Thursday, May 29, 2008

Local Option Liquor Election - Part 2

Secrets and Lies - Lies and Secrets. Part 2 of Wilmer Public Citizen's investigative report explores the companies and connections behind the proposition to approve package liquor sales in Wilmer on May 10. If you missed Part 1 of the series click here to read Secrets and Lies - Lies and Secrets Part 1. We will also update elements of our story which may have changed since Part 1 was originally published.

The great thing about a multi-part series from an editorial perspective, is that you can allow time for the story to unfold from a variety of news sources.
Click here to view the Dallas Morning News Article following up Part 1 of our series. As it turns out, there's nothing "news worthy" about business as usual for big money lobbying groups - only its' financial impact on a small target community like Wilmer.

Financial impact? Final pre-election campaign funding documents revealed one additional contribution of $5,125 from the Distilled Spirits Council was passed through the Wilmer & Hutchins Citizens for Better Business (WHCBB) political action committee to Texas Petition Strategies, Inc. (TPS), bringing the total to $44,000 in support of the ballot initiative. That investment figures roughly $15 per capita which includes every man woman and child in Wilmer) - or more than three times the per capita income (303%) in Wilmer.

Texas Petition Strategies, Inc. "Damage Control"

After Part 1 of our series was published, John Hatch of Texas Petition Strategies, Inc.(TPS) responded to our previous inquiries in an email. Mr. Hatch included updated pre-election financial disclosure statements, and provided a "press kit" for our research. After the election, Hatch granted a lengthy telephone interview to this reporter in response to our follow-up inquiry.

The TPS "press kit" included a press release, marketing presentation/bios of the company's principals, election results of their efforts, and two campaign finance reports through May 2, 2008. The Dallas Morning News article (referenced above) was based partly on this press release and interviews with TPS principal John Hatch and Campaign Treasurer Judy Pennington of "Wilmer & Hutchins Citizens for Better Business" (WHCBB).

Hatch discussed his background and initial work with the city of Buda where he lives just south of Austin. From a strategic perspective, Hatch promotes the idea of local option elections by precinct or justice-of-the-peace district as opposed to individual municipalities. Local option elections can authorize alcohol sales within a city but only as far as the boundaries existing at the time of the local option election. If a city is experiencing growth, it makes more sense to push local options in the county or precinct prior to working within an individual city. Once the county/precinct is "wet" the cities within these areas can be targeted for local option elections, and as they grow, new elections would not be required. The Wilmer scenario follows this model as local option election has already been passed in Dallas County Precinct 3, but has not been implemented by the county commissioners (more on this in Part 3).

The TPS marketing literature can be somewhat misleading if interpreted that "Client Cities" refer to the actual governing body of a political subdivision, rather than the Cities in which their clients conduct business. TPS made it clear that their services are not marketed to political subdivisions' governing bodies.

Hatch's primary concern in managing LOE campaigns is to combat the influence of extra-jurisdictional business interests to quash ballot measures, and spent a great deal of time relating how Dallas liquor retailers had financed opposition initiatives in Lancaster and Anna elections. He stated that the campaign flyer sent to Wilmer residents was designed as a "preemptive strike" against such outside opposition.

TPS has enough success with local option elections to get clients mostly by referrals. Hatch has significant experience speaking to civic and business groups promoting the ideas of local option elections and has been successful enough in getting these ititiatives passed to have earned a distinguished reputation in the area.

Mr. Hatch stated that he was approached by Zouheir Kassem of Tri-Gaz and Ali Sharaf of Victron Energy after having met them at a Fort Worth business social. As convenience store owners in the Wilmer & Hutchins areas, they were interested in increasing revenues and enlisted TPS to get the measure on the ballot. When it was apparent that all package liquor sales would be targeted, Hatch contacted the Distilled Spirits Council for additional funding.

