The National Reined Cow Horse Association, organizer of the Snaffle Bit Futurity, an annual cowboying contest in Fort Worth that carries $1.1 million in payouts, wanted some government help:
The group thought the contest and others it hosts might qualify for money from the state’s Major Events Reimbursement Program. Run out of Gov. Greg Abbott’s office, the program is meant to attract economic activity to Texas, and by the association’s reckoning, its Texas events have an economic impact of about $10 million.
To qualify for the state subsidy, however, the association needed lawmakers to add the organization to a select list that includes the National Football League, NASCAR, the Academy of Country Music, the Commission on Presidential Debates and Formula One.
To navigate the Capitol, officials with the association — headquartered in the small North Texas town of Pilot Point — needed some help. In early March, they signed Daniel Hodge, a former Abbott aide turned lobbyist, to a contract worth as much as $150,000, as they set about promoting House Bill 2402, which proposed adding the association to the catalog of qualifying groups for the state subsidy.
The association was one of more than two dozen clients Hodge, 41, represented during the legislative session. He earned as much as $3.7 million total this year, according to state lobbying records.
At one committee hearing, association Executive Director Jay Winborn told lawmakers, “We’re growing substantially in terms of popularity. We continue to trend upwards and continue to build on our western tradition.” At another hearing, Hodge registered in favor of the bill.
The Texas House and Senate overwhelmingly approved HB 2402, with opposition coming chiefly from the chambers’ most conservative Republicans. On June 14, Abbott signed the bill.
The new designation could be lucrative for the association: While a bill analysis by the state Legislative Budget Board found that the “specific fiscal impact to the state is unknown as the size and number of events that would become eligible and held in this state is unknown,” records of disbursements from the major events program show that several cutting horse events in Fort Worth have already qualified for taxpayer payouts worth $515,000 to $1.4 million in 2017 and 2018.
Winborn did not return a request for comment.
The bill’s author, Rep. Charlie Geren, R-Fort Worth, told the American-Statesman he filed the bill at the behest of his friend Dan Gattis, the former Republican state legislator who represented part of Williamson County and who, as president of Gattis Cattle Co., breeds horses for use in cattle operations, as well as for competition, show and sale.
“It was a pretty straightforward ask by Dan, just before the session, and it’s a good event for Fort Worth,” Geren told the Statesman. Geren said he couldn’t remember if he had met with Hodge about the bill.
Gattis did not return a request for comment.
There is no suggestion that anyone did anything unlawful: In many ways, the story of how the association won its potential subsidy is a conventional Capitol tale. But the story illuminates the thin membrane between public service and the lobby, and how someone like Hodge can, within a couple of years of hanging a shingle, become one of the highest-paid lobbyists in the state.
Longtime lobbyists say the transition is a natural one, using knowledge learned and relationships built in the public sector for effective advocacy outside it. Government watchdogs, on the other hand, have long pointed to the close link between the Legislature and those who peddle access to the government purse as an erosion of public trust.
In recent years, lawmakers have tried, with limited success, to expand restrictions on the well-worn and lucrative path from state government to lobbying.
Loyal adviser
Hodge, who is from Fort Worth, earned a bachelor’s degree in history from Davidson College in North Carolina and moved to Austin to attend law school at the University of Texas.
In 2001, he started working for the Abbott campaign for lieutenant governor sorting mail. (By the end of summer, prompted by a domino effect started by Phil Gramm’s retirement from the U.S. Senate, Abbott had switched targets, running instead for state attorney general.)
Hodge succeeded in another early task — collecting county Republican Party chair endorsements — and was soon asked to organize a variety of coalitions, such as Sheriffs for Abbott and Ranchers for Abbott. Working also as a travel aide and fundraiser for Abbott, he soon became indispensable.
Abbott was elected, and Hodge worked his way up to first assistant attorney general, managing operations under Abbott, and, after Abbott was elected governor in 2014, as his chief of staff.
