The Craddicks’ Gushers of Cash: How a Powerful Texas Lawmaker and a Key Regulator Profit From the Industry They OverseeTexas MonthlyMedia Coverage

Former house speaker Tom Craddick and his family—including his daughter, Railroad Commission chairman Christi Craddick—earned about $10 million last year from oil and gas rights.

By Russell Gold
March 14, 2023

Tom Craddick has served in the Texas House of Representatives since before the first man walked on the moon. At 54 years in office and counting, he is the longest-serving state lawmaker in the United States. For one of every three days the House has been in session since statehood, Craddick has been a member. He represents Midland, the pumping heart of the Permian Basin—the largest oil basin in the country and one of the largest in the world. So it should come as no surprise that for most of the past half century, Craddick has sat on the Energy Resources Committee, which oversees the misleadingly named Railroad Commission of Texas, the powerful body that has nothing to do with railroads but instead regulates the state’s oil and gas industry. From 2003 to 2009, Craddick served as a feared and formidable House speaker, the first Republican to hold that position since Reconstruction.

Craddick’s official Texas Legislature web page describes him as a “successful businessman” who owns an investment company. What it doesn’t mention has been an open secret in Austin for decades: Craddick not only regulates the oil industry; he also makes a lot of money from it—in ways that apparently are legal under Texas law but pose large and obvious conflicts of interest. No one knew just how much money he was making, or how widespread his holdings were, until Texas Monthly recently collected and compiled royalty data from 41 county tax offices from Laredo to Lubbock and San Angelo to Van Horn. These offices record who owns even a tiny fraction of royalties for every producing oil well in the state.

Craddick owns slivers of approximately six hundred oil and gas leases and receives a percentage of the value of the fossil fuels produced from them. Much of his family is involved, and some of Tom Craddick’s holdings are co-owned by his daughter, Christi Craddick. That’s notable because Christi has been an elected member of the Railroad Commission since 2012, and currently serves as its chairman, which makes her the state’s top oil and gas regulator.

The family business mixes oil and politics, and business is good. Last year, the Craddicks’ mineral interests in hundreds of wells across seventeen counties entitled them to profits from an ocean of oil that, based on prevailing prices, generated about $10 million. What’s more, the appraised value of the family’s mineral holdings—based on anticipated future royalty payments—totaled more than $20 million. That doesn’t include royalties from wells that have yet to be drilled, which may be substantial.

Having a powerful state lawmaker and an even more powerful state regulator profiting from oil deals makes good business sense for the fossil-fuel industry. The sector “wields a lot of power and influence across the state, and I think it probably does whatever it can do to make sure it holds on to that,” said Dan Gattis, a Republican House member from 2003 to 2011 who was one of Tom Craddick’s lieutenants. “The oil and gas industry is going to work hard to protect itself. I’ve watched it happen.”

For the Craddicks to get rich off oil interests while regulating those same interests is ethically troubling, said Luke Warford, a Democrat who ran unsuccessfully for railroad commissioner last year. “One of the roles of a public servant is to ensure public confidence in our institutions and our government,” he said. “They are failing at this.”

The Craddicks don’t drill or operate wells. Instead, Tom Craddick has been a consummate dealmaker, bringing together oil companies, large and small, to buy and sell leases. For his troubles, he typically takes what’s called an “overriding royalty interest.” This entitles him to a percentage of revenue from the oil and gas output. For Craddick, it’s a sweet deal. He doesn’t have to put up any investment capital. He doesn’t share in the costs of drilling. He just sits back and counts the royalties as they flow into his bank account.

What does Craddick do to earn his cut? Drawing up mineral leases and assigning overriding royalties is not a time-consuming job. But what matters in these deals are the hours spent schmoozing at the Petroleum Club of Midland and making phone calls to figure out who is selling and who is buying. Brokers such as Craddick rely on their contacts and reputation. “Unlike other industries that have adapted to the new age of technology, oil and gas deals are very old-school,” said Austin Kuenstler, president of the Permian Basin Landmen’s Association. “It is all about handshake relationships.”