According to Hatch, Kassem and Sharaf furnished all the information to establish the WHCBB political action committee. Campaign Treasurer Judy Pennington as well as all the referenced individuals in the advertising flyer mailed to Wilmer residents were names supplied by Kassem and Sharaf. Hatch says he worked closely with Pennington but did not have contact with the other WHCBB members. Hatch did not comment on the web site mentioned in the campaign flyer (, but we note that the site is registered to a "Hutch White" in the same town where Hatch resides: Buda, Texas.

We have discovered many variations and misquotes between the TPS written Press Release and the WHCBB campaign flyer. By comparison, these two documents look like amateur "cut and paste" jobs because they obviously were not "proofed or edited". According to our research, none of the folks quoted in Hutchins admit to supporting the proposition or making any statements. Comments attributed in the campaign flyer to "Tommy Nail, Hutchins" are quoted as coming from the mouth of Judy Pennington in the Press Release - except that "we have major grocery store chains in Carthage" in the Tommy Nail quote was changed to "we don't have any grocery stores in Wilmer-Hutchins" for the Pennington quote in the Press Release. Comments from "Jerry Griggs and Judy Pennington" in the campaign flyer are attributed to "Tanya Nail of Hutchins" in the Press Release. And comments from "Patricia Nail, Hutchins" in the campaign flyer are attributed to Jerry Griggs of Wilmer in the Press Release Additional Press Release quotes from Judy Pennington and Jerry Griggs were generic and not mentioned in the campaign flyer materials, but having interviewed Ms. Pennington personally, this reporter is skeptical.

When asked how the quotes in his campaign advertising flyer were attributed, Mr. Hatch acknowledged that he received a list of names from the principal contributors (Kassem and Sharaf). In our interview, Hatch was noncommittal about the differences to whom the quotes were attributed in his press release and in the marketing flyer.

Our research indicates that Tanya Nail of Hutchins had also been employed by the Sonic/Exxon at I45 & Belt Line in Wilmer. However, Ms. Nail's parents, quoted in the marketing flyer (Patricia Nail and Tommy Nail) deny that they supported the measure, stated that they voted against the measure, and gave no permission for their names to be used in campaign advertising literature. We have been unable to determine if Jerry Griggs, Miguel Briones and Natalia Briones of Wilmer had given permission for their names to be used in the advertising. Natalia Briones' signature appears on the list of petition signers, but not on the application to circulate the petition.

It is never obvious whom the intended audience for TPS' marketing materials may be - but the reader is left with the firm impression that various city governments have commissioned TPS to pass these initiatives. While their success rates are detailed in an "election results" document, one is easily misled to believe again, that cities were the customers of TPS. According to Hatch and our investigations, cities and other governing bodies are barred from participating in political activities and using public monies. It appears that TPS markets their services to "appropriate" business venues in a target jurisdiction and the WHCBB Press Release states that "The group is supported by local citizens and business owners".

But is it really? We can't verify that Ali Sharaf (Victron Energy) and Zouheir Kassem (Tri Gaz) are actually citizens. Victron Energy is based in Waxahachie. Tri Gaz has six different corporations in different locations (including one in Oklahoma), but Kassem lives in Dallas - Wadjen Al-Zoubi, vice president lives in Sunnyvale. We have a semantic problem referring to these non-Wilmer resident individuals as "local business owners". We have determined that Judy Pennington is a citizen, but not a registered voter (perhaps due to serious legal problems in her background).

Texas statutes impose no restrictions on qualifications for Campaign Treasurer, unlike petition signers and applicants for petitions. A Campaign Treasurer need not be a citizen, registered voter, legal resident (or even human for that matter) as long as the required reports are completed and filed in a timely manner with a signature. Campaign Treasurer Judy Pennington's signature does not appear on either the petition or the application, nor does her name appear on the list of registered voters for the Wilmer precinct.

Look for the wrapup in Part 3 of our series "Secrets and Lies - Lies and Secrets" coming this weekend.

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