By Chris Lane
By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
Through a quirk in state election statutes, the campaign funds of county party chairs in Texas are exempted from the reporting requirements for public officeholders. This isn't the first time Polland has used his private political slush fund in ways that amazed and confounded political observers. Newly obtained documents offer insights into both the sources of his money and the lengths he is willing to go to to hide them.
A confidential dismissal order of the Texas Ethics Commission was provided to The Insider. It indicates Polland either lied in a sworn affidavit to investigators about his use of the fund, or lied earlier in tape-recorded comments to the Houston Press. Either way it's hardly behavior becoming to a senatorial hopeful.
In the fall of 1999, Polland collected hundreds of thousands of dollars from opponents to the downtown basketball arena. He deposited them in his chairman's account, then immediately contributed an equal amount of money to the anti-arena political action committee called Citizens for Accountability. The effect was to shield the identities of the contributors from public disclosure.
Terry O'Rourke, a Democratic activist and former assistant county attorney, later filed a complaint with the Texas Ethics Commission alleging that Polland's fund transfers violated state campaign laws against so-called pass-through contributions. An illegal pass-through occurs when a person accepts a contribution from a source with the understanding that it will be passed on to another campaign or political action committee. Such maneuvers are illegal because they mask donors' identities.
The commission eventually dismissed O'Rourke's complaint, citing sworn affidavits from Polland and a "secret contributor" that the money had never been earmarked for the arena campaign. Although Polland has refused to name the source of the money, the commission's order of dismissal discloses that $400,000 came from Wincrest Ventures L.P., the personal investment vehicle for Chuck Watson, owner of the Houston Aeros hockey team. At the time, he operated the Compaq Center and was one of the leading opponents to the arena referendum.
In a second referendum a year later, Watson and Polland dropped their opposition and the measure passed. The arena is under construction in the southeast corner of downtown.
In his affidavit to the commission, Polland offered the following defense against O'Rourke's complaint:
"I decided to use some of my funds in the 'Chairman's account' to contribute to a specific purpose committee that was involved in a local measure election It was my understanding that the contributors to my 'Chairman's account' were contributing to the 'Chairman's account' for my use in my efforts in seeking the Chairmanship of the Republican Party, not the efforts of those involved in a measure election."
Bolstering that position was Watson's representative, John A. Blaisdell, who swore in an affidavit that "these contributions were unconditional; that is, they were not made with any intent or requirement that the funds either be given to anyone else or to any other entity, or to be spent for any particular purpose."
Taken at face value, the two affidavits contend that a sports franchise owner fighting the arena just happened to drop $400,000 with no strings attached on a county party chairman who had no opponent and was not engaged in a re-election effort. Then that party chairman just happened to take the money and immediately transfer it to a political action committee fighting the very arena that Watson had already publicly committed $100,000 to defeat. Because the cash had been laundered through Polland's campaign account, Watson's identity was never disclosed.
Far more plausible is the straight-ahead, no-regrets explanation Polland willingly blurted out to The Insider in a taped interview on Election Night in November 1999.
"Prior to the [anti-arena] PAC being formed, when people started sending money to fight the arena they sent it to me, that's how it happened," said the then-chairman during a raucous party at Pappa La Rosa's pasta bar. Polland recounted how he told the sources, "You can write checks to the Republican Party, you can wait till the PAC forms, or you can write checks to my campaign account." He left no doubt that the contributions had been earmarked to fight the arena, not for his re-election.
The ethics commission never bothered to ask the Press for Polland's taped comments to compare to the affidavits before it dismissed the complaint. Asked why, commission member Mickey Lawrence says the agency's hands are tied by its own bylaws.
"The commission thinks that by calling you they would have violated the confidentiality provision, so they can't investigate," says Lawrence. She had recused herself from the O'Rourke complaint because of her knowledge of Polland's campaign tactics. "They're just not going to go out and investigate."
A pro-arena combatant from the 1999 election had a good laugh over the affidavits.
"It's just complete bullshit," chuckled the source. "Blaisdell's never given a dime to a party chair or a party function before then, and I'm sure he hasn't given a dime since. That commission is so toothless they might just as well be eating baby food."