Davis Accuses Abbott of Grant Fund 'Cover-Up'

Sep 29, 2014

From The Texas Tribune:

Democratic gubernatorial candidate Wendy Davis accused her Republican opponent Monday of using his power as attorney general to “orchestrate a cover-up” of misspending inside the Texas Enterprise Fund that, according to an audit, handed out taxpayer subsidies to businesses with little oversight.

Davis seized on reports over the weekend detailing Attorney General Greg Abbott’s decade-old rulings that various Texas Enterprise Fund records be kept secret. Abbott’s office, in charge of ruling what government records must either be released or withheld, found that numerous “applications” for the grant money were exempt from state transparency laws. 

But a damning new state audit found that many of the companies never submitted applications, making it unclear what applications Abbott sought to block. Davis claims to have found the answer: She is accusing Abbott of declaring the records to be secret in order to hide what the audit turned up years later — a lack of oversight over millions of dollars in grant money.

“We need an independent investigation by appropriate state or federal authorities regarding the actions by the attorney general and the attempts to use the power of his office to cover up the transfer of millions of taxpayer dollars to companies whose applications he knew didn’t exist,” Davis said Monday at a news conference in Fort Worth.

Representatives of the Abbott campaign for governor and the attorney general’s office did not immediately return phone calls.

Davis is also calling for Abbott to hand over any documents that would shed light on what records his office blocked years ago, and she said he should give back more than $1 million in donations that, according to her campaign, were investors in the entities that received Texas Enterprise Fund money.

A recent audit found that the fund, long championed as a crucial job-creation tool by Gov. Rick Perry, was riddled with weak oversight policies, including more than $170 million awarded to recipients that never formally applied for the funds. 

The Texas State Auditor’s report of the Texas Enterprise Fund describes a system in which many recipients of financial awards were decided outside of formal channels and were often not properly monitored to ensure they were delivering the number of jobs or the type of jobs they had promised. 

The report suggests that the governor’s office was, at best, sloppy or, at worst, misleading in providing information to lawmakers and the public about how the program was run. A January 2013 biennial report on the program only reported the number of jobs that firms receiving incentives intended to create, and left out several other details, including that only 73 percent of those jobs had been created.  

The governor’s office said the audit confirmed the funds had been allocated “in accordance with state law” and has been reauthorized by the Texas Legislature since its inception.

Reporter Aman Batheja contributed to this story.