Cash and Carry Legislation
Any hope for a resolution to their dispute with United-Bilt Homes is directly linked to another homebuilder, however. Bob Perry, whose Houston-based Bob Perry Homes had gone to great lengths to avoid paying damages to other new home purchasers like the Hardys, willed the TRCC into existence in 2003 through the great influence he exerts over Texas politics by virtue of the fact he is the largest political contributor in state history. This explains, at least in part, why the TRCC - facing a mandatory review this session by the Sunset Commission - is not a likely candidate for elimination despite a litany of consumer complaints and harsh appraisals from elected officials in both parties.  "Bob Perry is the reason for many of the ills that plague homeowners and consumers in this state," said Winslow. "His money has allowed him unprecedented access to the legislature and to our courts and he has used that access to feather his own nest and make life a living hell for a lot of folks in Texas."

Cash and carry legislation
How wealthy Houston homebuilder Bob Perry used campaign contributions to rewrite the rulebook in Austin
James Shannon
Staff Writer

Back in 2005, The Examiner reported the story of Tommy and Audra Hardy, a couple in Fannett whose dream home had been turned into a nightmare by a homebuilder who attempted to deliver their new house with a cracked slab and major framing defects.
      When the Hardys refused to take possession of the house that engineers confirmed was badly damaged before they even moved in, they discovered their options were severely limited due to a law passed in 2003 that created the Texas Residential Construction Commission (TRCC). That law also prohibited them from filing a lawsuit against the homebuilder and forced them to binding arbitration hearings before a panel notorious for favoring builders.

Last week - April 2009 - found the Hardys still waiting for a resolution to their dilemma. They never moved into that house and were about to enter another round of arbitration with no apparent end in sight.

Any hope for a resolution to their dispute with United-Bilt Homes is directly linked to another homebuilder, however. Bob Perry, whose Houston-based Bob Perry Homes had gone to great lengths to avoid paying damages to other new home purchasers like the Hardys, willed the TRCC into existence in 2003 through the great influence he exerts over Texas politics by virtue of the fact he is the largest political contributor in state history.

This explains, at least in part, why the TRCC - facing a mandatory review this session by the Sunset Commission - is not a likely candidate for elimination despite a litany of consumer complaints and harsh appraisals from elected officials in both parties.

Alex Winslow, executive director of the nonprofit consumer group Texas Watch, doesn't mince words.

"Bob Perry is the reason for many of the ills that plague homeowners and consumers in this state," said Winslow. "His money has allowed him unprecedented access to the legislature and to our courts and he has used that access to feather his own nest and make life a living hell for a lot of folks in Texas."

A national radio audience got an introduction to Perry last month when National Public Radio's Weekend Edition aired a two-part report by Wade Goodwyn documenting a system that favors homebuilders over homeowners so disproportionately that many shocked listeners viewed it as a national scandal. In Texas, however, it passes for business as usual.

The story of how Perry used campaign cash to rewrite the rulebook in Austin is either a glorious account of one man's quest to spread his own ideas or a cautionary tale about the abuse of power, depending on your perspective.

With no relationship to Gov. Rick Perry other than the hundreds of thousands of dollars in contributions he's given Gov. Perry since he succeeded George W. Bush in the governor's mansion, Bob Perry has lavished millions of dollars to further his political agenda over the past two decades in Texas and beyond, remarkable even in a state known for wheeler-dealers in the backrooms of government. Although he has never held public office, Perry is among the most powerful political figures in Texas history.

Who is Bob Perry?
According to a biography on his own Web site, Bob Perry was born in 1932 and grew up in a small farmhouse in rural Bosque County northwest of Waco. After graduating from Baylor, Perry spent 10 years teaching high school history and coaching football in the Waco and the San Angelo areas. In 1965, he left teaching to work for a homebuilding company. Two years later, he moved to Houston and started Perry Homes, which became the nation's 35th largest builder.

