News

The House that Jackson Built

Jul 14
2019
Richie Jackson headshot

A lanky, disheveled, young staffer lurches toward our table in the Capitol Grill, (a.k.a. the center of the universe during legislative session, and most certainly not to be confused with The Capital Grille in Austin). He’s out of breath. “Richie, you’re the only person I can think of who might know the answer to this.” He immediately launches into a lengthy monologue detailing an intricate issue about parliamentary procedure.

Non-plussed, Richie Jackson, longtime CEO of the Texas Restaurant Association patiently listens, nodding slowly as his young colleague rambles on.  

By mid-session, I had become accustomed to scenes such as this. I leaned forward, trying to hear his answer. Keeping up with Richie Jackson during a legislative session has proven to be a daunting experience. I had worked several Texas legislative sessions in the past, both as a staffer and on the state agency side, but it wasn’t until I worked as a lobbyist, alongside Jackson, and his formidable team; former state representative-turned-lobbyist and TRA past president Mike (Tuffy) Hamilton, and TRA general counsel Kenneth Besserman, that I came to know just how much I didn’t know.    

To be fair, this legislative session, which was Texas’ 86th - was Jackson’s 24th. Texas is one of only four states (Montana, Nevada, and North Dakota) whose legislatures meet biennially, rather than annually, and in odd-numbered years. That’s more than a four-decade career for Jackson – plenty of time to learn the process, the issues, the subtleties, and perhaps most importantly, the players.  

Jackson was born in Lubbock, Texas to an Australian mother, Elsie and father, Richard from El Paso. His parents met during the war in the Pacific while Dick served as a naval aviator. Following the war, the couple married, moved to Austin and Dick received a degree from the University of Texas. A move to Lubbock followed. A middle child between two sisters, Richie spent his formative years in Lubbock, eventually attending Texas Tech for two years prior to following in his father’s footsteps at the University of Texas in 1969.

Three years later, with finance degree in hand, he sought his first post-graduate position. Working with, and around the Texas legislature wasn’t too far of a reach, given that Jackson’s elder sister had worked in the Senate as an intern during her time at U.T. He was also acquainted with Lubbock natives Governor Preston Smith, and Senator Doc Blanchard. Jackson’s college roommate also worked in the mailroom for the legendary Bob Bullock, who at that time was serving as secretary of state. The Texas legislature was, as he puts it, “…on my axis.”

The year was 1972, and Jackson found himself interviewing at the Texas Restaurant Association for an advocacy position. “It was a rather an extended process,” he recalls. Many lobbyists, then and now, hold law degrees or have held public office at one time or another. Jackson had neither credit. “Other than eating in them, did you know anything about restaurants?” I ask. “No,” he laughs, “It was a huge learning curve for me.”

 

All in the Timing

As it turns out, it was the perfect time to bring a young, new lobbyist on board. W. Price, then-president of TRA had fallen upon ill health, and was unable to meet the great physical, as well as time demands that the capitol requires. He enlisted his friends and colleagues to take Jackson under their wing and introduce him around.

However, just as Jackson was preparing for his new position, one of the most explosive and notorious scandals in Texas political history erupted, completely changing the legislative landscape. In 1971, the “Sharpstown Scandal” broke and within two years, it ended the careers of Texas’ three most powerful political positions, the governor (Preston Smith), the lieutenant governor (Ben Barnes) and the Speaker of the House (Gus Mutscher), and dozens of others.

The scandal centered around “….charges that state officials had made profitable quick-turnover, bank-financed stock purchases in return for the passage of legislation desired by the financier, Houston businessman Frank W. Sharp. By the time the stock fraud scandal died down, state officials also had been charged with numerous other offenses…”, as stated by the Houston Chronicle.* Quick to “drain the swamp”, a reform-minded, bi-partisan group of state legislators with the moniker, “Dirty Thirty” went on a campaign to oust the offenders and everyone associated with them.

In the aftershock of scandal, the year Jackson was hired, Texas voters replaced every single incumbent, statewide, elected official, as well as more than half the state legislature. Two of Texas’ current legislators were first elected to office during this historic time. Representative Senfronia Thompson was elected in 1972, as was then-state representative and now senator, John Whitmire, both of Houston. Many of the newly-elected players were not only brand-new to politics, but came to the table with no legislative experience. For the first time in Texas history, there was a very new, very politically liberal legislature. Jackson was also new, with no legislative experience. In a way, they were all starting from scratch.  “It was a fascinating time,” Jackson says. “We were all learning together.”

