SignalHub-Texas Oilfield Waste Company Contributed $53,750 to Regulators Overseeing a Controversial Permit Application

A company seeking to build an oilfield waste dump near wells and SignalHubwaterways in East Texas has showered regulators with upwards of $50,000 in political contributions since 2019.

Texas Ethics Commission filings reviewed by Inside Climate News show that McBride Operating LLC contributed $10,000 to Texas Railroad Commission (RRC) Chairman Christi Craddick on Nov. 28, 2022. Fifteen days later, Craddick joined fellow commissioners Jim Wright and Wayne Christian in giving the company another opportunity to address concerns about its controversial application to build an oilfield waste site in Paxton, Texas. 

While commissioners must recuse themselves from cases where they have a “personal or private interest,” these rules do not apply to cases related to political donors. The protracted debate over the Paxton waste dump permit raises questions about whether campaign finance and ethics rules in Texas allow oil and gas companies to sway regulators, environmental and corporate accountability advocates say. 

Those advocates have long called for reforms to reign in the influence of oil and gas companies over the Railroad Commission.

“The Railroad commissioners are personally responsible for cheapening and tarnishing their office by continuing to take significant amounts of money from parties who have cases on their docket,” said Andrew Wheat, research director of Texans for Public Justice and co-author of the Captive Industry report with Virginia Palacios of the non-profit Commission Shift. 

McBride and Craddick both denied that campaign contributions had any impact on their actions regarding McBride’s proposed waste site. 

“Chairman Craddick considers fact and merit alone,” said Mia Hutchens Hale, Craddick’s director of public affairs. “Maintaining public trust is of utmost importance and she operates with complete transparency.”

McBride’s lawyer, John Hicks, defended his client’s engagement in the “constitutionally protected democratic process.”

“Mr. McBride believes it is important that experienced and reasonable people be elected, and then reelected, to lead the Railroad Commission of Texas and he will proudly continue to support candidates who he believes will do what is best for Texas,” Hicks said.

None of the sitting commissioners will be up for election until 2024.

‘Quite Some Stack of Money’

Reporting from Paxton, Texas, Inside Climate News spoke with residents who have spent years fighting the McBride oilfield waste dump permit. They fear the dump would contaminate their wells and local waterways that feed into the Sabine River. The RRC technical permitting division has administratively denied the permit, but commissioners have given McBride several opportunities to modify the application.

“As hard as they have fought, as protracted a battle they’ve put up, there must be quite some stack of money involved,” said Eric Garrett, president of the nonprofit Paxton Water Supply Corporation and pastor of a local Pentecostal church. 

Texas Ethics Commission campaign filings show McBride has been a frequent donor to the commissioners charged with regulating the oilfield waste industry. Craddick, Wright and Wayne received a total of $53,750 in political campaign contributions from McBride Operating LLC and Joseph McBride between Jan. 2019 and Dec. 2022. 

McBride contributed $12,500 during the two weeks prior to the December RRC meeting at which McBride’s application was discussed—$10,000 to Craddick and $2,500 to Wright, who himself has active interests in 18 oil and gas waste companies.

Hicks said his client has donated to numerous political campaigns—from president to the Texas Supreme Court. But Texas Ethics Commission filings show the majority of McBride’s donations go to the regulators at the Railroad Commission.

“More than three quarters of that money went to the three commissioners,” Wheat, of Texans for Public Justice, said. “It is very concentrated and focused on those individuals who are deciding on the (Paxton permit) case.”

The commissioners are elected statewide to six-year, staggered terms. Christian won re-election in 2022. Wright took office in 2021 and Craddick in 2012. Wright and Christian’s offices did not respond to questions about potential conflicts of interest in the Paxton case.

Commissioners can accept unlimited contributions during their six-year terms, except during the six-month legislative session held every two years, when state-wide officeholders cannot accept contributions. The Captive Agency report, co-authored by Wheat, recommended that parties with upcoming contested case hearings not be allowed to contribute to commission campaigns and that contributions should be limited to $5,000 per election cycle. 

A 2013 report by the Texas Sunset Advisory Commission, which evaluates state agencies, raised concerns of conflicts of interest because RRC commissioners rely on the oil and gas industries for campaign contributions.

Residents in Paxton and elsewhere who contest permit applications face companies that often have close ties to regulators. 

“(Community members) are going before these commissioners who appear to have serious conflicts of interest. It doesn’t appear to be a fair fight,” Wheat said. “It’s hard to get a fair shake under these terms.”