With a personal fortune currently estimated at $600 million, Perry, 76, has the resources to press his legislative aims. He has been a major funder of the Republican Party and played a role in the ascent of George W. Bush. In 2004, he facilitated the Bush campaign's evisceration of Democratic presidential nominee Sen. John Kerry as the largest contributor to the Swift Boat Veterans For Truth, a group who spread lies and half-truths about Kerry in a matter so shameless that President Bush said they should stop - after the damage was done.

But it was in Texas where he was able to wield his power most effectively. According to a report from Texans for Public Justice, which tracks campaign contributions, since 2006 Perry has contributed more than $21 million to candidates and judges in the state - including the nine Republican justices of the Texas Supreme Court.

The NPR report documented the case of Bob and Jane Cull, a retirement-age couple who purchased a house from Bob Perry Homes in a Dallas suburb over 13 years ago. Weeks after moving in, they discovered foundation problems that dislocated walls and roof supports. In those days before the TRCC, they took their case to an arbitrator who sided with the Culls, ordering Perry Homes to pay $800,000 in damages and retake ownership of the house.

Perry appealed and appealed, and six years later, the $800,000 award was thrown out by the Texas Supreme Court, who disallowed arbitration and sent the case back to the lower courts. Between the time the Cull's case was filed and the decision finally overturned, a number of Supreme Court justices were elected with Bob Perry's help.

Carl Parker, a former state senator from Port Arthur who served 32 years in the Texas Legislature, said the result was no accident.

"The best money he spent probably was not with the Legislature but with the Supreme Court, because they have done what the Legislature has not been able to do. They have diminished the role of juries far more than the Legislature was able to do," said Parker. Since the advent of what some refer to as the "Perry Court," the Texas Supreme Court has overturned 72 percent of jury verdicts in the cases that it hears.

These reversals of fortune for plaintiffs who receive favorable verdicts from Texas juries have implications that extend far beyond unhappy new home buyers.

According to Winslow, "Bob Perry's influence goes beyond just the TRCC. He has heavily supported efforts to strip Texans of their legal rights, their ability to get to court. He bankrolls organizations like Texans for Lawsuit Reforms and others who have far reaching influence with regard to insurance protection for consumers and the ability to hold pharmaceutical companies and bad doctors accountable in court. It's almost incalculable the effect that his money has had on the process and what it means for Texas families. I mean, it is that influential."

Texas, Our Texas
While his national campaign contributions have almost exclusively favored Republicans, Perry has been more pragmatic in spreading his largesse around in Texas.

Dr. Richard Murray is a political scientist who directs the Center for Public Policy at the University of Houston. A long-time observer of the Texas political scene, he has watched the rise of Bob Perry with a certain fascination.

"I think he's got the 'money's like manure - spread it around' idea, and he invests in a lot of people on the way up, like Rick Noriega," said Murray, referring to the unsuccessful Democratic nominee who challenged Sen. John Cornyn. "That doesn't mean he will back you when you run against one of his favorites. He gives a lot of money in city races (in Houston)."

Murray cites the TRCC as almost a case study in the application of an overwhelming cash advantage.

"We talk about the triangle of government, like the defense contractors, the relevant committee and the military bureaucracy and the idea that the regulatory agencies are captured over time by the entities that they regulate," said Murray. "But with this deal, they weren't captured - Perry created them. It wasn't like the Securities and Exchange Commission that was created in the 1930s and by 2000 had been pretty thoroughly taken over by Wall Street. This was not capture; this was creation. They were in his pocket from day one."

According to Murray, a key to understanding Perry is charting where his self-interest lies.

"Perry isn't an office holder, so he's not distributing benefits; he's a benefits seeker par excellence and I think he has long since discovered that, even if he didn't have his homebuilding industry, he has direct interests that the government can greatly affect in terms of tort and other areas," observed Murray. "I think he's an ideological conservative and he likes giving the money away any way. It makes him a somebody and he's generous in other regards; he does a lot of scholarship support, so he's a philanthropic type, but he makes investments that are mutually beneficial as well as ideologically consistent."

