Austin American-Statesman

Tuesday, March 7, 2000

Bush backer's ads mix business, environment

by Scott S. Greenberger

Sen. John McCain of Arizona called him a "sleazy buddy" of Gov. George W. Bush's, and environmentalists expressed outrage at what they call his misleading message.

Sam Wyly of Dallas, a longtime Bush family backer, bought his way into the national political consciousness last week by laying out more than $2.5 million for TV ads in three key states -- New York, California and Ohio -- with presidential primaries today.

The ads attack McCain's environmental record, tout Bush's and at the same time boost Wyly's own renewable energy company. The ads also put Bush, their intended beneficiary, on the defensive: McCain on Monday filed a complaint with the Federal Election Commission, claiming that the spots are tantamount to an illegal political contribution.

"Tell his sleazy Texas buddies to stop these negative ads: . . . Don't try to corrupt American politics with your money," McCain told supporters in California.

Wyly, 65, and his brother Charles oversee a family fortune that may be worth as much as $1 billion. They made their money in an array of interests, including Sterling Software, Sterling Commerce, Bonanza Steakhouses, Michael's craft stores, Maverick Capital and Earth Resources, an oil and silver company.

Maverick Capital received a lucrative contract in 1998 to invest $96 million of the University of Texas endowment . The quasi-public University of Texas Investment Company has been under fire for allegedly steering such contracts to Bush's top donors.

Sam Wyly's current passion is, a Vermont company that offers consumers electricity produced from wind power and other renewable energy sources. Wyly is chairman and his family has invested more than $100 million in the company.

The Wylys also have longstanding political interests, and they've been Bush backers since former President Bush was a congressman in the 1960s. They donated $210,000 to the younger Bush's 1994 and 1998 gubernatorial campaigns, trailing only Enron Corporation and the Bass family, the Fort Worth billionaires, as Bush's largest contributors in the races.

It was Sam Wyly's involvement with and his close ties to the governor that spurred Tom "Smitty" Smith of Public Citizen to call him in the spring of 1999. Smith wanted the bill deregulating the state's electric utility industry to include a provision forcing utilities to reduce emissions from coal and other fossil fuels -- a measure that would help producers of renewable energy. But Bush favored a voluntary ap- proach.

Until Wyly spoke to him, that is. Wyly's entreaties, as well as rumblings of federal sanctions if Texas didn't clean up, convinced Bush to sign off on the mandatory rules.

"He asked how he could help, and he made calls and visited the governor," Smith recalled. "He's certainly an environmentalist, but he's also a very smart businessman."

Wyly would like to promote similar legislation at the federal level, and a second President Bush would be a powerful ally. Spending $2.5 million to advance that goal -- and raise consciousness about the issue -- may be a prudent investment.

"Sam's goal is to create a permanent organization within the Republican Party to promote clean air issues and, especially, to oppose the use of coal-burning power," said Rob Allyn, who produced the ads. Wyly did not return phone calls seeking comment.

"He's decided to spend the rest of his life promoting clean air issues, and he's decided to put his money where his mouth is by getting media to talk about clean air issues," Allyn said he added.

He describes Wyly's effort as "enlightened self-interest," readily acknowledging that federal legislation would benefit GreenMountain. "In the Republican Party, free enterprise is not a dirty word," Allyn said.

The ads attack McCain for a Senate vote against renewable energy, then praise Bush for cutting emissions from the coal-burning electric power plants.

Smith praised the ads for raising the issue of polluting coal-fired plants. But he and other environmentalists also say the ads include inaccurate statistics and portray Bush as an environmentalist when his record says otherwise.

"Governor Bush is no environmentalist, and the increasingly browner air in Texas is a clear demonstration of that," Smith said.

Environmentalists say Texas air has gotten significantly dirtier since Bush took office in 1995. They note that Houston recently surpassed Los Angeles as the nation's smoggiest city.

In 1995, Bush eliminated a tough auto emissions inspection program for Houston and Dallas. In 1999, he backed a voluntary, rather than a mandatory, approach to cutting emissions from industrial plants "grandfathered" from the state's 1971 clean air law.

McCain on Monday told reporters there is no question that the ads are a coordinated effort with the Bush campaign, which would make them illegal.

"It's all Bush people. If it has a longhorn, it walks like a longhorn, it moves like a longhorn, so it's a longhorn," he said. "It's a Texas operation."

In Los Angeles, Bush spokeswoman Karen Hughes called the allegations irresponsible .

"Senator McCain should be ashamed of himself," she said. "He is accusing us of something that would be illegal based on not one shred of evidence, and it simply is not true."