Texas Tea Party Candidate Profited From Federal Government Subsidies, Sweetheart Municipal Contracts

Investigative Report / February 24, 2010

By Yasha Levine and Mark Ames

Debra Medina ... Bush Republican

This article was first published by TruthDig (truthdig.com)

The Tea Party Revolution has struck the Texas gubernatorial race, with the insurgent Republican candidate, Debra Medina, gaining in the polls and threatening the leading candidates, incumbent Gov. Rick Perry and Sen. Kay Bailey Hutchison. Medina has positioned herself as a radical anti-government outsider who would cut Texas free from federal government programs and influence in favor of the free market. However, according to an investigation of Medina’s business records, her company, Prudentia Inc., benefited greatly over the past decade from federal government subsidies and lucrative municipal government contracts.

Our investigation shows that when you scratch the surface of Texas’ rising tea party star, you’ll find just another Bush-Republican, big-government hypocrite.

On Tuesday, Texas will hold a gubernatorial primary election that has come down to a three-way fight for the GOP nomination. Surprisingly, Medina, a rookie Republican candidate from the tiny rural town of Wharton who has positioned herself as the tea party alternative, is soaring beyond expectation. She has become a national celebrity, suddenly posing a threat to Gov. Perry and Sen. Hutchison. A tougher, rougher, stockier version of Sarah Palin, Medina surged in the polls after she slammed her mainstream Republican opponents in a televised debate, accusing both Perry and Hutchison of succumbing to “big-government solutions” and selling out their Republican ideals. But for all her derision, Medina has been milking taxpayers for years, including those in her own community who subsidize her business.

Medina, a 44-year-old registered nurse who presents herself as the proud owner of a small medical billing business, offered a small-government platform based on God and the free market. She would scrap Texas’ property taxes, criminalize abortions, expand home-schooling, eliminate guns laws and shrink government to the size of a walnut.

“If we get government off the backs of Texans, we’re not gonna have an economic crisis. We’re not gonna have an energy crisis. We’re not gonna have an immigration crisis,” she yelled to an audience of “Don’t Tread on Me” types during a stump speech at a Chevrolet dealership.

The crowd went wild for Medina. She had all the right credentials: ran a small business, grew up on a farm in rural Texas, paid her dues as Texas coordinator for Ron Paul’s 2008 presidential campaign, home-schooled her children, didn’t trust flu vaccines and always carried a loaded Springfield 9-millimeter in her purse—and made sure she was photographed doing it. But the biggest villain of all in Medina’s rhetoric is the United States federal government. In the Republican primary debate in January, Medina said that the federal government’s powers should be stripped down to nothing more than making treaties with other countries. She also has said that as governor of Texas she would make sure that her state’s laws overruled the federal government’s—under what’s called “nullification”—and that she would do her best to stop just short of full secession from the Union.

Tea-baggers are slurping it up, but they probably aren’t aware exactly what it is they’re slurping. Despite her impassioned rhetoric and principled anti-federal government stands, Debra Medina hasn’t stuck by her principles. What she hasn’t told her libertarian supporters is that her business success over the past decade has depended on the government subsidies and contracts that she denounces. The tea party candidate is the same sort of hypocrite as her Republican foes: preaching free-market ideals to the masses while profiting off taxpayer money.

According to data compiled by OMB Watch, Medina’s medical billing company, Prudentia Inc., was granted a $50,000 federal loan guarantee shortly after she incorporated it in 2002. The loan guarantee came courtesy of a program administered by the Small Business Administration, headquartered in Washington—a program that Republicans tried to kill twice in the past 15 years. Thanks to the federal government’s loan guarantees, Medina and people like her are able to secure loans for their fledgling small businesses that banks might otherwise be reluctant to grant, or would charge a higher rate of interest on.

How did Medina qualify? The federal record describes such loan guarantees as being “for small businesses which are unable to obtain financing in the private credit marketplace.” In the terms of Ayn Rand, this makes Medina one of the “moochers” who needed to soak the “producers” to fund her business, rather than (to use Medina’s words) “having the courage” to let the business sink or swim in the free market. Apparently Medina was not ready to face her beloved free market: She stood in judgment before the Invisible Hand, got an invisible thumbs down and beelined it straight to Uncle Sam for a loan guarantee.

And yet Medina does not want to share the welfare she gets with her fellow Texans, which seems kind of unfair. Here’s what she’s promising to offer the suckers: “Get the government off their back, let them get out there and get a job, and we don’t have to worry about unemployment, that charity does not belong with the government,” she told one right-wing radio host.

But while Medina would get government off everyone else’s back, she has made a handsome profit piggybacking on the government twice over: first, with a federal loan guarantee, and, even worse, by using that government-subsidized business to soak the taxpayers of Wharton, Texas, her hometown, by obtaining lucrative city contracts.

