Texas’ Republican old guard mobilizes to protect Dade Phelan from the far right

Dade Phelan addresses the floor after being elected for his second term as House speaker on on Jan 10, 2023. (Credit: Jordan Vonderhaar for The Texas Tribune)

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In mid-April, some of Texas’ most prolific Republican donors convened at the palatial and secluded mansion of Dallas pipeline mogul Kelcy Warren.

The RSVP list counted the likes of legendary GOP strategist Karl Rove, real estate billionaire Harlan Crow and Texans for Lawsuit Reform co-founder Dick Weekley. It also included several erstwhile Republican leaders, including Texas’ longest serving governor, Rick Perry; former U.S. Sen. Kay Bailey Hutchison; and two former Texas House speakers, Dennis Bonnen and Joe Straus.

Their mission: Save Dade Phelan.

It was a dramatic show of force from the state’s most influential GOP power brokers — or at least, it would have been a decade ago. Today, the once-gilded group of Republican kingmakers, who shaped Texas and national conservative politics across the Bush era, are locked in a power struggle with the party’s far-right, socially conservative wing — the very forces that pushed Phelan, the Republican Texas House speaker, into a career-threatening runoff five weeks earlier.

These conservative establishment players, whose own reputations have been under attack in recent months as they’ve been recast as RINOs, are going to bat for Phelan in a May 28 runoff that, by one account, is the most expensive state House race in history. They hope to prevent Texas’ lower chamber from falling under the control of hardline conservatives like their longtime rival, Tim Dunn, a Midland oilman and billionaire megadonor. Dunn and his sprawling political network have funded an aggressive campaign to oust Phelan, attack his allies and scrub so-called moderates from the party.

“If you have 100 issues, and you agree with them 99 times, you’re their enemy,” said Alan Hassenflu, a Houston real estate magnate who was on the host committee for Phelan’s April fundraiser.

Hassenflu, a board member of the powerful tort reform group Texans for Lawsuit Reform, added that the interests of the Dunn cohort frequently diverge from fiscal conservative orthodoxy.

“Often that purity isn’t conservative,” he said. “They’d be just fine having the government tell businesses they can’t have unisex bathrooms or mandate vaccines … That’s not limited governance.”

Phelan’s primary against GOP activist David Covey has emerged as a last stand for the Republican Party’s business-minded old guard against an insurgency, primarily motivated by social and cultural issues, that aims to reshape the House in the mold of the more conservative Senate and its leader, Lt. Gov. Dan Patrick. That movement landed a major victory in the March primaries, when nine House GOP incumbents were unseated by far-right challengers and eight others, including Phelan, were pushed into runoffs.

David Covey talks on the phone in Beaumont on Jan. 26, 2024. Covey is running against House Speaker Dade Phelan in the Republican primary. (Credit: Mark Felix for The Texas Tribune)

The ouster of Phelan, R-Beaumont, would give Dunn’s cohort its best chance yet to elect a speaker who is aligned with Patrick and the Senate, likely clearing the way for unfinished priorities like private school vouchers, expanded state control of elections in Democrat-run counties and various measures aimed at infusing more Christianity into public life.

“This is not the party of George Herbert Walker Bush or [former Sen.] John Tower or Kay Bailey Hutchison or George W. Bush,” said Jon Taylor, a political science professor at the University of Texas at San Antonio. “It is a party that is decidedly more conservative, much less interested in the kind of approach that Texas Republicans took for decades, which was working strongly and closely with the business community … but not pushing very hard on social stuff.”

Some hardline conservatives reject the notion that they have abandoned their pro-business principles, arguing it’s possible to focus on things like loosening the regulatory environment while also restricting abortion and LGBTQ+ rights.

“I don't think anybody has a better voting record than I do when it comes to alleviating and fighting against problematic regulations that we're putting on small businesses,” said state Rep. Steve Toth, a Republican from The Woodlands who owns a pool service business.

Toth, one of Phelan’s most outspoken critics in the House, has endorsed Covey and joined with a group of lawmakers and candidates who want to upend the House’s rules to further diminish the influence of Democrats and weaken the speaker’s power.

The fourth-term Republican blamed the intra-party tension on “an element of our party working against social conservatives,” singling out one of the most prolific pro-Phelan groups this cycle, the Associated Republicans of Texas. The group, known as ART, spent around $3 million defending House incumbents in the first round and likely millions more in the runoffs.

