Governor Perry's Shady Land Deal

For a while now Governor Rick Perry has been accusing his opponent, blue-dog conservative Democrat Bill White, of trying to hide some ethical lapses by not releasing his tax returns all the way back to when he worked for the federal government's Energy Department (although he has released those tax returns for the last few years). Perry has a minor point because while White tried to give the impression he hadn't made any money off his oil investments, it has come out that he made millions by selling off much of his oil stocks.

But now it looks like Perry may have some even more egregious ethical lapses of his own. While he has claimed that all of his business dealings have been open and above-board, it now looks like at least one land deal he was involved in could have actually been a political pay-off -- or at the very least an unreported gift of hundreds of thousands of dollars which would be a violation of Texas law.

The property in question is a half-acre lot in the resort community of Horseshoe Bay. The Dallas Morning News (DMN) has investigated the governor's purchase and sale of that property. They hired a nonpartisan property appraiser, and his appraisals show both the buying and selling prices to be way out of line. The property was worth a lot more than Perry paid for it and it was worth a lot less than he sold it for.

The development at Horseshoe Bay is owned by Doug Jaffe, whose family has been politically connected for many years. In 2000 Jaffe sold the plot of land to State Senator Troy Fraser (R-Horseshoe Bay), a friend and political ally of Governor Perry. Fraser turned around and sold the land to Perry for $300,000. The DMN appraiser said this was significantly below it's market value at that time, which was $450,000.

If this is true, and there's no reason to believe it's not true, then this would constitute a gift to the governor of $150,000 (ostensibly from Fraser, but more likely from Jaffe). The governor did not report this $150,000 gift as is required by state law (obviously thinking the gift could be hidden under the guise of a land deal).

Then in 2007 the governor sold the land to Alan Moffatt, a business partner and friend of Jaffe's, for $1.15 million. The DMN appraiser says the land was only worth about $800,000 at the time. Either Moffatt is a very bad businessman or this was another gift to Rick Perry -- a $350,000 gift, which he again failed to report as required by Texas law.

Had he paid and sold the land for its real value, Rick Perry could have realized a legitimate profit of $350,000 (since it's worth when he bought it was $450,000 and the worth when he sold it was $800,000). But instead, by buying the land below its value and selling it for an inflated price, he actually received a profit of $850,000. That means he received gifts totaling around $500,000. It leads me to wonder just what Jaffe and Moffatt received for the half-million dollars.

Ellen Miller, director of the Sunlight Foundation, says, "The man on the street on this would think that this is a series of deals that smell of special favors being created for elected officials to curry their favor."

She's right. That's exactly what I think.