In October 2002, just a few months after getting the federal loan guarantee, Medina was ready to start operating her business. And that meant heading straight to the Wharton City Council, where Medina lobbied the government to hand her a sweetheart deal to manage billing and collection for the city’s emergency medical services (EMS). Despite the fact that Medina’s company was brand new and therefore untested, the council voted unanimously to dump the previous company and bring Prudentia onboard, under generous terms. The city agreed to pay an 8.5 percent commission on whatever Prudentia collected (rising to 10 percent for collections over $500,000). According to Medina’s political campaign, Prudentia Inc. is a company that improves medical billing procedures. “Improves” for whom? Definitely for Medina.

On average, Prudentia hauled in roughly $70,000 a year from 2002 through 2009, judging by city records and Medina’s claim that Prudentia collected about half of the outstanding medical bills owed to the EMS.

In 2009, Prudentia made $72,000—a 9.3 percent commission—twice what private billing companies charged in some smaller but more affluent cities. In California, Berkeley paid only 4.5 percent and Manhattan Beach paid only 3.5 percent. On the other side of the U.S., Chelmsford, Mass., paid 4 percent.

But Prudentia’s exorbitant fees aren’t surprising in the Lone Star state, which has a nasty reputation for habitually overcharging Medicare, according to a recent article in The New Yorker. The medical professionals in Texas regularly overcharge Medicare, surpassing every other state.

Prudentia’s record of overcharging offers a window into how Lone Star State Medicare queens operate:

In 2003, just months after Prudential secured its first Wharton contract, Medina appeared before the City Council with a recommendation that the city increase its ambulance transportation fee from $8 to $8.48 per mile, the maximum per-mile charge that Medicare would reimburse. Her reasoning was simple: Wharton could pad its billing to Medicare. The council agreed, and voted unanimously to raise the rate to $8.50 per mile—two cents more per mile than what Medicare pays—increasing costs for everyone except Prudentia Inc., which took in 4 cents more in commission for every single EMS mile it billed. That meant more out-of-pocket cost for Wharton citizens misfortunate enough to require EMS care, and more bleeding of American taxpayers stuck with picking up the Medicare expenses.

Are you starting to get the picture of what this Tea Bag Revolution is going to look like in reality?

Celebrity libertarian Ron Paul, who in 2009 gushed about Medina and endorsed her bid for governor, thinks she’s upholding the small-government ideal: “As chairman of the Wharton County Republican Party, she has stood up to the big government establishment and fought to hold our party accountable to our platform and our conservative Texas values.” Further down in the endorsement text, Rep. Paul said, “Debra is a true success story and role model for Texans across our state.”

She’s certainly a model Bush Republican: Force all the suckers who vote for you to “compete” in the brutal free market, while laughing all the way to the federally funded bank. No wonder Medina is against health care reform: that would mean messing with her cash cow.

And that’s not all. Reports that Medina used campaign funds to buy clothes for herself further demonstrate her hypocrisy. She may have also misrepresented her ethnicity. According to voting registration records that we obtained, in 1991 Medina, born Debra Carolyn Parker (her last name comes from husband Noe), listed her race as “Hispanic.”

A year ago, on the eve of the first tea party protest, we were the first to debunk the movement as a fake grass-roots “astroturf” campaign, and expose its rich Republican sponsors, Freedomworks. Our article caused considerable controversy, as well as a coordinated smear campaign and a lawsuit threat against the article’s publisher, but finally Freedomworks admitted its role in setting up the campaign, and we were proved right. Ultimately, this astroturf movement evolved into a kind of “grass-roots” popular movement that is today as overestimated by the clueless media as it was underestimated last spring when it first began. What Medina’s candidacy proves is that the tea party movement has gone full circle, right back to what its rich sponsors paid it to be: talking the tough libertarian talk, while walking the same old corrupt big-government Republican walk.

POSTSCRIPT:

So far, we have not received comment from Medina’s campaign. After repeated attempts, we finally succeeded in sending these questions by e-mail to Medina’s campaign assistant, Gwen Walton:

1. Ms Medina says she is opposed to federal government “interference” in the free markets and health care in particular, saying, “Your government has to be courageous enough to say ‘That’s not our job, we can’t help you.’ ” However, our investigation shows that her business, Prudentia, has derived a substantial advantage from government assistance and contracts: federal assistance from a 2002 SBA loan guarantee to Prudentia, and local government assistance in the form of lucrative contracts handed to Ms Medina’s company shortly after receiving the federal loan. Our question is: How does she explain to her supporters that it’s fair for Ms. Medina to reap the benefits of government subsidized loans and contracts for her personal gain, but wrong for her Texan constituents to receive the same advantages?

