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Opponents criticize Strayhorn over tax attorneys' contributions

Lisa Sandberg

In her quest to become the next governor, Texas Comptroller Carole Keeton Strayhorn has continued to accept, despite criticism, hundreds of thousands of dollars in campaign contributions from attorneys whose firms appear to have a stake in tax rulings made by her staff.

Campaign records indicate that over the past 18 months, the comptroller, the self-described "tough grandma" who is running for governor as an independent, has received roughly $788,000 from individuals working for firms that practice tax law.

All of which raises a thorny question: Should an elected officeholder who leads an agency charged with settling tax matters take money from people whose livelihoods may depend on agency rulings?

Good-government watchdog groups say no, and so did a state audit last year, which concluded that Strayhorn had accepted nearly $2 million in contributions over 51/2 years from donors who — within a year of their donations — benefited from tax reductions totaling $461 million.

The audit said it uncovered no evidence of wrongdoing on Strayhorn's part, but it urged legislators to prohibit the comptroller or candidates for that job from taking contributions from individuals with business before the office.

On Thursday, Strayhorn spokesman Mark Sanders issued a statement in response to questions about the ongoing contributions, saying critics of it are engaging in "a political witch hunt" without merit.

"There is no conflict and there is no wrongdoing, according to the auditor himself," the statement read.

It also said the majority of firms cited in the audit "today infrequently, if at all, practice before the comptroller's agency — most are large general practice firms and one is a plaintiff attorney."

Her opponents criticized the contributions.

Chris Bell, the Democratic candidate and a former congressman, whose office gave the San Antonio Express-News an initial survey of Strayhorn's contributors, said the donations reflected a "cash-and-carry system" that should concern all Texans.

"Folks who are looking for special favors from certain elected officials are willing to curry that favor through writing checks," Bell said. "This has got to change."

Passing campaign finance reforms that would bar these type of practices, he said, would rank among his highest priorities.

Laura Stromberg, a spokeswoman for gubernatorial candidate Kinky Friedman, who also is running as an independent, said: "This isn't about 'Grandma,' this is about following the money if you want to know how policy is determined in Texas."

Gov. Rick Perry's spokesman, Robert Black, accused Strayhorn of engaging in "dirty dealings" and said "the new information comes as no surprise" on the heels of last year's audit.

Watchdog groups criticized Strayhorn for engaging in the kind of questionable campaign practices that are the bedrock of Texas politics. Special interest money prevails throughout the system.

"The people who have a vested interest are more likely to curry favor by giving you a campaign contribution, and that's true if you're a judge or the comptroller or the speaker of the house or the governor," said Craig McDonald, executive director of Texans for Public Justice, a group that advocates campaign finance reform.

McDonald said a report by his group several years ago indicated that more than half the contributions received by the state's supreme court justices came from lawyers, law firms or litigants with pending appeals. Contributors were more likely than non-contributors to have a favorable outcome.

Rep. Kevin Bailey, D-Houston, who heads the House General Investigating and Ethics Committee, said he didn't expect to see legislation pass that would restrict who gives how much to whom. "It's a hard one because practically every contribution any of us gets comes from people who have business with us," Bailey said.

Years ago, California barred lobbyists from contributing to politicians they lobby. But California is pretty much the exception, said Steve Levin, project director at the Center for Governmental Studies in California.

Like Texas, most states have statutes prohibiting explicit agreements of favors doled out in exchange for money.

Recent campaign reports indicate Strayhorn received more than $750,000, at least 19 percent of her total, last year from attorneys who worked for mostly full-service firms that do tax law in addition to other specialties. She received another $38,000 from similarly situated attorneys during the 2006 special session, 12 percent of what she raised during that period.

The contributors include employees of Ryan and Co., a tax consulting firm that gave Strayhorn $602,000 in 2005 and was named in the audit as being the biggest donor of 19 firms that represent businesses in tax disputes before the comptroller's agency.