexico, and insists the matter should be dealt with looking for practical results instead of stressing sensibilities. Texan companies, he said, are ready to join Mexican consortia in a US$60bil investments spree to solve the energy balance. Recently Lewis Energy Group won a multiple services contract (CSM) to develop exploration and Link Strategies LLC Confidential Document 235

production of natural gas in the Olmos block at the Burgos Basin. Olmos spreads over 260 Km2 and would cost investments of US$343mil. [South American Business Information, 6/25/04, link] Lewis Texas Wells Produce Approximately $300 Million in Annual Revenue. According to Forbes.com, Lewis, 54, is drilling practically in his own back yard. In south Texas he has 1,000 wells producing most of his 70 million cubic feet of gas and 350 barrels of oil each day, generating roughly $300 million in annual revenue. He owns his own drilling rigs, pipelines and gas-processing plants, and he is convinced that building a solid relationship with Pemex now will pay off if Mexican politicians finally rationalize an irrational system. [Forbes.com, 9/1/08, link] 2006: Lewis Sold His Most of His Texas Pipeline Network for $325 Million in Cash and Stock in Billionaire Dan L. Duncans enterprise Products Partners. According to Forbes.com, He has considered taking his company public but has found better ways to raise cash. Two years ago he sold much of his Texas pipeline network to billionaire Dan L. Duncan's Enterprise Products Partners (nyse: EPD - news - people ) for $325 million in cash and stock. [Forbes.com, 9/1/08, link]

Lewis has Worked in Columbia Since 2001 and Pays 20% Royalty to the Colombian Government. According to Forbes.com, He found rich opportunities in Colombia, where he made deals in 2001 with oil company Hupecol Caracara llc and in 2006 with Solana Resources of Calgary, Alta. Working unexplored oil basins and paying a modest 20% royalty to the Colombian government, those ventures now generate 10% of Lewis' output. [Forbes.com, 9/1/08, link] Lewis has 27 Planes, Including 17 World War II Fighter Planes. According to Forbes.com, Lewis keeps half his 27 planes in a 20,000-square-foot hangar a two-minute walk from the office. The rest are in a hangar on his ranch, in Encinal, 110 miles away. His favorite planes in his collection dont have anything to do with business. He has 17 warbirdsWorld War II fighters such as the Rare Bear, a Grumman F8F Bearcat that has set records as the worlds fastest piston-driven plane, hitting 528 mph. He has a TF-51 Mustang nicknamed La Pistolera, three more Bearcats, an FG-1D Corsair 29 and a British Spitfire. [Forbes.com, 9/1/08, link] Dillon Water Resources LP Involved in Partnership Attempting to Sell Water to San Antonio Dillon Water Resources LP Helotes $25,000 contribution on February 24, 2010 Dillon Water Resources LP has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Dean Davenport is the Owner of Dillon Water Resource LP and Formed a Partnership Called Water Exploration Co. (WECO) Whose Purpose was to Drill for Water and Sell it in San Antonio. According to a court document from Supreme.Courts.State.TX, In 1999, Mark Wynne, James Allen, and Dean Davenport formed a partnership named Water Exploration Co., Inc. (WECO). MR33/2. Its purpose was to drill for water in the Middle Trinity Aquifer in Northern Bexar County, and to sell the water produced to the City of San Antonio and Bexar Metropolitan Water District. MR33/1. Each of the three partners owned a 33% interest in WECO through their respective limited partnerships: Premier General Holdings, Ltd. (Wynne), J. Allen Family Partners, Ltd. (Allen), and Dillon Water Resources, LP (Davenport). [Supreme.Courts.State.TX, link] WECO Involved in Conflict of Interest ScandalState Senator Carlos Uresti Received $25,000 in Campaign Contributions from WECO, Later Donated the Contribution to Charity. According to TexasWatchdog.org, The chief spokesman for San Antonio's troubled water provider offered to steer contracts to a state senator's title company soon after the senator helped the problem utility avoid Link Strategies LLC Confidential Document 236

additional oversight, the San Antonio Express-News reported Sunday morning. Using more than 500 emails it obtained through the state's Public Information Act, the newspaper paints the relationship between BexarMet spokesman T.J. Connolly and state Sen. Carlos Uresti as a sort of unholy alliance that helped BexarMet's leadership retain power despite its various problems. The e-mails suggest a tangled web of deceit blocked the public from knowing what was really going on.Connollys role at the utility and his proximity to Uresti have come under scrutiny since recent Express-News reports showed that one of Connollys clients, Water Exploration Co. Ltd., donated $25,000 to Urestis campaign in September 2007. Uresti said he since has given the money to charity. [TexasWatchdog.org, 11/16/08, link] Nancy Richards Largest Private Sector Contractor for HUD Nancy Richards Dallas $20,000 contribution on February 24, 2010 Nancy Richards has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Nancy T. Richards is the Founder and CEO of First Preston. According to the First Preston website, First Preston has a 20-year history of sharing its success with others, particularly those hit hardest by poverty in our country, women and children. We support proven programs that provide access to health care, quality childcare, job training, homeownership, and economic self-sufficiency. Since the companys inception in 1988, millions of dollars have been contributed to community organizations helping those most in need. First Preston Founder and CEO, Nancy T. Richards, was recognized in 2006 by the Dallas Womens Foundation with their Power of the Purse Award for her community contributions and leadership in philanthropy. [FirstPreston.com, Accessed February 27, 2010, link] First Preston is a Provider of Single-Family Residential Management and Marketing Services to Financial Institutions, Government Organizations and Corporations. According to the First Preston website, First Preston is the premier provider of single-family residential management and marketing services to financial institutions, government organizations and corporations. For more than two decades, the company has set the standard of performance for the REO services industry. Since its inception, First Preston has organized, managed and accelerated the sale and closing of more than 350,000 properties representing more than $30 billion of invested capital. [FirstPreston.com, Accessed February 27, 2010, link] First Preston Has Managed Over 125,000 Real Estate Assets Worth Over $6 Billion. According to Lead411, Since its inception in 1988, First Preston has successfully managed an inventory of over 125,000 real estate assets with a total portfolio value of over $6 billion. [Lead411, Accessed February 27, 2010, link] First Preston is the Largest Private Sector Contractor for the U.S. Department of Housing and Urban Development. According to Lead411, Currently, First Preston is the largest private sector contractor for the U.S. Department of Housing and Urban Development's Real Estate Owned (REO) program. Under this program, First Preston provides total asset management and sales services for thousands of single family properties in 25 states, marketing them to prospective buyers over a unique Internet-based bidding system. [Lead411, Accessed February 27, 2010, link] Ramon Manning Host of February 24th, 2010 Fundraiser for Perry Ramon Manning Houston $10,000 contribution on February 24, 2010 Link Strategies LLC Confidential Document 237

Ramon Manning has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Ramon Mannings is an Investor for Ramkar Holdings. According to the Huffington Posts Fundrace, Ramon Manning contributed $1,500 to Bill Richardson and listed his address as 4340 South Macgregor Way, Houston, TX. [Huffingtonpost.com, Accessed February 28, 2010, link] Ramon Mannings is the President of Allpro Marketing. According to the Huffington Posts Fundrace, Ramon Manning contributed $250 to POWER Pac and listed his address as Houston, Texas. [Huffingtonpost.com, Accessed February 28, 2010, link] 2009: Ramon Manning Hosted a Fundraiser for Houston Mayoral Candidate Gene Locke. According to Isiah Careys Insite blog, If the numbers are an indicator Houston's next Mayor could be former City Hall insider Gene Locke. A fundraiser was held for the local attorney Thursday night at Hotel Za Za in the Museum District. Locke has made it official and he's running for Mayor of the 4th largest city in America. The event was put on by Houston businessman Ramon Manning and several others. [Isiah Careys Insite, 3/7/09, link] Ramon Manning is the President of the MFAHs African American Arts Advisory Association. According to The Houston Chronicle, Collectors often form friendships with artists whose works they collect. Ramon Manning, president of the MFAH's African American Arts Advisory Association, and his wife, Karen Manning, are loaning works by Charles Criner, David McGee and Kermit Oliver to the show. I always, about 95 percent of the time, try to connect with the artists because I like to know what's motivating them to produce this work, he says. If I'm hanging something on the wall, it means something, and I just think that it's important for me to have that connection with the artist if I'm bringing this stuff in my home. [The Houston Chronicle, 8/1/08, link] February 24, 2010: Ramon Manning and His Wife Karen Hosted a Private Campaign Lunch Event with Rick Perry. According to the blog On The Beat with Mary Benton, Today, Houston Businessman and Energy Executive Ramon Manning and his wife Karen, hosted a private campaign lunch event at their home in Houstons Third Ward for State of Texas Governor Rick Perry. In the photograph from left to right are: Ramon Manning, Texas Governor Rick Perry and Welcome W. Wilson, Sr., Chairman of the UH System Board of Regents. [On The Beat with Mary Benton, Accessed on February 28, 2010, link] Mark Mays Clear Channel Communications President/CEO Mark Mays San Antonio $10,000 contribution on February 24, 2010 Mark Mays has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Mark Mays is the President and CEO of Clear Channel Communications. According to Wikipedia, Mark P. Mays is the president and CEO of Clear Channel Communications, Inc., a global media and entertainment company based in San Antonio, Texas, USA. Mays took over as president and CEO in October 2004, after serving the company in other roles. Mays holds a B.A. from Vanderbilt University in Math and Economics, and an M.B.A. from Columbia Business School. Mays is an Eagle Scout. [Wikipedia, Accessed February 28, 2010, link] Mark Mays is on Perrys Finance Team for the 2010 Gubernatorial Campaign. [RickPerry.org, 6/29/09, link]

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41 Senate Democrats, Including Then Senator Obama, Signed a Letter to Mark Mays Calling on Him to Repudiate Rush Limbaughs Controversial Phony Soldiers Remark. According to CNN, The company that syndicates Rush Limbaugh's popular radio program defended the conservative talkshow host Wednesday over his controversial phony soldiers remark, telling the Senate's top Democrat it is unfair to assume his comments were directed at combat soldiers who disagree with the Iraq war. Mays' letter was a response to a letter sent by Reid Tuesday, and signed by 41 Senate Democrats, calling on Clear Channel to publicly repudiate the comments. Sens. Hillary Clinton and Barack Obama, the leading candidates for the Democratic presidential nomination, were among the senators that signed the letter. [CNN, 10/3/07, link] Rush Limbaugh Sold the Letter Sent to Mark Mays for $2.1 Million, Gave Proceeds to the Marine Corps-Law Enforcement Foundation. According to CNN, Rush Limbaugh sells Harry Reid letter on eBay 4 big $$ Turns out a genuine letter of complaint about Rush Limbaugh's recent on-air phony soldiers remark is producing some very real money for a good cause. Rush, who drives many Democrats crazy because so many Americans pay attention to his broadcast bloviating, recently had this exchange with a caller about Iraq war critics: Caller: And what's really funny is they never talk to real soldiers. They pull these soldiers that come up out of the blue and spout to the media. Limbaugh: The phony soldiers. He put the letter up for sale on eBay and said he'd give all the proceeds to the Marine Corps-Law Enforcement Foundation, which provides scholarships to children of slain Marines and police. The bidding on the letter closed yesterday. The final price: $2.1 million. [CNN, 10/20/07, link]

Albert Huddleston Former KBH Supporter, Big Donor to Swift Boat Veterans for Truth Albert Huddleston Dallas $30,000 contribution on February 24, 2010 Albert Huddleston has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] 2005 Albert Huddleston Lobbyists: [Texas Ethics Commission, link]

2004: Albet D. Huddleston hired lobbyist Virginia Stephens for between $100,000 and $150,000. According to the Texas Ethics Commission, Albet D. Huddleston is located at 5910 N. Central Expressway, Ste. 1350 Dallas, TX, 75206. [Texas Ethics Commission, link] 2003: Albert D. Huddleston hired lobbyist Virginia Stephens for $200,000 or more. According to the Texas Ethics Commission, Albert D. Huddleston is located at 5910 N. Central Expressway, Ste. 1350 Dallas, TX, 75206. [Texas Ethics Commission, link] 2001: Albert D. Huddleston hired lobbyist John Corbit Pouland for between $25,000 and $50,000. According to the Texas Ethics Commission, Albert D. Huddleston is located at 5949 Sherry Land, Suite 1500, Dallas, TX 75225. [Texas Ethics Commission, link] Lawsuit Alleged that Albert Huddleston Spent a Sizable Settlement for a Dispute in Vietnam Arising from One of Alberts Personal Transgressions Involving a Female Citizen of Vietnam. According to BizJournals.com, In his suit, Miro Vranac Jr. accuses the Huddlestons of misusing more than $6 million of the Lyda Hunt Bunker-Mary Moreland Hunt Trust. The lawsuit alleges the Huddlestons spent the funds on a number of misguided business ventures and for a sizable settlement of a dispute in Vietnam arising from one of Albert's personal transgressions involving a female citizen of Vietnam. [BizJournals.com, 5/2/08, link] Link Strategies LLC Confidential Document 239

Lawsuit Alleges Albert Huddleston Asked His Family Trust to Award $20 Million to His Wife for Projects in Iraq and South Dakota. According to BizJournals.com, The suit also alleges that Albert Huddleston asked the trust to award $20 million to his wife for projects in Iraq and South Dakota. When Vranac said he disagreed, Albert Huddleston became upset and threatened a lawsuit, the filing alleges. [BizJournals.com, 5/2/08, link]

