Obsidian/00.03 News/SpaceX’s ascent in Texas was fueled by accommodating local politicians.md

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# SpaceX’s ascent in Texas was fueled by accommodating local politicians

BROWNSVILLE, Texas

Five years ago, Celia Johnson rebuffed an offer from SpaceX, billionaire Elon Musk’s space venture, to buy two brick ranch houses she owns near the mouth of the Rio Grande.

The properties are nestled amid the South Texas scrubland where SpaceX established an ever-expanding facility for the production and launch of its rockets. For decades, they’ve served as a home for the former social worker and a source of retirement income from beachgoers who once rented one of the houses, a short walk from the Gulf of Mexico.

SpaceX’s breakneck development, and fast-changing local regulations that facilitated it, disrupted her quiet retirement and halted much of the beach traffic. It also raised her property taxes, inflated by soaring values all around her as neighbors sold land to SpaceX.

To seek relief, Johnson wrote local officials, including Alex Dominguez, a state legislator who at the time represented her district. In a 2021 email reviewed by Reuters, Dominguez replied that he was “sympathetic.” He couldn’t “choose sides,” though, because it was a matter for the county government.

What Dominguez didn’t tell Johnson: He, too, owned land in the area, purchased years before SpaceX’s arrival. Dominguez received campaign contributions from SpaceX lobbyists. And as he voted on measures that spurred SpaceX’s local development, the value of his property soared more than 180-fold.

The former legislator, who confirmed the exchange and his ownership of the property in a recent interview with Reuters, sold SpaceX the land shortly after he left the legislature last year. The sale, worth $330,000, hasn’t previously been reported.

Dominguez is one of dozens of current and former public officials here whose finances, business relationships and political fortunes are enmeshed with the speedy growth of Starbase, as the Musk development is known. Starbase’s expansion has injected a dizzying influx of money into campaign coffers, business dealings and the personal finances of people elected to represent the public.

The increasingly close ties have created a mix of resentment and accusations by some locals who see favoritism, conflicts of interest and a lack of accountability among authorities enabling SpaceX’s ascent. “The politicians here are in SpaceX’s pocket,” said Johnson, dismayed by the changes around her. “They’ve ignored me as a long-time property owner but they allow SpaceX to do whatever it wants.”

Last year, Reuters documented how rushed work at SpaceX led to [hundreds of unreported employee injuries](https://www.reuters.com/investigates/special-report/spacex-musk-safety/). A review of Starbase’s rapid development now offers previously unreported details of the business and political transactions and relationships that have propelled the operation. Starbase’s growth, Reuters found, was fueled by aggressive lobbying and eased by an accommodating political class that itself flourished with SpaceX’s rise.

Neither SpaceX nor Musk responded to requests for comment about their Texas political ties or the cases of Johnson and others described in this report.

It’s not unusual for a large company to exert economic, social, and political influence in an area where it operates, especially rural regions where a major enterprise can generate jobs and income that otherwise wouldn’t exist. Corporate campaign contributions, meanwhile, have been protected by the U.S. Supreme Court as a form of free speech, despite common criticism that they allow big business to buy public officials.

In an area that boasts some of the highest poverty and unemployment rates in the country, according to federal data, SpaceX has been transformative. By launching rockets into space from this hardscrabble corner of borderland, it has boosted Brownsville, seat of Cameron County, and a surrounding area once better known for migrant traffic and drug smuggling. County commissioners have sought to rechristen Boca Chica, the coastal village where Johnson remains a rare holdout, with the Musk-endorsed name of Starbase.

Besides the more than 2,100 direct jobs that SpaceX has reported to the federal government, the company’s precise impact on the region is difficult to calculate, economists and community leaders say.

Its initial growth was enabled by $15 million in state subsidies and a ten-year property tax exemption from Cameron County, both awarded in 2014. In a summary provided by SpaceX to county officials this year, the company claims its “economic value” in the area amounts to $6.5 billion annually. The one-page summary didn’t detail the figure or the methodology used to calculate it.

The county’s top elected official, Eddie Treviño Jr, told Reuters in an interview his government doesn’t have enough resources to independently assess the number. “It would appear to be in the ballpark,” he said of SpaceX’s claim.

Whatever the impact, the relationship between SpaceX and the area’s political class is mutually beneficial. The company’s bonds with local officials have allowed Starbase to grow fast and permitted local authorities to tout a type of economic progress that has long evaded the area, known broadly as the Rio Grande Valley.

“It’s obvious elected officials in that region would welcome SpaceX and allow it to launch whenever it wants and build whatever it wants,” said Jim Lee, an economics professor at Texas A&M University - Corpus Christi. “From a politician’s perspective, they don’t have anything to lose.”

