State of Texas: Oil Empire

Texas

AUSTIN (KXAN) — Most Texans would be forgiven for not knowing what the state’s Railroad Commission does, or how the commission’s chair — Christi Craddick — and her politically prominent family earn money off hundreds of oil and natural gas leases checkered across the state — part of the same industry she was elected to regulate.

Craddick’s job has nothing to do with railroads, as the three-member commission ceased jurisdiction over its namesake more than a decade ago. Today, it approves, oversees, and catalogues every well-drilling permit, every drop of oil and every bubble of natural gas produced in Texas. And business is booming.

In recent years, record production has pumped billions of dollars into private and corporate bank accounts. Oil and gas severance taxes have provided a windfall to help the state fund everything from highways to teacher salaries. In the upcoming budget cycle, that collection is projected to top $10 billion.

Railroad Commission Chairman Christi Craddick (KXAN Photo)

Texas Railroad Commission Chairman Christi Craddick
(KXAN Photo)

But it’s Craddick’s deep family ties and investments in Texas oil that draw scrutiny to her actions as a railroad commissioner. With their mineral and royalty interests, her family’s intertwined businesses carve a percentage of profit from the record production happening across thousands of acres from West Texas to Tarrant County to the South Texas border with Mexico. Her co-mingling roles as investor and regulator trouble ethics experts, and even some lawmakers.

Since winning her seat in 2012, the rising Republican star has voted hundreds of times on items largely benefiting the same companies that contribute to her family’s wealth. A year-long analysis of commission agendas, appraisal records and county documents reveals her decisions have the power to impact those operators’ ability to drill and pump oil and gas from the same leases in which the Craddicks’ have financial stakes.

“The sole purpose of each of Chairman Craddick’s votes has been to ensure the enhancement and safe operations of the Texas energy industry, preventing waste and protecting correlative rights,” according to a prepared statement sent by Craddick’s staffer. “Any suggestion to the contrary is entirely without merit, unconfirmed by her voting record, and unreflective of her integrity.”

But, as Craddick seeks her second, six-year term in next month’s election, critics are raising serious questions about her effectiveness and ability to serve statewide. Her father, Rep. Tom Craddick, R-Midland — Texas’ longest-serving legislator — has his own deep connections with the oil industry and is directly tied to many of his daughter’s interests. He is also up for re-election.

‘Be very careful’

Government watchdogs like Texas Public Citizen’s Adrian Shelley said commissioners generally should not cast votes “in which they have a clear bias.”

“At the least, that should require disclosure if not recusal,” Shelley said, adding that regulators who don’t adhere to that level of transparency “are probably not fit to serve in that position.”

Texas law allows railroad commissioners to hold oil and gas interests. The law also requires them to inform the public before considering measures which involve those interests and bans them from participating in related votes, according to state statute.

In a review of the official minutes from every Railroad Commission meeting since January 2014, we found no recorded disclosures or recusals by any commissioner.

If an elected official in Texas votes on items in which they are personally or financially involved, that official could be removed from office, according to state code.

The law also allows the attorney general to initiate the process when a complaint is received.

“If I were on the commission, I would be very careful here with involving myself in these items,” said Buck Wood, an Austin ethics attorney. “Someone needs to be looking into this. Someone needs to ask the attorney general about this.”

Policy experts and a legislator we spoke with say the state should strengthen its ethics and transparency rules for railroad commissioners, and they plan to push for changes in the upcoming legislative session.

‘Good government 101’

In recent years, a group at the Texas Capitol has tried, unsuccessfully, to strengthen ethics rules for railroad commissioners here. The Sunset Advisory Commission, which is a bipartisan legislative panel that reviews and recommends improvements to state agencies, pushed for reforms in 2013.

Shelley’s group was involved in that discussion and provided lawmakers with campaign finance research, showing railroad commissioners’ political campaigns were funded mostly by the oil companies they regulate. It also revealed commissioners took campaign dollars from those companies while making decisions on their applications.

Much of the Sunset Commission’s recommended improvements that year never became law, but state Rep. Rafael Anchia, D-Dallas, said he will try again in 2019.

“If you have a business interest in a company and that company is coming before you and asking you to make a determination on their behalf, you have to disclose it,” said Anchia, who sat on the Sunset Commission back then. “That is real basic. That is good government 101.”

Anchia also authored a bill in 2017 to limit when railroad commissioners could accept campaign cash from the industry they regulate. The bill unanimously passed a House committee but never made it to the full floor for a vote. He said our findings will help lawmakers understand the severity of this problem as they consider his forthcoming legislation.

.rs_caption_box { display: inline-block; font-style: italic; margin-bottom: 1em; } .rs_caption_box img { width: 100%; } .rs_caption_box p { font-size: .75em !important; padding-top: .75em; margin-bottom: 0; } .rs_video_block { display: inline-block; width: 100%; margin-bottom: 1em; } .rs_video_block p { margin-top: .5em; } .rs_callout_box { border: 1px solid #cccccc; background-color: #eeeeee; display: inline-block; padding: 1em; margin: 0 0 1em 0; width: 100%; } .rs_callout_box ul { list-style-type: none; margin: 0 0 1em 0; padding: 0px; padding-left: .75em; } ul.rs_bullets { list-style-type: disc !important; margin: 0 0 1em 0; padding: 0px; padding-left: 2.2em; } ul.rs_li_spacer li { margin-bottom: 1em; } .rs_shadow { box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.4), 0 6px 20px 0 rgba(0, 0, 0, 0.4); } .rs_w40 { width: 40%; } .rs_w50 { width: 50%; } .rs_fright { float: right; margin-left: .75em; margin-bottom: .75em; } .rs_fright p { text-align: right; } .rs_fleft { float: left; margin-right: .75em; margin-bottom: .75em; } .rs_mobile { display: none; } .rs_not_mobile { display: inline-block; } @media only screen and (max-width:641px) { .rs_w40 { width: 100%; } .rs_w50 { width: 100%; } .rs_fright { float: none; margin: .75em 0; } .rs_fright p { text-align: left; } .rs_fleft { float: none; margin: .75em 0; } .rs_mobile { display: inline-block; } .rs_not_mobile { display: none; } }

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.