Albert Huddleston is the Founder of Hyperion and Related by Marriage to the Hunt Oil Company Founder. According to RezNetNews.org, We found tidbits of information about both Hyperion and Albert Huddleston. The privately operated Hyperion, founded in 1990, is an oil-and-gas company in Dallas. Albert Huddleston is the son-in-law of Bunker Hunt, son of Hunt Oil Company founder, H.L. Hunt. [RezNetNews.org, 6/14/07, link] Huddleston Contributed $100,000 to the Swift Boat Veterans and POWS for Truth Organization. According to RezNetNews.org, Huddleston supported the Swift Boat Vets and POWS for Truth, an organization that campaigned in 2004 against presidential candidate John Kerry, a Democrat. Huddleston made a $100,000 contribution to the organization. [RezNetNews.org, 6/14/07, link] May 2005: Huddleston Said He Would Donate Heavily to Kay Bailey Hutchison if She Challenged Perry. According to Perryvsworld.blogspot.com, Dallas oilman Albert Huddleston says he'll donate heavily to KBH if she challenges Perry: A deep-pocketed Dallas contributor said Friday he will funnel big bucks to U.S. Sen. Kay Bailey Hutchison's campaign if she challenges Gov. Rick Perry's bid for another term next year. [Perryvsworld.blogspot.com, 5/11/05, link] 2005: Perrys Spokesperson Discounted Huddleston Because Hes Spoken Kindly of Creating a State Personal Income Tax and Supported Democrats. According to Perryvsworld.blogspot.com, She'd make a great governor, Albert Huddleston said. If (she) chooses to run, then I will be helping her in that effort more than I've rarely helped anybody. Perry's campaign spokesman, Luis Saenz, discounted Huddleston because he's spoken kindly of creating a state personal income tax and supported Democrats. [Perryvsworld.blogspot.com, 5/11/05, link] Huddleston has Contributed Hundreds of Thousands of Dollars into Cleaning Up and Defending Caddo Lake. According to Texas Monthly, That wish is seconded by Dallas oilman Albert Huddleston, whose political leanings, it should be noted, are at the opposite end of the spectrum from Henley's. A longtime contributor to Governor Rick Perry's campaigns, Huddleston has poured hundreds of thousands of dollars of his own money into defending Caddo Lake. I believe in both economic prosperity and environmental awareness, Huddleston told me by telephone from Peru, just hours after he'd climbed down from Machu Picchu, but sucking water out of Caddo Lake and destroying that fragile ecosystem is no different than sticking a pipe in the Alamo and selling it brick by brick. [Texas Monthly, 10/2002, link] George Ryan Former Lobbyist and Current Owner of Tax Firm Ryan & Co. George Ryan Dallas $100,000 contribution on February 24, 2010 Georg Ryan, aka G. Brint Ryan, is the Founder, CEO, and Managing Principal at Ryan & Co. and specializes in providing transaction, franchise, and multistate income tax services to clients. [Ryan.com, link] G. Brint Ryan was a registered lobbyist in 2009, 2008, 2007, and 2006. [Texas Ethics Commission, link]

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G. Brint Ryan ran for Dallas City Council in 2008/2009. According to the Dallas Morning News, But one newly announced District 13 hopeful provides us with a nomenclatural quandary. See, when tax consulting mogul Brint Ryan on December 9 registered a campaign treasurer, allowing him to raise money for his political ambitions, he referred to himself in official paperwork as Brint Ryan, then signed his name G. Brint Ryan. [Dallas Morning News, 12/30/08, link] G. Brint Ryan is the CEO and Managing Principal at Ryan & Co. Appointed by John Sharp to the Industry/Practitioner Liaison Group at the Texas Comptrollers Office. According to the Ryan & Co. website, Ryan has had several advisory roles with the Comptrollers Office including: Member, Taxpayer Advisory Group, Texas Comptroller of Public Accounts o Advisory committee appointed by Comptroller Combs to assist with tax policy matters. Member, Industry/Practitioner Liaison Group, Texas Comptroller of Public Accounts o Advisory committee appointed by Comptroller Sharp to assist with tax policy matters. Member, Taxpayer Advisory Group, Texas Comptroller of Public Accounts o Advisory committee appointed by Comptroller Strayhorn to assist with tax policy matters. [RyanCo.com, link]

Harry and Steven Mach Harry Mach Joined Senator Cornyn at a Press Conference about Cap and Trade Legislation Harry Mach Houston $10,000 contribution on February 24, 2010 Steven Mach Houston $10,000 contribution on February 24, 2010 Steven Mach has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Harry Mach has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Steven Mach is a Partner and CFO at Mach Industrial Group in Houston. [PinachePrivee.com, Accessed February 28, 2010, link] Harry Mach is the Owner of the Mach Industrial Group. [TexasWebportal.com, Accessed February 28, 2010, link] Mach Industrial Group Received an Emergency Welding Work Request After the First Attack on the New York Citys World Trade Center in 1993. According to the Mach Industrial Group website, After the first attack on New York City's World Trade Center in 1993, Houstonbased Mach Industrial Group received an emergency welding work request to repair and replace damaged equipment. A team of Mach employees worked around-the-clock, completing the job ahead of deadline. The 38-employee machine, fabrication and welding company's ability to service such a large-scale project seemed unlikely when Harry Mach Sr. started Mach Industrial Group from his garage in 1953. [MachIndustrialGroup.com, 6/18/03, link]

Harry Mach Jr. Joined Sen. John Cornyn at a Press Conference to Talk About the Impact of Capand-Trade Legislation Proposals. According to the Texas Insider, The press conference will take place at Mach Industrial Group, a Houston-based, family-owned, metal manufacturing business that would be directly impacted by current cap-and-trade proposals. Sen. Cornyn will be joined by Mach Link Strategies LLC Confidential Document 241

Industrial Group owner Harry Mach, Jr., along with other Mach executives and representatives from TPPF, Texas Association of Manufacturers and the American Council for Capital Formation. Other state and local business leaders will also be in attendance and available to comment on the reports findings. [Texas Insider, 2/17/2010, link] Committee on Closing the Gaps. [thecb.state.tx.us, Accessed February 27, 2010, link] Gary Petersen Bill White for Senate Donor Gary Petersen Houston $10,000 contribution on February 24, 2010 Gary Petersen has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Gary Petersen is in the Oil and Gas Industry, Works at EnCap Investments L.P. and EV Energy Partners, L.P.. According to Forbes, Gary R. Petersen has served as a director of our general partner since June 2001. Mr. Petersen is Senior Managing Director of EnCap Investments L.P., an investment management firm which he co-founded in 1988. He is also a director of EV Energy Partners, L.P. He had previously served as Senior Vice President and Manager of the Corporate Finance Division of the Energy Banking Group for RepublicBank Corporation. Prior to his position at RepublicBank, he was Executive Vice President and a member of the Board of Directors of Nicklos Oil & Gas Company from 1979 to 1984. He served from 1970 to 1971 in the U.S. Army as a First Lieutenant in the Finance Corps and as an Army Officer in the Army Security Agency. Mr. Petersen holds MBA and BBA degrees from Texas Tech University. [Forbes, Accessed February 27, 2010, link] Gary Peterson Contributed $2,400 to the Bill White for Texas Campaign on February 24, 2009. [CampaignMoney.com, Accessed February 27, 2010, link]

OTHER CONTRIBUTIONS
North Cypress Medical Center Operating Company North Cypress Medical Center Operating Company Cypress $100,000 contribution on February 24, 2010 North Cypress Medical Center Operating Company has not been a registered lobbyist from 2001 present or been listed as a client by a lobbyist. [Texas Ethics Commission, link] 2005: North Cypress Medical Center Operating Company Hired lobbyist Michael Richard Crowe for less than $10,000. According to the Texas Ethics Commission, North Cypress Medical Center Operating Company is located at 6830 North Eldridge Parkway Suite 406, Houston, TX 77041. [Texas Ethics Commission, link] 2006: North Cypress Medical Center Operating Company Hired lobbyist Randy C. Cain for between $10,000 and $25,000. According to the Texas Ethics Commission, North Cypress Medical Center Operating Company is located at P.O. Box 5352, Austin, TX 78763. [Texas Ethics Commission, link] 2007: North Cypress Medical Center Operating Company Hired lobbyist Julianne Acevedo for less than $10,000. According to the Texas Ethics Commission, North Cypress Medical Center Operating Company is located at P.O. Box 5352, Austin, TX 78763. [Texas Ethics Commission, link] Link Strategies LLC Confidential Document 242

2007: North Cypress Medical Center Operating Company Hired lobbyist Randy C. Cain for between $10,000 and $25,000. According to the Texas Ethics Commission, North Cypress Medical Center Operating Company is located at P.O. Box 5352, Austin, TX 78763. [Texas Ethics Commission, link] 2008: North Cypress Medical Center Operating Company Hired lobbyist Randy C. Cain for between $10,000 and $25,000. According to the Texas Ethics Commission, North Cypress Medical Center Operating Company is located at P.O. Box 5352, Austin, TX 78763. [Texas Ethics Commission, link] 2009: North Cypress Medical Center Operating Company Hired lobbyist Julianne Acevedo for $0.00. According to the Texas Ethics Commission, North Cypress Medical Center Operating Company is located at P.O. Box 5352, Austin, TX 78763. [Texas Ethics Commission, link] 2009: North Cypress Medical Center Operating Company Hired lobbyist Randy C. Cain for between $10,000 and $25,000. According to the Texas Ethics Commission, North Cypress Medical Center Operating Company is located at P.O. Box 5352, Austin, TX 78763. [Texas Ethics Commission, link] 2010: North Cypress Medical Center Operating Company Hired lobbyist Randy C. Cain for between $25,000 and $50,000. According to the Texas Ethics Commission, North Cypress Medical Center Operating Company is located at P.O. Box 5352, Austin, TX 78763. [Texas Ethics Commission, link] David Booth David Booth Austin $25,000 contribution on February 24, 2010 David Booth has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] David Booth is the Founder of Dimensional Fund Advisors Fund Includes Two Nobel Prize Winners for Economics. According to Wikipedia, Dimensional Fund Advisors (DFA or Dimensional) is an investment firm headquartered in Austin, Texas with regional offices in Sydney, London, Vancouver, Santa Monica and Chicago. The company was founded in 1981 by David G. Booth and Rex Sinquefield, both M.B.A. graduates of the University of Chicago Booth School of Business. DFA's objective is to use the insights of Modern Portfolio Theory to produce more efficient investment vehicles. The company's board of directors includes Myron Scholes and Robert C. Merton, both of whom won the Nobel Prize for economics. The late Merton Miller, another Nobel laureate, was also on the board of directors. Other directors include leading economists such as Eugene Fama, Kenneth French, and Roger G. Ibbotson. DFA hosts a forum where Eugene Fama and Kenneth French express their opionions on topics related to finance and current events.[1] This website is called the Fama/French Forum. [Wikipedia, link] Dimension Fund Advisors Only Works with Institutional Investors and Through Registered Fee-Based Investment Advisers. According to Wikipedia, The company rejects stock-picking and market timing and utilizes enhanced indexing to design portfolios and limit trading costs.[2] Their investment philosophy emphasizes five "dimensions" that determine investment results hence the firm's name. For example, one of their stock funds might overweight small-cap stocks and value stocks, to emphasize the dimensions of size and price. Dimensional has more than $160 billion under management as of 2009[update]. Its hundreds of mutual funds, trusts, and other portfolios are not offered directly to the public, but only to institutional investors and through registered fee-based Link Strategies LLC Confidential Document 243

only investment advisers. The company is owned by its employees, board members and a number of outside investors, which as of 2005 was reported to include Governor Arnold Schwarzenegger of California. [Wikipedia, link] 2006: Perry Welcome Dimensional Fund Advisors to Texas After They Decided to Move Their Headquarters to Texas. According to dfaus.com, We welcome Dimensional Fund Advisors decision to open an office in Texas, said Gov. Rick Perry. I am confident the company will quickly learn why Texas is the best place in the nation to do business: our relatively low taxes, a reasonable regulator climate, the most sweeping tort reforms in the nation, and our skilled workforce. [dfaus.com, 8/14/06] 2009: David Booth Bought a $30 Million 45 Acres Plot of Land Along Lake Austin to Build a Family HomeNeighbors Complained Booths Planned Home Would be an Eye Sore. According to The Austin American-Statesman, Two years ago, David Booth bought 45 acres along Lake Austin west of RM 2222, with plans to build a house for his wife, Suzanne, and their son and daughter. The Booths paid $30 million for the largest undeveloped parcel along Lake Austin inside Capital of Texas Highway (Loop 360) and later acquired 10 more acres. Now, the Booths have riled some residents in the Courtyard subdivision across Bull Creek from their property, who contend that the Booths' plans to build a sports pavilion and two covered terraces into a bluff would mar an untouched expanse of the Bull Creek inlet treasured for its serenity and natural splendor. The area is one of the most gorgeous parts of Lake Austin, said Ron Ginor, whose Courtyard home is directly across the creek from the Booths' property. They'll have the only structure between Lake Austin and the County Line (restaurant) that juts out from the cliff. It's kind of like if you were to build something in Zilker Park overlooking the water. It's a little grotesque. [The Austin American-Statesman, 5/18/09, link] Christopher Huckabee Christopher Huckabee Fort Worth $30,000 contribution on February 24, 2010 Christopher Huckabee has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] 2004: Huckabee Awarded the PSMJ CEO-of-the-Year Award in the Small Firms Category. According to Texas Contractor, Christopher M. Huckabee, AIA, CEO of Huckabee & Associates, Inc. of Fort Worth, was recently awarded the PSMJ CEO-of-the-Year Award in the small firms category. Huckabee & Associates, organized in 1967, is an educational architecture, engineering and management firm serving school districts throughout the state of Texas. [Texas Contractor, 12/6/04] 1994-2004: Huckabee has Handled in Excess of $2 Billion in Educational Facility Construction Costs. According to the Texas Contractor, Over the past 10 years, Huckabee has successfully handled in excess of $2 billion in educational facility construction costs, and is proud to be the only firm in Texas building solid masonry buildings. Christopher Huckabee is the co-author of Are You Building A School or a Liability, a book focusing on total masonry construction in public schools, now in its second edition printing. [Texas Contractor, 12/6/04] Gordon Davis Gordon Davis Lubbock $25,000 contribution on February 24, 2010 Gordon Davis has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Link Strategies LLC Confidential Document 244

