Convergen LifeSciences: Rick Perry’s Solyndra?

By Gary P Jackson

I was bombarded this morning with a bunch of articles exposing more serious issues of corruption and cronyism surrounding Rick Perry. We’ll get to all of them, but this one stands out.

From The American Thinker:

With such a clear pattern of corruption and special deals for contributors and insiders, how could Republicans possibly fail to capitalize on Obama’s reckless waste of taxpayer money in rewarding his biggest fundraisers?

Republicans can easily throw away the advantage by nominating a candidate with a record of rewarding friends and donors with the spoils of government power.

In Texas, bio-tech firm Convergen LifeSciences looks a lot like Governor Rick Perry’s Solyndra.

Governor Perry manages the Emerging Technology Fund (ETF), providing financial support to companies developing new technology in the hope of creating high-tech jobs. First created in 2005, ETF is made up of regional panels that screen proposals for a statewide advisory panel (all appointed by Perry). ETF dispersed $342 million through August 2010.

Like Solyndra, Convergen’s project to develop a lung cancer treatment was easily identified as a speculative endeavor. Convegen’s proposal was rejected at the regional review board, part of the normal ETF evaluation process designed to insulate the program from politics.

Solyndra had George Kaiser, mega-fund-raiser for Obama. Convergen had David Nance, mega-donor for Perry. Nance is the founder of Convergen. Despite several business and personal bankruptcies — including previously failed companies partially funded by the state — Nance managed to donate $335,000 to Perry’s campaigns, association fundraisers, and foundation.

As in the case of Solyndra, Convergen received help in circumventing the normal process. This part is very murky. Somehow, the proposal that failed the regional review was presented at the closed-door session of the state advisory panel (which previously included Nance), where it was approved. While the governor’s office claimed that an appeal was filed, there is no appeals process in ETF’s charter. The process by which Convergen received $4.5 million — the highest amount ever awarded — was “extraordinary.

Where Solyndra received a below-inflation interest rate, Convergen gave Texas an 8% annual interest promissory note with no due date.

Just like Solyndra, the principal investors unloaded risks on taxpayers. According to the previously secret state grant application, Convergen founders put up only $1,000 each, while Texas taxpayers put up $4.5 million. They were entering phase II clinical trials in late 2010, but only 33% of successful phase II drugs make it to market, and the success rate for cancer drugs is only 4.7%.

The big difference between Solyndra and Convergen is that Convergen hasn’t failed. Not yet, at least. The odds of success might be better than a roulette wheel, but this is taxpayer money.

Convergen is not an isolated case, either. In fact, Nance previously received state money “at the direction of the Governor’s budget office” for a now-bankrupt company which still owes Texas $50,000. Max Talbott served on Perry’s ETF panel and simultaneously was a paid consultant for several firms that sought and received money from the ETF. While he claims that he recused himself for some conflicts (in closed-door sessions), conflict of interest questions remain for other clients; $16 million of ETF funds went to the firms of major Perry donors, and $27 million of ETF funds went to firms of former ETF advisory board members.

There are also questions about unusual access by lobbyists who went to work for Perry and then returned to lobbying for firms doing business with the state. Still more questions exist about major donors influencing decisions, approvals, and the reorganization of state agencies. Much of this will almost certainly be revealed in the course of the campaign.

While these insider practices are shady and unfair to others who were denied similar opportunities, none of this is illegal (although the FBI is investigating Solyndra to see if they falsified records). Still, these incidents are damaging politically and forfeit a winning issue against Obama. More importantly, a candidate guilty of cronyism undercuts one of the best practical arguments in favor of reducing the size of government.

When the total economy is only $14.7 trillion and the federal/state/local expenditures exceed $5.8 trillion, is it any wonder that cronies “invest” so much donating to candidates and lobbying officials?

This is where Nader and populists on the left err in believing they can solve political cronyism through complex regulatory schemes and further concentration of power in a central government. The more power and money concentrated in one place, the higher the reward and the greater the incentive for corruption.

The first and most important step in tackling pay-to-play, political favoritism, and insider deals is to decentralize power and significantly reduce the money in Washington (and Austin). A lean and limited government is then much easier to police against cronyism.

Making the case for tackling cronyism, reducing the size of government, and decentralizing the corrupting power of a central government will be very difficult for a politician renowned for political favoritism.

The author makes a good point. More regulation isn’t the answer, as that just creates even more opportunities for corruption. The effort must be made to eliminate situations that allow politicians to be bought and sold.

This latest revelation would be shocking if we weren’t uncovering corrupt deals almost daily as we really look into Rick Perry’s record.

Perry has been in politics for almost 30 years now, and has been the Governor of Texas for 10 years. In this time Perry has set up a system of cronyism and patronage that surely rivals that of the seediest Chicago politician.

This particular deal is yet another case of Perry, and his people, usurping the normal process, in order to help out one of his cronies.

Texas lacks any real ethics laws, so none of what Perry does is illegal in the State of Texas. But it’s damned sure unethical! It cheats the people of Texas.

Texas also has zero limits on how much an individual can give a candidate. The ability to buy candidates is almost as unlimited.

Corruption and crony capitalism are going to be major issues in this presidential campaign, in both the primaries and the general. Barack Obama has built a career on cronyism. So has Rick Perry.

Conservatives love to point out that Mitt Romney can’t be our nominee because of RomneyCare. This is true. It takes a major issue off the table, because try as he might, Mitt simply can’t run from the fact he is the father of Socialized Medicine in America.

Conservatives need to wake up and realize that cronyism in government is a much bigger problem than ObamaCare. Massive corruption like this is destroying society, killing our economy, and job growth.

Until we have major governmental reforms that take away the ability for special interests to buy off politicians, our economy will never recover.

As Governor, Rick Perry had a golden opportunity to prove what sort of man he is. With ethics laws being all but non-existent, Perry could have championed laws that would have cleaned this mess up, and made cronyism a crime.

Instead, Perry not only embraced the corruption, he wallowed in it, and became the leader of the entire crony system in the state.

With someone like Rick Perry as the Republican nominee, there is no way in hell we can attack Obama over his massive corruption. Not with our nominee being just as dirty. Just as corrupt.

It’s going to take a real reformer to turn this nation around. Rick Perry ain’t it.


Filed under In The News, Politics

12 responses to “Convergen LifeSciences: Rick Perry’s Solyndra?

  1. Seattle

    SUPERB post, Gary! It was news to me, my jaw was dropping as I read. Keep up the good work!

  2. Excellent post Gary. Meanwhile there are whispers of Fast and Furious and El Paso Police and possibly Texas police corruption with payoffs coming from Mexico on the ‘net. And Perry’s comments about “then you don’t have a heart”, at the Thursday debate. Are both Perry and Romney outing themselves as “compassionate conservatives”? I wonder how that will play with the primary voters? bigmike.

    • Gary P

      Thanks. Perry’s comment at the debate nomination for certain. No one likes to be talked to like that.

      Lots of cronyism involved in the illegal situation. Perry’s largest donors are people who benefit from cheap labor.

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  7. Extremely well executed article.

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  10. This surely makes perfect sense to anyone..

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