The Insider

Aid and Comfort
Since he began running for mayor, Rob Mosbacher hasn't been the least bit shy about trumpeting his chairmanship of the Greater Houston Area Chapter of the American Red Cross and his other philanthropic endeavors.

The multimillionaire oilman has routinely mentioned his work for the Red Cross in his handouts and mailings. But recently, by highlighting his volunteer service in a television commercial, Mosbacher appears to have violated the nonprofit relief agency's code of conduct, which bans the use or involvement of the Red Cross or its name in political campaigns.

It's always possible, of course, that Mosbacher was simply confused by the Red Cross's slogan, "Help Can't Wait," and presumed that it applied to his ambitions to hold elective office as well as to aid for disaster victims.

Earlier this year, The Insider has learned, Red Cross funds were used to pay for a ghostwritten op-ed piece on the agency's behalf that ran under Mosbacher's byline in the Houston Chronicle -- after he had launched his mayoral bid. More on that later, but first let's examine the aid and comfort old Mosbacher associates received from the Red Cross while the candidate was a board member and later chairman of the Houston branch.

Back in 1993, the local chapter hired longtime Mosbacher family retainer Herb Butrum for a $100,000 "major gifts development" study funded by the agency's national organization. Butrum has worked for years for Mosbacher Energy, the family-owned company of which Rob Mosbacher is president, and is currently being paid $7,500 a month as a consultant to Mosbacher's campaign. Mosbacher was on the Red Cross board at the time Butrum signed on for the study. He began his two-year run as chairman in 1995.

Butrum told The Insider he received "$60,000 or $70,000" for the study, and also performed similar work for a half-dozen other Red Cross chapters around the country. He acknowledged that Mosbacher recommended him for the local contract, but defended the assignment, which he described as an intensive two-year study of how the Red Cross could fill the vacuum created when the United Way withdrew as major funding source for the agency's efforts. Butrum says he also advised the local chapter on the purchase of new computers and sophisticated software to enhance its fundraising capabilities.

A person with inside knowledge of the Houston chapter's operation has a different take on Butrum's work: "The study, which uncovered such startling facts as the Red Cross was not in the in-crowd and that its own board members were ignorant of what it did, was considered nonsense and quickly forgotten."

The Mosbacher campaign did not respond to verbal and written requests from The Insider for a response to this story.

During his chairmanship, Mosbacher also approved the local chapter's hiring of Donna Rybiski as its marketing and communications director -- reportedly at a $70,000 salary, considerably above the $36,000$41,000 salary the chapter initially advertised for the position. Rybiski declined to divulge her annual pay to The Insider, saying it was not public information.

Rybiski is old friends with Mosbacher and his wife, Catherine, as Rybiski let it be known to other employees in the Houston office after her hiring. Her resume includes a stint as executive director of the Houston Committee for Private Sector Initiatives, a group sponsored by Tenneco that Mosbacher helped found in the early 1980s. It encourages corporate involvement in community self-help projects and has a distinctly Republican aura. (The same Mosbacher television commercial that promotes his Red Cross service also features Ann Kaufman, a former board member of Committee for Private Sector Initiatives, praising Mosbacher for his involvement with that group. Last week, the head of another nonprofit agency complained to the IRS that Kaufman's appearance in the commercial violates federal rules prohibiting nonprofits from endorsing candidates.)

Under Rybiski's direction, Mosbacher was afforded a generous amount of face-time in two newsletters of the local chapter that were issued after he began his campaign for mayor. The spring edition of the Good Neighbor News contained a front-page letter from the outgoing chairman entitled "Mosbacher Recalls Volunteer Rewards." Inside are photographs of Mosbacher gripping and grinning with American Red Cross President Elizabeth Dole and Councilwoman Martha Wong. Four photographs of the mayoral candidate with various dignitaries were shoehorned into the newsletter's summer edition, published after Mosbacher's tenure as chairman was over.

Rybiski, who displays a photo of herself, Mosbacher and President Reagan at her Red Cross office, was responsible for a $787 expenditure of the nonprofit's funds to pay corporate communications specialist Suzanne Thomas to ghostwrite the Chronicle op-ed page piece that ran under Mosbacher's byline on March 2, a week after Mosbacher conducted a fundraiser that netted more than a million bucks for his campaign. The 732-word piece was not overtly political -- it simply plumped the Red Cross's efforts -- but it definitely provided some free exposure for the fledgling candidate with the advertised "warm heart for Houston."  

Thomas confirms she wrote the editorial that carried Mosbacher's byline and was paid out of local Red Cross funds. Her billing to the agency even included a handwritten thank-you note to Rybiski. "Donna, many thanks again for the business," wrote Thomas. "It is always most appreciated."

