FOR IMMEDIATE RELEASE August 4, 2009

CONTACT: Jeff Sadosky, Press Secretary 512.236.8656

$1 Million To Pharmaceutical Company With Perry Allies On Board Of Directors
Austin, TX – Rick Perry’s penchant for awarding taxpayer dollars to his political friends was readily apparent on Monday when he announced a $750,000 Emerging Technology Grant (ETF) to Halsa Pharmaceuticals. This is the second ETF Grant Halsa has received and brings the total amount of taxpayer money Perry has funneled the company to $1 million. Not surprisingly, a few of Perry’s buddies and former political appointees sit on the pharmaceutical company’s board of directors. The same friends who have advised Perry to award controversial government contracts and defended his notorious $50 million ETF grant to Texas A&M. The decision-making process for the ETF remains behind closed doors. Texans for Kay Press Secretary Jeff Sadosky released the following statement today: “Hypocrisy and cronyism define Rick Perry’s tenure as Governor of Texas. With small businesses in Texas facing a projected $2 billion in tax increases to pay for Rick Perry's politics, millions upon millions of taxpayer dollars have gone to a well-connected few. Rick Perry's payoffs to his friends won't get Texas' economy back on track, that takes real leadership." Rick Perry Gave $1 Million To Halsa Pharmaceuticals Through Emerging Technology Fund On August 3, Rick Perry Announced $750,000 Emerging Technology Grant Awarded To Halsa Pharmaceuticals, Bring Total ETF Grants Awarded To Halsa To $1 Million. “Gov. Rick Perry today announced the state will invest $750,000 in Halsa Pharmaceuticals Inc. of Houston through the Texas Emerging Technology

Rick Perry Funnels Taxpayer Money To Friends

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Fund (ETF). This investment follows a $250,000 deal announced in March 2008, and will fund additional development of Halsa’s treatment for obesity and diabetes.” (Governor Rick Perry, “Gov. Perry Announces Second ETF Investment In Halsa
Pharmaceuticals,” Press Release, 8/3/09)

Perry Has Close Ties To Halsa Board Members
Perry Has Close Ties To Halsa Board Member Guy Diedrich Texas A&M Vice Chancellor For Federal Relations, Commercialization And Economic Development Guy Diedrich Is On Halsa’s Board Of Directors. “Dr. Diedrich is the Vice Chancellor for The Texas A&M University System responsible for federal relations, economic development and technology commercialization. Dr. Diedrich served for eleven years as President and CEO of GRA Inc., a software development and consulting company acquired in 1998 by a publicly-traded technology company. He also served as President of Austin Technology Ventures. Dr. Diedrich serves as a member of the Board of Directors of the Texas Life Sciences Center, American Trauma Society, Texas A&M College of Science, Young President’s Organization, Royal Economic Society, and Society of Business Economists. He is a founding member of the Board of Directors of the Texas Institute for Genomic Medicine.” (Halsa Pharmaceuticals Website, www.halsapharma.net, Accessed 8/3/09) June 2009 Austin American-Statesman Article On Power Struggle Between A&M System Chancellor Mike McKinney And Then-A&M University President Elsa Murano Describes Diedrich As “Close” With Perry. “Recent events and disclosures reveal a power struggle involving system Chancellor Mike McKinney, campus President Elsa Murano, the regents, the faculty and, to some extent, Gov. Rick Perry. … Not only did Perry appoint all nine regents, but McKinney is a former chief of staff for the governor. Guy Diedrich , vice chancellor for federal relations and commercialization, is also close to Perry. Mark Ellison , associate vice chancellor for economic development, is a former director of the state's Emerging Technology Fund, a pet project of Perry's.” (Ralph K.M. Haurwitz,
“Aggie leadership fight coming to a head,” Austin American-Statesman, 6/13/09)

