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"I think what they did, Lockheed and Gulf Coast Careers, was restrict competition," Gonzalez says. "All of these organizations applied to be subcontractors, and they made us all believe we were partnering with Gulf Coast Careers. If I had known she was considering Lockheed, I would have looked for somebody else to partner with."
Diamond's trip through the "revolving door" recalls the ruckus Lockheed caused in July 1996, when it was learned that a number of high-level officials who helped develop the state's privatization policies had gone to work for Lockheed Martin. For instance, Dan Shelley, Bush's former legislative liaison, helped consolidate state services under the Texas Workforce Commission, and then left to become a lobbyist whose first client was Lockheed Martin IMS.
Greg Hartman, a high-ranking employee of state Comptroller John Sharp, lobbied the Legislature on welfare-reform measures on behalf of Sharp. He then joined the Austin office of MGT of America, where he helped Lockheed Martin prepare its bid to manage the Texas Integrated Enrollment System.
In October 1996, the Texas State Employees Union filed a complaint with the state ethics commission, alleging violations of Texas's "revolving door" law. Besides Shelley and Hartman, the TSEU complaint named Allan Pollock, a former Sharp employee who joined Hartman at MGT; Steve Bresnan, former special assistant to Lieutenant Governor Bob Bullock, who became a lobbyist for Lockheed Martin; and Michael Grossenbacher, a former TWC administrator who was hired away from the state by Lockheed.
Gulf Coast board member Richard Shaw says that privatization, if not Lockheed's role in it, is "a political deal to benefit George Bush."
"Even as we are doing this, members of the Texas Legislature are saying we weren't supposed to contract out all of these jobs," Shaw says. "But, you know, it's a done deal. George Bush is turning this into a platform to run for president of this country."
Indeed, Bush's desires are so obvious and Lockheed's influence so prevailing that even a strong, established organization like Houston Works has decided to seek an alliance, rather than buck the trend.
"Let's just be honest about it," says Terry Hudson, director of Houston Works, "I mean, Lockheed was a political favorite, and they were obviously going to get a slice of the 13 counties. And if we can control what they do inside our centers, that's got to be a win-win for us."
Toward that end, Houston Works and Lockheed issued a joint proposal for about $12 million in job-training services for welfare and food-stamp recipients. The proposal was approved, but later changed to award each agency about $9 million to operate its own career center: Lockheed with Gulf Coast Careers of Harris County; and Houston Works with the Houston Urban League, the Chicano Family Center and the Neighborhood Center.
While the end result was an increase in job-training funds for Houston and Harris County, only a handful of community-based organizations were able to secure subcontracts.
Says Irma Gonzalez: "I think we have gotten quite a taste of what Lockheed is capable of and the influence that it carries, everywhere."
On a cloudy afternoon in late February, a few members of the Texas State Employees Union held a press conference for exactly one member of the press in front of 3555 Timmons.
The building is home to the Houston-Galveston Area Council, and is where the Gulf Coast Workforce Development Board meets every month. The address also happens to be the offices of Lockheed Martin IMS -- a fact that TSEU president Linda Herrera pointed out early in the press conference.
"Just after [the state legislation] was passed, they opened an office in this building," Herrera said. "Right next to the conference room where the workforce-development board meets."
Without question, the biggest thorn in the side of privatization has been the state employees union. According to organizer Judy Graves, 700 to 800 state employees stand to lose their jobs as companies like Lockheed Martin take over their duties. Already, according to the union, more than 215 local state employees have been notified that they will be laid off by April 30.
In an effort to slow the privatization effort, the union, in addition to the ethics complaint it filed in October 1996, has taken its fight to Washington. A year ago, TSEU and its supporters persuaded the Clinton administration not to allow states to turn over key parts of social-service functions. Clinton told Texas officials that only state employees could determine who is eligible for food-stamp and Medicaid benefits. The decision scuttled the Texas Integrated Enrollment System, which would have privatized the administration of Medicaid, food stamps and welfare payments.
In November, the union sued the Texas Workforce Commission, seeking an injunction to halt contracts that would eliminate state jobs. The union also charged TWC with violating state procurement laws by transferring state property to private companies.
TSEU has also appealed to elected officials such as U.S. Congressman Gene Green, who was asked by the union to conduct an inquiry of both TWC and the Gulf Coast board for procurement irregularities that favored Lockheed Martin.
State officials such as TWC Commissioner Bill Hammond and Department of Human Services Director Mike McKinney have dismissed the lawsuit as evidence that the union is losing members, thereby proving that privatization is cutting costs by reducing the state's payroll.