Cronyism

In Kaufman – It Pays To Be A Crony

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Property taxes are the largest and most onerous taxes Texans pay. But in Kaufman County, it pays to be well-connected.

Donald Trump’s election victory has been broadly viewed as retaliation by hard-working Americans to frustration with today’s political establishment and its close companion—cronyism. The politically connected receive special treatment, while the average taxpayer foots the bill for both the taxes and special interest handouts.

While we often consider cronyism to be relegated to the federal level in Washington D.C., it’s not. Cronyism is alive and well in Texas, particularly at the local level. Kaufman County provides an egregious example with inequities found in the state property tax system.

The Mayor of Forney – Rick Wilson – appears to be a personal beneficiary of preferential tax treatment. Wilson was able to get the appraised value of various parcels of real estate significantly lowered, including his personal residence.

Of particular interest are two parcels that he owns under the name SKW Holdings. (SKW Holdings is Rick Wilson’s entity.) The two parcels – 6509 and 6513 – are commercial tracts of land along Highway 80 next to Baylor Hospital. Despite their prime commercial location, Wilson was able to get them zoned agricultural, known colloquially as an “AG” exemption. Unsurprisingly, the two parcels are not eligible for such treatment.

The two parcels were originally valued at $3,575,180 combined, against which the owner would pay an annual property tax levy of $59,915.87. The appraisal has been lowered 99.9 percent so that Wilson now pays only $76.45 per year. (6509.1 / 6509.2; 6513.1/ 6513.2)

On yet another separate 45.6 acre tract, Wilson carries a sweetheart value of only $173,510. As for his personal property, unlike many Kaufman county residents, his appraisal value has remained the same value for at least 6 years. All during a time period marked by record growth in appraised value. (Wilson’s Personal Values HERE)

Would you be surprised to learn that the cronyism doesn’t stop with elected officials?

In 2013, Kaufman County Appraisal District’s Senior Appraiser (who is now in Van Zandt) – (William) Tanner Grimes – purchased his personal residence for $142,900. At the time of purchase, the county listed the appraised value at $98,850. Shortly after purchasing it, Grimes reduced the value on his own property to $85,100 (See Record HERE).

In the years that have followed, Grimes’s personal account has had a number of odd valuation changes made to it. To date his house is not assessed at the amount he paid for it 5 years ago. For Grimes, it literally pays to be the senior appraiser!

Kaufman also doles out benefits to those who are properly connected to local government officials. In the late 2000’s, a religious group named Gospel for Asia moved their headquarters from Carrollton to Willis Point. It appears they understood how things really work in Kaufman (Skyview HERE).

The group showered local officials with an all expenses trip to Asia where officials were wined and dined. Upon return, the group’s entire compound – which includes 85 homes, various community structures, and a worship facility – was granted tax-exempt status.

County records show the appraised values of the entire property at $35,682,320 (Value HERE) yet they pay no taxes. State law explicitly designates only the worship center and the religious leader’s parsonage as eligible for exemption, not the entire housing development for the congregation.

In Kaufman County, however, the law is merely a suggestion.

While other examples of property tax irregularities have been provided by sources inside the county, these are the most egregious and offensive.

The cronies get away with it when they make their deals in the dark. Local citizens must get more informed and engaged to help hold them accountable. Conservative reformers believe that this duty entrusted to taxpayers will be much easier to accomplish if government is put back inside its constitutional box.

In other words, a smaller government with less power and fewer responsibilities is much easier to hold accountable than the system we live under today.

Another Example of Cronyism?

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A top-ranking county official in one of Texas most conservative counties is facing harsh criticism for attempting to use his political position for personal gain.

Tarrant County Judge Glen Whitley recently pushed to improperly award a “no-bid” contract to a client of his government-accounting firm, Whitley-Penn.

During a November 8th, 2016 meeting of the Tarrant County Commissioner’s Court, Judge Whitley championed the idea of greater efficiency in county employee health care.

There was an urgent crisis and Whitley had the solution—pay $5,000 to a vendor, Integer Health Technologies, to study the county’s healthcare data. Then examine their findings and award Integer a $400,000-$500,000 annual contract.

The three County Commissioners present, along with several staffers, did not share Whitley’s enthusiasm for the deal.

Both Commissioners Johnson and Brooks were not pleased when It was later revealed that the initial cost rose by $12,000. Commissioner Brooks, a reliable ally of Whitley, stated, “I must admit that we’re not starting off real well going from a $5,000 expense to a $17,000 expense.”

Commissioner Nguyen firmly voiced concerns about fair bidding practices, as are required by state law.  Awarding Integer the initial contract without seeking alternative bids would give them an “unfair competitive advantage” over another vendor who could later bid for the same contract.

Whitley and Integer attempted to improperly use an exception to avoid competitive bidding by claiming the company was the “sole source” for this technology.  Sole source is a label applied to companies for which there is no competitor. But Integer is not the only company who offers this service.

Later in the meeting, Jack Beacham from the Purchasing Department expressed his desire to delay the deal and actually investigate Integer’s claims that they are sole-source. Whitley insisted this could be done after approving payment for the initial study.  According to Whitley, Integer would eventually be proven to be the only provider, so the county should just go ahead with the deal.

Whitley had clearly not done his own due diligence, as Integer’s sole-source claims were false.

A compelling motive for Whitley oversight was later revealed. Integer is a client of Whitley-Penn, the public accounting firm of which Whitley is a partner. This is the typical back room deal cronyism that plagues politics. Integer gives its business to Whitley-Penn, and then, Whitley turns around and gives Tarrant County’s business to Integer.

If it were not for the insistence of Commissioner Nguyen for the investigation into the sole-source claims, along with questions raised by other commissioners, the Integer deal would have sailed through. Without citizens engaged, many do.

It raises several important questions: What other conflicts of interest exist between Whitley and his accounting firm, considering his firm is one of the largest in the state? How many similar deals get pushed through city councils and school boards every week?

It is imperative that we watch each and every official we elect to office.  Choosing your candidate and voting is not enough. Citizens must hold their elected official accountable for each vote they cast.

The term “cronyism” is often used to describe back room dealing made between special interests and politicians in Washington D.C. or Austin.  Yet cronyism happens at all levels of government, especially at the local level.  For a recent example, look no further than Tarrant County.

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