State Rep. Steve Toth, R-The Woodlands, right, speaks with state Rep. Tom Oliverson, R-Cypress, on the House floor at the state Capitol on April 6, 2023. (Credit: Evan L'Roy/The Texas Tribune)

“If we try and take out someone that is moderate, we're seen as extreme, and we're the problem with the Republican Party,” said Toth, who was opposed in his own primary by ART, making him the group’s only GOP incumbent target this year.

Added Toth, who was backed by Dunn’s PAC and easily fended off a moderate challenger in March: “They don’t want you to be socially conservative, they only want you to be moderate on those issues, and to get along and go along with the Democrats. And we're just not willing to do it.”

The old guard

Phelan’s high-profile backers include some of the state’s wealthiest business executives who have benefited from the state’s boom years and industry-friendly approach to governing.

One member of the Dallas fundraiser’s host committee was Jeanne Tower Cox, daughter of former U.S. Sen. John Tower. Tower, the first Republican Texan elected to the Senate since Reconstruction, helped launch Associated Republicans of Texas in 1974 when the party held fewer than two dozen seats in the Legislature.

Phelan’s backers also include Robert Rowling, the billionaire owner of Omni hotels; energy titan Ray Hunt; and beverage distribution magnate John Nau, who serves as co-chair of ART’s board. Each is also among Gov. Greg Abbott’s top donors, contributing at least a million dollars to the governor’s campaigns. Abbott, for his part, has remained neutral in Phelan's race.

The wave of anti-establishment energy this cycle has not only threatened Phelan’s career, but also raised the prospect that his supporters in the Republican old guard — already considered pariahs among a large segment of the GOP — could become full-on outcasts in the party they helped create decades ago.

Among them is Rove, who masterminded the Texas GOP’s rise in the 1980s and 1990s, engineering some of the party’s earliest statewide wins, including the 1990 campaigns of Perry for agriculture commissioner and Hutchison for state treasurer, followed by George W. Bush’s election as governor in 1994.

Rove, who declined comment for this story, has been in the crosshairs of the GOP grassroots since he penned an essay last year suggesting Attorney General Ken Paxton was likely to be convicted at his impeachment trial. Rove continued to blast Paxton after he was acquitted by the state Senate, arguing the attorney general bore full responsibility for the impeachment because of his “arrogance.”

Former White House Deputy Chief of Staff under President George W. Bush and Republican political consultant Karl Rove speaks on a panel at The Texas Tribune Festival in Austin on Saturday, Sept. 24, 2022. (Credit: Eddie Gaspar/The Texas Tribune)

Perry, once praised for deftly changing his political stripes to become a tea party darling, has also fallen out of favor with much of the GOP grassroots after penning his own opinion piece calling for Paxton’s impeachment trial to go forward, and more recently emerging as Phelan’s most high-profile defender on the campaign trail.

Perry, a former Trump cabinet member, has leaned into the criticism, joking at a Phelan rally that the derisive term “RINO” is “kind of sexy, frankly.” He has also defended Phelan’s willingness to work with Democrats, noting that he often did so himself on the vast range of issues that transcend partisan politics.

“The speaker’s role is not to be a dictator,” Perry said at a Phelan rally in February. He later added that he was worried about the magnitude of intra-party fighting among Republicans, telling the Tribune, “if we continue down this path, pointing our guns inside the tent, that is the definition of suicide.”

Former Gov. Rick Perry attends a get out the vote rally in support of Texas House Speaker Dade Phelan on Feb. 29, 2024, in Vidor. (Credit: Callaghan O'Hare for The Texas Tribune)

Former state Sen. Don Huffines, a wealthy businessman who has also championed social conservative causes, argued that much of Phelan’s support is coming from groups like Texans for Lawsuit Reform that are interested in preserving their access to House leadership.

“You've got these people that are used to that environment in Austin, and they want to keep the levers of power,” said Huffines, who challenged Abbott in the 2022 primary with the financial backing of Dunn and fellow West Texas oil billionaire Farris Wilks.

Texans for Lawsuit Reform, known as TLR, is a major force in state politics, with a war chest of more than $29 million at last count and a reputation as the business community’s leading bellwether. Once heralded on the right for helping Republicans flip Texas, TLR has been recently vilified by Paxton and his hardline allies, who believe the group worked behind the scenes to orchestrate his impeachment. TLR, which spent more than $3 million trying to oust Paxton in the 2022 primary, has insisted it had nothing to do with the effort.