Davis is a Leader in the Development of Multimedia Textbooks. According to Texas Tech University, Texas Tech Universitys meat science laboratory building was named in honor of Gordon W. Davis, a Lubbock businessman and leader in the development of multimedia textbooks. [TTU.edu, link] Davis is a Former Texas Tech Professor. According to Texas Tech University, Davis, a former Tech professor, earlier this year created a $500,000 Gordon W. Davis Meat Science Enhancement Endowment. [TTU.edu, link] Stevan Hammond Stevan Hammond Dallas $100,000 contribution on February 24, 2010 Stevan Hammond is the Chairman of the Marketing Investors Corporation. [Texas Ethics Commission, link] Stevan Hammond has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Stevan Hammond is a Restaurateur in Dallas. According to Pegasus News, If restaurateur Stevan Hammond has his way, his Park Cities Prime, opening in early January, will be a steak house that serves the best seafood in town. If restaurateur Stevan Hammond has his way, his Park Cities Prime, opening in early January, will be a steak house that serves the best seafood in town. Theres no way I can serve a better steak than Bobs or Als (Al Biernats) or Three Forks, Hammond said last night during a preopening tour of his intimate spot at 8411 Preston Rd. I love those steaks, and while I believe mine will be their equal, I think that our seafood will set us apart. Hes got a shot: Hammond has owned Popolos Caf in Preston Royal, one of the better fish kitchens in a town that desperately needs more good ones, since 2000. [Pegasus News, 12/20/06, link] Hammond is in Marketing and Real Estate. According to Pegasus News, If all of that isnt enough, the delightfully gifted pianist Adrian King, also a fugitive from the Montaigne Club, will be providing his complex harmonies and witty personality nightly. This is a labor of love for me, said Hammond, whose day gig is marketing and real estate, And itll be one of a kind. Theres no way I want to make a chain out of this place. [Pegasus News, 12/20/06, link] Todd Brock Todd Brock Beaumont $30,000 contribution on February 24, 2010 Todd Brock has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Todd Brock is the Chairman of The Brock Group. [BrockGroup.com, Accessed February 26, 2010, link] The Brock Group was Founded in 1947 in Beaumont, Texas. According to TheFreeLibrary.com, Founded in 1947 and based in Beaumont, Texas, The Brock Group is one of the largest providers of industrial maintenance services in the country and the nation's leading multi-craft maintenance contractor. Brock is the parent company of Brock Services, Ltd., Brock Maintenance, Inc., Brock Specialty Services, Ltd., Custom Blast Services, Inc., Custom Pipe Coating, Inc., and Industrial Services Link Strategies LLC Confidential Document 245

Unlimited, Inc. For more information about Brock, please visit www.brockgroup.com. [TheFreeLibrary.com, 1/17/07, link] The Brock Group Received the Voluntary Protection Program Star Status from the Occupational Safety and Health Administration (OSHA). According to CalendarTexas.com, Associated Builders and Contractors, Inc. / Texas Coastal Bend Chapter, (ACB / TCB), is proud to recognize ABC member, The Brock Group, who most recently received Voluntary Protection Program (VPP) Star status by the Occupational Safety and Health Administration (OSHA) at the ConocoPhillips site in Borger, Texas. In the past few months, Brock also received Star status at the Bill Greehey Valero Refinery in Corpus Christi and the Valero Refinery in Three Rivers. OSHA VPP recognize exemplary safety and health efforts demonstrated by company management and its employees in a cooperative effort. Brock is in a partnership agreement with OSHA and ABC / TCB. [CalendarTexas.com, Accessed February 26, 2010, link] Clayton Reaser Clayton Reaser Dallas $30,000 contribution on February 24, 2010 Clayton Reaser has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Clayon Reaser is an Employee at the Texas Teachers Alternative Certification Program. [TexasTeachers.org, Accessed February 16, 2010, link] L. Simmons L. Simmons Houston $30,000 contribution on February 24, 2010 L. Simmons has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] L. Simmons is the SCF Partners President. [TexasMonthly.com, 7/15/08, link] SCF Partners was Founded in 1989 and Provides Equity Capital and Strategic Growth Assistance to Build Energy Service and Equipment Companies. According to SCFPartners.com, Founded in 1989, SCF Partners provides equity capital and strategic growth assistance to build energy service and equipment companies that operate throughout the world. The firm is headquartered in Houston, Texas, and manages its foreign investments via offices in Calgary and Aberdeen. [SCFPartners.com, link] James Dondero James Dondero Dallas $25,000 contribution on February 24, 2010 James Dondero has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link]

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James Dondero is a Founder and President of Highland Capital Management, L.P. [HCMLP.com, link] March 2009: Highland Capital Fund Sued for $1.8 Million by a Texas Charity. According the Texas Observer, In January, a family foundation affiliated with a Texas tort-reform giant filed a $1.8 million claim against hammered Dallas hedge fund Highland Capital Management LP, depicting the foundation as a victim of deceit. The Bivins lawsuit says the foundation invested $1.75 million in a Highland Capital fund in 2006, but in March 2008 the fund balked when the foundation invoked its contractual right to withdraw its money. Rather than pay a lump sum, Highland informed the charity that it would pay the money over nine months. Then Highland closed the fund in October as the value of its investments in high-yield, high-risk debt tanked. Investors like Bivins were informed that they would receive a pro-rata (proportionate) share of Highland's remaining assets. [Texas Observer, 5/20/09, link] Carl Allen Carl Allen Carrollton $10,000 contribution on February 24, 2010 Carl Allen has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Carl Allen is the Owner of the Heritage Bag Company, Inc.: [Heritage-bag.com, Accessed February 27, 2010, link]

Carl Allen Contributed $30,800 to John McCains Campaign Committees in 2008. [CampaignMoney.com, link] John Cardwell John Cardwell Austin $10,000 contribution on February 24, 2010 John Cardwell has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link] Attorney John Cardwell Disposed a Political Opponent and Sierra Club Member with Hours of Rigorous Questioning Over Information They Received Under the Texas Open Records Act. According to the Austin Chronicle, Sore losing. That's what City Councilmember Daryl Slusher calls the round of depositions recently undertaken by the law partner of Jeff Hart, whom Slusher defeated in last month's Place One race. Hart's partner, John Cardwell, put Scott Henson, one of Slusher's former campaign dirt-diggers, and Scott Royder, a Sierra Club member, through hours of rigorous questioning about the information they received regarding Hart's client, Griffin Industries, Inc., under the Texas Open Records Act from the Texas Natural Resource Conservation Commission (TNRCC). [Austin Chronicle, 7/12/96, link] Link Strategies LLC Confidential Document 247

Sierra Club Member Said what Cardwell Did was Clearly Abusive Political Payback. According to the Austin Chronicle, (During the runoff, the Sierra Club and Slusher's campaign publicized the fact that Hart represented a company that had received 32 notices from the TNRCC for alleged environmental violations, in order to question Hart's commitment to the environment.) Hart maintains that the Slusher supporters were subpoenaed the Monday after the runoff so Griffin could get a gander at the documents, which, he says, the TNRCC never released to their side. In that case, why not depose the TNRCC? Because we went to the source, Hart says. Replies Royder: The TNRCC is the source, adding that what Hart and Cardwell are doing is clearly abusive political payback. Hart denies it, and Cardwell did not return calls... [Austin Chronicle, 7/12/96, link]

Attorney John Cardwell Practices Energy, Oil and Gas Law. [ Justia Legal Services & Lawyers, Accessed February 28, 2010, link] Gaye Kelsey Gaye Kelsey Houston $10,000 contribution on February 24, 2010 Gaye Kelsey has not been a registered lobbyist from 2001-present. [Texas Ethics Commission, link]

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RICK PERRYS VETOES


TOTAL NUMBER OF PERRY VETOES: 2001, 77th Legislature: 82 Bills Vetoed 2003, 78th Legislature: 48 Bills Vetoed 2005, 79th Legislature: 19 Bills Vetoed 2007, 80th Legislature: 51 Bills Vetoed 2009, 81st Legislature: 35 Bills Vetoed [Texas Legislature Online Bill Search, link]

2009: Legislation Passed the Texas House and Senate That Gave Judges the Ability to Exempt a Sex Offender from Registering for Life from the Sex Offender Registry if They Met Certain Specific Requirements. According to The Houston Chronicle, It was then that Smith won passage in the House, 131-12, for a bill that brings a bit of common sense and compassion to Texas laws on registration for sex offenders. The Senate would later pass the bill, with minor changes, 30-0. The bill applied only to one-time offenders whose crime was to have sex with someone who was at least 14 and was less than four years younger than the offender. The bill did not save the offenders, usually young men, from punishment. It just allowed judges to hold a hearing and exempt them from being listed for life on the sex offender registry if they met certain requirements. The sex had to have been consensual and the only factor that made it a crime was the age of the victim. The judge had to make a finding that the public would not be endangered, and that the exemption was in the best interest of the victim and of justice. Being in the best interest of the victim was not some ethereal notion. Many of these young hormonal couplings lead to babies (that's often how the man is caught) and some to marriages. But being a registered sex offender can have a severe impact on a man's ability to pay good child support or to support a family. So the young women and the babies become long-term victims, even if the young man tries to do the right thing by them. [The Houston Chronicle, 2/26/10] Perry Vetoed Sex Offender Registry LegislationThe Houston Chronicle Said Perrys Reason was False and Called Him a Cowardly Demagogue. According to The Houston Chronicle, By the way, Cason isn't the only cowardly demagogue in this story. After passing overwhelmingly in the House and without opposition in the Senate, Smith's bill was vetoed by Gov. Rick Perry. His reason, according to his veto statement, was also false. He said the bill would make offenders "eligible to petition a court for an exemption from sex offender registration, regardless of the age of the victim." He also said the bill could lead to very young victims being re-victimized in the event that a court were to improvidently exempt their abusers from sex offender registration. I am not willing to take that gamble with the lives of young Texans, Perry said sanctimoniously. [The Houston Chronicle, 2/26/10]

Perry Vetoed a Bill That Overwhelmingly Passed Both Houses of the Legislature and Required Motorists to Move Over for Bicyclists and Pedestrians. According to the Corpus Christi CallerTimes, A model ordinance supported by the Texas Bicycle Coalition is similar to a bill that overwhelmingly passed both houses of the Legislature last year but was vetoed by Gov. Rick Perry. Perry said in his veto that safe passing wouldn't fit with existing laws. The Texas Bicycle Coalition is urging cities around the state to pass the model ordinance. Austin, San Antonio and Helotes have all passed versions of safe passing laws. Gretchen Arnold, a cyclist and vice chairwoman of the subcommittee, said she has worked with cyclists to simplify the model ordinance. For example, the model would require motorists to move over for workers and horseback riders, while the local draft now includes only bicyclists and pedestrians. Arnold has collected about 300 signatures in recent months on petitions placed at athletic stores in the city. [Corpus Christi Caller-Times, 2/14/10] Bicycle Safety Measure Taken Up After a Couple was Killed While Bike Riding. According to the San Antonio Express-News, The bill ultimately was vetoed by Gov. Rick Perry, who said it Link Strategies LLC Confidential Document 249

