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Sunday, July 8, 2007
Tycoon Backs Gov. All the Way
By Thomas J. Cole
Copyright © 2007 Albuquerque Journal; Journal Investigative Reporter
Chances are you've never heard of Johnny Cope if you don't live in the oil patch of southeast New Mexico or travel in political circles.
But he's a man you need to know about.
The wealthy Hobbs businessman is a deal-maker, mover-and-shaker and kingmaker in state government and politics. He is also tight make that very tight with Gov. Bill Richardson.
Cope was the master of ceremonies when Richardson put his left hand on the Bible and took the oath for a second term on New Year's Day in Santa Fe.
A self-made millionaire many times over, Cope is a Richardson ATM, contributing lots of his own money and helping the governor raise millions more for his gubernatorial and presidential campaigns.
Those who know him describe Cope as a man of his word, generous, hardworking and a shrewd businessman.
But his rise to the top hasn't been without troubles: business setbacks, a drug problem that led to jail time and a couple of stormy marriages that involved allegations of abuse.
He has also found himself under scrutiny in connection with a couple of state deals. One involved his work as a lobbyist for a prison contractor; the other a failed attempt by Cope and business associates to line up a $30 million loan guarantee for a fish farm in southern New Mexico.
When it comes to giving money to politicians, Cope doesn't stop at the top.
For last year's elections alone, he and his companies contributed more than $170,000 to candidates for state office. All but one of the recipients was a Democrat.
Because no good deed goes unnoticed in politics, Richardson made Cope the chairman of the powerful commission that oversees state road work.
Remarried, Cope, 58, leads a lifestyle that might seem inconsistent with his unassuming and soft-spoken country charm. He has a couple of vacation homes, drives a black luxury sedan, races horses and is part-owner of two-jet aircraft.
He has a reputation as a go-to guy.
When legislators balked at buying a state jet, Cope tried to use road money to buy a propjet for use by the Richardson administration.
That move failed, but the administration eventually got lawmakers to pony up for a plane a Cessna jet Cope now uses in his role as chairman of the Transportation Commission.
He has been active in community causes, including promoting economic development in southeast New Mexico. A terminal being built at the Hobbs airport is named for him.
He says he doesn't know exactly how much he's worth but says it's more than $50 million.
Bob Gallagher, who calls Cope his best friend, says Cope had known Richardson for many years and had the money and time to help him get elected and govern.
"Johnny emerged not really out of the closet, but his business chair," says Gallagher, president of the state Oil and Gas Association and a regent at New Mexico State University.
Cope says he's involved in politics to support his beliefs.
He says everyone should have the opportunity to succeed and government should provide social programs where needed to guarantee opportunity for all.
"I started with zero and I want this country preserved that if you can dream it, you can make it happen. ... That's what America's about," Cope says.
He has been making contributions for decades to candidates for state office; it's just the amount of money given that has shot up in recent years.
Cope and 10 companies he owned in whole or in part contributed at least $174,825 to 13 candidates for state office in the 2006 election cycle, according to a search of New Mexico campaign finance data compiled by the National Institute on Money in State Politics.
Richardson received the lion's share of Cope's contributions $107,000 and his running mate, Lt. Gov. Diane Denish, took in at least $37,500.
The amount contributed by Cope and his companies for the 2006 elections was up sharply from 2002.
Contributions to state candidates for the 2002 elections totaled at least $79,311, with Richardson receiving nearly half that money in his first run for governor.
Asked why the amount jumped last year, Cope says, "It's the difference between 30-dollar (a barrel) oil and 60-dollar oil."
Cope says he met the governor shortly after Richardson's arrival in New Mexico in the late 1970s and has been a political supporter since his first run for Congress in 1980.
Although Hobbs wasn't in Richardson's congressional district, Cope says he held fundraisers at his house. Richardson would then spend the night.
"We've just become friends," Cope says. "I admire his record and his public service. There's no one works any harder than he does."
