Following the landfall of Hurricane Rita in 2005, Houston Mayor Bill White directed the Coastal Water Authority to award a $1.8 million contract to BTEC, a company whose majority owner, the Wedge Group, had White on its payroll for more than $81,000 in 2005.
White was CEO of Wedge Group from 1997-2003. In 2001, Wedge Group purchased a controlling interest in BTEC, and Bill White became a manager and board member of BTEC. In 2006, Bill White invested one million dollars in the company, and soon thereafter made more than a half-million dollars in profit.
When Bill White released his 2004-2008 income tax returns on June 8, 2010, his campaign said, “Bill performed no services for his former employer after he began his service as mayor in 2004.”
Later that day, when confronted with facts about BTEC’s role in Hurricane Rita, “White said he saw no conflict of interest in the arrangement,” according to the Associated Press, and the White campaign told KTRK-TV in Houston, “Bill White had no financial interest in BTEC during the time of Hurricane Rita.”
The timeline below reveals the truth about Bill White’s financial relationship with BTEC and the conflict of interest he had in 2005 when the company was awarded a $1.8 million contract following Hurricane Rita’s landfall.
TIMELINE OF BILL WHITE AND BTEC/WEDGE GROUP
April 7, 1997: Bill White named CEO of Wedge Group.
Dec. 17, 2001: Houston Business Journal reports, “The Wedge Group, a Houston-based investment firm has bought a 70 percent stake in BTEC Turbines, a Houston company that designs and manufactures control systems for gas turbine generators.” The investment is reported to be $20 million.
Dec. 6, 2003: Bill White elected mayor of Houston.
Dec. 8, 2003: Bill White resigns as Wedge Group CEO.
2005: Bill White receives $81,854.65 in “wages, tips, and other compensation” from Wedge Services, LLC, as he reports on his 2005 income tax return. He also reports $3,633,085 in “gross receipts and sales” that Bill White says is a payment from Wedge Services “based on the realized value of gains from investments he had previously managed.”
June 29, 2005: In a Houston Chronicle article about corruption at Houston City Hall, Bill White says, “If there is somebody who has done anything improper in terms of receiving a benefit for city business, they ought to quit and hire a good defense lawyer, because we’re going to try to help the prosecutors go after them.”
Sept. 13, 2005: Texas Franchise Tax Public Information Report for BTEC LLC declares that WEDGE-BTEC Investment, Inc. has a 50.31 percent ownership interest in BTEC LLC.
Sept. 23, 2005: Hurricane Rita makes landfall.
Fall 2005: BTEC awarded $1.8 million contract by the Coastal Water Authority at the direction of Houston Mayor Bill White. As the Associated Press reported on June 8, 2010: “White said he called the company to help provide power generators to ensure the Houston-area refineries and the adjoining city of Baytown could maintain their water supply during the power outages. The company then got an emergency contract with the regional Coastal Water Authority, White recalled.”
2006: Bill White receives $83,626.09 in “wages, tips, and other compensation” from Wedge Services, LLC, and suffers a $4,922 “passive loss” from his partnership in BTEC Investments LLC, as he reports on his 2006 income tax return.
2007: Bill White earns $556,513 in “passive income” from his partnership in BTEC Investments LLC, and receives $109,014.58 in “wages, tips, and other compensation” from Wedge Services, LLC, as he reports on his 2007 income tax return.
2008: Bill White receives $103,497.67 in “wages, tips, and other compensation” from Wedge Services, LLC, and suffers a $12,336 “passive loss” from his partnership in BTEC Investments LLC, as he reports on his 2008 income tax return. This BTEC figure is contradicted by a personal financial disclosure Bill White files with the U.S. Senate on May 15, 2009, covering his 2008 activity. In that disclosure, White declares between $100,000 and $1,000,000 in partnership income from “BTEC Investments, LLC, – Business of refurbishing gas-fired turbines.” White notes this value is a “good faith estimate.”
2009: Bill White earns $163,000 in “passive income” from his partnership in BTEC Investments LLC, and receives $83,676.88 in “wages, tips, and other compensation” from Wedge Services, LLC, as he reports on his 2009 income tax return.