"contradicts much of the current statute." Advocates have pressed on, working to get the law passed in cities around Texas - Austin and Helotes already have passed it - and they plan to reintroduce it in the Legislature next session. Calls for a local ordinance picked up after the deaths of Gregory Bruehler and his wife, Alexandra. The couple were riding a tandem bike when they were killed by a motorist last fall on Texas 16, just outside Helotes. The driver never was cited. [San Antonio Express-News, 2/5/10] 2009: Perry Vetoed a Bill That Would Have Made it Simpler for Pipelines to Run Along State Highways. According to the Fort Worth Star-Telegram, Pipeline companies can condemn private land but have to get permission to cross city streets. However, Alanis said the city has only reasonable control over the location of pipelines. Theyve shown adequate review of the other possible routes, she said. A bill that would have made it simpler for pipelines to run along state highways passed the Texas House and Senate, but was vetoed by Gov. Rick Perry. The Transportation Department has declined to allow the line along I-30 because there are no access roads in the area. Without them, it s possible that the entire freeway could be shut down if the line ever needed repairs, spokesman Val Lopez said. If this highway had frontage roads, this wouldn t be an issue, Lopez said. If they re willing or able to put in a frontage road, that changes the situation. We have mentioned that to them, and I think discussions about that are ongoing. [Fort Worth Star-Telegram, 10/16/09] 2009: Perry Vetoed a Bill That Tied Education Funding to Class Sizes and Teacher-Child Ratio, Texas Remains One of Only a Few States Without Limits on Class Sizes. According to the States News Service, Thanks to the focused advocacy effort of early learning supporters, lawmakers approved an additional $25 million to expand the Public School Prekindergarten program. The Bush School of Government and Public Service at Texas AandM University found that every $1 spent on high-quality pre-k returns at least $3.50 to the state in savings and increased revenue. Provisions that would have tied the new dollars to program quality standards, including research-based class sizes and teacher-child ratio, also passed the legislature with strong backing but were vetoed by Governor Rick Perry. Texas remains one of only a few states without limits on class size and teacher-child ratio. [States News Service, 7/29/09] 2009: Perry Vetoed a Bill That Would Have Given the Secretary of State the Authority Prevent Tens of Thousands of Texans from Being Denied the Right to Vote Based on Clerical Errors. According to the Burnt Orange Report, Rep. Scott Hochberg's bill, HB 1457, which would have given authority to the Secretary of State to allow for corrections of obvious typos by voter registration clerks when matching voter registrations to the DPS drivers license file, has been vetoed by Gov. Rick Perry. Each year it is estimated that tens of thousands of valid voter registration applications are denied because of clerical error. Understandably, Gov. Perry isn't all that interested in voters being able to register to vote given his strong support for Voter Suppression legislation. But in a hint of irony, his veto message of HB 1457... contains a clerical error. Hat tip to Quorum Report. House Bill No. 1457 would require the secretary of state to develop a system for accepting voter registration applications when the information provided by the voter does not match the indentifying information for that individual in the records of the Texas Department of Public Safety (DPS) or other state agencies. [Burnt Orange Report, 7/3/09] 2009: Perry Vetoed a Bill That Would Have Allowed Texas Child Protective Services to Go Into a Home Without a Court Hearing or Notice to Parents and Take Children from the Home. According to the Topeka Capital-Journal, One example is a bill that was passed by the Texas Legislature and recently vetoed by Texas Gov. Rick Perry. It would have allowed Texas Child Protective Services rights that would violate constitutional protections. The bill would have allowed the Texas Child Protective Services, on an anonymous tip, without a court hearing or notice to parents, to go into a home, take children from the home, physically and psychologically examine the children and question the children. [Topeka Capital-Journal, 7/3/09]

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Supporters of The Child Protective Services Legislation Argued the Legislation Clarified the Criteria State Officials Must Meet to Get a Court Order to Enter a Families House. According to the Topeka Capital-Journal, Supporters of Senate Bill 1440 say it would have helped abuse investigations by clarifying the criteria state officials must meet to get a court order to enter a family's house, transport a child or review children's medical records. SB 1440 would have improved our ability to protect Texas' most vulnerable citizens and enabled us to fulfill our moral obligation to help those who cannot help themselves, said Sen. Kirk Watson, D-Austin , the author of the bill. [Austin American-Statesman, 6/20/09]

2009: Perry Vetoed a Bill That Would Have Created Green-Collar Jobs by Helping People Recycle Their Obsolete Televisions. According to The Dallas Morning News, Re: Perry crushes recycling bill, by Jeffrey Jacoby, Wednesday Letters. Jacoby states that the TV recycling bill, vetoed by Gov. Rick Perry, would have saved taxpayer dollars and created green-collar jobs for out-of-work Texans. He states that Best Buy and some major manufacturers are some responsible options for getting rid of outdated televisions. If private industry is helping citizens regarding disposal of their obsolete televisions, why should we pass a bill we don't need so that people can have state-created green jobs? Perry's veto protects a precious resource of another kind - taxpayer dollars, which are needed upfront to implement such a program. [The Dallas Morning News, 6/28/09] 2009: Perry Vetoed a Bill That Would have Required University Health Care Centers to Accept Private Insurance. According to The Eagle, Brown pointed to several bills he authored or sponsored during the past session -- one that will allow night classes at colleges and another that will extend victim confidentiality in child sexual abuse cases to civil courts. A third bill that would have required university health care centers to accept private insurance was vetoed by Gov. Rick Perry. [The Eagle, 6/24/09] 2009: Perry Vetoed a Bill That Would Have Put in place New Quality Standards for PreKindergarten Classes Including Teacher Training and Class-Size Limits. According do the Austin American-Statesman, Gov. Rick Perry vetoed 37 pieces of legislation Friday, including measures to hold pre-kindergarten programs to new standards, change the way students pay for health care at colleges and allow the City of Austin to restrict home prices near commuter rail stations. The pre-kindergarten measure that Perry vetoed would have put in place new quality standards for pre-kindergarten classes, including teacher training and class-size limits. The classes serve children who are homeless or in foster care, have a parent in the military, have limited English-speaking skills or whose families are low-income. The cost of the bill, which at one time was $623 million so that half-day programs could expand to fullday, was reduced to $25 million in grant money for districts that already have full-day programs but were slated to lose state funding. With the veto, those districts will still get the money, but the quality standards will not take effect. It's a bad day for public education and for Texas' youngest and neediest children, said Rep. Diane Patrick, R-Arlington , the bill's author. [Austin American-Statesman, 6/20/09] Perry Vetoed a Bill That Would Have Allowed the City of Austin to Set a Ceiling on the Cost of Some Housing Within 1 Mile of Commuter Rail Stations. According to the Austin AmericanStatesman, The veto list also included a measure by Rep. Eddie Rodriguez, D-Austin , which would have allowed the City of Austin to set a ceiling on the cost of some housing within 1 mile of commuter rail stations. The market should be allowed to thrive without unnecessary government interference, Perry said. [Austin American-Statesman, 6/20/09] Perry Vetoed a Bill That Would Have Created a Pilot Program in Travis County Allowing Buses to Use the Shoulders of Congested Highways. According to the Austin American-Statesman, Another measure with local impact that Perry killed was Senate Bill 434. It would have created a pilot program in Travis County allowing buses to use the shoulders of congested highways. Perry said the measure would eliminate emergency lanes, creating a public danger. [Austin American-Statesman, 6/20/09] Perry Vetoed a Bill That Prohibited TxDOT from Promoting Toll Road Projects. [Austin AmericanStatesman, 6/20/09] Link Strategies LLC Confidential Document 251

Perry Vetoed a Bill That Would Have Added an Additional Retiree to the Board of the Teacher Retirement System. According to the Austin American-Statesman, Perry vetoed a bill Adding an additional retiree to the board of the Teacher Retirement System of Texas, which would have meant one less financial professional on the nine-member board. [Austin American-Statesman, 6/20/09] Perry Vetoed a $6 Million Appropriation for a Life Sciences Institute at the University of Texas San Antonio. According to the Austin American-Statesman, Cigarroa has the chops for the rough and tumble of a legislative session, said Joe Krier, former president of the San Antonio chamber, who has observed him many times at the Capitol. He knows how you work with the lieutenant governor, speaker and committee chairs, Krier said. He was better at working under the pink granite dome than most people I've worked with for 20 years. He has also tasted defeat, such as in 2007, when he pushed through a $6 million appropriation for a life sciences institute planned jointly by his campus and its academic counterpart, UT-San Antonio, only to see it vetoed by Gov. Rick Perry. [Austin AmericanStatesman, 1/25/09] Perry Vetoed Legislation That Offered Tuition Assistance to Texas Department of Criminal Justice Employees Attending Sam Houston State University. According to The Huntsville Item, The Texas Department of Criminal Justice, Huntsville ISD and Sam Houston State University. I want to be a big champion of the TDCJ pay raise that has been looked for, and hopefully we can find enough money to do that, she said. It's really important that we continue to improve the quality of our correctional officers. In addition to pressing for a pay raise for correctional officers, Kolkhorst hopes to reintroduce HB 518, the TDCJ Correctional Officer Bill. The bill, which would give tuition assistance to TDCJ employees, was vetoed by Governor Rick Perry in the last legislative session. Governor Perry vetoed it because he thought it was too narrow, that it would only help Sam Houston State students, Kolkhorst said. This time we're broadening it so that it will affect everybody. It's a very positive bill, and I know the correctional officers were behind it. I'm looking forward to working it through the system again. [The Huntsville Item, 1/13/09] Perry Vetoed a Bill That Would Have Limited the Purposes for Which the Government Can Use Eminent Domain to Take Private Land. According to The Houston Chronicle, Also, an eminent domain bill passed by the Texas House during the last session but vetoed by Gov. Rick Perry would have limited the purposes for which the government can use the practice to take private land. Howard said he will support any effort to reintroduce the bill. [The Houston Chronicle, 1/8/09] Texas Farm Bureau President Said the Bill Vetoed by Perry was Excellent and That He Hoped It Would be Resurrected and Enacted in 2009. According to the Abilene ReporterNews, The Texas Farm Bureau hopes to see the eminent domain bill vetoed by Gov. Rick Perry last year resurrected and enacted in 2009, Vernie Glasson told Taylor County Farm Bureau members Saturday night. The executive director of the Waco-based Texas Farm Bureau, Glasson addressed about 250 people at the Taylor County affiliate's annual convention at Wylie High School. Perry vetoed the bill after it passed by overwhelming margins in the Republicandominated Senate and the narrowly controlled Republican House. Because the veto came after the regular session ended, the Legislature had no chance to override. Texas has always been a private property state, and we've been proud of that, Glasson said. We had an excellent bill pass. [Abilene Reporter-News, 8/10/08] Texas Farm Bureau President Said the Eminent Domain Bill Would be the Organizations Top Priority in 2009. According to the Abilene Reporter-News, That will be our top priority in '09, he said. The Farm Bureau will push for a fair negotiated settlement so that you can have a level playing field, if you will, with those who are trying to take your land. Eminent domain is the process by which government condemns privately owned land for public purposes, usually for public works such as roads and schools. Eminent domain often becomes more controversial when employed for purposes such as economic development that results in one private property Link Strategies LLC Confidential Document 252

owner having to sell land that winds up being used by another private property owner. [Abilene Reporter-News, 8/10/08] 2008: Perry Vetoed a Bill That Would Have Allowed Non-Violent Parole Offenders to Post Bail While They Await a Hearing. According to the San Antonio Express-News, State Rep. Trey Martinez Fischer, D-San Antonio, wrote a bill last legislative session that would have allowed non-violent parole offenders to post bail while they await a hearing. The bill passed, but was vetoed by Gov. Rick Perry. [San Antonio Express-News, 2/8/08] 2008: Perry Vetoed Legislation That Would Have Examine Plans to Create a New Research University in Texas. According to the University Wire, University of Texas and Texas A&M may have more academic competition if a proposed committee finds that the state needs a third research university. Lt. Gov. David Dewhurst ordered a study on the need for such a flagship university last week when he announced his interim charges. The study will determine the impact of another research university in the state. A committee will review the cost, need and location of the possible university and will also hold hearings and gather testimony from the public and experts in higher education across Texas. Texas Sen. Kirk Watson, D-Austin, filed legislation last session to examine plans for additional flagship universities, but it was vetoed by Gov. Rick Perry. [University Wire, 2/6/08] 2007: Perry Vetoed $154 Million in Community College Funding. According to the San Antonio Express-News, State leaders appear to be on track to restore the $154 million in community college funding vetoed by Gov. Rick Perry earlier this summer. That spells good news for the 575,000 students enrolled in community colleges in Texas and the taxpayers who support the community college districts. Community college district officials were stunned by the governor's action and have stated that the veto of the funding for employee health benefits means they will have to increase tuition and taxes to balance their budgets. Those actions have the potential of impacting 72 percent of the freshmen college students in this state. [San Antonio Express-News, 8/17/07] Texas Community College Officials Warned State Lawmakers That Property Taxes and Tuition Rates Would Increase Dramatically Without Funding for Community Colleges. According to The Houston Chronicle, Texas community college officials warned state lawmakers Tuesday that property taxes and tuition rates would increase dramatically unless they restore $154 million vetoed byGov. Rick Perry earlier this summer. Legislators needed to hear about the impact of Perry's veto as they look for a way to restore funding, said Sen. Judith Zaffirini, DLaredo, chairwoman of the Senate Higher Education Subcommittee. Perry and his staff are not opposed to increasing funding for community colleges, although there is no agreement on how to do it. I remain optimistic that we will address this issue and resolve it, as thorny as it may be, Zaffirini said during a packed meeting in the Senate Finance hearing room. There are many members of the Legislature who will not rest until we resolve this situation. [The Houston Chronicle, 8/15/07]

Perry Vetoed Legislation That Would Have Strengthened Landowner Protections When StateSanctioned Developers Condemn Privately Owned Property Under Eminent Domain Provisions. According to The Houston Chronicle, When the Texas Legislature's 81st session convenes in 2009, a couple of Katy-area lawmakers plan to strengthen landowner protections when state-sanctioned developers condemn privately owned property under eminent domain provisions. Legislation envisioned by state Rep. Bill Callegari, R-Katy, and state Sen. Glenn Hegar, R-Katy, would be similar in scope to the law vetoed by Gov. Rick Perry in June. Some version of House Bill 2006, they say, is necessary to protect the rights of property owners. There's great interest in reviving such a bill in Waller County, where residents have fought against having their land become part of the the proposed 4,000-mile Trans-Texas Corridor roadway and oil-and-gas pipeline, said Precinct 4 Waller County Commissioner Glenn Beckendorff. [The Houston Chronicle, 7/26/07]

