Texas Loves Rudy

After joining Bracewell, Giuliani became a frequent visitor to Texas. He's raised nearly $4 million in the state, more than any other Republican, and as of August recruited thirty-seven of George W. Bush's Pioneers and Rangers (those who raised at least $100,000 and $200,000, respectively, for the Bush campaigns), second only to John McCain. Rudy became acquainted with Texas politics when he launched his aborted senatorial run against Hillary Clinton in 2000. Roy Bailey, a Dallas insurance mogul and former finance chair of the Texas Republican Party, helped him raise money for that race. They struck up a close friendship, and after 9/11 Giuliani told The American Lawyer magazine he "turned over" his postmayoral planning to Bailey, who became managing director of Giuliani Partners. At the 2004 Republican National Convention in New York City, where Rudy's invocation of 9/11 took center stage, Bailey met Pat Oxford, managing partner of Bracewell & Patterson. Over coffee the next day, Bailey floated the idea of Giuliani joining Bracewell. They clicked, and soon the deal was done.

Oxford himself is a player in Texas Republican politics. He met George W. Bush in the 1970s, worked on his campaigns and became a Pioneer in 2000 for Bush/Cheney. Through Texas Senator Kay Bailey Hutchison, a law school classmate, Oxford met Karl Rove; they became "fast friends," Oxford told The American Lawyer. In 2000 Oxford formed the Mighty Texas Strike Force, dispatching volunteers from Texas to battleground states. During the 2000 recount in Florida, Oxford said he "ran Broward County" and managed the Bush/Cheney legal defense team, talking with Bush frequently in Texas. In 2004 his twenty-five-person "strike force" in Ohio became a source of contention when hotel workers in Columbus, according to a report compiled by the Democratic staff of the House Judiciary Committee, claimed that the strike team used "payphones to make intimidating calls to likely voters, targeting people recently in the prison system" and alleging that the FBI would send them back to jail if they voted.

Giuliani's business partners and Texas allies have come to play a prominent role in his presidential campaign. Oxford is the campaign's national chairman, marshaling operations and squiring Giuliani throughout the state. A fellow Houstonian, Jim Lee, a close ally of Governor Rick Perry and a Pioneer for Bush/Cheney in '04, is the campaign's new finance chief. The day-trading company Lee co-founded, Momentum Securities, was censured and fined $75,000 by the National Association of Security Dealers in 2001 for producing misleading advertising material, downplaying financial risks to investors and overstating its capital. After Lee raised $200,000 for Perry's re-election campaign, the governor appointed him last year to the board overseeing Texas's $96 billion public school employee pension fund.

Giuliani Partners's Roy Bailey introduced the candidate to GOP billionaires and major Bush supporters like T. Boone Pickens and Tom Hicks. Pickens got to know Rudy after dinner one night at Bailey's house. Hicks had committed to McCain's campaign, but after Bailey "went to see him and rib him about it," he changed his mind and became Giuliani's Texas chairman. The three hosted a fundraiser for Rudy last March in Dallas.

Pickens is a legendary corporate raider from West Texas who terrorized Wall Street by threatening to take over oil companies and grew filthy rich in the process. Since launching a hedge fund specializing in energy investments in 1996, Pickens has become even richer, making more than $1.5 billion in 2005. That same year he gave $165 million to Cowboy Golf, a small charity connected to his alma mater, Oklahoma State, and on whose board Pickens sits. Within an hour, the tax-deductible donation was invested back into the Pickens hedge fund, BP Capital. Critics who objected to the transaction, and Pickens's influence at OSU, began calling the school "Boone State."

More recently, Pickens has been prospecting in Texas's new oil: water. His company, Mesa Water, owns groundwater rights to 200,000 acres of land north of Amarillo (in Texas, unlike other Western states, groundwater is considered private by virtue of a "right to capture" law), which he's said he plans to sell to cities like El Paso, San Antonio and Dallas, potentially netting him $1 billion over the next thirty years. Pickens claims to be the "number-one steward of the land," but locals are wary of what Fortune magazine dubbed a Chinatown-esque scheme to divert water from the Panhandle, earning Pickens the status of "regional reprobate," as Salon put it. For a born-and-bred Texan, Pickens is more like Giuliani than you'd think, especially when it comes to his personal life: four wives, semi-estranged from his children, reviled in his hometown. His political profile is no less turbulent. When the Swift Boat Veterans for Truth needed seed money for an ad campaign smearing John Kerry's service record in Vietnam, Pickens ponied up an initial $500,000. He eventually gave $3 million to the group. Pickens has raised more than $500,000 for Giuliani, including $50,000 from employees of his hedge fund.

Tom Hicks isn't far behind Pickens financially, and his ties to the Bush family go even deeper. In 1994 under then-Governor Bush Hicks joined the University of Texas Board of Regents, one of the plushest appointments in the state, and was put in charge of investing the university's multibillion-dollar endowment. Hicks formed a private entity using UT money, called the University of Texas Investment Management Company, which invested millions with Bush family supporters and Hicks allies like The Carlyle Group, Bass Brothers of Fort Worth--who bailed out Bush's previous company, Harken Energy--and Dallas's Wyly family, all major patrons of the Bushes. News reports detailing the close family connections led to a major public controversy. Hicks stepped down at the end of his term, but the ties to Bush didn't end there. In 1998 Hicks bought the Texas Rangers for $250 million, three times what Bush and his partners paid for the team in 1989, and granted Bush six times his original share, making the failed businessman an overnight multimillionaire.

Hicks, who became vice chairman of the radio behemoth Clear Channel in 2000, helped Bush in whatever way he could. According to Salon, "Hicks announced on a conference call among Clear Channel's senior radio executives that the company was supporting Bush's presidential run, that everyone was encouraged to make donations, and that the legal department would be in contact with donors in order to maintain a proper roster." After 9/11 Clear Channel banned "potentially offensive" songs from its stations, and in the run-up to the war in Iraq, bankrolled supposedly grassroots pro-war "Rallies for America" across the country. The company gave nearly $470,000 to Republican candidates in 2006, roughly the same as in '04. Ironically, Hicks's investment fund sold its stake in Clear Channel last year to the private equity firm Bain Capital Partners--the longtime employer of Mitt Romney. Today, though, Hicks says, "I'm more closely aligned to Rudy than I am to Bush." As state chair for Giuliani, Hicks was given the task last January, according to the leaked strategy memo, of raising $30 million for the campaign in Texas, a figure that has thus far proven wildly optimistic.

The benefits of Giuliani's association with Bracewell are evident when it comes to hauling in money and supporters. "If people in Texas want a presidential candidate with Texas connections, I think I have the strongest one," he told donors at a private golf club in Dallas in March. "I'm here a lot on business. I've got to know Texas really well." Bracewell gave Giuliani a foothold in Texas that other candidates don't have. "It helped considerably," says Robert Stein, a professor of political science at Rice University in Houston whose daughter recently accepted a job with the firm.

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