Neither Tom nor Christi Craddick agreed to be interviewed for this article. Instead, they issued a statement to Texas Monthly through Bill Miller, the cofounder of HillCo Partners, an Austin lobbying and public-relations firm. “Their experience and knowledge about the industry and our state’s natural resources is one of the reasons why voters have consistently reelected Tom and Christi to public office,” the statement read. The Craddicks, Miller added, cast votes to ensure that Texas has a robust oil and gas industry “that promotes energy independence and security and supports hundreds of thousands of jobs.”

While the Craddicks’ ownership stakes tend to look relatively small—sometimes just a fraction of a percentage point—the payouts can be quite large. Consider the Alkaline Earth leases, about twenty minutes southeast of Midland. Four wells were drilled on the leases in 2020, and they began producing oil the following year. Midland County assessed the value of the leases in 2022 to be $83.4 million. The operator and largest owner was CrownQuest Operating LLC, the twelfth-largest oil producer in Texas.

CrownQuest’s CEO is Tim Dunn, one of the most powerful figures in the state, who wields unparalleled influence over Texas’s elected officials. Dunn is a major Republican donor who has pushed for restrictions on the development of renewable energy, as well as on voting, reproductive rights, and transgender students’ participation in sports. One of his political organizations maintains a scorecard that tracks how Republican lawmakers vote on Dunn’s pet issues, and he and his allies dole out campaign contributions accordingly. The second-largest owner of the Alkaline Earth leases was Tom Craddick, whose fractional interest was appraised at $2.64 million.

You’d never know how lucrative Craddick’s ownership of these wells was if you looked at the personal financial statements he provides to the state. That’s because disclosure guidelines in Texas are as flimsy as a wet paper towel. Last year, Craddick reported earning royalties worth more than $46,580 from CrownQuest—the highest figure that the Texas Ethics Commission asks lawmakers to disclose. Craddick’s public filing doesn’t reveal that his interest in the CrownQuest wells entitled him to payments for more than 20,000 barrels of oil last year, worth an estimated $1.9 million. Because his stake was an overriding interest, he didn’t have to pay any of the substantial costs of drilling or fracking. It was all profit.

Craddick holds some of his oil and gas interests under his name and others through a limited partnership called Craddick Partners. According to records filed with the state, Tom and his wife, Nadine, as well as his daughter, Christi, are general partners and part owners of the company. Again, he only had to disclose that he earned more than $46,580 in income from Craddick Partners. Texas Monthly added up the output from wells the company partially owned in 2022 and found that Craddick Partners’ interest entitled it to more than 38,000 barrels, worth $3.5 million.

Born in Beloit, Wisconsin, Tom Craddick came of age in Midland, where he became an Eagle Scout. He served in student government in high school, and again as an undergraduate at Texas Tech. Craddick recently told the National Conference of State Legislatures that at the beginning of his political career he wanted to be a U.S. congressman, and he figured that serving in Austin would be a good stepping stone to Washington, D.C. His ambitions weren’t exclusively political, though. Before his first election, he told a friend that he wanted to make enough money to leave his children a million dollars. At the time, he wasn’t married and didn’t have children.

Craddick was 25 in 1968 when he was elected to the Texas House. The job clearly suited him better than he had expected; he never ran for Congress or for any higher state office. In the early 1970s, the Texas Legislature paid its members $6,480 per year (including a $12 per diem) for the odd-numbered years when the lawmakers were in session; that’s $48,709 in today’s dollars, adjusted for inflation. To earn more, Craddick became a “mud” salesman—an unglamorous job selling fluid used in drilling oil wells.

Craddick was successful in politics, and eventually in the oil business as well. When he joined the Legislature, Texas was ruled by Democrats. In 2002, years of recruiting candidates and helping them raise funds paid off when Craddick helped the party win control of the state House for the first time in more than a century. Craddick, a pro-business, low-tax conservative, was elected speaker. He was “the most powerful speaker ever,” Paul Burka, Texas Monthly’s longtime politics writer, wrote in 2009, in large part because Craddick would recruit and finance an opponent to unseat almost anyone, Democrat or Republican, who crossed him. Eventually, his heavy-handed tactics sparked a backlash; in 2009, Craddick was deposed and replaced as speaker by Joe Straus, a moderate Republican with a more conciliatory leadership style.