This was a period of pitched partisan politics and a yawning ideological divide: As attorney general, Abbott once described his job as waking up each morning and figuring out a way to sue the Obama administration.
Among Abbott’s inner circle and through the halls of the Capitol, Hodge won a reputation as a straight shooter and as a shrewd, dependable adviser to the politician he served.
His proximity to power appears to have paid off.
In September 2017, having told the governor two years earlier that he intended to wind down his government work, Hodge stepped down from public service and started a lobbying business.
“I have been privileged to have Daniel Hodge by my side dating back to my tenure as attorney general, bringing excellence to the organizations in which he has served. I am truly grateful for his commitment and service to the state of Texas,” Abbott said at the time.
By October that year, Hodge had signed up as clients AT&T, insurance companies and an American Indian tribe, among others, earning as much as $300,000 for the final 2½ months of 2017, according to state lobbying records.
By this year’s legislative session, which ran from January to May, lobbying records show he was among the top compensated lobbyists in Texas. (Because lobbyists report their compensation in a range, he could have been paid as little as $2.35 million.)
In a sense, Hodge is emblematic of the go-to lobbyists at the Capitol: Nearly every one of them joined the lobby after stints in state government.
Lobbyist Rusty Kelley, who lists as much as $4.3 million in contracts, served as chief of staff to former Democratic House Speaker Billy Clayton and chief sergeant at arms in the Texas House. (Kelley’s business partner, Carol McGarah, lists many of the same clients and contract amounts among her clients.)
Many of the most prominent lobbyists were top aides to a lieutenant governor or worked on powerful finance committees. Some of them were lawmakers themselves.
Their connections are typically central to their pitch to prospective clients.
Lobbyist Logan Spence, whose contracts total as much as $2.3 million this year, lists on his firm’s website his posts dating to a 1999 internship with a state senator, as well as a stint as policy director in Gov. Rick Perry’s office and his work as campaign manager during Dan Patrick’s 2013 run for lieutenant governor and then as Patrick’s chief of staff.
“Logan’s broad experience in the Texas House, Texas Senate as well as the offices of Governor and Lt. Governor, give him a unique ability to advocate for his clients in Texas government,” says his bio.
In this way, Hodge is different: Known for his discretion, he does not have a website for his firm, DTH Strategies — which carries the initials of his name — nor does he put out news releases touting his work.
He declined comment for this story.
This year, his earnings included:
• As much as $250,000 for a contract with Academic Partnerships, a Texas-based company that markets and provides technical support for online academic programs offered by colleges and universities.
• As much as $150,000 representing AT&T.
• As much as $150,000 representing Silver Eagle Distributors, the nation’s largest distributor of Anheuser-Busch products.
• As much as $100,000 to represent the Lower Colorado River Authority as it faced a Sunset Commission review.
• As much as $250,000 representing the Chickasaw Nation, which operates casinos just north of the Texas-Oklahoma border.
It’s hard to know how successful Hodge was, but his clients appear satisfied — his list has been growing year over year.
Unlike some other firms, which might have high overhead and lots of assistants, Hodge has only a single associate, a former legislative director at the governor’s office who also is registered as a lobbyist.
“Over the years, we observed Daniel’s work in both the attorney general’s office and the governor’s office and were impressed,” LCRA spokesman Bill Lauderback said. “Daniel conducts himself in a highly professional manner, and we were pleased to have him assist us during the session.”
Overall, the river authority is spending as much as $660,000 on lobbyists in 2019, according to records reviewed by the Statesman.
‘Strong moral compass’
There are no lobbying limits at the Legislature. A lawmaker or legislative aide can work in the Texas Senate or House one day and as a lobbyist the next, but many executive branch agencies bar employees from immediately lobbying their former colleagues.
Abbott, for one, implemented a policy that employees who work in the governor’s office can’t lobby the office for a minimum of one year. And if at the end of that year there has not yet been a legislative session, the former employee must wait until the next session ends.
