Donor resigns from job in scandal
Dannenbaum CEO steps down after he admitted to violating federal election law
For more than half a century, major transportation projects, public works and land development ventures and across Texas have borne the name Dannenbaum.
By midday Thursday, James D. Dannenbaum, a former University of Texas regent and the namesake of a leading Houstonbased engineering firm, had his name removed as CEO of the infrastructure empire his father founded in 1945. He stepped down from his executive duties in the wake of a criminal scandal after admitting to the Justice Department that he circumvented federal election law by making excessive donations to three congressional candidates.
The 80-year-old River Oaks resident is accused of working with a former company official in February 2017 to violate a federal election law that prohibits contributing to a campaign in the name of another. His company and its parent company also are charged in the case. The plan outlined by prosecutors says he and the other person recruited employees to make donations to various candidates with the promise that they would be reimbursed with company money.
Prosecutors said he and an unnamed ex-employee made illegal contributions totaling between $10,000 and $25,000 for candidates, giving more money than federal law permitted and by illegal means.
Dannenbaum has not been arrested, according to court documents.
The charges come two years after simultaneous FBI raids in April 2017 at Dannenbaum’s engineering offices across the state and his Houston home that resulted in convictions against two South Texas politicians who were implicated in a bribery scheme.
The court record for Dannenbaum’s federal case does not name the three candidates for Congress that Dannenbaum and his companies sought to support. But U.S. Sen. John Cornyn,
whose campaign committees received $30,000 from Dannenbaum and his wife in February 2017, has vowed to cooperate with the Justice Department and return the donation money to the U.S. Treasury as mandated by law, a spokesperson said.
“The campaign was not aware of what Mr. Dannenbaum was doing, and we will fully cooperate with the U.S. Attorney’s Office,” said John Jackson, Cornyn’s campaign spokesman. “We take great strides to ensure all contributions are proper and follow the law.”
Bill Miller, a spokesman for Dannenbaum, said the former chairman, president and CEO “acknowledged that he made prohibited contributions to various federal election campaigns.”
“His acknowledgment to the federal government has led to his agreement to plea to this offense and he has agreed to step down as chairman, president and CEO. Jim has been active in philanthropy and in the community for over 50 years,” Miller said. “He deeply regrets these events.”
Johnny Sutton, a lawyer for the company, announced Dannenbaum’s resignation effective Thursday, noting the company was involved in an agreement with the federal government related to participation in prohibited campaign contributions.
Decades of contributions
Dannenbaum has been a backstage player in the halls of government for years. He also serves on boards for the Greater Houston Partnership and MD Anderson Cancer Center.
The firm, which has satellite offices in Austin, Dallas, San Antonio, Laredo and McAllen, oversees public works projects including freeways, airports, bridges and drainage districts stretching from Texarkana to Lubbock and the border region. The firm built parts of the Sam Houston Tollway, the Grand Parkway, the Hardy Toll Road and taxiways at Bush Intercontinental and William P. Hobby airports.
Dannenbaum has maintained deep ties to politicians at all levels of government over his decades running the firm, contributing millions to officials from the Houston area and candidates for statewide offices since the 1960s, according to campaign finance records and archival news reports.
Dannenbaum donated more than $420,000 to Rick Perry’s political campaigns. Perry named him a UT Regent in 2007, and Dannenbaum’s firm received multiple engineering contracts from the state during Perry’s governorship.
Though he has primarily contributed to Republican incumbents, Dannenbaum also has given to powerful liberal, conservative and nonpartisan elected officials in Houston, contributing to every Harris County commissioner and Houston mayor for multiple election cycles. In some cases, he also gave to their opponents.
Jointly, Dannenbaum and his wife, Shirley, rank among the top donors to Mayor Sylvester Turner, giving $25,000 to Turner during his first term in office.
Sue Davis, Turner’s spokeswoman, said “all contributions received by the Mayor from Mr. and Mrs. Dannenbaum were legally and properly reported.”
Wide-sweeping raid
On April 26, 2017, FBI agents executed the raids on Laredo City Hall, on the Webb County Courthouse and at Dannenbaum’s home and corporate offices in Houston, San Antonio, McAllen and Laredo. Federal agents in Houston donning black windbreakers carted out box loads of documents from the corporate headquarters. News reports at the time listed more than a dozen FBI targets including Dannenbaum and a couple of his South Texas employees, several city council members and a state representative.
In addition, Jaime Alberto Canales,
52, a former Webb County commissioner, pleaded guilty last year in Houston federal court to accepting bribes — including checks disguised as campaign contributions and an offer to use a company executive’s Padre Island getaway — in exchange for influence in helping the engineering firm secure its bid for a city-county road project. Former Laredo City Councilman John “Johnny” Amaya, 71, pleaded guilty to acting as the middleman for the deals. They both face up to five years in prison at their sentencing on Feb. 13.
Several local politicians, not known to be linked to the illegal scheme, said they would consider returning donations associated with Dannenbaum.
At-Large Councilman David
Robinson, reached by phone moments after he had read the Chronicle’s initial story online, said he was still processing the news but was considering returning contributions he had received from Dannenbaum.
Robinson, an architect who chairs the council’s infrastructure committee, has received $23,000 from Dannenbaum since 2011, making him the top recipient among incumbent council members.
Robinson, who is seeking a third and final term on the council in a December runoff election, said he had asked Dannenbaum about the criminal allegations sometime in the last year or so.
“He reassured me it was all behind him and it was all his associates who were the politicos down in the Valley. I’m disappointed and surprised,” Robinson said. “He’s been very generous to me as chair of the (transportation, technology and infrastructure) committee and an architect and someone who works with engineers all the time. I haven’t decided what appropriate action, if anything, we should take, but I’m thinking about it.”
Councilman Greg Travis, who on Tuesday won a second and final four-year term representing west-side District G, has received $8,500 from Dannenbaum since 2015, the second most of any incumbent council member.
“I’m shocked, in a sense. I don’t know Jim Dannenbaum that well, but I’ve met him on several occasions,” Travis said. “He’s always been very pleasant. He seems to care about the community. I’ve met his wife on those occasions; she, too, is very pleasant. It’s sad to see this happening.”
Councilwoman Brenda Stardig — who received $7,500, tied for the third-most among current council members, between 2009 and 2017 — said she was sorry to hear about the allegations.
“I don’t know how to respond,” she said, adding that she would look into it. “I work really hard to not cross any lines or knowingly do anything that’s inappropriate.”
Harris County Commissioner Steve Radack said he would consider returning donations, which amount to at least $45,000 over the years. His fellow commissioners did not respond to a request for comment.