Opinion

If chosen for HUD, Julian Castro's work, big payday could face scrutiny

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Politics,Beltway Confidential,Opinion,Byron York,2016 Elections

San Antonio Mayor Julian Castro is widely referred to as a "rising star" in Democratic politics. There's even talk the Mexican-American Castro could earn the vice-presidential spot on the 2016 Democratic ticket in an effort to further strengthen the party's bonds with Hispanic voters. And now, it appears Castro's national profile is about to rise with word that President Obama plans to nominate him to be Secretary of Housing and Urban Development.

If Castro is tapped for the job, his Senate confirmation hearings will likely shine a spotlight both on his role in San Antonio's government and his way of making a living.

San Antonio, the second-largest city in Texas and seventh-largest in the nation, has a council-manager-weak mayor form of government. The manager runs the city. "The office of the city manager serves as the focal point for the executive leadership and direction of the city organization," says the website of San Antonio City Manager Sheryl Sculley. The site says Sculley, in office seven years, has "appointed executive leadership, reorganized city departments, streamlined city business systems, improved customer service and elevated the professionalism of city management." Sculley makes $355,000 a year, one of the highest salaries for a local office in Texas.

The office of mayor carries with it no executive authority. Castro's website says he has "focused on attracting well-paying jobs in 21st century industries, positioning San Antonio to be a leader in the New Energy Economy." Castro's site says he has also "brought a sense of urgency" to urban revitalization, and has created something called SA2020, "a community-wide visioning effort turned nonprofit that has galvanized thousands of San Antonians around a simple, but powerful vision for San Antonio -- to create a brainpower community that is the liveliest city in the nation."

Creating visioning efforts, senses of urgency, and brainpower communities brings the mayor far, far less money than the city manager. "The mayor's job pays $20 a meeting plus a one-time $2,000 fee, so I basically make $4,000 a year," Castro told San Antonio television station KENS last year.

So how does Castro, 39 years old, with a wife and a child, make a living? First, his wife, Erica, an elementary school teacher, makes about $55,000 a year. But lately, it appears Castro's real livelihood comes from being Julian Castro -- making speeches, surfing on his fame after a well-received keynote address at the 2012 Democratic National Convention, and writing a book about himself.

San Antonio Express-News columnist Brian Chasnoff recently reported that Castro made more than $200,000 in 2013. The bulk of that, Chasnoff noted, was a $127,500 advance for the memoir that Castro is writing. More came from the speaking fees that were a product of Castro's post-convention visibility: $12,750 for one speech, $16,250 for another, $8,500 for another, and so on. "When I asked [Castro] how much he was charging in speaking fees, he declined to comment," Chasnoff wrote, explaining that the figures came from a recent financial disclosure form.

That's how Castro supports himself and his family now. But the seed money for Castro's time in the mayor's office -- he was first elected in 2009 -- was a controversial seven-figure "referral fee" that Castro, a Harvard-educated lawyer, received from a well-connected trial lawyer and Democratic donor in a personal injury lawsuit in which Castro may or may not have played a major role.

The case stemmed from a 2006 drunk driving accident in which three people were killed. The short version, according to accounts in the San Antonio Express-News, is that the drunk driver was behind the wheel of a truck owned by an oilfield services company. (The fact that a company's vehicle was involved provided a big source of money for a potential damages award.) One of the victims, a man who lost his mother, wife, and son in the crash, knew Castro and chose Castro's small firm to represent him in a suit against the oilfield services company. Castro then referred the case to a much larger firm, headed by Mikal Watts, a prominent personal injury lawyer and Democratic contributor. Watts won the case, and a big award, and Castro was paid a seven-figure "referral fee" for bringing the suit to Watts' firm. It's not clear whether the fee was on the high side or low side of the seven-figure range; the figure has not been disclosed. In response to questions about what Castro did to earn the money, both he and Watts have said he played an important role in the case. (Watts, meanwhile, has been busy with allegations of misconduct in lawsuits stemming from the British Petroleum oil spill. The New York Times reported that he was accused of "claiming thousands of people as clients who were either unwitting or did not, in fact, exist." Federal agents served search warrants at his San Antonio offices last year.)

In 2009, the Express-News reported, Castro loaned his campaign $215,000 in his first run for mayor. Last year, he told KENS that, "I do have savings from my law practice, and there are some things I will do to try to make some income. I am writing a book and will start to speak for a fee when I can. But I have to make sure it does not take away from the business of San Antonio and the responsibility I have here."

Castro's lawsuit payday has attracted some scrutiny. In 2009, the Express-News ran a piece (not available on the Web) headlined, "Whispers about Castro's referral of case grow louder." But Castro has remained mostly silent about the financial details of the matter. Still, the bottom line is that it appears the referral fee and Castro's connection to Watts are major parts of the foundation of Castro's political career so far. If Castro is nominated to be HUD secretary, the senators charged with his confirmation will undoubtedly want to know more about them.

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