With many campaign contributions, there are unspoken understandings in place, and both the giver and receiver are reluctant to express specific demands to vote for Bill A in return for a contribution - which would be a violation of the law.

"I don't think he's got a quid pro quo, but by putting in so much money you don't have to remind members," explained Murray. "They just know if they cross a certain line, that money is going to go away. I think he makes it pretty clear the issues that he really does care about."

The perils of crossing such an influential backer are well known. "In the Senate, those races are so expensive that one donor wouldn't make that much difference," said Murray. "But in the House, where you have people putting in $100,000 or $200,000 in a single race, that's pretty frightening if you're a member."

Sunset for the TRCC?
Many Austin observers will tell you the most naked exercise of Perry power is still the Texas Residential Construction Commission, which had the effect of putting home buyers like the Hardys in a proverbial box.

The bill creating TRCC was written not by a member of the legislature but by a lawyer employed by Bob Perry, a logical extension of the GOP "cash and carry" government espoused most famously in Washington by Texas Congressman Tom Delay. The early reviews for TRCC were not glowing, to say the least, and soon got much worse.

Murray put it simply. "I tell my friends don't buy a new home in Texas; you've got no recourse if the building has got serious problems," he said. "The builder can simply string it out and almost everybody ends up walking away because they run out of time and money."

He said TRCC is so bad it would seem that it must eventually sink of its own weight.

"Every now and then, somebody that's politically powerful gets gored by this damn deal," said Murray. "They do buy $2 million homes that have real problems, so you do have some counter-examples where you have people that are otherwise conservative Republicans find out this is not frivolous lawsuits; this is not permitting anybody to sue under any reasonable circumstances."

In a January 2006 report from state Comptroller Carole Keeton Rylander, she observed that TRCC was created as a mechanism to resolve disputes between owners and builders.

"In a homeowner survey conducted by my office, I found that 86 percent of homeowners who responded said their builder failed to fix construction defects in their homes. And that was after going through the mandated State Sponsored Inspection and Dispute Resolution process that verified the defects," the report noted, then observed with dismay that TRCC has "no statutory authority to hold builders accountable for shoddy building practices."

In a blistering conclusion, she declared "It is clear that the agency functions as a builder protection agency" and concluded by saying "If it were up to me personally, I would blast this TRCC builder-protection agency off the bureaucratic books."

Keep in mind that Keeton-Rylander is a Republican and winner of statewide races where she was supported by Perry. Her view of TRCC was widely shared by many members of the legislature, and three years later when the agency was up for sunset review, the staff of the Sunset Commission echoed her conclusion and recommended that TRCC be abolished.

That made it all the more remarkable when the commission unanimously voted to overturn the recommendation of their own staff, paving the way for the likely renewal of the troubled agency before the end of the session.

"It's a done deal," said Parker. "You can look and see how much money he gave to people who are on the Sunset Commission. The Commission staff said it's not doing any good, it's helping the bad guys instead of the poor folks trying to get their homes fixed. But the politicians on the commission rejected the staff proposal in a 10 to nothing vote. They just overturned it."

The road goes on
With the ouster of key Perry ally Tom Craddick as Speaker of the House, it appears that the homebuilder's influence might be on the wane - but don't count him out just yet. An analysis of campaign finance records indicate Perry has given money to 103 members of the 150 in the Texas House, and has also given to 28 of the 31 senators. As previously noted, all nine members of the Texas Supreme Court have gotten contributions.

"It will be interesting to see how he fares overall in this House because he was, of course, close to (former Speaker) Craddick and Craddick really delivered for him," says Murray. "But we've got 40 days left or 50 days and he seems to be doing pretty well in 2009 with a new Speaker."