Lucy Nashed, a spokesperson for Texans for Lawsuit Reform, said the group backs incumbents who support TLR’s legislative agenda — though she suggested other factors also play a role in endorsement decisions.

“TLRPAC’s primary consideration is whether a candidate is philosophically aligned on civil justice issues, but we also seek to support men and women of integrity who we expect will be constructive members of the Legislature,” Nashed said in an email.

“Fire-breathing” conservatives

Since winning control of the speaker’s gavel in 2021, Phelan has shepherded the passage of numerous conservative priorities once seen as a bridge too far for some Republicans, including laws banning abortion, allowing the permitless carry of handguns, restricting transgender rights and vastly expanding Texas’ role in immigration law enforcement.

At the same time, Phelan, a real estate developer, has overseen a number of key wins for the Texas business community, including the revival of a corporate tax break program, a new law aimed at speeding up permitting for developers and a sweeping limit on city and county ordinances — a priority of business groups that complained of a growing patchwork of local regulations. The Legislature also created a new court, filled with governor-appointed judges, to hear business cases involving large transactions.

Hassenflu, who founded the Houston firm Fidelis Realty Partners and has long been involved in local Republican politics, said he appreciates that Phelan has supported business-friendly policies that promote growth and limit government. He described Phelan as more conservative than his two predecessors as speaker, fellow Republicans Bonnen and Straus, and said Dunn and his allies used “outright lies” to distort the records of Phelan and other incumbents in this year’s ugly Republican primary campaign, which is nearing its conclusion with early voting underway this week.

“There’s no integrity in that,” Hassenflu said of the anti-Phelan tactics.

Dunn and Phelan did not respond to requests for comment.

The far-right faction of Texas Republicans have cast Phelan as a feckless capitulator to Democrats who has slow-walked conservative priorities approved by the Senate. A 2023 documentary by Texas Scorecard — a conservative media organization funded by Dunn — made the bold and specious claim that the House is actually controlled by Democrats.

That wing of the GOP has increasingly pushed Phelan to stop appointing Democratic committee chairs, a longstanding practice in the House that has sought to foster bipartisanship by rewarding the minority party with minor positions in leadership.

What got Phelan in trouble with the far right last year were two issues: the House’s rejection of Abbott’s school voucher bill after it sailed through the Senate and Phelan’s full-throated support for impeaching Paxton — one of Dunn’s key political allies — on corruption and bribery charges.

Phelan did not take a public stance on the voucher measure at the time, but he later told the Tribune he would have preferred a modest version of it to pass; his critics say he didn’t do enough to whip his caucus in line.

The speaker’s political foes have pointed to a handful of other conservative priorities that did not make it through the House, including a proposal to bar the sale of Texas farmland to citizens and entities associated with China and several other countries. Covey has also blamed Phelan for allowing Democrats to sink a bill that would have created a “Border Protection Unit,” staffed by deputized everyday residents and licensed peace officers, with authority to “deter and repel” migrants between ports of entry. Phelan and his allies point to his record overseeing an eightfold spike in border security spending and passage of landmark immigration laws.

The opposing factions in Phelan’s primary have been on divergent paths since Straus, a San Antonio Republican, first became speaker a decade and a half ago.

Straus rose to power in 2009, assembling a coalition of around a dozen Republicans and most Democrats in the House. Straus’ reliance on the minority party made him a frequent punching bag in GOP primaries the following year, when the tea party wave swept out part of his moderate coalition, making his position seem tenuous. But the threat never materialized. Straus easily held onto the speaker’s gavel, with only 15 members voting to oppose him in 2011.

Straus said this year’s crop of “fire-breathing, I'm-gonna-change-everything conservatives” reminds him of the freshman class he faced in 2011. Many of them changed their tune, Straus said, once they actually met him and learned about the give-and-take needed to pass legislation.

“It was always gratifying to see how many of those who came in with that disposition learned about the institution of the House, and learned that if they were just respectful of others, and respectful of the rules and of the institution, they could be leaders too,” Straus said.

Former House Speaker Joe Straus at The Texas Tribune Festival in Austin on Sept. 24, 2022. (Credit: Eddie Gaspar/The Texas Tribune)

Still, there are important differences this year that could point to more enduring changes in the House next session. For one, Phelan is in jeopardy of becoming the first speaker in 52 years to lose reelection, while Straus was never truly threatened in his district. The in-House challenges to Straus’ speakership were even less serious; in contrast, the first challenger out of the gate against Phelan is one of his own committee chairmen.

