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Rick Perry’s “Insider” Hypocrisy

Last week, corrupt lobbyist Jack Abramoff offered his thoughts on how to clean up Washington. Today, crony capitalist Rick Perry chimed in.

In an apparent attempt to paint himself as an outsider who would change Washington, Rick Perry released a web video asserting that members of Congress who use their “inside knowledge to profit in the stock market ought to be sent to jail.”

Not so fast, Governor. As detailed below, he has a long history of using his position to make a quick buck.

If Perry thinks members of Congress belong in jail, what would he think about an elected official who purchased 2,800 shares of stock after speaking with that company’s CEO on the same day a giant investment group purchased 2.2 million of its shares?

Perry Earned $38,000 Profit After Selling Shares In Donor’s Company. According to the Associated Press, “Buying land low and selling it high isn’t the only way Perry has pushed his income above his salary. He turned a $38,000 profit in 1996 after selling shares of Kinetic Concepts, Inc., the hospital equipment company founded by wealthy Republican donor James Leininger.” [AP, 9/26/09]

  • Perry’s Shares Purchased The Same Day A California Investment Group Bought 2.2 Million Shares. According to the Dallas Morning News, “Mr. Perry said it was a coincidence that 2,800 shares of stock in a hospital equipment company, Kinetic Concepts Inc., were purchased on his behalf on the same day a California investment group began buying 2.2 million shares in the company, boosting the stock’s value.” [Dallas Morning News, 5/15/98]
  • Perry Had Spoken With Kinetic Concepts CEO James Leiniger The Same Day As His Stock Purchase. According to the Dallas Morning News, “On Jan. 24, 1996, Mr. Perry was in San Antonio to speak at a luncheon sponsored by the Texas Public Policy Foundation, a group founded by Mr. Leininger. The same day, 2,800 shares of Kinetic Concepts stock at about $10.40 a share were purchased, according to Mr. Perry’s personal financial statement. Mr. Perry and Mr. Leininger both said they did not discuss the company or its stock at the luncheon… Mr. Leininger, whose family was selling 6 million shares of stock in a public offering, said he did not know that San Francisco investors Richard Blum and Jerald Weintraub were preparing to buy 2.2 million shares. He said that if he had known, it would have been illegal to pass on inside information.” [Dallas Morning News, 5/15/98]
    • Perry: “I May Have” Said To Buy More Kinetic Stock. “Perry said he has never talked to Leininger about his company’s stock. Perry said his stockbroker said the Jan. 24 stock was bought due to customer order, but Perry said he does not remember placing that order. ‘I may have called and said sell something that’s not performing and buy some more KCI stock. It was a stock that was going up at that particular time,’ Perry said.” [Houston Chronicle, 5/22/98]

2007: Perry Bought Land From Close Friend At $150,000 Below Market Value. In July 2010, the Dallas Morning News reported extensively on Perry’s lucrative real estate dealings: “Three years after Gov. Rick Perry’s biggest real estate score, questions persist about whether the governor benefited from favoritism, backroom dealing and influence-buying… At the center of the dispute is a gently sloping, half-acre grassy lot on the shore of Lake Lyndon B. Johnson in the Texas Hill Country resort of Horseshoe Bay. The resort is owned by Doug Jaffe, whose family has long, deep and sometimes controversial ties to Texas politics. Jaffe’s company had sold the parcel to state Sen. Troy Fraser, R-Horseshoe Bay, a friend and political ally of Perry’s. Fraser sold the lot to Perry for just above $300,000. An appraiser hired by The News determined that the land actually was worth $450,000 when Perry bought it. [Dallas Morning News, 7/25/10]

  • Perry Sold Horseshoe Bay Property For $1.15 Million, Potentially $350,000 Above Market Value. “Perry sold the property in 2007 to Alan Moffatt, a British national who is a business partner and close associate of Jaffe’s. Moffatt, as the owner of an aviation firm, was questioned, but never prosecuted, for his company’s international arms shipments to Africa in the 1990s. He paid Perry $1.15 million for the parcel. The News’ appraiser, who has decades of experience in Horseshoe Bay real estate, found that price to be $350,000 above market value. Moffatt denied that anything improper occurred in the transaction. ‘It just happened that the governor of Texas owned that lot,’ he said. ‘It was a good deal for me.’” [Dallas Morning News, 7/25/10]

1998: Perry Transferred Austin Property To Blind Trust Prior To Legislative Session, Trustee Sold Land For $235,000 Profit After Development Bill Passed. According to the Houston Chronicle, “Gov. Rick Perry’s aides Wednesday said he had nothing to hide in 1998 when he transferred 60 acres of south Austin real estate to his blind trust immediately before a legislative session that passed a bill benefiting area landowners. Perry’s aides said it also was coincidental that his trustee sold the property for a $ 235,000 profit in May 1999, six days after former Gov. George W. Bush signed the bill, which raised the value of the land in the area by allowing more development on it. ‘Any decisions about the disposition of assets in that trust were made by the trustee, not the governor,’ said Perry spokesman Ray Sullivan. ‘It was open. It was an above-board, arms-length transaction.’ Sullivan said Perry had no contact with trustee Tommy Orr of Houston on the property’s sale. Sullivan said the sale is public in state real estate records.” [Houston Chronicle, 4/18/02]

  • Perry Was Tipped Off By Developer Who Had Sold Plot Two Weeks Earlier. According to the Austin American-Statesman, “The [land deal] that has drawn the most scrutiny began on Nov. 7, 1996, when Perry, then serving as agriculture commissioner, bought 60 acres in southwest Travis County from a company operated by developer John Lloyd. That company purchased the land two weeks earlier from a firm controlled by developer Gary Bradley. Perry has said Bradley tipped him about the land, which Perry bought for $290,000.” [Austin American-Statesman, 10/3/02]

1993: Perry Sold 9.3-Acre Tract To Michael Dell For Four Times What He Paid, Parcel Separated Dell’s Mansion From The Nearest Sewer Line. According to the San Antonio Express-News, “In 1993, while living in a 1,600-square-foot home in Austin on Exposition Boulevard, the Perry’s purchased a 9.3-acre lot of raw land in the prestigious West Lake Hills area. Perry and Sullivan have said that Perry — then Texas’ agriculture commissioner — hoped to build a family homestead there. Instead, his family stayed in their existing house. He sold the property to Michael Dell less than two years later for $ 465,000 — a 281 percent increase from his purchase price. It turned out that Perry’s parcel was the only thing standing between the sprawling hilltop mansion Dell was building and the nearest sewer lines.” [San Antonio Express-News, 10/21/02]