Considered more business-friendly than states with stricter regulations, the Lone Star State has become a preferred base of operations for Musk. After a Delaware court rejected billions in compensation awarded to him by the board of Tesla, Musk this year moved the electric carmaker’s corporate registry to Texas. In July, he said the headquarters of X, his social media platform, and SpaceX would soon follow.

His growing clout around Brownsville and with Texas politicians comes as Musk is increasingly active as a donor and influencer in U.S. national politics. After former President Donald Trump survived an assassination attempt in July, Musk endorsed him in the November election and pledged to finance a political action committee that would help defeat Democrats.

Musk began financing campaigns in the state around the time SpaceX set up shop near Brownsville. In 2014, the year the subsidies and tax breaks were approved, he donated $150,000 to the campaigns of dozens of elected officials from both major parties, Texas records show. The donations were made by Musk or a trust in his name.

Businesses associated with SpaceX have also joined Musk and company lobbyists to finance local officials. Musk and lobbyists representing SpaceX and S&B Infrastructure, an engineering and construction firm that worked with the space venture, have contributed more than $500,000 to the campaigns of two dozen elected officials from the region since 2014, records show.

The sums are small considering the many millions of dollars regularly spent on major political campaigns and the vast wealth at Musk’s disposal. Still, the recipients include state and local officials – like Dominguez, the lawmaker who sold his coastal property – whose support has proven crucial for SpaceX and its expanding activities.

“I didn’t pay attention to those details”

SpaceX launched operations in Texas in 2003, when the company bought land to begin testing rockets in McGregor, a small town in the center of the state. Another entrepreneur previously had acquired the land for a space venture that never got off the ground. Toward the end of that decade, according to people familiar with the history, Musk spotted Boca Chica from an airplane.

Its remoteness, lack of development and proximity to the Gulf of Mexico – useful for liftoff and recovery of spacecraft after splashdown – intrigued Musk. He ordered an assessment of the site’s potential as a launch site, these people said, but didn’t publicize his interest in the area.

At the time, Boca Chica remained a small community of roughly three dozen families, according to longtime locals. Mostly considered a beach retreat by people in Brownsville, 25 miles inland, the area was so remote that the county had begun to seize and auction properties of absentee landowners whose taxes had gone unpaid for years.

“I just knew it as an undeveloped beach,” said Dominguez, who was a Brownsville lawyer then, years before a political career as a county commissioner and state legislator. In 2007, he purchased three of the auctioned lots from the county for a total of about $1,800, property records show.

In 2012, SpaceX hired S&B Infrastructure, a big engineering and construction firm headquartered in Houston, to help it explore the area and get to know local authorities. Alma Santos, at the time working as a government liaison for S&B, began acquiring land using a shell company registered by SpaceX as Dogleg Park, state records show. The term “dogleg” is a navigational reference to a sharp turn in a rocket’s trajectory.

An S&B spokesperson, in an email, said the company no longer works for SpaceX, and declined to comment on details of its past relationship with the space venture.

In an interview, Santos said many locals welcomed the prospect of development. “The infrastructure was from the 1940s,” she said. “It was a very substandard type of living out there.”

Soon, Santos was making appearances at public discussions, laying out SpaceX’s early plans for a rocket launch facility and pressing local officials for support. To help with the effort, SpaceX enlisted other political insiders including Greenberg Traurig, a nationally known law and lobbying firm, state lobbying records show.

Greenberg Traurig didn’t return calls seeking comment.

An early SpaceX concern, local authorities recall, was that the company could become the target of lawsuits if testing or launch of rockets damaged surrounding properties. Because most rocket launches in the United States had historically been conducted by the federal government, few laws existed to consider such operations by the private sector, aerospace industry experts said.

In short order, a local state representative introduced a bill in the Texas legislature to shield SpaceX from such lawsuits. “They wanted to make sure they were protected, which I understood,” the lawmaker, Eddie Lucio III, told Reuters. The legislature approved the measure, signed into law in 2013.

That year, Lucio was also one of the lawmakers who supported a separate bill to allow closure of the two-lane road to Boca Chica during SpaceX activities. The company pushed for the law so it could conduct launches and other operations without risk to bystanders or disruption from passersby. That measure also passed, setting up what would become a growing source of tension for residents and visitors accustomed to regular access to coastal homes and the beach.

Lucio, an attorney who served in the statehouse until 2022, was among many local lawmakers who received campaign financing from SpaceX lobbyists. Musk himself donated $1,000 to Lucio’s re-election bid in 2012 and another $1,000 in 2014, campaign finance records show. S&B and Greenberg Traurig lobbyists, meanwhile, supplied Lucio with more than $10,000 for various campaigns through 2020.

In an interview, Lucio said he was unaware of the Musk-related funding. “My campaign raised the money,” he said. “I didn’t pay attention to those details.”

