AUSTIN, Texas (AP) — State Sen. Dan Patrick spent more than $46,000 in donations to a political action committee he co-founded on his Houston radio station and a marketing firm controlled by his former employees — payments that weren't illegal but that critics contend violated the spirit of Texas' ethics laws.
An Associated Press analysis of filings with the Texas Ethics Commission shows that Patrick, a conservative talk radio host trying to unseat Lt. Gov. David Dewhurst in next year's Republican primary, also received a $5,000 campaign donation from the group, Citizens to Lower Our Unfair Taxes, or CLOUT. The PAC also paid nearly $1,900 in redesign fees to a website that hosts Patrick's personal blog.
That's more than $52,500, all told, to Patrick's campaign or related business interests — or almost 20 percent of the total of $272,000-plus CLOUT raised between being founded in June 2003 and its last reported political contribution in July 2010.
Patrick and fellow conservative KSEV radio show host Edd Hendee started CLOUT to work with state lawmakers to reduce government spending and lower property taxes. Hendee was treasurer while Patrick was listed on state filings as a decision-maker on the group's contributions and expenditures.
Texas campaign finance rules generally don't prohibit outside advocacy groups from contributing to political campaigns or spending funds to promote political causes however they see fit. But watchdog groups say that CLOUT's donors didn't expect the group to spend on Patrick's businesses or related interests — and the fact that payments went directly to Patrick's radio station is especially brazen.
Patrick responded that "we didn't do any of that to enrich our business." In phone interviews he said he'd been questioned about CLOUT when he first ran for Senate in 2006 and "it turned out to be nothing."
Others, though, aren't convinced.
"While it may be legal, it certainly doesn't pass the smell test," said Tom "Smitty" Smith, director of the advocacy group Public Citizen's Texas office.
A radio show host since the 1990s, Patrick is a majority owner of Houston's KSEV-AM, which airs his daily afternoon talk show, and of KVCE-AM in Dallas.
Ethics Commission records show the group relied heavily on contributions that often came in $20, $50, $100 and $200 increments, many from donors in Houston or nearby.
CLOUT spent $29,600 in May 2004 on radio advertising with C&M Marketing, which shared an address with Patrick and Hendee's KSEV-AM Radio. The following month, CLOUT paid $900 to KSEV to put its logo on the station's website, as well as for radio spots.
"C&M marketing was in our building, on our floor, but it was an independent operation," Patrick said. He added: "They were some of my former employees that started their own business."
In November 2005, CLOUT made a $5,000 contribution to Patrick's senate campaign fund. Then, in July 2006, CLOUT paid $1,868 for "Web site redesign" to Lone-Star Times.Com, where Patrick posted his personal blog.
Patrick said of the campaign contribution, "Edd may have made that decision, if he wanted to contribute to my campaign."
Meanwhile, from July 2004 through December 2008, CLOUT made 56 payments of $200 each, plus four separate, larger payments totaling $4,000 — for a total of $15,200 — to KSEV so its logo could appear on station websites, for advertising on those sites and for on-air mentions.
Patrick said the amount spent was small given that CLOUT paid for so many months of web advertising. He also said that while the group bought some of its on-air mentions, he spent much longer periods of time on his radio show promoting it for free.
But Smith joked that what occurred "looks like a new wrinkle that hasn't been seen since the days of LBJ."
He was referring to President Lyndon B. Johnson, whose wife bought Austin's KTBC-AM in 1943 and saw her husband's governmental influence help the radio station win federal permission to broadcast 24 hours a day from a more-favorable frequency. Its call letters eventually were changed to KLBJ, and the couple built a broadcasting empire that promoted Johnson's political career.
Patrick countered of CLOUT, "We raised all this money and 20 percent of it went back to the station."
The group spent much of the rest of its funds on a 2006 lawsuit against Dewhurst and other top officials for violating the budgetary spending limit mandated by the state constitution. The case was dismissed due to lack of jurisdiction — but CLOUT paid nearly $128,000 in legal fees.
CLOUT has been less active recently. It had less than $3,000 on-hand in January 2009 and it has had no money since January 2012, filings show.
Patrick also helped found another group, Independent Conservative Republicans of Texas, which was created in April 2010 to promote outreach to tea party Republicans. It had about $10,000 in contributions and loans through June 2010, including a $7,000 loan from the campaign fund Texans for Dan Patrick.
In September 2011, it made a loan repayment of $4,795 to Patrick's campaign.
Listed among its expenditures were April 2010 charges of $41 at the Stage Deli in New York and $349.75 at the Warwick Hotel, a midtown Manhattan hotel built in 1926 by William Randolph Hearst and Marion Davies to "host their Hollywood friends."