In May 2009, Perry Appointed Diedrich To Product Development And Small Business Incubator Board. “Gov. Rick Perry has appointed four members to the Product Development and Small Business Incubator Board. The board advises the Economic Development Bank on the administration of the product and small business development fund. Guy K. Diedrich of Austin is vice chancellor of the Texas A&M University System. … He replaces Richard E. Ewing of College Station for a term to expire Feb. 1, 2011.” (Gov. Rick Perry, “Gov. Perry Appoints Four to
Product Development and Small Business Incubator Board,” Press Release, 5/14/09)

On March 24, 2009, Diedrich Appeared Before State House Appropriations Committee To Testify On Controversial $50 Million ETF Grant To National Center For Therapeutics Manufacturing. “Lawmakers grilled Gov. Rick Perry’s advisers Tuesday on their decision to spend $50 million meant to lure new businesses to Texas on a new research facility. Members of the House budget-writing committee said they don't oppose creation of the Texas A&M University System's National Center for Therapeutics Manufacturing, which will be built on the campus of A&M, Perry's alma mater. The world-class facility will help researchers advance production processes for new drug therapies. But the way Perry's office funded it - moving $50 million that lawmakers earmarked for the state's deal-closing fund into an account used for new technology programs - raises red flags for legislators. The grant is the largest by far from a fund that has never before been used to construct university buildings. The money transfer was the first of its kind.” (Emily Ramshaw, “Perry advisers take heat on A&M grant,” The Dallas Morning News, 3/25/09; Appropriations Committee, Texas State
House, Hearing, 3/24/09)

In 2008, Diedrich Was Interviewed By Perry Advisers As A Possible Replacement For Former Secretary Of State Phil Wilson. “Gov. Rick Perry has a high-profile job to fill and, far as I can tell, hasn't found a favorite. Don't rush to apply, though. Unless he breaks with history, Perry isn't likely to give the job to just anybody. The post of secretary of state, which pays up to $117,516, amounts to a political plum - meaning only a select few have a shot.

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… Secretary of State Phil Wilson took a private-sector job this month. … One prospect has come and gone. Guy Diedrich, vice chancellor for technology commercialization at the Texas A&M University System , talked to Perry's advisers before concluding he fits where he is.” (W. Gardner Selby, “Will Perry play it safe in choosing secretary of state?,” Austin AmericanStatesman, 7/10/08)

Halsa Board Member James Cox Is A Former Perry Appointee James Cox Sits On Halsa’s Board Of Directors. “Mr. Cox served as Chairman of the Texas Lottery Commission from 2002 to 2009. He also served on the Texas General Services Commission from 1999 to 2002. Cox was president of the Casino and Aviation Groups of the Estate of Howard Hughes, and president and CEO of Hydrolab Corporation. He was previously a Deloitte accounting and auditing partner. He is a member of the American Institute of Certified Public Accountants (AICPA) and served on the Gaming Industry Special Committee, which wrote the AICPA’s Audit Guide for Casinos.” (Halsa Pharmaceuticals Website, www.halsapharma.net, Accessed 8/3/09) Cox Served As A Perry Appointee To Texas Lottery Commission From 2002 To 2009. “Mr. Cox served as Chairman of the Texas Lottery Commission from 2002 to 2009. He also served on the Texas General Services Commission from 1999 to 2002. Cox was president of the Casino and Aviation Groups of the Estate of Howard Hughes, and president and CEO of Hydrolab Corporation. He was previously a Deloitte accounting and auditing partner. He is a member of the American Institute of Certified Public Accountants (AICPA) and served on the Gaming Industry Special Committee, which wrote the AICPA’s Audit Guide for Casinos.” (Halsa Pharmaceuticals Website, • Perry Appointed Cox To Chair Commission In January 2007; Cox Served In That Position Until March 2009. “Gov. Rick Perry has announced the appointment of Jim Cox of Austin as presiding officer of the Texas Lottery Commission for a term to expire at the pleasure of the governor. The commission oversees the Texas Lottery and ensures that lottery and bingo games are conducted in a legal and fair manner. Cox has served on the Texas Lottery Commission since 2002.” (Gov. Rick Perry, “Gov. Perry Appoints Jim Cox As Presiding Officer Of Texas Lottery Commission,” Press Release, 1/5/07; Gov. Rick

www.halsapharma.net, Accessed 8/3/09)

