Category Archives: Construction

Houston Engineering Company pays $1.6 million to settle campaign finance violations

Dannenbaum Engineering, a major civil engineering contractor, has agreed to pay a $1.6 million fine for its involvement in campaign finance violations.



The company built parts of the Sam Houston Tollway, the Hardy Toll Road and taxiways at both Houston airports.

CEO recently stepped down

The former CEO of Dannenbaum, 80-year-old James Dannenbaum, has been separately charged for his role in the scheme. Mr Dannenbaum is a former Regent of the University of Texas (appointed by Rick Perry). He also serves on the boards of MD Anderson Cancer Center and until recently, the Greater Houston Partnership.

Also heavily involved was Louis H Jones, the Director of Dannenbaum’s South Texas region. Mr Jones lived in McAllen.¬† He died by suicide in October 2018.

The Scheme

The company admitted to making $323,300 in illegal contributions between 2015 and 2017

The scheme involved employees of the company making campaign contributions in their own name and then, secretly, being reimbursed by the company. The individuals and the campaigns involved are not named in the Information document filed in court in early November. However, searches of the database of the Federal Election Commission reveal the true recipients.

  • Kevin Brady (R) – House Representative for the 8th District of Texas (which covers the Woodlands and Huntsville). In February 2017, Brady’s campaign committee received a total of $10,000 from Jones and three employees (one based in Houston, the other two in South Texas).
  • John Cornyn (R) – Senior Senator for Texas. Cornyn’s campaign committee also received¬† total of $10,000 from the same individuals in February 2017.
  • Filemon Vela (D) – House Representative for the 34th District of Texas (which covers the Gulf Coast between Brownsville and Corpus Christi). Jones donated $2,500 to Vela’s campaign.

The company reimbursed Jones for the total amounts paid. In the company books, these were disguised as marketing advances. In turn, Jones issued personal checks to the three employees involved.

It’s interesting that the amounts involved quickly snowballed from the $22,500 disclosed in the Information document filed in early November to the $323,300 disclosed in the settlement agreement. The company has a new CEO, Michael Maksoud, who has vowed to restructure its board and stop all politically-related payments to its employees.

Perry and McCarthy big beneficiaries

A breakdown of the $323,300 has not been made public. While politicians from both parties appeared to receive donations, the two biggest recipients according to the FEC records were Rick Perry’s Super PAC (at least $90,000) and Kevin McCarthy’s committees (at least $38,500).

In the same period James Dannenbaum made almost $0.5 million in legal contributions to various candidates. They were mostly Republican including the Cruz, Perry and Rubio Presidential campaigns. However he also donated to Houston Democrats such as Al Green and Sheila Jackson Lee.

https://www.justice.gov/usao-sdtx/pr/houston-engineering-corporation-enters-corporate-resolution-and-agrees-pay-16-million