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Perry Vetoed Funding for the Texas A&M System Including $3 Million for the Texas Cooperative Extension. According to the University Wire, The state provided $33 million in funds for the A&M Health Science Center, and another $4 million for the health center in Temple. For the planned San Antonio and Killeen campuses, the state allotted $10 million to each, and they also gave another $4 million to the A&M Agriculture and Engineering BioEnergy Alliance. Some of the requests by the A&M System were vetoed by Gov. Rick Perry such as $3 million for the Texas Cooperative Extension. Ed Smith, director of Texas Cooperative Extension, said the $3 million would have been used to put in place nine specialists throughout the state in areas such as agro security and wildlife sciences. [University Wire, 7/18/07] 2007: Perry Vetoed Legislation That Put a Two-Year Moratorium on Toll-Concession Deals. According to the Engineering News-Record , Texas was an early champion of PPP but many state lawmakers want to slow its progress. The legislature in May passed a bill to put a two-year moratorium on toll-concession deals. The bill was quickly vetoed by Gov. Rick Perry (R). [Engineering NewsRecord, 6/25/07] 2007: Perry Vetoed Millions of Dollars for Education Projects. According to the San Antonio Express-News, Among the higher education items vetoed by Gov. Rick Perry were: --$6 million for Life Science Institute shared by UT-San Antonio and UT Health Science Center in San Antonio. --$5 million for an engineering program at West Texas A&M University in Canyon. --$5 million for public health expansion at UT Health Science Center in Houston. --$2 million for the Stark Diabetes Center at UT Medical Branch in Galveston. --$474,000 for system operations at University of Houston. [San Antonio Express-News, 6/16/07] 2007: Perry Vetoed Legislation that Shortened the Maximum Length of Private Toll-Road Contracts from 70 Years to 40 Years. According to the Austin Business Journal, A controversial transportation bill has been vetoed by Gov. Rick Perry. However, some of the issues addressed in HB 1892 may still see legislative action, as the house bill has a reworked version in the form of a SB 792. HB 1892 addressed toll road funding, calling for a two-year moratorium on private toll road deals, with some exceptions outside the Central Texas area. The bill also proposed shortening the maximum length of private contracts from 70 years to 40 years. [Austin Business Journal, 5/21/07] 2003: Perry Vetoed Legislation That Would Have Regulated Cactus Harvesting in Order to Prevent Poaching. According to The Associated Press State & Local Wire, Sen. Eliot Shapleigh, the El Paso Democrat sponsoring the bill passed by the Senate on Friday to regulate the sale and shipping of the plants, showed reporters photographs of large truck convoys loaded with hundreds, perhaps thousands, of cacti that can sell for up to $250 each. Cactus poachers often work at night, using hundreds of workers at a time, Shapleigh said Friday. Whole sections of the Chihuahua Desert are being stripped of these plants, Shapleigh said. Texas lawmakers tried to regulate cactus harvesting in 2003 when they passed a bill that was later vetoed by Gov. Rick Perry. The governor's veto message said it would create a barricade to xeriscaping at a time when the government should be promoting ways to conserve water. According to a Senate analysis, almost 100,000 desert plants worth up about $3 million were shipped from Texas to Arizona from 1998-2001, including plants harvested in Texas and illegal imports from Mexico. [The Associated Press State & Local Wire, 4/28/07] Perry Vetoed Legislation That Would Have Kept Nonviolent Parole Offenders Out of Jail. According to the Fort Worth Star-Telegram, Victims' advocates oppose cutting short punishments and say denying funding when offenders' probations are revoked on technical violations could endanger the public. I understand and support what Representative Madden and Senator Whitmire are trying to do as far as taking some of the particularly nonviolent offenders and reallocating those spaces for more violent offenders, said Diane Clements, executive director of Justice For All, a Houston-based victim advocacy group. But when someone is put on probation, they are serving a sentence in the community, she said. If they fail to meet the requirements of their probation, they should be revoked. Clements is concerned that cutting funding to probation departments for technical revocations could create a system that Link Strategies LLC Confidential Document 254

overlooks offenders when they fail to comply with probation conditions.Prompted by a similar probation overhaul bill that passed the 2005 Texas Legislature but was vetoed by Gov. Rick Perry, Tarrant County officials have begun reviewing probation cases at the halfway mark. [Fort Worth Star-Telegram, 3/19/07] Perry Vetoed a Quality Assurance Tax That Would Have Taxed Hospital and Surgery-Center Revenues and Could Have Sent Up to $1.7 Billion in New Federal Dollars to Texas. According to the Austin Business Journal, But others, such as a new provider or quality assurance tax, are sure to generate opposition in Austin and in hospital-administration offices across the state. That tax is a 3 percent levy on hospital and surgery-center revenues that would trigger matching funds from the federal government. Such a tax could generate $1.1 billion in state general revenue and could bring $1.7 billion in federal dollars to Texas, according to the Code Red report. Last session the nursing home industry tried to implement a similar tax, but it was vetoed by Gov. Rick Perry. [Austin Business Journal, 11/6/06] 2005: Perry Vetoed Legislation That Would Have Allowed County Medical Health Agencies to Retain Local Control of Money and Services Offered. According to the Fort Worth Star Telegram, The Keller Republican had introduced, then quickly withdrew, a bill defining who could call themselves a meteorologist. She sought tougher penalties for car burglars, only to see her bill scorned by a key senator. Then her major legislative effort, which would have altered rules for county mental health agencies, was vetoed by Gov. Rick Perry. Susan Garnett, chief operating officer with Tarrant County Mental Health/Mental Retardation, worked with Truitt to draft legislation that would have allowed county MHMR agencies to retain local control of money and services offered. [Fort Worth Star Telegram, 7/21/05] 2005: Perry Vetoed Legislation That Would Have Added Billions in funding for Public Schools. According to The Dallas Morning News, The Senate unanimously approved legislation Friday that would restore about $33.6 billion in funding for public schools in Texas that was vetoed by Gov. Rick Perry last month. House members already have approved their own version, but it carries a smaller price tag than the Senate bill. The two chambers will have to iron out differences before the special session ends July 20. The Senate bill also would provide funding for the Texas Education Agency, increase salaries of state judges and fund tuition revenue bonds for state universities. [The Dallas Morning News, 7/9/05] Perry Vetoed a Medicaid Bill That Would Have Helped to Fund Pap Smears for Cervical Cancer, and Screenings for Breast Cancer. According to the San Antonio Express-News, Senate Bill 747 by state Sen. John Carona, R-Dallas, allows for a Medicaid waiver that would expand eligibility for women in Texas seeking pap smears for cervical cancer and screenings for breast cancer, sexually transmitted diseases, hypertension, cholesterol and tuberculosis. Women on Medicaid currently are ineligible for the screenings if they earn more than $3,300 a year. The waiver would expand eligibility to women whose families make up to $34,000. Technically, legislation is not needed to implement the waiver, but political pressure has kept the Texas Department of Health from taking the action administratively. This is the second attempt by the Legislature to approve the Medicaid waiver. Two years ago it was included in the ominous Medicaid bill, which was vetoed by Gov. Rick Perry. [San Antonio Express-News, 4/4/05] Perry Vetoed a Bill That Would Ban the Execution of the Mentally Retarded. According to the Grand Rapid Press, It would be very prudent for us as a system, a criminal justice system, to delay further executions until we've had an opportunity to re-examine evidence that played a particular role in the conviction of an individual that was sentenced to death, Hurtt said. An effort by the Texas Legislature to enact a moratorium statewide failed in 2001. Two years later, Ellis sponsored a bill to ban the execution of the mentally retarded, which passed but was vetoed by Gov. Rick Perry. The practice has since been prohibited by the U.S. Supreme Court. [Grand Rapid Press, 10/3/04] Perry Vetoed Legislation that Would Expand the Tax District for District 34 in Order to Expand the Del Mar College. According to the Corpus Christi Caller-Times, As an employee of Del Mar College, I worked with the community, city hall, faculty and the school district, Karsh said. I have two children enrolled at Del Mar College. I hear it from them when they have registration problems and they can't find Link Strategies LLC Confidential Document 255

parking. I've worked there and I know what people to ask. King said he wanted to see the college expand to a university complete with dorms and a cafeteria. King has run for several positions before, including city council and precinct chairman. Initially, I jumped in for the state race, he said. My goal is to be state rep for District 34. Yruegas said he also wanted to see the college grow. He said the tax district would need to expand, a measure that was vetoed by Gov. Rick Perry last summer. Yruegas also ran for at-large in 2000. [Corpus Christi Caller-Times, 9/15/04] Perry Vetoed Legislation That Would Give Election Authorities the Ability to Let Unchallenged Candidates the Ability to Assume Office Without an Election. According to The Houston Chronicle, Proposition 18, similarly, would let election authorities in any political subdivision omit the names of unchallenged candidates from a ballot and let them assume office without an election, even if that ballot contained propositions or other races in which more than one candidate were running. Its ballot language reads, The constitutional amendment authorizing the Legislature to permit a person to assume an office of a political subdivision without an election if the person is the only candidate to qualify for an election for that office. Here again, the proposal would save little in election costs while creating a shortcut around voter expression in some cases. Besides being fundamentally unsound, Proposition 18 shares the added disadvantage of having had its enabling legislation vetoed by Gov. Rick Perry. That means a future Legislature would have to implement its provisions. Therefore, voters can't know with certainty what the real result of approving Proposition 18 would be. [The Houston Chronicle, 8/8/03] 2003: Perrys Spokeswoman Said Perry Had No Plans to Add Health Care Funding to the Special Session Agenda. According to The Houston Chronicle, The money would come from federal funds given to states for fiscal relief, appropriations vetoed by Gov. Rick Perry and general revenue mistakenly put in a transportation bill. The funds could restore much of the $ 1 billion legislators cut from children's health insurance, prenatal care, home care for elderly and disabled Texans, mental health services and HIV medications. Perry's spokeswoman, Kathy Walt, said the governor had no plans to add health care funding to the special session agenda. She said the governor and the Legislative Budget Board had the power to use available revenue to restore money for health care. If that is the appropriate action to take, they will do so, Walt said. [The Houston Chronicle, 7/25/03] Perry Surprisingly Vetoed Legislation That Would Have Created The Excellence Fund to Assist University on the Cusp of Becoming Major Research Institutions. According to the University Wire, The surprising veto of Excellence funding in higher education will be detrimental to research both at Texas Tech and in the state of Texas, Chancellor David Smith said. The Excellence Fund, a bill enacted to assist universities on the cusp of becoming major research institutions, was originally signed into law, but the appropriation of the funding was unexpectedly vetoed by Gov. Rick Perry for undisclosed reasons. To atone for the loss of funding, Perry approved a bill that recovers 100 percent of indirect costs, but Smith said that will only allow Tech to keep up as oppose to being a step ahead. [University Wire, 7/18/03] The Excellence Fund Would Have Helped to Texas Tech Attract Researchers to the University. According to the University Wire, The veto was really a surprise to the delegation, Smith said. We had been working on several initiatives, partnerships, and other economic developments where we used Excellence funding as leverage. Without that money it will be more difficult to continue those projects. Smith said one of the major benefits of funding was the ability to attract researchers that otherwise may not have been interested in Tech. It was nice to be able to bring in researchers and experts in our field, he said. The extra money also allowed us to bring in researchers that already had grants and their own funding which helped as well. Kathleen Harris, associate vice president for research services said Excellence funding contributed more than $ 4 million to research at Tech last year. [University Wire, 7/18/03] Perry Vetoed Legislation that Would Have Allowed Certain Individuals to Have Their Criminal Records Expunged After 5-10 Years of Good Behavior. According to the Public Broadcasting Report, The Tex. Senate is considering legislation that represents a serious abridgement of freedom of the press, Radio-TV News Dirs. Assn. (RTNDA) charged. The bill (1477) would allow certain individuals to Link Strategies LLC Confidential Document 256