2. Regarding Prudentia’s business, what portion of the company’s revenues come from contracts with the city of Wharton, and what portion of revenues does her company earn from “free market” clients: the “physicians, attorneys, insurance companies and ambulance services” she says are her clients?

3. According to records, Ms Medina registered to vote in 1991 in Texas, identifying her race as “Hispanic.” Exactly how “Hispanic” is Ms Medina? Who among her parents, grandparents, etc is “Hispanic”?

4. Has Ms Medina ever applied as a “Hispanic” for government contracts, government loans or student loans? Has Ms Medina ever used her gender or “Hispanic” race to gain competitive advantage in either business or student activities? What about the SBA loan—was her Prudentia loan granted based on a program favoring either Ms. Medina’s gender or “Hispanic” race?

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25 Comments

Add your own

1. Judas Chongo | February 24th, 2010 at 4:55 pm
ahahaahahahaaaahahaha and here I was thinking she was another suck up self loathing latino that were all too familiar with here in Texas.
2. big deal | February 24th, 2010 at 5:05 pm
Good points but she is running against Ricky Perry child snatcher, and Kay TARPy Hutchison.
3. Carlito | February 24th, 2010 at 9:21 pm
This is all nice and well, but you were totally silent when Obama was running. Why aren’t you as vigilant when it comes to exposing the hypocrisy on the left? It makes me have my doubts because it makes you seem as if you have a bone to pick.
4. mr. mike | February 24th, 2010 at 10:29 pm
Less Tea Bag and more Dick Cheney ballsack.
5. Jefe | February 25th, 2010 at 12:22 am
Take away the defense, energy and telecom handouts and there’s not much left in the entire state.
And good point- why didn’t the exile expose Obama as the conservative he has turned out to be?
6. anonymous | February 25th, 2010 at 3:44 am
obama didnt really say he was a left wing hero
people created their own image of what he was
he never said he’d reform everything
he never said he’d give back all those powers bush gained for the president
he said change a lot
he’d be the centre-right option if you appllied his polices to most european countries
7. aleke | February 25th, 2010 at 10:51 am
@Carlito,
Moron, Obama is not the left, nor has ever been.
8. Judas Chongo | February 25th, 2010 at 5:15 pm
if you couldn’t see obama as a milquetoast centrist while he was campaigning then idk what to tell you
9. wYSeGuy | February 25th, 2010 at 7:35 pm
the eXile ought to be congratulated for the props they’ve gotten from Vanity Fair for at least being right about shit. And I want to thank you guys for also dredging up this annoying (faux) libertarian bitch. My two cents on her are that she’s a nine eleven Truther so that’s good for a laugh.
What I wanted to discuss with you guys is that I found she’s a truther through the Alex Jones show. And that’s the heart of the matter I wanted to bring up. Who is this Alex Jones and what his agenda?
Is he selling totalitarian dooms day bullshit to peddle his dvd’s and survivalist bullshit?
Is this obese man who looks older than Ames, but is nine years younger part of some planted Bircher agenda from a decade/(s?) back to discredit alternate media? Is his mixture of populism, libertarianism and deep paranoia a sign of opportunism (as Debrah Medina used his show to trumpet herself), or does he well and truly believe his own horse shit? And if he believes truly is he the victim of some sort of implemented marketting campaign of some political marketting gone awry of a decades ago version of some Freedom Works type organisation?
Seriously, this man has given Deborah Medina space to popularise herself and peddle her horseshit. As an apparent fellow traveller of Medina’s, he should be looked into. His conspiracism has rightfully kept him out of the mainstream press (and rightfully so), but with the rise of various kooks (exhibit A. Glenn Beck), may I aim at Alex Jones as the next target of the Exile’s vengeance.
10. ROFL | February 26th, 2010 at 2:01 am
Are you people morons? Clearly Ames never criticized Obama, not once: http://exiledonline.com/are-obama-and-geithner-the-twins-from-hell/ Oh wait…. And when Obama was running, the other option was McPalin, and a nuclear war with Russia, because the Russian Army actually *gasp* shot back. Sometimes the intelligence of some posters leaves me remembering the Hangover scene: “You are literaly too stupid to insult!”
What America needs is a real third party. Obama isn’t left, he’s Centrist in American politics, which makes him “Right” in virtually any other country.
11. Erik Bramsen | February 26th, 2010 at 3:14 am
…or did someone hack your website?
12. Allison Bricker | February 26th, 2010 at 3:15 am
Is there a purity test required for all Tea Party candidates?
Is it expected that all who run now in opposition to the largess of the Central Authority, must demonstrate a lifelong record of understanding and opposing the system of entitlement which is unfortunately ingrained from childhood?
Where is the supporting evidence you cite in the article such as business records et cetra?