Rybiski says she hired Thomas to write copy for the Red Cross's March fundraising campaign. Mosbacher's name was slapped on the op-ed piece, she says, "because he was chairman of our board at that time." Rybiski plans to do the same thing next March with the new chairman, Alan Buckwalter, and sees nothing wrong with the practice.

While Mosbacher was undeniably the local chapter chairman, Red Cross bylaws would seem to forbid him from exploiting his service for political gain, as he's done in his television ad, where the smiling candidate is shown walking in front of the Red Cross offices on the Southwest Freeway. The agency's name and insignia are clearly visible in the background.

According to the American Red Cross's code of conduct, "no volunteer or paid staff member shall authorize the use of or use for the benefit or advantage of any person, the name, emblem, endorsement, services, or property of the American Red Cross." The code also specifically bans the public utilization of "any Red Cross affiliation with the promotion of partisan politics, religious matters, or positions on any issues not in conformity with the official position of the American Red Cross."

Rybiski says she had nothing to do with the Mosbacher ad and is not aware whether his campaign sought permission from the Red Cross for use of its name or emblem.

Another mayoral candidate, George Greanias, has authored numerous Chronicle op-ed pieces over the years, and Greanias says that he wrote the copy for all of them, although some of the finished pieces were edited by assistants. Once Mosbacher entered the mayor's race, opines Greanias, he should have stopped using the Red Cross as a public platform.

"The Red Cross is a tax-exempt organization, and the last thing you want to do is anything that could endanger their tax-exempt status," says the former city controller. "And that includes anything that could even arguably be seen as supporting a political candidacy."

When contacted by The Insider, Andrea Morisi, a spokeswoman for the national Red Cross's general counsel, was uneasy with the agency's appearance in the Mosbacher commercial.

"I'm not sure going and standing in front of the chapter house is a good idea," said Morisi.

Mosbacher's pal Libby Dole has come under fire recently for allegedly attempting to use the charity as a stepping stone for her presidential ambitions. In an editorial, the Philadelphia Inquirer suggested she resign, and accused her of offering fat, no-bid contracts to well-known Republican political consultants who worked in her husband's presidential campaign and for Ronald Reagan.

Great Republican minds must think alike.

All Is Forgiven
More than one neighborhood activist in northwest Houston was puzzled by the Chronicle's endorsement of Liz Lara-Carreno for the District A Council seat being vacated by Helen Huey, since Lara-Carreno is a relative newcomer to the district without much of a record of community involvement in the area.

Lara-Carreno has, however, sought office previously: In 1993, running as Liz Lara, she sought the District H seat on Council. She lost in a runoff to Felix Fraga and apparently never looked back, at least when it came to repaying a $30,000 loan to her campaign from lawyer Frumencio Reyes. Lara has since married consultant Hector Carreno.

"We were very close to her family, both my wife and I and our daughters, so it's money down the tubes as far as we're concerned," says Reyes, who is backing Brenda Flynn Flores in the District A race. "The offer was not made to repay, and I'm not going after her."

Lara-Carreno has lived in District A for less than a year and paid her fee to be on the November 4 ballot shortly before the filing deadline. Reyes has an interesting theory on Lara-Carreno's candidacy, claiming she decided to run at the behest of Huey, who wanted another candidate to bleed off Hispanic votes and keep Flores out of a runoff with one of the Anglo contenders.

But Lara-Carreno, who's a member of the Democratic National Committee from Texas and chairwoman of the DNC's Hispanic Caucus, says Huey had nothing to do with her decision to seek the office. As a good Democrat, she says, she just got sick of hearing the District A contenders "trying to out-conservative each other."  

As for the unpaid loan from Reyes, Lara-Carreno admits she never bothered to look at her 1993 campaign financial statement after that race was over. And she indicates Reyes should not expect a repayment any time soon.

"I think if I had owed $30,000 to somebody," she reasons, "they would have been after me by now."

Late Arrival
With the recent hiring of Marc Campos, the team of operatives who ran Bob Lanier's 1991 bid for mayor has been completely reunited for the Lee Brown campaign. Campos is credited with helping Lanier win from 65 to 80 percent of the vote at predominantly Hispanic precincts in Lanier's runoff with Sylvester Turner, and he's signed on to do the same for Brown in an expected runoff after the November 4 election.

This time around, Campos would like to nail down a commitment from Brown to include Hispanic voices in his inner circle at City Hall. Campos points out that the power players in Lanier's ivory tower -- including Dave Walden, Jimmie Schindewolf and Dan Jones -- are all white men, with City Attorney Gene Locke, an African-American, providing the only minority voice.

Campos joins Brown fundraiser Sue Walden, campaign manager Craig Varoga and consultants Dan McClung and Bill Miller, who performed essentially the same tasks for Lanier six years ago.

Call The Insider at (713) 624-1483 or (713) 624-1496 (fax), or e-mail him at

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