 

Trial by Fire

Jackson’s first challenge for TRA focused on, funnily enough, mixed drinks. Prior to being TRA President, Jackson’s boss, W. Price, a former restaurateur, spent the majority of his career trying to secure passage of liquor by the drink. It finally occurred at long last, during a Special Session in 1971 with Preston Smith as governor. It was a hard-fought issue and one that several Texas governors had failed to pass. Jackson recalls that former governor John Connolly used the bill as bait at one point, to woo the Democrat National Convention to the Lone Star State, but “He couldn’t,” Jackson says, “…so they didn’t.”

Like many conservative, Southern states at that time, Texas only allowed for the sale of beer and wine in wet jurisdictions, but not mixed drinks. As a get-around, private clubs popped up in wet areas, which could serve mixed drinks, as long as you were a “member”.  Jackson’s first efforts were to make private club laws “…as close as we could to an open bar,” he recalls. “We made it as easy as possible to become a member – something like a driver’s license and $3, probably $2!”

The 1973 session was groundbreaking in many ways. It produced some historic consumer protection laws and, according to Jackson, “It was a time when debates on the floor were larger than life. There were great orators, and it really meant something.” It was a rare time when liberals predominated and Texas political legends such as Babe Schwartz of Galveston went toe to toe with titans of the oil industry, and often butted heads on the Senate floor with conservative Bill Moore of Bryan. Jackson laughingly remembers one of Moore’s more memorable statements, “I am not a crook! I made every dime I ever earned right here on this senate floor!”  

Jackson recalls that many liberal-leaning bills were being passed during the day, but in the evenings, lobbyists would track down legislators, and do their best convincing, so that when they returned to the House floor after a dinner break – legislators would “un-do” what had just been done. “That’s when Price Daniel started feeding the House,” Jackson chuckles.

Perhaps in reaction to such liberalism, and to protect and improve the entrepreneurial climate, institutions of business began to take a far greater role in the legislative process. The Texas Chemical Council, the Texas Farm Bureau, the Midcontinent Oil & Gas Association and the Railroad Association among others, all became major players.

Jackson, while short on experience, shrewdly decided to “…get to know the people who know the process.” The best way to do that? Get involved in big issues. In doing so, he ended up with a ‘Who’s Who’ of Texas politics for his mentor list; Gene Fondren of the Car Dealers Association, Jim Yancy who ran the Manufacturers Association, Harry Wentworth with Chemical Council and Bill Abington with the Midcontinent Oil & Gas Association, among several others. “I got to pick my mentors and I picked well,” he says.

That 1973 session was also notable because as soon as it ended, a rare unicorn in the form of a Constitutional Convention materialized, charged with the task of rewriting the Texas Constitution during the interim. Every legislator was a delegate, and that summer battles raged over Texas being a ‘right to work’ or an ‘agency (Union) shop’ and Jackson was ringside for all of it. (Richie notices my baffled expression here, and patiently explains that Texas was, and remains, a right-to-work state, but only in statute only).  It was one of the major issues that caused the Convention to fail. In the end, no document was produced, and a deep divide grew between party lines which was to set the stage for years to come.

 

The Broader Issues

Jackson rolled up his sleeves and delved into the broader issues, and in doing so, uncovered a whopper.

The early 80s had produced a devastating economy, and during that time, many Texans were out of work. The state was struggling to pay out an overwhelming number of unemployment benefits, and only managing to do so by borrowing from the Federal government. The tab was more than $1.6 billion.

Tim Richardson, founding editor of Quorum Report, Texas’ legislative news mainstay, remembers the time. “The oil and gas bust was accelerating when energy royalties paid a much higher share of state revenue than today, and the S&L collapse was just getting started in that fateful May of 1983.  Special sessions became so frequent that Texas legislators met more often than Congress for the next five years.  The Wall Street Journal called the Southwest’s real estate and energy meltdown ‘the worst economic bust since the 1929 stock market crash.’”

