City Slickers
How the state’s most influential conservative think tank works to undermine our local control
By Mary Tuma, Fri., Oct. 12, 2018
Two blocks from the Capitol, in a pristine auditorium on Congress Avenue, attorney/activist Fred Lewis, District 8 City Council candidate Bobby Levinski, and Art Martinez de Vara of the Texas Local Government Center debated Proposition K, the November ballot measure that calls for a third-party efficiency audit of the city. Chuck DeVore of the Texas Public Policy Foundation, owners of the $20 million building with its Rick Perry Liberty Balcony and its Red McCombs Event Center, led the conversation, held last Wednesday.
What was supposed to be an objective debate quickly devolved into a 3-1 attack on Prop K adversary Levinski, who in breathless refrain, persistently reminded the audience that the city is routinely and robustly audited and does not need to spend an additional $4 million on Prop K's proposed audit. City Auditor Corrie Stokes – who works directly for City Council and its Audit and Finance Committee – and her office perform annual audits of all departments on a rotating basis, to ensure efficiency, effectiveness, and equity.
Prop K defender Lewis – a progressive Democrat who has often worked in common cause with Levinski on land-use issues – countered that the city "can do better" when it comes to budgetary spending, and insisted outside "expertise" would serve to improve city staff processes. DeVore, a former California GOP legislator and failed U.S. Senate candidate, added soliloquies about the many benefits of a city audit – especially potential staff layoffs and tax cuts.
On its face, Prop K appears to be a commonsense transparency and accountability measure. Who doesn't want their government checked up on? But critics say it's another way for TPPF and its Republican backers, hellbent on undermining Austin's local control, to try to roll back or privatize city services. The think tank has attacked a slew of Austin policies, including the city's short-term rental and ridesharing regulations, single-use bag ban, the upcoming $250 million affordable housing bond, and paid sick leave, giving critics plenty of reasons to believe the seemingly innocuous proposal is a Trojan horse.
A Tangled Web
The TPPF was established in 1989 by San Antonio's James R. Leininger, a wealthy and prolific donor to conservative candidates and causes, a Christian activist, and a school voucher champion. Its professed mission is "to promote and defend liberty, personal responsibility, and free enterprise in Texas and the nation," and it describes itself as nonpartisan. In reality, the staunchly conservative group is beholden to a powerful cluster of funders and corporations that benefit from weak government regulation and privatization, including oil and gas, telecommunications, and private prison companies.
As a 501(c)(3) nonprofit, TPPF isn't technically required to disclose all of its donors. However, watchdogs and a 2012 tax document, reported in the Texas Observer, revealed TPPF's financial links to the right-wing libertarian Koch brothers. A November 2013 report by Progress Texas and the Center for Media and Democracy showed TPPF received at least $3,314,591 from the Koch network of organizations, which favors low taxes, less government oversight, and scant services for the poor. They've helped bankroll the American Legislative Exchange Council, a conservative corporate bill mill, and its policy and legal arm the State Policy Network.
While TPPF continues to insist it isn't directly backing Prop K, ample evidence shows its ties to the initiative. The pro-Prop K political action committee Citizens for an Accountable Austin is headed by Michael Searle, former aide to District 8 Council Member Ellen Troxclair, a favorite of TPPF and a leader of ALEC's local-government affiliate, which aims to find partners who will "privatize historically municipal services."
Searle may be in hot water over his PAC, which has been financed by a single source, the nonprofit Austin Civic Fund (also headed by Searle) doling out some $137,000 to the effort. Who donated that money to the Civic Fund? Searle has shielded the identities of its donors in possible defiance of a 2016 "dark money" city ordinance and told the Chronicle, "We operate in compliance with all laws, and do not disclose private donors to our fund." Last month, the city's Ethics Commission decided to punt any action on the alleged violation to Nov. 14.
Other players in the Prop K push have similar ties. Chris Covo, a listed agent for the Civic Fund, is a former director of Young Americans for Prosperity, the youth branch of the main Koch advocacy group, which fights against unions and raising the minimum wage and for government privatization. He's a former Texas State University student regent (appointed by Perry) and member of the city's Board of Adjustment (appointed by Troxclair). Both Covo and fellow Civic Fund director Kirk Golinghorst are employed by Professional Janitorial Services, whose CEO Don Dyer chairs TPPF's Texas Public Policy Action advocacy group. Another Civic Fund director, John Nantz, is represented by TPPF as a party in Texas Attorney General Ken Paxton's current lawsuit to overturn the Affordable Care Act.
Searle's PAC hired a Longview-based company, Vici Media, paying them $5,000 for advertising, according to a Sept. 28 campaign expenditure report. Vici's website – which boasts "We Kick" [image of Democratic donkey] – touts the firm's work for the Young Conservatives of Texas, anti-abortion groups, and far right-wing Republican politicians (such as Freedom Caucus member Rep. Tony Tinderholt) and against moderate Republicans (such as retiring Rep. Byron Cook). They've also given a hand to ATX4All, the pro-ridesharing group that sought to recall Council Member Ann Kitchen.
