News Asserts Gov. Perry Misused Tech Fund

Governor Perry

Dallas Morning News Asserts Governor Perry Misused Tech Fund Awards


The Emerging Technology Fund, a key component of Governor Perry’s economic development program, is a recent target of investigation by The Dallas Morning News, who asserts that $16 million has been awarded to companies that are significant donors to the governor’s campaign for re-election.  Hailed as an important investment in the future of Texas, the ETF fund directs taxpayer dollars toward promising high-tech startups.

The governor’s office administers the tech fund, and the governor must approve each award – a system that most other states with tech funds avoid to guard against political influence.

Gov. Perry denies letting politics influence his decisions in awarding the tech fund, telling The Dallas Morning News in an interview that he usually does not know if his campaign supporters have financial interests in the companies that receive tech fund money.  He stated…

“From time to time, I may know someone who has an interest in a project.  That is a pretty rare occurrence.”

However, Perry spokeswoman Katherine Cesinger said in an email that applicants for technology funding must provide full financial disclosure to the governor’s staff, including the names of investors.

The governor said he does not look at these disclosures when deciding whether to approve an award. He added…

“Whether they contribute to my campaign or not has nothing to do with whether or not the project is appropriate [for funding].”

Mark Ellison, a former director of the tech fund, called the involvement of Perry’s contributors incidental. “Decisions were based on the quality of the deal, the market and character of the people running the company or the project,” he said.


The Texas Legislature set up the Emerging Technology Fund in 2005 to bring business and jobs to the Lone Star State.  A statewide advisory committee of 17 members, appointed by the governor, must decide whether to recommend a company for ETF money, and the governor must approve each award – a system that most other states with tech funds avoid to guard against political influence.  It begs the question of why a system so prone to abuses would be implemented in such a way to begin with.

“The tech fund has the same disclosure weaknesses as many other government programs that try to mirror the private sector,” said James Nolen, a distinguished senior lecturer at the University of Texas at Austin business school.  “Transparency, accountability, measurement: that is what most of these programs lack,” said Nolen. “They don’t want transparency. People might figure out what is going on.”


These allegations mark an aggressive push by the Democrat Governor’s Association this month in preparation of a new schedule of Rick Perry attack ads.  Conservative blogs and news media networks argue that a lack of evidence of any impropriety in this matter suggests a ploy by the Bill White opposition to cast aspersions on the incumbent governor.  Reportedly, only 8 out of 120 recipients of the tech fund were found to have made a donation to Perry.  In a blog from Redstate, one blogger writes…

“All we know now is an investigative reporter has found that some Perry contributors got money from the fund for businesses they are associated with. It is a handful of people that we know about so far. So what, I say. It’s Texas. Texas is a red state. Many of the heavy hitters in Texas donate to Perry. The Morning News seems to find this shocking. Where’s the common sense? Stifled by an agenda?”  (Redstate/texasgalt)

The Dallas Morning News found that tech fund money has been awarded to companies with which at least eight significant Perry donors are affiliated.  Among them:

•$2.75 million to Terrabon Inc., a Houston company. Its backers have included Phil Adams, a college friend of Perry’s who has given his campaign at least $314,000.

•$1.75 million to Gradalis Inc., a Carrollton firm. Among its investors has been Dr. James R. Leininger, who has contributed more than $264,000 to Perry’s campaigns.

•$1.5 million to ThromboVision Inc., a Houston company. One of its investors was Charles W. Tate, who has donated more than $424,000 to Perry.

•$4.5 million to Convergen Lifesciences Inc. of Austin. The company was founded by David G. Nance, a former Perry appointee who has given the governor $80,000.

•$2 million to Seno Medical Instruments Inc. of San Antonio. Its investors have included Southwest Business Corp. and its subsidiaries, whose chairman, Charles Amato, gave Perry more than $32,000.

•$975,000 to Carbon Nanotechnologies Inc. of Houston. At the time of the award, one investor was William A. McMinn, who has contributed $152,000 to Perry.

–       The Dallas Morning News, October 3, 2010



The Dallas Morning News: Perry’s Tech Fund Aided Firms With Ties to his donors, by James Drew, Steve McGonigle, and Ryan McNeill (08/03/2010)

Redstate: Fast and Loose With a Month to Go.  The Dallas Morning News Goes After Rick Perry, blog post by texasgalt (10/04/2010)

Dallas Observer Blogs: Democratic Governors Association is Betting Plenty on Bill White to Take Texas, by Robert Wilonsky (09/28/2010)

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