To compensate for the shortfall, the state traditionally passed along a uniform rate hike for all employers. True to his finance roots, Jackson began to study to how the unemployment trust fund worked. What he discovered was that over 80 percent of the total payroll in the restaurant industry was subject to the tax due to having lower wages, a large number of part-time workers, and higher employee turnover. Yet, in other industries, like manufacturing and oil, less than 20 percent of their payroll was subject to the tax. Further, in industries like construction where most, if not all employees receive benefits when a job ends, the rates were capped, while the restaurant industry was being taxed to make up the shortfall. This - despite the fact that restaurant unemployment claims were (and are) infrequent, even in a down economy. This presented a real “equity gap” when high-tax, low-use industries were asked to subsidize the cost of low-tax, high-use employers. 

Jackson started brainstorming ways through which the state could pay the money back. He came up with a complex but creative solution that to this day, few can easily explain (including those in office), which eventually became the basis for how Texas employers pay their taxes to this day.

Then-House member and Committee Chair Lloyd Chris (R-Galveston) in a letter to TRA writes, “Richie Jackson should bear much of the credit for saving Texas employers $150 million in unemployment taxes next year…Richie orchestrated a successful campaign to change the TEC’s method of calculating the tax. Thanks largely to Richie’s efforts, the average Texas employee will pay $24.50 less per employee...”.

Representative Chris authored the bill which rewrote, based on Jackson’s calculations, the Texas unemployment trust fund. The legislation raised the wages subject to the tax, shifting the tax burden to higher wage employers, equitably shared the cost of benefits that could not be attributed to an existing employer, and created a trust fund repayment process that was driven by an employer’s contribution to the deficit.  In essence, the balance got shifted to employers who would have otherwise been capped.

It was a highly complex, beautiful maneuvering and, a “…massive win for our guys,” says Jackson. It also got Jackson’s[RR1]  headshot a coveted spot on the cover of Quorum Report. “QR’s feature on Richie’s innovative fix on the Unemployment Compensation Fund’s $1.6 billion tax hike now reads like an almost peaceful prelude of what became a Texas-sized plunge into fiscal crisis,” Richardson says.

“Frankly, it was a great time to be a Capitol ‘insider’ reporter covering the movers and shakers getting shaken and moved.  Knives came out in the business lobby as more folks attempted to do for their clients what Richie did for TRA.  It didn’t always work out for folks, but it made for dramatic, easy to write copy as did the Democratic establishment’s stubborn grappling with the Reagan electoral realignment in Texas in 1984, ’86 and ’88.  Bodies were flying, careers were made and lost.”

Heady after the unemployment trust fund victory, Jackson and colleague Tom Blanton, lobbyist for the Texas Automobile Dealers Association were looking to right the next wrong for their respective industries. Both took sharp notice of staggering increases in workers’ compensation premiums – over a five-year period, a 152 percent premium increase for the restaurant industry (and a whopping 322 percent for QSRs). The two men did what you do when you’re unhappy with your premiums. They scrutinized the rate making process. What followed was an epic, exhausting, five-year saga, with a surprise ending that has been written about, discussed and emblazoned into Texas history.

Jackson and Blanton started by intervening at the insurance rate hearing. That first year, they listened and learned. The second year, they challenged the numbers. “When we really started examining it, we realized the entire workers’ compensation system was broken. The rate would never be high enough to cover the losses, which were growing,” Jackson said. 

The first hurdle, won quickly, was the appointment of an interim committee after Jackson and two other lobbyists expressed their concerns to the Speaker of the House. Hearings were held, and rates were examined, which led to a second, more high-profile interim committee, concluding that, as Jackson had found, that the entire structure of the system was badly broken. Employers were “…not eaten by lions but pecked to death by ducks. It was an absolute racket,” Jackson recalls, “So we asked lawmakers to re-write the law.”

The recommendations of the committee became House Bill 1. In January 1989, the bill easily passes the House, but falls short in the Senate. Lt. Governor Hobby then brought members of the business community and the trial lawyers together to negotiate a bill palatable to all parties. After 28 painstaking days – it became clear that no one was budging.

A watered-down version arrives from the Senate but fails. The Governor called for the dreaded “special session” to address the issue. To no avail. One special session becomes two. Lt. Governor Hobby rallies his own special troops, consisting of field experts and specially-selected senators to craft a bill that will pass.

During the second special session, Senate Bill 1, the “Hobby Plan” and its House companion is unveiled, much to the chagrin of labor and trial law groups. It is gutted on the floor and sent back to the House, a hollow shell. The House substitutes the “Hobby Plan” in the bill, and ping-pongs it back to the Senate. As most predicted, the Senate refuses the House amendments, and the bill is sent to conference committee.