Lucio and Dominguez, who by then was a county commissioner, were among local officials who in 2014 supported the incentives that subsidized SpaceX’s early expansion: $15 million in state funding and a 10-year property tax break from the county. Ever since, SpaceX has speedily built up its manufacturing, test and launch facilities, covering an area that the company has said will soon exceed 1 million square feet – roughly the size of 17 football fields.

Despite the impact Starbase could have on area land valuations, Dominguez told Reuters that an attorney for the commissioners advised him his nearby property posed no conflict of interest. Officials at the county commissioners’ office didn’t respond to requests for comment.

Dominguez continued to propose and vote on matters related to SpaceX for four years as a commissioner and during two terms later as a state legislator. Over that period, he received over $6,000 in campaign contributions from lobbyists associated with SpaceX, including Greenberg Traurig and S&B, according to state records. Dominguez said neither his land nor the campaign contributions influenced his decisions as a lawmaker.

Lucio took a job in 2015 as an attorney for Noble Texas Builders, a Cameron County construction company. As Starbase expanded, Noble became a SpaceX contractor. Because the legislature is in session only every other year, legislators maintain outside jobs along with their public duties.

State records show that Lucio was also an attorney for five other real estate or development businesses formed by Noble’s chief executive, Rene Capistran, between 2016 and 2021. Noble and Capistran didn’t respond to requests for comment about those businesses or their relationships with the lawmaker. Lucio told Reuters his work with Noble and the other ventures was unrelated to SpaceX contracts.

Ultimately, according to four people familiar with Noble’s work, its relationship with SpaceX soured because the builder, echoing [complaints by other contractors](https://www.reuters.com/technology/space/musks-spacex-is-quick-build-texas-slow-pay-its-bills-2024-05-13/#:~:text=May%2013%20\(Reuters\)%20%2D%20SpaceX,across%20the%20Lone%20Star%20state.), said the Musk venture didn’t pay invoices on time.

By 2015, Santos, the S&B government liaison, had left that job for a similar position at SpaceX itself. S&B, she said, at that time no longer had a contract with SpaceX.

That April, Santos testified before the Texas Senate, urging lawmakers to keep funding aerospace development. She praised “the state’s business-friendly climate and the legislature’s great efforts,” according to an account of her appearance in local media.

Santos left SpaceX earlier this year.

“This conduct is unacceptable”

In 2016, Cameron County voters elected Treviño, an attorney and former Brownsville mayor, as county judge. That title in Texas refers to the top elected official in the county government. In office, Treviño has been an intermediary between SpaceX and frustrated residents, including those upset by the beach road closures and those critical of what they see as unchecked expansion.

In an interview, Treviño said his relations with SpaceX have been positive. “The great majority of my interactions from the beginning to the present have been professional and cordial based on a mutually beneficial viewpoint,” he said.

Treviño has had business ties with two associates who became contractors for SpaceX through a company registered as Core Construction of RGV, according to Texas registry records. Those associates are Conrad Bodden, a law partner of the county judge until 2021, and Juan Andrade Jr, a local bail bondsman. Treviño, with Bodden, incorporated two ventures to develop land in Cameron County, the records show, one of them including Andrade.

The land ventures were unrelated to Core Construction or its work with SpaceX, Treviño said. “I had nothing to do with any SpaceX business,” he told Reuters.

Since Treviño first became county judge, Bodden and other SpaceX contractors have contributed at least $47,000 to his campaigns, according to campaign finance records. In a follow-up email, Treviño added that campaign financing and other activity by SpaceX lobbyists haven’t influenced his decisions as county judge. Never “have I ever voted in favor of any SpaceX matter at their or anyone else’s urging,” he wrote.

Neither Treviño, Bodden nor Andrade have been accused of any wrongdoing related to their business activities or partnerships. Bodden declined to comment. Andrade didn’t respond to requests for comment. Core Construction didn’t return calls from Reuters.

As a contractor, Core Construction was involved in projects that four former SpaceX employees said were typical of fast-paced, sometimes slipshod building at Starbase. Starting in 2021, SpaceX hired Core Construction to pave a parking lot and residential streets where homes for employees were being remodeled.

Shortly afterward, the employees said, the roads cracked, forcing SpaceX to call the company back to redo the work. County records show that a subcontractor who supplied materials to Core Construction later filed a lien against the company. The supplier claimed the builder was months late paying for more than $12,000 in materials used at Starbase.

At times, SpaceX’s own employees complained about rushed projects, shoddy contractors and orders to build before authorities had approved construction. “The company’s attitude was to move ahead without asking permission and apologize later,” said Josh Gardner, a former SpaceX employee who worked as a construction project manager.

Gardner is one of five former SpaceX employees who described a frantic project schedule that they believe should have been more closely regulated. County records reviewed by Reuters show that in at least one instance, involving the construction of a metal building, SpaceX built without county permission. The former employees said there were others.

