Little-Known Texas Patron
Guided Bush Policies
On Vouchers, Tort Reform
31) Only three days after Texas Gov. George W. Bush was inaugurated in 1995, he declared the state of the Texas judicial system to be an �emergency� situation, and pressed the legislature to hurriedly pass legislation that would make it harder for consumers to sue companies for defective products.
In Texas, though, Dr. James Leininger's name is synonymous with political power. In a state where egos are huge, he plays the game quietly, rarely drawing attention to himself. Leininger has used his enormous wealth to create a conglomerate of a half-dozen influential foundations and think tanks. Their pro-business policy positions have become the basis of key state legislative initiatives, including tort reform and school vouchers. By placing some of the most well-connected Texans on the boards, Leininger has built a vast network of supporters who have benefited from his favors.
Leininger, 55, also has created numerous political action committees, which he has employed so effectively that he has been nicknamed the �Daddy Warbucks' of the Texas Republican Party. The largest single political donor in the state, Leininger helped to engineer the Republican takeover of the legislature and governor's mansion. In the 1998 election cycle alone, Leininger and his family spent more than $4 million to finance think tanks and political campaigns, according to the Texas Freedom Network, a nonprofit group established to counter the religious right, and reports filed with the Federal Election Commission.
�He is a kingmaker. His infusion of money has helped to elect many statewide officials," said Craig McDonald, director of Texans for Public Justice, a nonpartisan watchdog group based in Austin.
Bush's ties to Leininger are strong. Leininger has given Bush's campaigns $83,750 over the years. Though this places Leininger only 73 on the list of Bush's all-time career patrons, the ranking belies the support that Leininger has given Bush over his political career through his various organizations. In 1992, while cutting his political teeth, Bush sat on the board of advisers of Leininger's flagship think tank, the Texas Public Policy Foundation, which churns out conservative policy positions and is modeled after the influential Heritage Foundation in Washington. Bush also spoke at the foundation's 10th anniversary event in January 1999. So it should come as no surprise that Bush has embraced Leininger's two pet causes: tort reform and school vouchers.
Leininger declined repeated requests to be interviewed for this story.
A bootstrap biography
Though he didn�t make his money in oil, Leininger possesses a bootstrap biography like many of his fellow Texans. Born poor, he eventually became an emergency-room surgeon. He made his early fortune as founder of Kinetic Concepts Inc., which manufactures hospital beds that rotate patients to prevent bedsores. From that, he built a business empire with diverse interests. According to filings with the FEC, Leininger owns a real estate company, a business that makes Bible coloring books, a turkey mail-order firm and a dairy, and is part-owner of a San Antonio-based television news service syndicated statewide. Along with Bob Cone, another wealthy Republican donor, he owns ATX Technologies, which manufactures "smart� technology products such as the security and navigation communication tools inside automobiles. Leininger owns Winning Strategies, a political consulting firm. In addition, he holds a minority interest in the San Antonio Spurs pro basketball team.
Considering that he's worth $300 million, Leininger, a former Forbes 400 millionaire and a born-again Christian, lives modestly, driving a 12-year-old Jeep. He prefers to give much of his money to political causes. And Leininger's supporters insist that his political activities are pursued for good-citizenship reasons. Jeff Judson, director of the Texas Public Policy Foundation, told the Center for Public Integrity, "The thing about Leininger is that none of his political interests helps his bottom line."
Still, Leininger didn�t come to the issue of tort reform accidentally. Nor has the passage of tough laws hurt business. He had a financial stake in seeing a decline in the number of lawsuits filed against companies. A Center review found 60 suits filed against Leininger personally or against Kinetic Concepts. In 1997, Leininger sold 10 percent of his interest in the publicly traded company for $885 million to Richard Blum, the husband of Sen. Dianne Feinstein, D-Calif. Leininger still retains a 33 percent stake.
Hospital accident report filed with the federal Food and Drug Administration linked the oscillating beds with patient injuries, saying the beds had thrown, crushed and strangled patients.
In 1988, after his company lost liability insurance, Leininger established his first political action committee, Texans for Justice, to push the tort reform movement. In 1989, he created the Texas Public Policy Foundation to create "intellectual capital in Texas." Over the years, Leininger has given more than a million dollars to support the group. The foundation drives much of the policy agenda in Texas. Its numerous policy papers -- on everything from the environment to teacher pay to transportation issues -- often become the philosophical underpinnings of the Republican legislative agenda.
The tort reform issue
But it is the tort reform issue that is among the closest to Leininger's heart. Texans for Justice, together with other Texas tort reform PACS, has pumped $4 million into Bush's two gubernatorial campaigns, according to data collected by Texans for Public Justice. Their support paid off. Tort reform was a major theme of Bush's 1994 campaign. One of Bush's first actions was to propose a tort reform bill to the legislature as an "emergency measure." The bill capped punitive-damages awards at $200,000 and increased the bond that plaintiffs post from $2,000 to $5,000, effectively discouraging poor people from filing lawsuits. Also, limits were placed on who could sue, who could be sued and where lawsuits could be filed. The bill limited the right to sue a "professional, " such as a doctor or a lawyer.
Only three years earlier, Bush was an active board member of Leininger's Texas Public Policy Foundation. In 1992, he sent a letter on the group's behalf to Texas businessmen, condemning the "runaway tort system" that awarded huge punitive damages. Later, in 1998, while Bush was governor, he invited Judson, the foundation's director, for breakfast at the governor's mansion, along with Grover Norquist, director of the influential and conservative Americans for Tax Reform.
Director thanks Bush
In a thank-you note that Judson wrote to Bush on Nov. 19, 1998, he noted that he and Norquist were pleased �that we left the meeting with some good action items to work on. I have no doubt of our success in these areas, which will ultimately be attributed to your leadership. I look forward to many more opportunities to work toward common goals." Three months later, Judson wrote, "We will be releasing the good news on your tax proposals next Wednesday, and look forward to many more opportunities to complement your good work in the coming months."
Judson says that nothing became of the November meeting and that there wasn't as much collaboration as the letters imply. "We have taken the opportunity to criticize Bush as much as we compliment. It cuts both ways," Judson said.
But the relationship seems to cut more favorably than not. Besides supporting Leininger's position on tort reform, Bush has embraced his proposals for private school vouchers. In 1999, Bush vigorously supported voucher legislation that would have allowed children from 80 public school systems in the state's six largest metropolitan areas to opt out of the public schools with taxpayer-backed tuition credits. Despite the millions of dollars that Leininger and friends poured into lobbying for vouchers, the idea tanked in the state legislature.
Vigorous support for vouchers
Though his efforts ultimately lost, Leininger pulled out all the stops a year earlier to get it passed. In the 1998 election cycle, Leininger and his family personally distributed $4.5 million in voucher lobbying and campaign donations. His PACs appealed to out-of-state donors for money to help defeat state politicians who opposed the voucher plan. The Center obtained a
letter written by the director of one of Leininger's voucher groups, Putting Children First, to a major Republican donor, Betsy DeVos, chair of the Michigan Republican State Committee and wife of the
president of Amway Corp.
Kathryn Wallace is a writer at the Center for Public Integrity.
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