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George P. Bush, son of former Florida Gov. Jeb Bush and current Texas land commissioner, denies reports that his office has strong financial ties to Pennybacker Capital, an Austin-based private-equity firm he helped start in 2006.
The Texas General Land Office (GLO) allegedly invested in the Pennybacker Fund through the agency’s Texas Permanent School Fund.
But Bush said he left Pennybacker Capital in 2012 and was not elected commissioner of the GLO until 2015.
George P. Bush
| Facebook/George P. Bush
“The GLO does not have any investments in Pennybacker Capital,” said Karina Erickson, communications director for Bush.
Documents obtained by Houston Daily show that in 2017 the Texas Permanent School Fund contributed $75 million to Pennybacker Capital's Pennybacker IV project, helping the company to exceed its funding target.
“The investment to which the author refers and the document that they link to in the article was made by the State Board of Education (SBOE), a state organization over which neither the Texas General Land Office (GLO) nor Commissioner Bush has any control," Erickson told the Houston Daily.
The appearance of a conflict of interest surfaced after Commissioner Bush announced he would campaign to unseat Attorney General Ken Paxton, who has served in office for the past six years and is currently under felony indictment for allegedly defrauding investors.
“Investments made by the SBOE are completely different than investments made by the GLO and the GLO has no decision making in respect to the SBOE’s investments,” Erickson said.
The Texas Land Commissioner oversees the GLO. One GLO role involves overseeing the Texas Permanent School Fund, according to media reports.
As previously reported, a 2019 PERE News report disclosed that the Pennybacker IV fund ultimately topped out at $510 million, meaning that the Permanent School Fund contributed about 15% of the total investment
“Reporting that the GLO is an investor or has any association with Pennybacker Capital is completely incorrect,” Erickson said. “Further, Commissioner Bush sold his ownership interest in Pennybacker almost 10 years ago. He has no control over investments by Pennybacker Capital or any decisions made by the State Board of Education.”
The Austin Property Blog reports that the Texas Permanent School Fund is a sovereign wealth fund that serves to provide revenues for funding of public primary and secondary education statewide. However, the Austin Business Journal reports that Pennybacker allegedly is connected to a conspiracy to purchase loans on Austin commercial properties from banks through secret businesses, forcing the properties into receivership while using a court-ordered bidding process so the new loan holders obtain the underlying assets for no additional cost.
“This is nothing more than a deliberately false and manufactured attack,” Erickson added.