“The county did nothing to stop them,” Gardner said.

Santos, the former government liaison, told Reuters that “SpaceX was moving fast, but not maliciously,” adding “the county initially was very, very slow.”

Some local officials had a different view – that in its rush to build, SpaceX outpaced its own ability to file the proper paperwork. “They were slow in turning in permits,” said Juan Martinez, the Cameron County fire marshal, who often inspected SpaceX job sites. The company’s compliance, he added, improved over time.

> “The company’s attitude was to move ahead without asking permission and apologize later”

In 2021, Gardner and four other former employees said, SpaceX began construction on a leased site for facilities related to a backup power plant. SpaceX, the employees recalled, had no permit to build there.

Nonetheless, Gardner said, Shyamal “Sam” Patel, an engineer then in charge of Starbase facilities, told workers to proceed. To disguise their work, Gardner said, Patel told them to bury pipes and other materials that if seen from above would reveal construction. SpaceX enthusiasts often post aerial views of Starbase progress online.

Patel, who left SpaceX in 2023, declined to comment.

Musk himself sometimes appeared at the plant and other nearby facilities, arriving in late afternoon and staying throughout the night, according to Gardner and the other former employees. “I remember seeing Elon out there screaming,” Gardner said, recalling Musk’s efforts to accelerate the labor.

SpaceX finished building the power plant facilities, Gardner and the other former employees said. County records contain no indication that a permit was ever granted for the construction.

SpaceX fired Gardner in 2022.

His dismissal, Gardner said, followed objections he made to superiors about rushed schedules and what he considered poor work by some contractors, including Core Construction. Upon his dismissal, Gardner added, SpaceX managers, including Matthew Lewis, his supervisor, told him that a contractor had complained about him.

Lewis, reached by telephone, declined to comment.

In official termination papers, reviewed by Reuters, SpaceX didn’t mention the alleged contractor complaint. Instead, Gardner said, the company told him he hadn’t gotten the proper authorization for a project. Gardner said he had never needed such authorization before.

By then, SpaceX’s sprawling presence had angered so many locals that Luis Saenz, the county’s district attorney, embarked on a rare effort by a public official to curb the company’s behavior.

In a June 2021 letter, addressed to facilities engineer Patel, Saenz warned that SpaceX’s private security guards were illegally shutting down thoroughfares beyond what’s authorized by the beach-road law. The guards, moreover, were usurping the authority of public officials by keeping locals, including Saenz’s staff, from those roads.

“This conduct is unacceptable,” wrote the district attorney. Saenz declined to comment further.

Eventually, SpaceX ceded control of the closures to the county, which now shuts the roads at SpaceX’s request. The frequent closures still cause friction.

In recent years, some of the officials who facilitated Starbase growth have left office. Dominguez, the former state legislator, last year departed the legislature after his district was redrawn. He sold his land to SpaceX months later. At the time, electoral finance records show, his campaign efforts had amassed debt of $140,000.

“I haven’t gotten rich from this sale,” he said of the $330,000 he received, “far from it.”

Neighbors of Starbase continue to be perplexed by some of SpaceX’s activities. Last year, a homeowner in the area, Keith Reynolds, noticed that SpaceX builders had cleared a parcel and were storing construction materials there. The parcel belonged to Cards Against Humanity, a card game company that sometimes engages in progressive political activism and bought land there to thwart a border wall with Mexico.

Reynolds said he called SpaceX to complain, but got no response. He also phoned an executive at Cards Against Humanity to inform them. The executive, who asked not to be identified by name, told Reuters that Denise Marrufo, a SpaceX real estate analyst, called afterward, asking if the company wanted to sell the property.

The executive ignored the offer.

Marrufo didn’t respond to a request for comment.

Cards Against Humanity on Thursday filed a $15 million lawsuit against SpaceX in Cameron County District Court, alleging illegal trespassing and destruction of property.

Johnson, the retiree who refused to sell her houses, said SpaceX’s offer wasn’t enough to tempt her. The company, she said, made her a take-it-or-leave-it offer of $340,000 for both houses, and told her it wouldn’t consider buying just one.

Today, she is one of just a handful of original neighbors remaining. Most residents now are SpaceX workers, many of them living in refurbished neocolonial and modernist homes.

At some point, former SpaceX employees and locals told Reuters, Starbase workers took down a Boca Chica sign identifying their village. They said workers also removed a statue of the Virgin of Guadalupe, an icon revered by the predominantly Mexican-American residents who long lived in the area.

“SpaceX has been good for SpaceX and the elected officials that helped it come here,” said Johnson. “All Elon Musk has done for me is destroy my dreams.”

**The Boosters**

By Marisa Taylor

Photo editing: Corrine Perkins

Art direction: John Emerson

Edited by Paulo Prada

 
 

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