have their criminal records expunged after 5-10 years of good behavior. A similar measure was vetoed byGov. Rick Perry (R) last year. In a letter to Perry and the Tex. Senate, RTNDA Pres. Barbara Cochran said the legislation would prevent the public from being "fully informed about the individuals they entrust with their children, their property and their communities." [Public Broadcasting Report, 5/30/03] Perry Anticipated to Veto Raising the Tax on Cigarettes Because His Chief of Staff was Formerlly a Tobacco Lobbyist. According to The Houston Chronicle, The recent political fireworks in Austin notwithstanding, several measures remain pending in the Legislature that, by raising the tax on cigarettes, would help Texas better deal with its looming budget crisis. When lawmakers get back to work, these measures merit support. Proponents are concerned that even if such a measure passes, it will be vetoed by Gov. Rick Perry. The governor's chief of staff, Mike Toomey, was a tobacco lobbyist and has ties to the industry, and Perry pledged to balance Texas' budget without new taxes. If the first circumstance motivates a veto, then shame on Perry. As for the latter, call the $ 1 levy a user fee, which it is, and let it help Texans. [The Houston Chronicle, 5/18/03] Perry Vetoed Legislation that Would Create Strict Deadlines for Managed-Care Organizations to Pay Medical Claims to Doctors. According to The Houston Chronicle, Managed-care organizations would have strict deadlines to pay medical claims under a prompt-pay bill given tentative approval by the House on Thursday. Senate Bill 418 is similar to one that was vetoed by Gov. Rick Perry after the 2001 session. The veto angered doctors and led the Texas Medical Association to endorse Democrat Tony Sanchez in last year's governor's race. We hope that the bill becomes law this time, said Rep. Craig Eiland, D-Galveston. [The Houston Chronicle, 5/9/03] Perry Vetoed Legislation That Would Have Allowed Illegal Immigrants to Obtain Drivers Licenses. According to The Houston Chronicle, The legislation would apply to commercial driver's licenses and Department of Public Safety identification cards, as well as regular operator's licenses. Similar legislation is pending before a House committee. Ogden's bill would allow only foreigners who are in the country legally to obtain driver's licenses. Two years ago, the Legislature approved a bill that would have allowed illegal immigrants to obtain driver's licenses, but it was vetoed by Gov. Rick Perry. [The Houston Chronicle, 4/8/03] Perry Vetoed a Bill to Tighten Ethics Rules and Change Spending Policies of the Permanent School Board, Bill Would Have Created a Panel of Financial Experts to Manage the MultibillionDollar Fund. According to the Austin American-Statesman, The State Board of Education has vigorously defended its management of the $16 billion school trust fund and fiercely fought legislative efforts to tighten ethics rules and change spending policies. Members of the education board even helped torpedo a bipartisan bill that would have created a panel of financial experts to advise it in managing the multibillion-dollar Permanent School Fund. The bill was passed by the Legislature in 2001, but vetoed by Gov. Rick Perry after a faction of the board lobbied him to kill it. [Austin AmericanStatesman, 3/5/03] Perry Vetoed a Bill That Would Have Consolidated the Administrative Operations of Texas Medicaid Program. According to the Austin American-Statesman, Analysis: Democrats want to follow the lead of Wisconsin and New York and provide health insurance to all parents whose children qualify for Medicaid or the Children's Health Insurance Program. They also want to resurrect some provisions of a Medicaid restructuring bill vetoed by Gov. Rick Perry in 2001. The bill would have consolidated the administrative operations of the state-run federal health program. About $25 billion of the state's current $114 billion budget pays for Medicaid. [Austin American-Statesman, 1/12/03] Perry Vetoed a Bill that Would Allow Oil Drilling in the East Texas Oil Field. According to Greenwire, Texas lawmakers will consider a controversial proposal to allow oil drilling in the East Texas Oil Field when the state Legislature convenes on Jan. 14. The proposal, identical to a bill vetoed by Texas Gov. Rick Perry (R) in 2001, would allow research into tapping the field's estimated 600 million barrels of oil. State Rep. Tommy Merritt (R), chairman of the state House Energy Committee, said he is Link Strategies LLC Confidential Document 257

renewing the effort this year because of the unrest in Venezuela and the possibility of a conflict in Iraq. [Greenwire, 1/6/03] Perry Vetoed Legislation That would Allow Video Lottery at Pari-Mutuel Horse and Dog-Racing Tracks. According to the Fort Worth Star-Telegram, McDonald dismissed such talk as alarmist, and said any video lottery machines would be regulated by the Texas Lottery Commission and supervised by track officials at each site. State Sen. Ken Armbrister, D-Victoria, said he would sponsor legislation allowing video lottery at pari-mutuel tracks if the horse- and dog-racing industries want it when lawmakers return to Austin next month. A provision was included in legislation he carried in 2001 that was vetoed by Gov. Rick Perry. Even those who would abhor voting for anything that seems to expand gambling knows that we are facing a revenue problem next session, said Armbrister. [Fort Worth StarTelegram, 12/17/02] Perry Vetoed Two Bill That Would Help Consumers Make Better Health Care Choices By Making Complaints About Hospitals and Physicians Public. According to The Associated Press State & Local Wire, The Consumers Union wants to change state law to help consumers make better health care choices. The group is calling for several major changes, including publicizing complaints made against hospitals and physicians. Such complaints are currently confidential by law. It also wants medical malpractice information about specific doctors made available to the public in a central location, a streamlined process for registering complaints and changes to the formation of licensing boards so that a majority of members represent the public not the profession being regulated. In 1999, the Texas Hospital Association added an obscure provision into a bill that made it impossible for the public to find out what complaints have been filed against a hospital, McGiffert said, noting that such information had been public for years. Two bills supported by the Consumers Union to reverse the new secrecy law were vetoed by Gov. Rick Perry in 2001. [The Associated Press State & Local Wire, 9/25/02] Contributions from Auto Dealers Decreased Significantly After Perry Vetoed Two Bills Favored Their Industry. According to Texans for Public Justice, The lists of Sanchezs top overall and top individual donors each include three auto dealer interests. Auto dealers were angered in 2001 when Perry vetoed their two priority bills in his so called Fathers Day Massacre.13 Both bills, HB 1994 and HB 2139, merited vetoes. The Consumers Union testified that the bills, authorizing dealers to increase vehicle documentation fees and to assess unregulated debt-insurance policies on car loans, would gouge consumers. Prior to the vetoes, Perry received $463,841 from auto dealers; afterwards he received $124,900. [Texans for Public Justice, 10/2002, link] Perry Vetoed 81 Bills on June 17, 2001, Day Called to the Fathers Day Massacre. According to the San Antonio Express-News, That's exactly what lawmakers tried to do in the last session when they passed a bill that would have created safeguards for the fund. It successfully made its way through the legislative maze, Keel noted, despite an intense lobbying effort against it. The individuals and companies who stood to benefit from these conflicts of interests hired (lobbyists) to a tune of about a half-million dollars, he said. But that bill met the same fate as 81 others vetoed by Gov. Rick Perry, 72 of them on June 17, 2001, a day referred to as the Father's Day Massacre. [San Antonio ExpressNews, 9/9/02] Perry Vetoed Legislation That Would Have Banned Texas Supreme Court Clerks from Being Paid Hiring Bonuses. According to The Dallas Morning News, Hiring bonuses paid to Texas Supreme Court clerks by private law firms could possibly run afoul of state bribery laws, the Texas Ethics Commission found in an opinion issued Friday. The Supreme Court has suspended the bonuses this year for its law clerks, and Chief Justice Tom Phillips said the court will work with the opinion and Travis County Attorney Ken Oden to reach an agreement on how clerks might be compensated. For almost 60 years, the high court has hired top students from law schools to work for a year as clerks for the nine justices. But attracting top talent is hindered because the best students could earn beginning salaries at private law firms well above the about $ 40,000 the court pays, Justice Phillips has said. Over the years, the clerks have been allowed to accept as much as $ 35,000 in stipends from private law firms that have Link Strategies LLC Confidential Document 258

hired them to come to work after they complete their court clerkships. State law prohibits public employees from accepting gifts. Mr. Oden has interpreted such stipends to be illegal, and said a clerk or law firm could be punished by as much as a year in jail for those payments, even without evidence that the payments influenced a clerk's work. Legislators attempted to deal with the issue during the session earlier this year, but the bill addressing the clerk stipends was vetoed by Gov. Rick Perry. [The Dallas Morning News, 12/15/01] 2001: Out of 172 Bill Related to Education, Perry Vetoed All but Seven of the Bills. According to the San Antonio Express-News, Although this year's session of the state Legislature was dominated by issues such as redistricting, teacher health insurance and setting the first day of school, lawmakers passed a myriad of other, less-publicized education items that may affect the schooling of children throughout the state. In all, the Legislature passed 172 bills related to education, according to an analysis conducted by the Texas Association of School Administrators. All but the seven that were vetoed by Gov. Rick Perry went into law. A lot of times, it's the smaller bills that have the biggest impact on the day-to-day working environment, said Richard Kouri, spokesman for the Texas State Teachers Association. [San Antonio Express-News, 9/4/01] Perry Vetoed Two Bills That Were Opposed by Consumer Advocates, One Bill Deregulated Debt Cancellation Insurance and the Other Raised Fees for Auto Purchases. According to The Houston Chronicle, Consumer advocacy groups fought all four pieces of legislation. Two other key bills opposed by consumer advocates also won legislative approval during this year's session but were vetoed by Gov. Rick Perry. One would have deregulated debt cancellation insurance, and the other would have raised the fee allowed auto dealers for processing documents related to auto purchases from $ 50 to $ 75. It's impossible to directly link any one vote to campaign contributions or to the influence of lobbyists, noted the report by Campaigns for People, which backs campaign finance and government ethics reforms. But it added, We know that the legislators, who represent these Texans and voted for the bills imposing these costs, received substantial contributions and lobbying attention from the benefiting industries. The amount of campaign contributions and the amount of money paid to lobbyists were derived from documents filed with the Texas Ethics Commission. [The Houston Chronicle, 8/31/01] 2001: Perry Vetoed a Bill That Would Have Required City or County Created Corporations to Be Held to the Same Rules of Public Disclosure as the Entities That Created Them. According to The Houston Chronicle, Lindsay outlined a number of bills that didn't pass, about which he said he was disappointed. Senate Bill 354 would have required city- or county-created corporations to be held to the same rules of public disclosure as the entities that created them. The bill passed but was vetoed by Gov. Rick Perry. The public interest will not be served by this veto, Lindsay said. [The Houston Chronicle, 8/16/01] Perry Vetoed a Resolution That Would Have Been Sent to the Federal Government Encouraging the Opening of the Cuban Market to U.S. Producers. According to The Beaumont Enterprise, The session also produced a resolution that the state sent to the federal government that supports opening the Cuban market to U.S. producers. It was vetoed by Gov. Rick Perry. I think it will eventually happen, Cook said. [The Beaumont Enterprise, 7/13/01]

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JAY KIMBROUGH CA$HED IN FROM CONNECTIONS TO PERRY


Jay Kimbrough has spent most of his life working for the State of Texas in one capacity or another. Kimbrough worked his way up from an Attorney in Bee County to a District Attorney and then on to become a Judge. More recently, Kimbrough has come to be in the service of Texans through his political connections to Rick Perry. Kimbrough first met Perry through his work with George Bush Sr. and the Republican Party. He first worked for Perry in 2001 and again in 2003-2005. In those years he helped restructure the states drug task forces and spearheaded a homeland security task force. He also spent time in the mid 2000s working in the Attorney Generals office. In 2007, Perry picked Kimbrough to be the conservator of the Texas Youth Commission, following a controversy involving sexual and physical abuse in youth prisons. Next Kimbrough was picked to serve as Deputy Chancellor and General Counsel at the Texas A&M University System. Finally and most recently, Kimbrough has been working in the governors office Being at Perrys beck and call whenever an agency needed help overcoming a controversy opened Kimbrough up to praise but also to criticism. But above all, it has lead to large salaries for the self-made government tycoon. KIMBROUGHS POSITIONS Much of Kimbroughs Career Spent in Public Positions. According to the Dallas Morning News, Much of Jay Kimbrough's public career has been in crisis management at the service of Texas governors. He's won praise as an effective reformer, though his style has rubbed plenty of officials the wrong way. A look at his jobs: Texas Commission on Private Security, 1997-2000 As executive director, he solved major fiscal mismanagement and implemented criminal background checks for thousands of security guards. Texas Commission on Alcohol and Drug Abuse, 2000-01 After he was appointed conservator by Gov. George W. Bush, Mr. Kimbrough resolved the agency's $20 million debt. Gov. Rick Perry's office, 2001; 2003-05 He restructured the state's mismanaged drug task forces and helped spearhead a homeland security task force following Sept. 11, 2001. Attorney general's office, 2002-03; 2005-06 As a deputy attorney general, he started programs to target online sex predators and dramatically expanded the Medicaid fraud unit. Texas Youth Commission, 2007 Link Strategies LLC Confidential Document 260