Richardson spokesman Gilbert Gallegos said, "The governor considers Johnny Cope a good friend whose many contributions as a community leader and transportation commissioner have benefited all of New Mexico."
Cope and Richardson both played baseball in their youth and share a passion for the game. Cope's office is decorated with autographed balls and other memorabilia.
Richardson sent Cope a newspaper clipping with a photograph showing the two men in the stands when New York Yankee Jorge Posada hit a two-run homer in the bottom of the ninth to defeat the Texas Rangers last year in Yankee Stadium.
Cope was finance chairman of Richardson's re-election campaign last year.
He also hosted a fundraiser March 1 for Richardson's presidential campaign and says he has helped organize others in Texas.
"I know friends that want to help the governor raise money and really believe in him," says Cope, reaching behind his office desk to show a check for Richardson sent to him by a Texas contributor.
Recipients of Cope's money for the 2006 elections included a Republican State Land Commissioner Patrick Lyons, whose office leases state land.
CMB, a company formed by Cope and longtime business partner Ken Marsh in 2003, contributed $10,000 to Lyons in 2004. He won re-election last year.
Lyons' office manages state trust lands, as well as state-owned oil, gas and mineral rights.
"His oil and gas division has certainly been fair with oil and gas" producers, Cope says. "Pat has been very balanced."
The Land Office is a major property owner in southeast New Mexico, and Cope leases some of its land for commercial buildings.
In addition to state candidates, Cope has been a major contributor to candidates for federal office.
Since 1993, he has donated more than $113,000 to congressional and presidential candidates and national political committees, according to federal campaign finance data compiled by The Center for Responsive Politics.
Cope says he was a New Mexico finance chairman for President Clinton and he co-sponsored a fundraiser in Santa Fe for Clinton's library.
He says he also worked as a finance chairman for the presidential campaigns of Vice President Al Gore in 2000 and Massachusetts Sen. John Kerry in 2004.
After taking office in 2003, Richardson sought and got a new law saying members of the Transportation Commission serve at the pleasure of the governor.
Previously, commissioners could be removed only for cause before the end of their terms.
The change allowed Richardson to boot out commissioners left over from the administration of Republican Gov. Gary Johnson and take firm control of the Transportation Commission, which sets policy for the Transportation Department.
After the change, Richardson, in July 2003, appointed Cope to the Transportation Commission. Cope says he told the governor he wanted to be chairman.
The commission has overseen Governor Richardson's Investment Partnership, or GRIP, a $1.6 billion program started in 2004 to reconstruct highways and improve public transportation.
The initiative includes one of Richardson's biggest projects the Belen-to-Albuquerque-to-Santa Fe Rail Runner Express commuter train. Its estimated cost is $393 million although the tab for state taxpayers is likely to grow now that a $75 million federal grant looks doubtful.
The Transportation Commission also oversees the smaller GRIP 2 program, which includes $10 million for another major Richardson project a spaceport in southern New Mexico.
Republican Rep. Anna Crook of Clovis, a member of the House transportation committee, says Cope knows the needs and issues facing the Transportation Department.
"Any time he is up here for our committee, he seems up to speed," Crook says.
In 2004, the Transportation Commission tried but failed to buy a propjet for use by Richardson and others in government.
Without the approval of the Legislature, the commission quietly voted to use $4 million in road money to purchase a nine-passenger aircraft.
Attorney General Patricia Madrid later threatened the administration, saying it would be illegal to use road money for the plane.
The Legislature eventually approved $5 million for a new plane, and the state purchased a Cessna Citation Bravo jet.
The jet has been used by the Governor's Office for trips by Richardson and by various other government agencies, including the Transportation Department to ferry commission members to meetings.
The Journal reported in April that Cope had flown six times as the only passenger on the aircraft.
Cope said at the time the state has a longtime policy of flying transportation commissioners to monthly meetings and that he is sensitive about his use of the jet.
Cope has pursued some private business interests in Santa Fe during the Richardson administration.
He is an investor in a new company called New Mexico Tilapia that sought a $30 million state loan guarantee for a fish farm near Lordsburg.