At this point, session days were dwindling. The conference committee report has to pick up two additional votes in the Senate. The House adopts the Hobby Plan as the conference committee report and adjourns to put more pressure on the Senate.  The bill – yet again, dies in the Senate.

Then comes the twist. Representative Bruce Gibson (D-Godley) learns that Congressman Marvin Leath is going to announce he is not seeking re-election.  Senator Chet Edwards, a firm Hobby Plan “no” vote, lives in Leath’s Congressional district. Edwards could easily win the Congressional seat with business support, and withdraw from a doomed election bid against Bob Bullock to replace retiring Lt Governor Hobby. With a strategy in mind, he is willing to broker legislation to break the impasse. Rep. Gibson then reached out to Jackson, explaining the opportunity, and asking him to reassemble the team to assist in his negotiations. When Senator Edwards concerns were addressed, he reached out to Senator Zaffirini who was a key ally and much-needed vote. 

Jackson wrote an article for the association that describes the dramatic scene, “While the state aircraft warms up on the tarmac, and a flight plan is filed for Laredo, Edwards and Gibson meet at the Austin airport with Senator Brooks to explain the changes. At 1:00 a.m. Sunday, in the Laredo airport, the third and final Senate signature is obtained, cementing the critical support necessary for passage of the bill. In addition to a pledge for support of the amended workers’ compensation reform measure, Senator Zaffirini provides fajitas and pound cake for the weary but successful negotiators.” Pure Texas politics. The bill passed slightly more than a day before the session’s end, concluding a five-year effort.

As Governor Clements signed Senate Bill 1 into law, he called it, “…the most hard-fought and most significant piece of legislation to come out of the Texas Legislature in 20 years.”

 

TRA PAC - Stand and Deliver

The unemployment trust fund and worker’s compensation were mammoth issues and important wins, but over the next four decades, Jackson secured dozens upon dozens of important victories for the industry.

“Richie has an incredible institutional knowledge. He knows everything about everything that’s going on,” Tuffy says with a grin. “At least, if he doesn’t know it, he thinks he knows it, and he tries to act like he knows it. He covers up for himself until he figures it out, and then he just gets things done.”

“He is very good with legislators. He knows how to say the exact right words, how to phrase things. He knows how to get the bills passed that need to get passed or kill the bills that need to be killed. He lives and breathes for it. He goes at it like that is his lifeblood – and he’s good at it.”

 

Perhaps his most lasting TRA legacy is not only making a name for himself at the Capitol, but for Texas restaurants, as a force with which to be reckoned. He mobilized TRA members and the Political Action Committee to the point where those even those outside the Capitol were taking notice. Texas Business profiled the TRA PAC’s success, praising Jackson for activating members, branding TRA among “…the most powerful lobbies in the state.”

 “Jackson awakened the slumbering capacity of the trade association by understanding who the major players were in the state and by making sure he had his own players in those power circles. Often, those ‘players’ are the proverbial little guys, independent restaurant owners with small sales volumes who pay the minimum in dues.”

Other legislative highlights for which Jackson is credited includes most notably, restructuring the mixed beverage tax, saving Texas restaurants more than $400 million; dram shop liability which pre-empted the Supreme Court’s ‘should have known’ standard; allowing for alcohol to be served during Sunday brunch; successfully moving tax collections from TABC to the Comptroller’s office; and a sales tax exemption for food-making equipment.

Jackson grew the association in other ways as well, with a number of innovative programs and projects. TRA was the first organization in the country, to use the Internet for alcohol training, and foodservice manager certification.

 

There was also the creation of the now well-known Texas Restaurant Association Education Foundation in 1995, home of the Texas ProStart program, now in 265 high schools throughout the state. TRA was instrumental in creating what was to be the first fully-operational student-operated restaurant – an Outback Steakhouse, located inside a school - Westside High, in Houston, which became a flagship model for the United States. A second restaurant, Carmelo’s, soon followed in Del Valle High School in Austin. “The whole concept was borne out of an idea from the Dallas Food Bank,” Richie says. “They were training those whom they were serving, and we thought ‘wow – we could do this in schools’, and with a lot of help from our Foundation, sponsors and committed educators, we did.”