Perry, “Gov. Perry Names Williamson Chair Of Texas Lottery Commission,” Press Release, 3/27/09)

Cox Was Involved In Lottery Commission’s Controversial 2004 Decision To Hire Las Vegas Firm With Ties To Gambling Industry To Draft Legislation Legalizing Video Lottery In Texas. “A Las Vegas law firm that represents some of the nation's largest manufacturers of video lottery terminals received a $250,000 contract from the Texas Lottery Commission to draft legislation for legalizing video lottery in Texas. A proposed state constitutional amendment to legalize video lottery -- a form of slot machine -- failed in the Texas House in the recent special legislative session. But both Gov. Rick Perry and Lt. Gov. David Dewhurst have indicated they would like to revive the issue if there is another special session on school finance.” (R.G. Ratcliffe, “Texas Hires Vegas Firm to Push Video Lottery,”
Houston Chronicle, 5/20/04)

Cox Recommended Firm That Received Contract. “[Texas Lottery Commission General Counsel Kim] Kipling said the Las Vegas firm was chosen on the recommendation of lottery Commissioner James Cox of Austin. During the 1980s, Cox ran four hotels and casinos for the estate of Howard Hughes.” (R.G. Ratcliffe, “Texas Hires Vegas Firm to Push Video Lottery,” Houston Chronicle, 5/20/04) In Defending Contract, Perry Cited Cox’s Advice On The Issue. “Gov. Rick Perry on Thursday defended the state's hiring of a Las Vegas law firm, with ties to casinos and companies that make gambling devices, to draft the legislation that could legalize slot machines in Texas. Perry said the decision to hire Lionel Sawyer & Collins was made on a recommendation from Jim Cox of Austin, a Texas Lottery Commission member and a former casino industry executive. ‘I think it was appropriate, and it is my opinion that the (lottery) commission made that decision. There is some

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very, very deep experience on the Lottery Commission,’ Perry said, referring to Cox. … ‘I have got great faith that Jim Cox made a good decision for the State of Texas and went to a firm with very deep knowledge and experience in dealing with this particular subject,’ Perry said.” (Ken Herman,
“Governor defends Las Vegas firm pick,” Austin American-Statesman, 5/21/04)

Lawmakers Questioned Whether Contract Was Ban On Legislative Lobbying By State Agencies, And Questioned Appropriateness Of Hiring Firm That Represented Casinos To Draft Legislation On Gambling. “The hiring of the law firm, which is being paid by the Texas Lottery Commission, has raised questions from legislators on two fronts: * By paying the law firm to draft legislation, has the Lottery Commission violated the ban on legislative lobbying by state agencies? * Is it a good idea to let a firm that represents casinos draft the law that could govern the opening of a major new market for those clients?” (Ken Herman, “Las Vegas firm hired to draft slot rules,” Austin AmericanStatesman, 5/20/04)

Firm’s Legal Bill For Project Was $367,204, Over $100,000 Above Its Contractual Limit. “[Attorney General Greg] Abbott's office then took Lottery Commissioner Jim Cox's recommendation to hire Las Vegas gambling law firm Lionel Sawyer & Collins to draft such a bill-ostensibly because the AG's office lacked in-house gambling expertise. During the special session that Governor Perry convened for this legislative proposal in 2004, the bill failed loudly. Politicians and watchdogs have complained that: the state lacked authority to hire the firm; the firm's gambling clients posed conflicts of interest; and the firm's $367,204 legal bill exceeds its contractual limit by more than $100,000.” (“Playing the House,” The Texas Observer, 2/4/05) -###P.O. Box 130 • Austin, TX 78767 • www.TexansForKay.com
Political ad paid for by Texans for Kay Bailey Hutchison, Allan Shivers, Jr., Treasurer

8/4/2009

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