After Mr. Perry appointed him conservator, Mr. Kimbrough rehabilitated an agency suffering widespread sexual and physical abuse in youth prisons. Texas A&M University, 2006-present Shortly after arriving as deputy chancellor, Mr. Kimbrough helped smooth over a biodefense safety scandal in which researchers failed to report lab accidents to the Centers for Disease Control and Prevention. [Dallas Morning News, 11/24/07] Kimbrough was Promoted from Senior Advisor to Deputy Chief of Staff for Perry. According to the Austin American-Statesman, In promoting Delisi on Tuesday, Perry named Jay Kimbrough, 56, to become deputy chief of staff. Kimbrough, a lawyer and former Bee County judge, has served as a senior adviser to Perry and previously was the state's homeland security director and director of criminal justice programs in the governor's office. [Austin American-Statesman, 9/8/04] Kimbrough Named as Perry Chief of Staff. According to the Office of the Governor, Gov. Rick Perry today named Jay Kimbrough, deputy chancellor and general counsel of Texas A&M University System, as chief of staff. I am excited that Jay is returning to my staff. He is a man of integrity with a proven track record and my complete trust, Perry said. Jay is a decorated combat veteran, a man of action and sound judgment, and will help lead us through the upcoming session. [Office of the Governor, 10/16/08] Kimbrough Worked with Many Agencies to Overhaul Programs and Mend Controversies. According to the Dallas Morning News, Mr. Kimbrough has overhauled drug task forces, targeted sexual predators and fought corruption at the Texas Commission on Private Security and the Texas Commission on Alcohol and Drug Abuse. In his most recent roles, he oversaw the TYC as conservator after reports of widespread abuse in the agency, and he has taken charge of A&M's biodefense crisis as deputy chancellor of the university system. [Dallas Morning News, 11/24/07] Kimbrough Jumped Back and Forth Between Posts with Perry and Attorney General. According to the Dallas Morning News, By 2001, Mr. Perry had made Mr. Kimbrough his criminal justice adviser, and later, his deputy chief of staff. For the five years following Sept. 11, Mr. Kimbrough jumped back and forth between top posts with Mr. Perry and Attorney General Greg Abbott, as the state's go-to man for every law enforcement and homeland security crisis. [Dallas Morning News, 11/24/07] Kimbrough Worked as an Attorney, District Attorney and County Judge. According to Purple Hearts Austin, Since leaving the military service he has continued to add to an impressive career record. Listed here are most, but by no means all of the positions that he has held, in succession beginning in 1982. Attorney in Bee County. Assistant District Attorney for the 156th District of Texas. Bee County Judge. Executive Director, Texas Commission on Private Security. Executive Director, Texas Commission on Alcohol and Drug Abuse. Executive Director of the Governors Criminal Justice Division, Office of the Governor of Texas. Deputy Chief of Staff, Office of the Governor of Texas. Deputy Attorney General for Criminal Justice, Office of the Attorney General of Texas. Director, Office of Homeland Security, Office of the Governor of Texas. Link Strategies LLC Confidential Document 261

Deputy General Counsel, The Texas A&M University System. Conservator, Texas Youth Commission. Deputy Chancellor and General Counsel, The Texas A&M University System, and finally, Chief of Staff, Office of the Governor of Texas, which position he currently holds at this writing. [Purple Hearts Austin, Accessed 4/7/10] KIMBROUGHS TAXPAYER SALARIES In the last two years alone, Jay Kimbrough has made $735,213 working for the state in various capacities, all positions he acquired through his political connections to Rick Perry. Kimbrough Made $275,000 in 2008 Working for Texas A&M. According to information from the Archive.org,
WrkStn FullName LongTitleDesc LongAdlocDesc Salary

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Texas A&M DEPUTY University System CHANCELLOR AND CHANCELLOR'S Offices KIMBROUGH JAY T GENERAL COUNSEL OFFICE $275,000.00 [Arcive.org Texas A&M University Salaries Sep. 2008, Accessed 4/7/10, Downloaded 4/7/10]

17-Jul-06

Title Special Advisor To The Board Of Regents Agency Texas A&M System Department Board Of Regents - Direct Reports Gender Male Hire Date 08/01/2009 Salary $260,000 [Texas Tribune, Accessed 4/7/10] Title Deputy Director Agency State of Texas Department Office of The Governor Gender Hire Date Salary $179,412 [Texas Tribune, Accessed 4/7/10] Kimbrough made $20,801 in First Few Months in Perrys Office. According to the Houston Chronicle, 2008 State of Texas public employee salaries Name JAY KIMBROUGH Title DEPUTY DIRECTOR Department OFFICE OF THE GOVERNOR Base $20,801 Incentive Allowances Overtime Total $20,801 [Houston Chronicle, Accessed 4/7/10] Kimbrough Earned $260,00 as Special Advisor to Texas A&M System Regents, Made $300,000 as Deputy Chancellor of Texas A&M System. According to the Fort Worth Star-Telegram, Jay Link Strategies LLC Confidential Document 262

Kimbrough, an ex-chief of staff to Gov. Rick Perry, has been hired as a special adviser to Texas A&M System regents. The Eagle in Bryan-College Station reports that Kimbrough, 61, will earn $260,000 annually when he rejoins the university system. Kimbrough said he was hired to help foster and enhance the mission of the university. In 2006, Kimbrough was hired as deputy general counsel, eventually adding duties of deputy chancellor of the Texas A&M System for a $300,000 annual salary. Kimbrough was selected in October by Perry to lead his staff, going into the 2009 legislative session. The lawyer left Perry s staff in July. In 2007, Perry named Kimbrough as conservator of the Texas Youth Commission. Kimbrough is also a former executive director of the Texas Commission on Alcohol and Drug Abuse. [Fort Worth Star-Telegram, 9/1/09] KIMBROUGH APPOINTED BY PERRY MULTIPLE TIMES Perry Named Jay Kimbrough, a Former Aide, to Special Master to Oversee Investigation of the TYC. According to the Houston Chronicle, Under pressure from the Legislature to put the troubled Texas Youth Commission into conservatorship, Gov. Rick Perry on Friday instead named one of his aides as a special master to oversee an investigation of the agency Perry named his former Deputy Chief of Staff Jay Kimbrough, who has had his own controversial past, as the special master to head an investigation into whether TYC administrators covered up allegations that staff members had sexually abused youthful offenders incarcerated in agency facilities. [Houston Chronicle, 3/3/07] House Committee Looked into Perrys Authority to Appoint a Special Master for the TYC. According to the Associated Press, A House committee looking into allegations of rampant abuse in youth prisons asked the attorney general's office on Monday to determine whether Gov. Rick Perry had the authority to appoint a special master for the Texas Youth Commission. Lawmakers wanted Perry to appoint a conservator to overhaul the troubled agency, which incarcerates the state's most dangerous, incorrigible or chronic juvenile offenders. Instead, he appointed special master Jay Kimbrough to investigate the problems and directed the commission's six-person board to hire acting executive director Ed Owens to restructure the agency. The problem, according to some members of the House corrections committee, is that a conservator's powers and duties are outlined in state law and a special master's aren't. [AP, 3/20/07] Perry Said Kimbrough Was Doing a Good Job Investigating Reported Abuses. According to the Associated Press, On the juvenile sex abuse allegations, Perry said he believes TYC special master Jay Kimbrough is doing a good job investigating reported abuses. He also repeatedly urged the Legislature to work with his office to pass laws to prevent something similar happening again. Jay Kimbrough is getting the changes made at TYC. I am absolutely satisfied in his progress and hope the Legislature will continue to work with us to put safeguards into place and not spend any more legislative time standing in a circle, pointing to the left and saying, Its his fault. Perry said. [AP, 3/24/07] House Committee Approved Legislation to Demand News, Outside Management for TYC. According to the Austin American-Statesman, In a direct challenge to Gov. Rick Perry, a House committee approved legislation Monday demanding new, outside management to rehabilitate the scandal-wracked Texas Youth Commission. Perry last month named Jay Kimbrough special master to oversee investigations into the scandal and chose veteran prison official Ed Owens as acting executive director. But key senators had voted for a conservator instead, and on Monday, the House Corrections Committee joined that chorus. [Austin American-Statesman, 3/27/07] Kimbrough Was Promoted from Special Master to Conservator. According to the Associated Press, State officials reached a major compromise aimed at fixing the troubled juvenile prison system on Wednesday, putting the agency into a conservatorship for now and allowing a single executive to take it over later. The plan would involve permanently abolishing Texas Youth Commission's board and replacing it with a juvenile prison czar. A much less powerful advisory council would be established as well. Jay Kimbrough has been promoted from special master to conservator, Gov. Rick Perry said. He Link Strategies LLC Confidential Document 263

will serve until the end of the legislative session in May, when officials hope to find a new conservator who eventually will become the agency's new chief. [AP, 3/28/07] Lawmakers Had Protested Perrys Decision to Appoint a Special Master Instead of Conservator. According to the Associated Press, Lawmakers had loudly protested Perry's decision to appoint a special master because that position is not defined in state law. They said that could leave the state vulnerable to arguments by defense attorneys representing clients charged under evidence Kimbrough unearthed. State law, however, gives conservators a wide range of powers, including the authority to hire and fire employees for any reason. Kimbrough said he plans to immediately fire the 111 TYC employees with felony convictions on their records. He said he also will make the superintendents of TYC facilities and other top officials reapply for their jobs The fact of the matter is it's time now to put a conservator in, Perry said when asked why he changed his mind. This is the right thing to do at the right time. [AP, 3/28/07]

Perry Appointed Ed Owens as News Conservator of the TYC. According to US States News, Gov. Rick Perry today appointed Ed Owens as Conservator of the Texas Youth Commission (TYC). Owens, a lifelong criminal justice professional with more than three decades of experience, has served as TYC Acting Executive Director since March and authored a long-term rehabilitation plan for the agency. As Acting Executive Director, Ed Owens has been an essential leader in the transformation and rehabilitation of the youth commission, Perry said. There is no one more dedicated or more capable of rebuilding this troubled agency from the ground up and implementing the reforms passed by the legislature. Owens replaces Jay Kimbrough, who led a sweeping investigation that rapidly restored order to the agency since his appointment by Perry earlier this year. Kimbrough pledged to serve as conservator through the recently concluded legislative session, and the governor accepted his resignation effective yesterday. He was recently named deputy chancellor of the Texas A&M University System. [US States News, 6/8/07] Former TYC Conservator Returned to Governors Office as Chief of Staff. According to the Dallas Morning News, Former Texas Youth Commission conservator Jay Kimbrough, a longtime adviser to Gov. Rick Perry, will return to the governor's office to serve as chief of staff. It's a sign that Mr. Perry, who faces a likely gubernatorial run against Sen. Kay Bailey Hutchison in 2010, is turning on the heat in advance of the upcoming legislative session. He is a man of integrity with a proven track record and my complete trust, Mr. Perry said in a statement. Jay is a decorated combat veteran, a man of action and sound judgment, and will help lead us through the upcoming session. [Dallas Morning News, 10/17/08] Kimbrough was Perrys Point-Man for Almost Every Crisis. According to the Texas Tribune, Jay Kimbrough has been Gov. Rick Perry's policy point-man for almost every crisis through two Republican administrations. Over the last two decades, he has overhauled drug task forces, targeted sexual predators and fought corruption at the Texas Commission on Private Security and the Texas Commission on Alcohol and Drug Abuse. Most recently, he oversaw the Texas Youth Commission following reports of widespread abuse in the agency, and took charge of Texas A&M University's safety problems in biodefense labs. Kimbrough, a Dallas native who survived near fatal injuries during the Vietnam War, grew up a self-described Kennedy Democrat. He eventually switched parties, organizing Texas events for former President George H.W. Bush. By 2001, he was Gov. Rick Perry's criminal justice adviser, and later, his deputy chief of staff. For the next five years, he led most of the state's law enforcement and homeland security crises. Kimbrough made headlines in 2003 after he was captured on video in the Capitol command center helping to track down House Democrats who fled the state to prevent a vote on Republican redistricting. Kimbrough is now general counsel for the Texas A&M University System. He is married and has two adult children. [Texas Tribune, Accessed 4/7/10] PERSONAL Kimbrough Signed up to Serve in the Military Following Kennedys Assassination. According to the Dallas Morning News, Mr. Kimbrough says his life changed on Nov. 22, 1963, as he sat in Link Strategies LLC Confidential Document 264

sophomore study hall at South Oak Cliff High School, dreaming of the night's city championship football game against Woodrow Wilson and listening to radio coverage of John F. Kennedy's motorcade in Dallas. Almost as soon as those shots were fired, said Mr. Kimbrough, who idolized the young president, I knew everything was going to be different. He was determined to serve his country in Kennedy's honor. He graduated early, then headed down to the military recruiting office on Commerce Street, demanding to know which branch could get him to Vietnam first. [Dallas Morning News, 11/24/07] Kimbrough was Injured in Vietnam, Received Purple Heart. According to the Dallas Morning News, As an 18-year-old Marine, he shipped out in the summer of 1966, thinking the war would be over by Christmas. Within days he was deep in the gnarled and jungle-hot bush, a machine gunner trained to search and destroy. On May 10, 1967, as Mr. Kimbrough and others scrambled to relieve another unit hit hard by fighting, their helicopter was taken down by enemy fire. He and a Navy medic jumped before the helicopter crashed. Lying in a rice paddy in enemy territory, Mr. Kimbrough felt bullets pierce his gut. For the next four hours, he waited bleeding, unable to feel his legs, with the medic lying on him for cover for the North Vietnamese soldiers to close in and execute them. I wasn't about to die, Mr. Kimbrough says, his throat tightening. I was already dead. His platoon sergeant and four others rushed Mr. Kimbrough back to the landing zone, dropping him every time they dodged bullets and returned fire. He ended up with a Purple Heart and a bed in a Corpus Christi military hospital; and it took nine months of rehabilitation to overcome spinal cord damage and regain the strength to walk. [Dallas Morning News, 11/24/07] Kimbrough was Still Affected by Vietnam. According to the Dallas Morning News, Four decades after the helicopter he was riding in was shot down, Mr. Kimbrough's lower lip still trembles when he speaks about Vietnam his first and last trip outside the United States and MASH is the only on-screen war he can stomach. He hasn't gone on vacation since 1979 or been in an airport since Sept. 11. And he spends his weekends checking obituaries and driving to military funerals of soldiers he never met, often becoming so choked up he must turn and ride away. [Dallas Morning News, 11/24/07] Kimbrough Worked his Way up to County Attorney and Made an Unsuccessful Bid for Congress. According to the Dallas Morning News, During the 1970s, he finished college at Southern Methodist University, earned a law degree from Houston's South Texas College of Law and married his sweetheart, Ann. He later had a high-profile legal career in Bee County, working his way from the Navy's Judge Advocate General's Corps to assistant county attorney, county attorney and county judge, and making an unsuccessful bid for Congress in 1992. [Dallas Morning News, 11/24/07] Kimbrough Switched for Democrat to Republican, Organized Events for Bush Sr. According to the Dallas Morning News, And despite his years as a Kennedy Democrat, he eventually switched political parties, organizing Texas events for the elder George Bush and earning an invitation to the White House. It was through his work with the Republican Party that he first met Mr. Perry. From the get-go, the future governor was impressed with Mr. Kimbrough's hard-charging style. [Dallas Morning News, 11/24/07] Kimbrough Helped Track Down House Democrats who Fled to Prevent a Vote on Redistricting. According to the Dallas Morning News, He soon landed in his most significant political dust-up, one that follows him to this day. In 2003, Mr. Kimbrough was repeatedly captured on video in a Capitol command center helping to track down House Democrats who fled the state to prevent a vote on a Republican plan to redraw the state's congressional districts. For Mr. Kimbrough, it was absolutely not a partisan thing a pretty dang simple request from the speaker's office to see if there was a way to enforce the rules of the House. Democrats saw it as an abuse of power and an insult to elected officials. Many hold a grudge. [Dallas Morning News, 11/24/07]