With Jackson’s vision, TRA also hosted innovative and wildly popular national conferences that were on the forefront of the culinary scene. Held in Dallas, and also in the heart of the French Quarter in New Orleans, the FS Exec National Conference was specifically created for chef-owned/driven restaurants. Jackson put together an advisory council of top food critics throughout the country, including John Mariani from Esquire Magazine at that time, writers from USA Today and Southern Living, and Pat Sharpe of Texas Monthly. “It gave us incredible exposure in the industry,” he says.

The conference included a national awards dinner, (with honors selected by the critics committee), a ‘Hunting the Haunts of New Orleans’ scavenger hunt-type reception, where chefs and attendees worked in teams to explore the city of New Orleans, exceptional multi-course lunches, showcase dinners and a four-track forum with special breakout sessions on a number of relevant topics.

“We’ve just done a lot of fun, innovative stuff,” Jackson says.

Jackson’s service as an industry representative or board member for the National Restaurant Association spans three decades.  He was first appointed by NRA Chairman Jim Hasslcoher in 1986 to serve on one of the board’s committees making him an “industry representative” to the board.  When NRA’s bylaws were changes to allow state restaurant association executives to be voting board members, he was asked to serve on the board and is completing three terms. and nine years in that position.

He has the unique distinction of being the only non‑restaurateur to Chair the NRA’s PAC, and has served on two Strategic Planning Committees, the Governance Committee, the Advocacy Strategy Committee and the Richard E Marriott Restaurant Advocacy Fundraising Committee.  He has also been a member of a number of task forces including the Unified Partnership Committee which crafted the partnership agreement that exists to this day, between NRA and the state associations.

Jackson has been very active in the industry, serving as Chairman of the Texas Society of Association Executives (TSAE), as well as receiving their Distinguished Executive Award. He is also past president of the International Society of Restaurant Association Executives and current chairman of the Texas Civil Justice League. He was inducted into TRA’s Hall of Honor in 2008 – the highest honor the association can bestow.

 

Full Circle

Back at Capitol Grill I’ve finished my limp salad, try not to think about my aching feet, and wearily wonder how much longer this hearing we are listening to will last. Richie, having adequately schooled his young colleague, is already back up and pacing the capitol hallway like an expectant father, waiting for his bill to pass committee.

What makes Richie so good at what he does? Close friend and fellow lobbyist Lance Lively reflects. “Richie is one of the most intelligent people I’ve ever met. He has a methodical, photographic memory,” (I laugh to myself as I recall Richie spouting off specific bill numbers from years’ past, while I struggle to remember what I had for breakfast.)  “Restaurants cover an enormous amount of ground space – from healthcare to food, to business, to taxes – and he has a firm grasp, and deep understanding of all that. It serves him well.”

Jackson is also a masterful strategist. Kenneth Besserman notes, “There have been times in recent legislative sessions where an issue was stalled or seemingly dead, and Richie has been able to move the issue forward by coming up with a new and innovative way to look at an issue, or new language that brings many parties together to achieve the desired goal. Richie is always working - talking, cajoling and maneuvering to push the issue forward, never stopping until an issue has absolutely run its course.”

Blanton, who recalls that fellow lobbyists and legislators had their eye on Jackson from very early on to accomplish great things, tells me that there are four things that make a truly good lobbyist, and Richie possesses all of them. “Honesty - which is not as common as it should be,” he quips, “…and likeability, which is not something you can teach. You can work all day and all night but if people don’t like you, it will be for nothing. People like Richie.” The third thing is knowing the issues inside and out, and the fourth thing is hard work. “It’s an extremely physical job. It’s a big building. You have to work day and night. No matter how late we were out the night before talking to legislators at the Quorum Club, and that was an important part of the job, Richie was always on top of things the next morning. I tried my best to emulate that.”

To get to know and understand Jackson’s career is to learn about Texas politics – they are inexorably entwined. Also, much like Texas politics, Jackson is something of an enigma. Soft-spoken and genteel, he is a leader and a true statesman. I ask him several prodding, personal questions, and without me even realizing it, he adroitly changes direction and we’re suddenly having a fascinating conversation about dram shop legislation.

It is impossible to summarize a 47-year career in a 3,000-word article – even the highlights. The impact that Richie Jackson has had on the restaurant industry, consumers, employers, political circles, the Texas lobby – and the entire state is tremendous and cannot be overstated.  Certainly, the industry has been incredibly fortunate to have such a loyal champion, and much like lobbyists in the gallery during session, we wait in eager anticipation for his next move.

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