The Legislature rejected the proposal this year despite the company's group of high-powered lobbyists, including former Gov. Toney Anaya, former House Speaker Raymond Sanchez and former Republican Rep. Joe Thompson.
Under the deal, the $30 million would have gone to investors in the fish farm if New Mexico Tilapia had defaulted on bonds sold for the project.
The company wanted the loan guarantee to make its bond more attractive to investors.
Any loss to the state would have been covered by taxpayers through the gross receipts tax.
Cope's fellow Transportation Commissioner David Schutz also was identified as an investor in the project.
The Senate tabled the loan guarantee bill in March with several senators questioning why the state should provide such a deal for a new company.
Cope says the tilapia farm would have had 1,500 workers when running at full capacity.
"That's better economic development than looks like to me Eclipse (Aviation) or these movie deals that they (state officials) give $9 and $10 million dollars away," he says.
In the Legislature's defense, Cope says, the proposed project came together near the start of its session and backers had little time to brief lawmakers.
He says he and the other backers probably erred in hiring six lobbyists.
"It looked like we were buying influence," Cope says.
He says he doesn't believe lawmakers gave the proposed loan guarantee and the project a fair shake.
Cope says he remembers someone paging Joe Tilapia on the Capitol's speaker system. "They just were all joking about tilapia, the legislators were," he says.
"I really feel like my reputation is somewhat bruised a little bit and I think a little unfairly," Cope says, adding he told one senator:
"I've gone too long in this life for this to be the end of my legacy, that I screwed the state."
Cope says the tilapia farm remains a possibility without government help but on a smaller scale.
Stint as lobbyist
In another private venture in Santa Fe, Cope registered as a lobbyist for Wexford Health Services of Pittsburgh in 2005, a year after the company won a contract potentially worth more than $100 million to provide health care for state prison inmates.
Cope is a friend of Corrections Secretary Joe R. Williams, previously the warden at a prison in Hobbs.
In addition to Cope, Wexford's other registered lobbyist was Ann E. Casey, Williams' girlfriend.
Richardson suspended Williams from his job for nearly 30 days without pay after the Journal reported in May 2006 that he had used his government cell telephone to make hundreds of calls to Casey.
Cope says Wexford, after winning the state contract, approached him to work as a consultant, providing advice on issues, representation at political events and views on New Mexico politics.
He says he recommended to Wexford that it hire Casey because of her corrections expertise. At the time, she was a deputy warden at an Illinois prison.
Cope says the job was out of character for him and gave rise to questions of impropriety because of the ties linking him, Casey and Williams.
He denies any impropriety but adds, "On the surface, I can see it could possibly be perceived different."
Taking the job "was a mistake," he adds. "I don't know why I did that. ... I guess I don't say no very often. If somebody asks for some help, I usually do it."
Cope says he worked for Wexford for about 18 months and that he never actually lobbied legislators on the company's behalf.
Following complaints about Wexford's health-care services from company workers, inmates and lawmakers, Williams moved to terminate the company's contract.
Cope says he believes there is no problem with him serving as Transportation Commission chairman and pursuing private business interests in Santa Fe.
"I try to be as concerned about conflict as anyone in the state," he says.
The cocaine years
Born in Midland, Texas, but raised in Hobbs, Cope graduated from Eastern New Mexico University with a bachelor's degree in business in 1971.
He initially wanted to go into banking, but a prominent Hobbs family offered him a finance job in its oilfield pipe and supply company.
He took the position, but within a few years he was out on his own as co-owner of Lasco Construction.
"We made some mistakes but we lived by them," Cope says.
He bought out his partner in Lasco in 1978 and a few years later established Hobbs Rental, an oilfield services company.
Cope doesn't know exactly when he made his first million but suspects it was in the early 1980s.
He is certain of one thing he spent the money. Some of it went up his nose.
Cocaine "seemed like the hip in-fashionable thing going on when the oil boom was going on," he says. "I think I had a bigger problem than I wanted to admit."