Murray also notes a tactical advantage that may allow Perry to retain disproportionate power with his influence in gradual decline. "He's more or less in a defensive posture," said Murray. "He's gotten most of what he wants legislatively. He just doesn't want anybody rolling stuff back, so that's a very good position to be in where you can just deep six stuff at the end. Top to bottom, things are wired and even if the Democrats were to take over, Perry would not be as powerful but would still be extraordinarily influential. He's just given so much money across the aisle."

When pressed, Murray mused aloud about the seemingly contradictory Perry.

"I think it's his extraordinary generosity," he said. "He gives money at the level of George Soros, and Soros is a multi-billionaire. Perry is nowhere near that wealthy, but he puts a very sizeable percentage of his discretionary income into the political process."

Make no mistake about where most of that money ends up, Murray was quick to add.

"He's a straight ideologue," said the veteran political scientist. "Apparently personally he's a nice guy and does give a fair amount of money to non-political good things, scholarships and so forth. He's a backer of this university of the Mexican-American Studies Center, so I think he's always looking to make these investments figuring that down the road they'll pay off."

Winslow shares some of Murray's puzzlement over the enigmatic political fixer.

"That's part of the deal with Bob Perry. He is in many ways an unknown entity; he never appears in public," said Winslow.

"Last week, he happened to come to the capitol and had some closed-door meetings and reporters were searching the hallways to find him just to see what he looks like. Nobody ever sees him; he never speaks to the press. There are a lot of legislators that have taken money from him - and not insignificant amounts of money - who say they've never talked to the man. He has been content to let his money do his speaking for him in many cases and so far, has been wildly successful in that."

From the Perry camp
Calls to Bob Perry seeking comment for this story were not returned by press time. After the story was completed but before it hit the streets, spokesman Anthony Holm called The Examiner. Describing himself as licensed but non-practicing attorney who has represented Bob Perry for three years, Holm first addressed Perry Homes' 13-year battle with the Culls, detailed in the NPR series and referenced above. He said the reason for the homebuilder's lengthy appeal of the couple's $800,000 award was not on the merits of the case but Perry's assertion that the Culls' attorney made an improper legal maneuver.

"The legal question before all the courts was: Has this (case) evolved too far? Has it gone so far that you've waived your right to arbitration?" Holm explained.

Holm was asked if he believed it was an overstatement to say Perry's actions in creating the TRCC were in reaction to his experience with the Cull case.

"It is unequivocally an overstatement," insisted Holm, "and Mr. Perry unequivocally did not create the TRCC."

Wait, wasn't it John Krugh - Perry's corporate counsel - who wrote the legislation?

"Not exclusively; he advised on it," replied Holm, then added, "But first and foremost, only the legislature can create an entity like (TRCC)... I would reject any characterization suggesting that Mr. Perry created this entity."

Holm said the TRCC law was enacted because reputable homebuilders wanted to protect consumers from "a few bad apples" among Texas homebuilders, but acknowledged there are problems.

"Nobody is suggesting that (TRCC) is a utopian organization," he said. "It appears that the TRCC needs more enforcement power to execute their charge."

Asked if Perry has called for increasing that enforcement power, Holm said, "We defer to the will of the legislature" but voiced support for some unspecified form of consumer protection.

Holm also took exception to the idea that political contributions in general and Bob Perry's in particular are made in an attempt to influence legislation.

"Donors support people they believe will execute a good government philosophy," said Holm, then specifically tied that notion to his boss.

"He's an American success story and started a company and contributes because he values the republic," said Holm. "Bob Perry's history of charitable donations far exceed his political contributions. He is first and foremost a charitable donor focusing primarily on the youth and educational opportunities; he has a particular passion for orphanages throughout Latin America."

Meanwhile, expect legislative action to renew the Texas Residential Construction Commission before the end of the session. Despite its troubled history, it remains an odds-on favorite for renewal at this time.

James Shannon can be reached at (409) 832-1400, ext. 227, or by e-mail at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

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