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TexasOne Charity and Rick Perry


TexasOne is the Major Source of Economic Development Marketing Funds for the State of Texas. According to the TexasOne website, TexasOne is the major source of economic development marketing funds for the State of Texas. Through its fundraising efforts and member participation, TexasOne has directly enabled strategic economic development outreach at the state level and we are making a difference. The unique marketing approach made possible by TexasOne has championed the state's record-breaking economic development initiatives and created a surge of national and international awareness of Texas as a business friendly state. The successes are a direct result of the contributions, input and vision of TexasOne members. Together, we have created a successful public-private partnership. [Texasone.us, Accessed 4/12/10, link] Since 2004, TexasOne Directly Associated with More Than 28,000 New Jobs and $10.2 Billion in Capital Investment. According to the TexasOne website, TexasOne missions and events are directly associated with more than 28,000 new jobs and $10.2 billion in capital investment since 2004. [Texasone.us, Accessed 4/12/10, link] 2008: The Business Recruitment Missions for TexasOne were in Los Angeles, New York, Brazil/Argentina, Canada, and Spain. [Texasone.us, Accessed 4/12/10, link] TexasOne Contact Information is for Jennifer Lustina at the JHL Company. [Texasone.us, Accessed 4/12/10, link]

Jennifer Lustina is the Former Campaign Manager for Senator John Cornyn. According to Texans for Public Justice, Overall, Cornyns federal senate campaign paid for 59 percent of the $125,368 in common expenditures. The joint payments that Cornyn campaign manager Jennifer Lustina received on four occasions totaled $17,639, with the federal campaign paying 73 percent. In contrast, the state campaign covered 76 percent of the $14,324 in postal payments that the two campaigns made on November 20, 2001. [Texans for Public Justice, 5/08/02, link] Rick Perry has Accepted $750 from JHL Company Employees, Including $500 from Jennifer Lustina. [Texas Ethics Commission, link]
Dt ae A on mu t Ls at 2 -Jun-0 3 9 $ 5 .0 H 2 0 0 oneyc utt 3 -Jun-0 0 9 $ 0 .0 L 5 0 0 ustina Fs ir t L uren a Jennifer Cy it Austin Austin Sa e tt T X T X Z ip 773 80 779 85 E p yr m lo e JH C pa L om ny JH C L onsulting L C L O c p tio cu a n Ac ount Ma g c na er C onsulting

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JHL Company was Paid $219,914 by the Texas Economic Development Corporation (TEDC) for Fundraising Also the Only Independent Contractor Hired by TEDC. [Guidestar 990 forms, Filed for 2005 Calendar Year beginning September 1, 2005 and ending August 31, 2006, link]

The Same Day Perry Named Phil Wilson Texas Secretary of State, Wilson Received an $80,000 Check from TexasOne, the Nonprofit He Managed as the Governors Deputy Chief of Staff. According to a story written by the Dallas Morning News, posted on the Texans for Public Justice website, On the same June day Gov. Rick Perry named him Texas secretary of state, Phil Wilson received an $80,000 check from TexasOne - the nonprofit economic development organization that he managed as the governor's deputy chief of staff. [Texans for Public Justice, 8/12/07, link] Voting Members of the TexasOne Board Wrote Wilson the $80,000 Check to Recognize the Work He Did for the Organization. According to a story written by the Dallas Morning News, posted on the Texans for Public Justice website, Mr. Wilson, 39, who is credited with closing deals on some of the state's biggest economic development projects, as well as shepherding the TexasOne program through its first few years, said the voting members of the organization's board wrote him the $80,000 check to recognize the work I've done for the organization. It was an opportunity to say, Phil Wilson, job well done, said Robert Wingo, president of TexasOne's board. We felt like, What's wrong with rewarding people for doing a great job? [Texans for Public Justice, 8/12/07, link]

The TexasOne Groups Funding Comes from Memberships Purchased by Businesses and Local Governments and Does Not Include Taxpayer Money. According to a story written by the Dallas Morning News, posted on the Texans for Public Justice website, The group's funding comes from memberships purchased by businesses and local governments and does not include taxpayer money. [Texans for Public Justice, 8/12/07, link] TexasOne is a Program of the Texas Economic Development Corporation, a Non-Profit Corporation Managed by a Board of Directors Appointed by Governor Rick Perry. According to the Disclaimer on the bottom of the TexasOne Membership Packet, TexasOne is a program of the Texas Economic Development Corporation, a non-profit, non-partisan, tax Link Strategies LLC Confidential Document 267

exempt, 501(c) (3) corporation managed by a statewide board of directors appointed by Governor Perry. [TexasOne.us, Accessed 4/12/10, link] TexasOne Partners are Kept Informed Through the TexasOne website, a Bi-Monthly Newsletter, and Quarterly Board Meetings. According to the TexasOne website, TexasOne partners are kept informed through the TexasOne website, a bi-monthly newsletter and are invited to quarterly board meetings. [Texasone.us, Accessed 4/12/10, link] Tier One Members of TexasOne are Given a Seat on the TexasOne Economic Development Partnership Council that Recomends the Implementaion and Focus of TexasOne. According to the TexasOne website, Tier One members are given a seat on the TexasOne Economic Development Partnership Council an advisory committee that meets bi-annually and provides recommendations on the implementation and the focus of TexasOne. Additional opportunities by member level are outlined on the Membership Commitment Form. [Texasone.us, Accessed 4/12/10, link] TexasOnes Spending Includes Recruiting Trips at Luxury Resorts and Hot-Ticket Sporting Events. According to a story written by the Dallas Morning News, posted on the Texans for Public Justice website, There's no prohibition on padding salaries with supplements, and the practice is common during campaign season, when state officials' staffers often get bonuses for their work outside the office. But critics of the economic development organization's spending, which also include recruiting trips at luxury resorts and hot-ticket sporting events, say it's another sign that TexasOne is being used as petty cash for the governor's office. [Texans for Public Justice, 8/12/07, link] Craig McDonald of Texans for Public Justice Said TexasOne is Functioning as a Slush Fund to Reward Staff. According to a story written by the Dallas Morning News, posted on the Texans for Public Justice website, It looks like this fund is functioning as a slush fund to reward staff, said Craig McDonald, director of Texans for Public Justice, which tracks the influence of money in state politics. It's just another pot for the governor to play with. [Texans for Public Justice, 8/12/07, link] August 2005: Rick Perry Announced That He was Launching the Governors Economic Development Partnership Council, Which was Made Up of Tier One TexasOne Members and Led by S.O.S Roger Williams. According to prepared remarks, Rick Perry said, That is why we are launching the Governors Economic Development Partnership Council, which will be made up of our Tier One members and led by someone with a tremendous amount of experience in closing deals, one of Texas most powerful salesmen and spokesmen, Secretary of State Roger Williams. [Governor.State.TX.US, 8/07/05, link] MANAGEMENT OF TEXASONE TexasOne is Managed by a Seven Member Board Comprised of: [Texasone.us, Accessed 4/12/10, link] 1. Nicholas Serafy, Jr., President Proficiency Testing Services Brownsville, Texas 2. Bob Wingo, Former Board President Sanders/Wingo El Paso, Texas 3. Tracye McDaniel, Vice President Greater Houston Partnership Houston, Texas Link Strategies LLC Confidential Document 268

4. Scott Johnson, Secretary/Treasurer Wheelhouse Ventures Frisco, Texas 5. Paul Foster Western Refining El Paso, Texas 6. Kerry Hall Texas Capital Bank Austin, Texas 7. David Cabrales Locke Lord Bissell & Liddell Dallas, Texas Ex-Officio Members 1. Esperanza "Hope" Andrade Texas Secretary of State 2. Aaron Demerson Executive Director Office of the Governor Economic Development & Tourism 3. Ray Sullivan Chief of Staff Office of the Governor MEMBERS OF TEXASONE Tier One Members of TexasOne, Who Pay $50,000 Annually for Three Years, Includes: The Associated General Contractors of Texas The Central Texas Business Initiative Opportunity Austin Hewlett-Packard (HP) Novartis Verizon At&T CenterPoint Energy ExxonMobil Opportunity Houston, Greater Houston Partnership McLane Shell Capital One Bank Contran Corporation [Texasone.us, Accessed 4/12/10, link] Tier Two Members of TexasOne, Who Pay $25,000 Annually for Three Years, Includes: BNSF Railway CPS Energy Link Strategies LLC Confidential Document 269

Lockheed Martin Frisco Economic Development Corporation Team Texas ONCOR City of Sugarland Western Refining Williams Brother Construction Company Inc. Brownsville Economic Development Council Temple, Texas Economic Development Corporation McKinney MEDC [Texasone.us, Accessed 4/12/10, link] Tier Three Members of TexasOne, Who Pay $10,000 Annually for Three Years, Includes: Allen Economic Development Corporation Altria Client Services American Electric Power Cedar Hill Economic Development Corporation Citi City of Schertz Economic Development Corporation El Paso Regional Economic Development Corporation El Paso Electric Greater Dallas Chamber of Commerce Greater Waco Chamber of Commerce Mansfield Economic Development Corporation McGinnis, Lochridge & Kilgore, L.L.P. Odessa Economic Development Corporation Pearland Economic Development Corporation Pflugerville Community Development Corporation Plano Economic Development Board Proficiency Testing Services Ryan & Company The Research Valley Partnership Uranium Energy Corporation Zachry Group, Inc. [Texasone.us, Accessed 4/12/10, link] Tier Four Members of TexasOne, Who Pay $5,000 Annually for Three Years, Includes: Amarillo Economic Development Corporation Corpus Christi Regional Economic Development Corporation Economic Development Partnership of Central Texas Entergy Gardere Wynne Sewell LLP Irving Economic Development Corporation LCRA Lubbock Economic Development Alliance, Inc. McCombs Foundation Port of Brownsville Port of Corpus Christi Richardson Economic Development Partnership Link Strategies LLC Confidential Document 270

Schulte Building Systems, Inc. Tejon Exploration Company Texas Automobile Dealers Association Texas Capital Bank Texas City Economic Development Corporation Texas Engineering Extension Service (TED) Texas Motor Transportation Association Union Pacific Wichita Falls Chamber of Commerce and Industry [Texasone.us, Accessed 4/12/10, link] Tier Five Members of TexasOne, Who Pay $1,000 Annually for Three Years, Includes: Abilene Industrial Foundation Abilene - Senter Realtors Allen Boone Humphries Robinson, LLP Athens Economic Development Corporation Atlanta Economic Development Corporation Balch Springs Economic Development Corporation Bay Area Houston Economic Partnership Beaumont Economic Development Foundation Beirne, Maynard & Parsons, LLP Belton Economic Development Corporation Bridgeport Economic Development Corporation Brooks Development Authority Brown Distributing Company Bowie Economic Development Corporation Buda Economic Development Corporation Calhoun County Economic Development Corporation Celina Economic Development Corporation City of Arlington Office of Economic Development City of Burleson City of Cedar Park City of Cibolo City of Dallas City of Farmers Branch City of Gonzales City of Live Oak - Economic Development Corporation City of Lufkin City of Rowlett City of San Angelo Development Corporation City of Waco Commerce Economic Development Corporation Community Development Associates, LLC Craig Wallace Construction Denison Development Alliance Denton Economic Development Partnership DeSoto Economic Development Corporation Development Corporation of Snyder, Inc. Dumas Economic Development Corporation Dunbar Harder, PLLC Link Strategies LLC Confidential Document 271

Fort Worth Chamber of Commerce Foster Quan, LLP Greater Fort Bend Economic Development Council Greater Killeen Chamber of Commerce Greenville Board of Development GrowOne San Marcos Guadalupe Valley Electric Cooperative Harlingen Economic Development Corporation Harrison, Walker, Harper - We Build Houston East End Chamber of Commerce Jacksboro Economic Development Corporation Jackson Walker L.L.P. Jumburrito Franchises, LLC Karin Richmond & Associates, Inc. Kaufman Economic Development