Playing Possum

Rudyard Kipling penned those words in 1895 and went on to advocate trust, truth, virtue, and betting it all on the River Card.

While his words were thoughtful, they were not necessarily actionable as he neglected to specify when to go all-in. This is especially true if you define action as separating someone from their money or from their real estate. Although Rudyard lived in the United States for four years, there is no evidence that he ever stepped foot into the State of Texas and he probably never once played a hand of Texas Hold ‘Em. If he had, he might have learned what defines the true measure of a man.

In January of 2009, it seemed that everyone was losing their head and then some. Everyone that is except for The River Card. He never blinked.

Those who regulate, marshal, and otherwise steer the American economic system were collectively convinced in January of 2009 that we were all staring into the Abyss. The S&P 500 had just lost 10 years worth of value and The Great Recession was in full swing. Names like Bear Stearns and Lehman Brothers had been reduced to entries in the history books and the US Treasury Department was rebranding itself on a daily basis. Annual bonuses for bankers and brokers were in question and there was even talk that freshly minted Harvard MBA’s might not find jobs upon graduation. Fortune 500 CEO’s were flying commercial for the sake of public relations and their CFO’s were packing their dry powder into storage kegs and stashing them away accordingly. The U.S. financial markets were paralyzed.

Since the executives on Wall Street are the only ones who actually know what an abyss looks like, the rest of us were required to look through their prism and gasp on cue.

Expecting an abyss to be something filled with brimstone and flying monkeys; ninety percent of us were eventually relieved to learn that an abyss is simply a basket of pink slips that get handed out to the other 10% of the workforce. For the remaining 90% of us who kept our jobs, an abyss turned out to be something that actually creates lower prices for food, cars, gasoline, electronic devices, stocks, lake houses, and; most importantly, the ground beneath those lake houses.

In Washington, D.C. change was in the air. Who knows whether the American voters looked into the Abyss and recoiled or simply considered the next option offered by the Republican Party to be abysmal? If you’re trying to separate someone from their money, or from their real estate, who cares? For the first time in 20 years, a man that didn’t hail from Texas or Arkansas was about to be installed as the President of the United States. Moreover, the President-elect appeared to be the fulfillment of MLK’s dream and he captured the attention of every vein of the media. As a result, no one gave a Possum’s ass about local issues such as the sale of surplus real estate in Palo Pinto County, Texas.

In Austin, Texas; January of 2009 was noteworthy for decidedly different reasons. Four years earlier, U.S. Senator Kay Bailey Hutchison from Texas had mounted and then abandoned a challenge against incumbent Texas Governor Rick Perry. On January 14, 2009, Todd J. Gillman of the Dallas Morning News reported that Senator Hutchison would be mounting a second challenge in 2010. Perry and Hutchison were both tenured leaders in the Texas Republican Party and the party faithful would be forced to choose sides. At the outset, Kay Bailey Hutchinson enjoyed a 25 point lead in the polls and major newspapers across the state were endorsing her candidacy. Rick Perry had never lost an election at any level and losing to Hutchinson would surely doom his 2012 Presidential bid before it even got started. In the face of this challenge, Perry could not have enough friends with money in their pockets and influence at their disposal. Now was the time for Perry to put his reputation as a Governor who “transparently rewards friends and punishes enemies” to good use. The contest for the Governor’s mansion was shaping up to be a repeat of Clayton Williams vs. Ann Richards.

Simultaneously, one of the largest battles in the history of the Texas Legislature was reaching its climax. The Speaker of the House, Representative Tom Craddick from Midland, had managed to alienate the entire House of Representatives. The power struggle that followed in both Parties became known as the “Anyone but Craddick” sweepstakes. The number of ambitious Representatives seeking the Speaker’s gavel was approaching double-digits and so too were the horse-trading opportunities that arose from the process.

Tom Craddick began his political career at the age of 25 when he ran for the Texas House of Representatives as a Republican. By his own admission, most people thought him foolish as Texas was a one-party state run by the Democrats. Coattails are a powerful thing in politics, however, and the voters of Midland elected Craddick along with Richard M. Nixon in 1968. Tom Craddick became one of only nine Republicans in the 150-seat House of Representatives. In the wake of the Sharpstown Stock-Fraud Scandal, he quickly rose to prominence as a reformer. On January 11, 2003, after thirty-four years in the House, Craddick became the first Republican Speaker in more than 130 years. He held the presiding officer's position for six years.

Unfortunately, exercising power became Speaker Craddick’s drug of choice. He established a reputation as a tyrant and nothing short of mutiny erupted on the floor of the House on Friday, May 25, 2007. A fellow Republican, Representative Fred Hill, attempted to raise a question of privilege to remove Craddick from office. Craddick refused to allow the question. When Representative Hill requested a vote, the Speaker replied: "The Speaker's power of recognition on any matter cannot be appealed." Those turned out to be Tom’s famous last words as Speaker of the House. At the beginning of the next Legislative Session in January of 2009, a full-blown power grab was under way.

A new Speaker of the House would mean new Committee Chairs and new Committee Members. This was the flop that The River Card was waiting for and it married up perfectly with the suited Jack-Queen that he was holding in the pocket. The River Card was staring at a Royal Flush. The only thing left to do was play possum, get the pot up, and take everyone else out.

The River Card knew that it was time to go all-in.

The Tale of The River Card is best told backwards. The beginning of the ending occurred on April 8, 2009 when The River Card offered $50 million to buy roughly 1,200 acres of surplus real estate from the State of Texas. Those in the know on this deal valued that same property at roughly $1 billion.

As the story goes, the ensuing transaction represented a case study in collaborative commerce where a collection of Strategic Partners worked in unison to achieve a mutually beneficial outcome. If everyone got what they wanted, then The Tale of The River Card must be without a victim. In the absence of a victim, there can be no crime per se and thus no motives that need to be examined. In the absence of a crime, there is simply no story worth telling outside of academia.

I have learned over the years that there are usually two sides to every story. This is true whether you are talking about an ugly divorce or the sale of surplus real estate in Palo Pinto County, Texas. As the other side of the story goes, the taxpayers of Texas got screwed like a bunch of tied up goats. To quote one of the public servants charged with safeguarding the welfare of the citizenry:

It’s not whether you’re going to get raped or not, it’s just at what extreme are you going to? Welcome to the Great State of Texas where we are “Wide Open for Business.”