“Daniel is guided by a strong moral compass, and he adhered to the governor’s office ethics policy,” John Wittman, a spokesman for Abbott, told the Statesman. “Daniel was a close aide and trusted adviser to Gov. Abbott for over a decade, and his relationship with the governor and our office continues to thrive. Given the success he experienced during his time in the governor’s office, it’s no surprise he was able to translate that to the private sector.”
State law enshrines other executive branch limits: Former state employees and board members are barred from working for companies for two years with whom they worked on a state procurement contract.
Rules also bar some state employees from representing a person in particular matters in which they participated, such as an investigation, contract or rulemaking. State law also prohibits a state agency from entering into any contracts with a former or retired employee of that agency for one year after that employee’s departure.
For two years after a board member or executive head leaves a regulatory agency, he or she may not appear before or communicate with officers of the agency with the intent to influence the board. And state law restricts for four years a state agency from contracting with a former executive head of the agency.
But recent attempts at regulating state officials who lobby their former colleagues have been unsuccessful. In 2017, one such proposal led to a high-profile dispute between the legislative and executive branches.
Abbott called on lawmakers to pass ethics reform measures during the 2015 and 2017 sessions. In 2017, three ethics bills passed, and three others — including one that would have required former lawmakers to take a two-year “cooling off period” before joining the lobby — died in the House, where some members grumbled that the Abbott-backed reforms applied to the Legislature but not to his office.
Reps. Lyle Larson, R-San Antonio, and Sarah Davis, R-Houston, criticized Abbott for not asking the Legislature to address ethics during the 2017 special session and called on him to back a clutch of bills, including another attempt at instituting a two-year cooling off period for former lawmakers and statewide elected officials who want to lobby.
They also called for prohibiting governors from appointing major campaign donors to state boards and commissions and for banning political contributions to the legislative and executive branches during special sessions and 20-day veto periods. (Abbott had been sending out fundraising solicitations during the 2017 special session.)
Abbott, who as governor prescribes the policy areas for the Legislature to tackle during a special session, rejected adding ethics legislation to the agenda. Wittman called the lawmakers’ plea to the governor showboating.
The next year, Abbott endorsed GOP primary challengers to Larson and Davis, an almost unheard-of maneuver for a sitting governor of the same party, but both lawmakers won reelection.
In a move that some interpreted as a sign that ethics reform would not be a priority in the 2019 session, new House Speaker Dennis Bonnen, R-Lake Jackson, dropped “Ethics” from the title of the panel previously named the House General Investigating and Ethics Committee. Under Bonnen’s rules, most ethics bills were referred to the State Affairs Committee, where no significant proposals gained traction.
Corrosive effect?
Longtime lobbyists say the current system serves the public well.
“Texas has a strong lobby law, providing strict requirements of when and how to provide the public, and the governmental bodies with which they deal, with detailed info about their clients and issues,” said Jack Gullahorn, an attorney who founded the Professional Advocacy Association of Texas and who runs an ethics compliance practice.
“The public has cynicism about lobbyists and legislators, and together they think no good can come of that,” Gullahorn said, But, he said, “there’s nothing wrong with someone opening a practice after leaving state service if they’re providing a legitimate, ethical service using knowledge they have of the process and of the issues.”
“When I hear from folks who say, ‘I’d like to be a lobbyist,’ I suggest they go work at the Legislature for a few years and learn the process,” he said. “There’s nothing untoward about that, and in the long run, we’re well served by people who understand how government works on the inside while working from the outside.”
Andrew Wheat, research director of Texans for Public Justice, a group that tracks money and politics, has a different view: The revolving door has a corrosive effect, he said.
“There’s a biennial lobby mating ritual in which former public officials embrace corporate clients on a bed of cash,” Wheat said. “Watching these wanton displays through the revolving door’s glass walls drains public confidence in government. Viewing this Nature Channel show repeatedly fosters the impression that the money-and-power courtship dance begins long before public officials leave office.”
This year, Abbott was mostly silent on the issue of ethics reform.
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