“These people have a taste for blood in the water, and they're going after him,” said Taylor, the political scientist, noting that the anti-Phelan insurgents are not only pushing a “really strong conservative agenda” like in 2011, but also outlining a specific list of demands aimed at kneecapping Phelan.

The resurgence of the party’s rightmost faction comes after Dunn and his cohort spent the last several years struggling to make a dent in the primaries — including in 2022, when candidates supported by Dunn’s network lost every head-to-head matchup against Phelan-backed incumbents.

The group seemed to reach its nadir in late 2023, when its leader was caught hosting Nick Fuentes, a prominent antisemite and white supremacist, at his consulting firm’s office. But Dunn went on to notch a number of key wins in the March 5 primaries.

Tim Dunn, CEO of CrownQuest Operating and chairman of Empower Texans, speaks during The Texas Tribune Festival on Sept. 24, 2016. (Credit: Brett Buchanan for The Texas Tribune)

Nick Fuentes (middle) is seen exiting the offices of Pale Horse strategies with Chris Russo, founder and president of Texans for Strong Borders (right) in Fort Worth on Oct. 6, 2023. (Credit: Azul Sordo for the Texas Tribune)

Unlike in previous years, hardline candidates are getting a major boost from Abbott and deep-pocketed groups looking to oust GOP lawmakers who oppose private school vouchers. While the governor has stayed out of Phelan’s primary, he is going after four of the speaker’s anti-voucher allies in the May runoffs — and one of the pro-voucher groups, Club For Growth, has targeted the speaker directly with a TV ad that calls him “unwaveringly liberal” and a “Democrat in disguise.”

“A fundamental shift”

Democrats, meanwhile, are determined to fight to preserve the limited power they have in the lower chamber. Their caucus leader, Trey Martinez Fischer of San Antonio, said Republicans should not discount the fact that Democrats currently control 64 of 150 seats in the House and could pick up more in November.

And Republicans, no matter what they may say in campaign speeches about stamping out the last vestiges of Democratic influence in the chamber, need the minority party for certain votes. Passing the budget, establishing a daily quorum and approving constitutional amendments each require 100 ayes — a threshold Republicans, currently with 86 members, lack on their own.

Rep. Trey Martinez Fischer, D-San Antonio, speaks at a press conference prior to the start of the 3rd-called special session of the 88th Legislature on Oct. 9, 2023. (Credit: Bob Daemmrich for the Texas Tribune)

Martinez Fischer said with Republicans fighting among themselves, the possibility exists for a more moderate conservative to successfully attain the gavel through a bipartisan coalition, much as Straus did to begin his five-term reign that ended in 2019.

But if House Republicans attempt to further cut the minority party out of the legislative process, the Democratic leader said they will fight back.

“House Democrats will show up and work hard every day,” Martinez Fischer said. “You show us what the rules are and we’ll find a way to elevate the discussion — that’s just who we are.”

Beyond ending the tradition of bipartisan committee chairs, Phelan’s critics have also called for the next speaker to only solicit support from Republican members, a demand aimed at forestalling another Straus-type coalition. The hardline faction also wants the next speaker to “ensure all GOP legislative priorities receive a floor vote before any Democrat bills.”

Sylvester Turner, a Democrat who spent 27 years in the Texas House before his recent stint as Houston mayor, said the proposed changes would produce “a fundamental shift, and in the end, quite frankly, I think everybody loses.”

Turner, a key ally of Straus’ predecessor, GOP speaker Tom Craddick, served as speaker pro tempore for all three of Craddick’s terms leading the chamber. Phelan’s critics are also calling for an end to that tradition, which has often been used as an olive branch by Republicans to fill a largely ceremonial role.

The House’s bipartisan culture, Turner said, has long prevented the chamber from devolving into “outright gridlock,” while allowing members of both parties to prevent “a lot of bad shit” from reaching the House floor.

“If one side is going to play this partisan hardball sort of system, it forces the other side to do the same,” Turner said. “So, you gotta be careful what you ask for.”

Disclosure: Texans for Lawsuit Reform and University of Texas at San Antonio have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

House Speaker Dade Phelan presides over the House during Sine Die, the last day of the 88th Texas Legislative Session, at the Capitol in Austin on May 29, 2023. (Credit: Eddie Gaspar/The Texas Tribune)

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