Cope's cocaine use landed him in U.S. District Court in October 1987, charged with two misdemeanor counts of possession as a result of a federal sting.
He pleaded guilty and was sentenced to four months, spending his time in the Lea County jail in Lovington and at a Salvation Army halfway house in Roswell.
"There wasn't a lot of people wanting to do business with me at that point," Cope says. "At least I could put in a full day's work" while at the halfway house.
Making matters worse was the collapse of oil prices in 1986 and the resulting economic downturn in southeast New Mexico.
"Hobbs seemed like a ghost town there for a few years," he says. "It took all the might that I had to continue. There was a lot of good families that didn't keep their doors open."
Cope says he became less involved in politics after his cocaine conviction.
"Obviously, I was embarrassed," he says. "I felt like I had some things to straighten out in my own life."
Gallagher, president of the New Mexico Oil and Gas Association and a former city manager of Hobbs, says Cope's rebound from his cocaine conviction says a lot about the man.
"He picked his head up from shame," Gallagher says. "I have the utmost respect for someone who can do that."
Cope is credited with helping secure economic development projects for southeast New Mexico, including the private prison in Hobbs, the Waste Isolation Pilot Plant near Carlsbad, and Louisiana Energy Services' planned multibillion-dollar uranium enrichment plant near Eunice.
Cope and others have formed a company to provide security for the LES plant.
Both Cope and his wife, Marty, have served as chairs of the Lea County Democratic Party.
Lt. Gov. Denish, who grew up in Hobbs and has known Cope since grade school, says the Copes have often allowed the use of their home for fundraising events for community causes.
"If you ask me, they're too soft a touch for that," she says. "Everybody goes to him almost first."
Cope was married twice previously, the first time to Jean Vanise Cope in 1978. They had a girl, Kyleigh, and divorced in 1980.
Jean Vanise Cope reported to police in September 1989 that Cope came to her home upset over a child custody matter and threatened several times to kill her.
She said he doubled up his fist and drew it back but didn't strike, according to a police report. She said she talked Cope into leaving after the child became upset.
A court records search didn't turn up any charges having been filed against Cope.
Cope says that the incident was detailed accurately in the police report and that he regrets his actions.
"I was pretty upset with her for not allowing me to see my child," he says.
Cope in March 1990 married Rebecca Cope. They separated a couple of times in 1992 and were divorced the following year. They had no children.
During a separation, Rebecca Cope reported to police in November 1993 that she went to Cope's home to discuss a settlement on a vehicle.
She told police Cope had been drinking, became upset with her, pulled her into the living room area, choked her and struck her in the face.
A police report said Rebecca Cope had a swollen right cheek and eye area that was turning blue and that she had several scratch marks on the left side of her neck.
The police officer who filled out the report said he didn't contact Cope, and a search of court records didn't turn up any charges in the incident.
Cope disputes the report and says "what happened was a total reversal" of what was reported.
He also says he didn't know a police report was filed until learning that it was provided to the Journal in response to a background check on Cope.
"That's embarrassing, I mean honestly. I think it damages my reputation," Cope says. "If it was true, I would deserve every bit of that."
Rebecca Cope declined to be interviewed for this story.
Johnny Cope Contributions for 2006 Elections
Bill Richardson - Governor: $107,000
Diane Denish - Lieutenant Governor: $37,500
Patrick Lyons - State Land Commissioner: $10,825
Geno Zamora - Attorney General: $7,750
Gary King - State Attorney General: $3,000
Ray Powell - State Land Commissioner: $2,000
Shirley Hooper -Secretary of State: $1,500
Joseph Calderon: State Public Regulation Commission: $1,500
Lemuel Martinez - State Attorney General: $1,000
Kiki Saavedra - State House: $1,000
Al Park - State House: $1,000
Steve Gallegos - State Public Regulation Commission: $500
Hector Balderas -State Auditor: $250
Note: Includes personal contributions and contributions by Cope-affiliated companies.
SOURCE: National Institute on Money in State Politics