As he gathered political power over the decades, Craddick had also been amassing a growing stake in the state’s oil fields. In 1976, the lawmaker and his wife created the Craddick Children’s Trust for their two young kids. The family began dissolving the trust in 2013, long after the children became adults, with the assets transferred to Quarry LLC, controlled by his daughter, Christi, and son, Tom Jr. Like Craddick Partners, Quarry owns pieces of wells across several counties.

Tom Craddick was a wheeler-dealer, a broker who connected buyers and sellers of leases for drilling. He told Texas Monthly in 2005 that his fee for brokering deals was a stake between 1.5 percent and 3 percent. “The art of making the deal is the thing for me,” he said.

After he lost the speakership in 2009, Craddick’s power in Austin declined precipitously. But he was given a plum first-floor office, along with assignments to the energy and state affairs committees. “He retained a base of influence because of his deep roots in both policy and politics in the energy sector,” said James Henson, director of the Texas Politics Project at the University of Texas. Still, his new role marked a step down from the preceding three decades when he’d served not only as speaker but also as chairman of the formidable Ways & Means Committee and the Natural Resources Committee.

Following her graduation from the University of Texas Law School, Christi Craddick went to work as an oil and gas lobbyist; her father’s political action committee reportedly paid her $1 million for consulting work over seventeen years. Not long after being replaced as speaker, he helped her launch her political career. In 2011, she announced a run for an open seat on the Railroad Commission. “Growing up in the Permian Basin, I have a unique understanding of the oil and gas industry,” she said. “It is the economic engine that drives the Texas economy.”

Christi Craddick had never previously run for elected office. In the Republican primary, she faced state representative Warren Chisum of Pampa. From the beginning of her campaign through the end of the primary, she raised nearly $2.4 million. Her largest donor, by far, was her father; Tom Craddick contributed more than $600,000. More than $1 million came from donors with oil and gas interests. Christi outraised Chisum by a margin of more than two to one, and defeated him in a runoff before dispatching her Democratic opponent in the general election. Since taking office, she has been an unabashed supporter of the oil and gas industry, even in cases where its interests seemed at odds with those of most Texans. About 1.5 percent of state residents work in oil and gas extraction and production, and another 1.1 percent work on pipelines and in petrochemical manufacturing and refining—while all Texas residents are affected by the prices of petroleum products, as well as by the industry’s impact on air and water resources. During the extended freeze of 2021, for instance, the failure of natural-gas companies to weatherize their facilities — a legal requirement in most states, but not in Texas —contributed heavily to the multi-day blackouts suffered across the state. Meanwhile, injection deep into the ground of salty water used in fracking has “almost certainly” triggered numerous West Texas earthquakes in the past couple years.

With Tom Craddick serving as a member of the energy committee in the Texas House, and Christi Craddick as one of the elected officials who runs the state’s oil regulatory agency, the family has exerted enormous influence over Texas energy policy. And with Christi Craddick as a commissioner, staffers of the agency were put in the awkward position of being assigned to regulate wells that were sometimes partly owned by the father of their boss, and sometimes by the boss herself.

Take, for example, the Alkaline Earth wells in which Tom Craddick holds a 3.1 percent interest. They’ve required a lot of attention from Railroad Commission employees. In 2020, before the wells were drilled, the agency’s staff cited issues with CrownQuest’s lease. The commission issued six so-called “problem” letters, an unusually large number. They flagged errors with the paperwork and layout of the leases that needed correcting before CrownQuest could begin drilling. CrownQuest complied and drilled four wells in October 2020. Between January and June of 2021, the Midland company completed the wells by fracking layers of petroleum-bearing rock, installing cement and pipes to protect shallow aquifers, and connecting the well pad to pipelines. By the end of the year, all four wells were producing oil.


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