Meanwhile, TPPF itself filed an amicus brief with the Texas Supreme Court in August to support the failed effort to force Council to change the Prop K ballot language. "The proposed ordinance must be understood as a response to Austin's high taxes, high spending, and high debt load in return for questionable quality in city services," TPPF attorney Robert Henneke wrote. In its 2019-20 guide for legislators, TPPF's "local spending" recommendations advocate "Certain local governments should be made to undergo a private sector-led efficiency study." If Austin voters don't approve Prop K, according to TPPF's social media, the group has vowed to bring the issue to the Capitol.
A Wolf in Sheep's Clothing?
Seeing all this writing on the wall, the Travis County Democratic Party, AFSCME, Mayor Steve Adler, and political consultant David Butts have joined Levinski in the Prop K resistance, with an outspoken Butts calling it a move to "gut" and "attack" our city. For Prop K opponents at the Capitol such as Rep. Gina Hinojosa, the audit is a thinly veiled attempt to collect detailed and sensitive city data that TPPF and GOP legislators could use to make their anti-Austin cases. (The proposed city code amendment calls for "unfettered access" to all data and information from all city departments.)
"We don't need to give TPPF or the tea party any more ammunition to come after Austin," says Hinojosa, besieged by attacks on local control at the Capitol such as the perennial effort to privatize Austin Energy. "An outside group may come in and say we can privatize it and save this amount, but for Austinites, money and values go hand in hand. It's important we leave those decisions to local elected officials." TPPF has lobbied the Legislature to support outsourcing and divestiture of both state and local services, including stripping cities of their municipal utilities.
"It's ironic how [Citizens for an Accountable Austin] wants to shine a light on the way our city spends money but won't turn the light on its own propaganda funding," Hinojosa continued. "That's just fishy and makes me question their motives." She adds that third-party audits don't always align with the values of the community, pointing to the 2011 Austin ISD facilities master plan, conducted by Ohio-based consultants, and the resulting community uproar when the plan proposed school closures. "They weren't looking at equity, they were just looking at square footage and the cost of buildings, but policymakers have to consider a lot more than that," said Hinojosa, who was elected to the AISD board in the wake of the facilities crisis. "Prop K is another attempt to use an outside group that may not take our city values into account in their decision making."
As part of the petition drive that got Prop K on the ballot, Searle provided "government efficiency reviews" from New York firm Alvarez & Marsal that include "opportunities for the monetization of underutilized and abandoned" public land and facilities and "opportunities to outsource or privatize functions currently performed in-house." The firm, known for helping restructure Lehman Brothers and Arthur Andersen post-Enron, has faced criticism over its recommendations: In Kansas, it suggested a single, high-deductible health insurance plan for all state employees, greater use of inmate labor, and the full privatization of its Medicaid eligibility system. A contract with New Orleans ended with the layoffs of 7,000 teachers after Hurricane Katrina, later found to be improperly handled by a federal appeals court.
If Prop K is a right-wing wolf in sheep's clothing, why are some Austin liberals ready to be eaten alive? Lewis, who helped spearhead the Community Not Commodity coalition, genuinely appears to see the proposal as an objective attempt to streamline government. He pointed to his deep trust in PAC founder Searle, an "honest and honorable man," but admits he's rarely if ever agreed with TPPF on any issue; he opposes privatizing government and a statewide municipal audit mandate. "Ultimately, the progressive City Council has the final say in accepting the recommendations. I think it's a good thing for Austin to try," he said. "I hope I'm right. But hey, I've been wrong once or twice in my life."
Sick of Local Control
At a Texas Tribune Festival session the weekend before TPPF's panel, Henneke and conservative Rep. Paul Workman attacked Austin's paid sick leave ordinance – currently blocked by a temporary injunction sought by TPPF – and its author, City Council Member Greg Casar. To audience chuckles, Workman accused Casar of propping up a "national socialist agenda," while Henneke defended the legal effort to stifle a measure that could help 200,000 Austin residents, especially low-income and minority employees. After Workman announced that he plans to file legislation to overturn all such ordinances and limit how cities can regulate employers, Casar invited Workman to join him to meet constituents who could benefit from paid sick leave. Workman declined, saying in the end it wouldn't change his mind.
Paid sick leave is not TPPF's only Austin target; in 2016, the group was behind a lawsuit to overturn the city's short-term rental ordinance. When not suing the city, they're writing near-obsessive, zealous takedowns of Austin and other progressive Texas cities in their blog or on social media, giving fuel to the state's conservative legislators and leadership – despite Republicans' traditional championing of democratically elected local control.
To Casar, TPPF's constant attacks show the strength and threat posed to them by successful progressive movements in Austin and elsewhere. "TPPF will provide the cover to legislators and make sure right-wing interests get their way. That's what Workman showed in action," said Casar following his panel. "With enormous corporate funding, their baseline goal is making money and ensuring working conditions are not improved. They've conducted such a takeover of state government that at this point they're turning their attention to stamping out the progressive work at the city level."
While Austinites have the opportunity to stand up for those values when they vote on Prop K in November, the Lege session starting in January 2019 is not far away. TPPF has already announced its latest plans to cripple Austin and other municipalities. An 18-group "Conservative Texas Budget" coalition led by TPPF unveiled its legislative priorities at the Capitol in late September. These include abolishing the corporate franchise tax, put in place to cover prior property tax pandering by state government, and a revenue cap requiring voter approval for city property tax increases above 2.5% – a cap strongly opposed by many urban officials throughout Texas.
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