These are some of the questions that immediately pop into my head as it pertains to this article.
An article with no sources is not really investigative journalism. Please provide your sources so the article may be judged appropriately.
However if you can substantiate the claims, then bravo for uncovering Ms. Medina’s inconsistencies as relates to her current platform.
13. Steve | February 26th, 2010 at 4:43 am
@wYSeGuy…
You really seem to have things all figured out, don’t you, you co-intel-pro scum?
14. Gina | February 26th, 2010 at 7:17 am
On the business loan….The Federal Government has bailed out the banks so that they would give loans to small business..But they do not and did not..they gave themselves bonuses instead..borrowing money as in a loan..is not a subsidy..because the rich, elite refuse to loan you any..
free market for all…down with wall street and the bankers
15. FrankMcG | February 26th, 2010 at 11:54 am
Here’s hoping that the Tea Party remains just viable enough to fracture conservatives, but not enough to actually gain any power.
Not all Republicans are dumb. Some of them are rich.
16. FrankMcG | February 26th, 2010 at 12:09 pm
I also love and can’t get enough of the bitter conservative bunker-dwellers still sore that Obama won, usually along the lines of “Here’s your CHANGE, America!”
Right wingnuts have really latched onto that whole “change” slogan. Taking every opportunity they can to point out that because Obama hasn’t cured cancer or walked on water yet (like our Lord Jesus Christ Reagan), that all the commie sheeple who voted for him were duped WELL I KNEW THE REAL TRUTH THE WHOLE TIME, ME AND MY ASSAULT RIFLE “BETSY”!
This is because blind fanaticism and empty buzzword slogans (freedom! free market! big government! freedom market!) is all they know, hence they try to discredit anyone disagreeing with them by projecting their own mental shortfalls on them.
And honestly, what exactly HAS this site dug up on Obama? That at one point, decades ago in college, both he and one of his current cabinet members tried to stop lynch mobs from killing some loud mouthed racists? That’s the exact same kind of logic that idiots use to try and discredit the ACLU by labeling them as “Nazi lovers”.
“Change” was a campaign slogan. It’s done with. Get over it.
17. wYSeGuy | February 27th, 2010 at 11:37 am
You really seem to have things all figured out
I try to. That’s why you read the news nooby, to try and figure out how this pathetic world works.
you co-intel-pro scum
Fuck you noobwad if I can see a paranoid phony and you can’t. This guy Jones has been screaming into the internet since I first logged on to the interwebs a decade or so ago, polluting all news with his useless “analysis”, making it a pain to find real assessments on the news cause his followers fucking SPAM everything with Fat Jones’ blatherings.
And I didn’t grow up in your neck of the world (i.e Russia or Umrika) so I find his weird-fuck-Yank radio announcer’s voice annoying. And this fat fuck made the mistake of actually interviewing somebody from my country who I know for a fact is not just a fraud, but a dangerous establishmentarian fraud, used to push my government’s anti-democratic agenda. And this Alex Jones fucker linked up with *THAT* dangerous scum (Said scum ACTUALLY having carried out my country’s version of co-intel-pro, lol-irony) to push Fat Jone’s own agenda.
Fuck that bastard. Screw Jones.
18. yokophono | February 27th, 2010 at 1:08 pm
“On the business loan….The Federal Government has bailed out the banks so that they would give loans to small business.”
Can you point to any article or any media coverage where there was ever a statement that said that the bail-out was with the explicit purpose of ensuring loans to small businesses? I think the purpose of this money was to ensure that the largest banking institutions would remain solvent to avert the worst case scenario: a complete shutdown of the US economy.
“free market for all…”
In an absolute free market with zero regulatory oversight you’d end up crushed.
19. thomas callahan | February 27th, 2010 at 2:09 pm
@Allison Bricker… the evidence you ask for is linked to in the article. All hail Ames.
20. JBax52 | March 2nd, 2010 at 9:12 pm
Her husband is Hispanic I think, which should not mean that she can claim the Hispanic label for herself. This is just more of the typical Republican/Teabagger hypocrisy. They rail against big government, but at the same time take advantage of every opportunity to “get their share” in any way they can. Then they want the rest of us to go without the same benefits they have received from the government. It’s really getting old, their speeches are all propaganda, lies and BS.
21. ryan | March 4th, 2010 at 7:42 am
Too bad this unelectable bitch only pulled about 1/6th of Republicans in the primary.
22. abc123 | March 13th, 2010 at 10:58 pm
One needs to take all government subsidies available to survive as a company. To decline taking government subsidies out of principle would only lead to seeing your company loose out to other companies that did take it. You can still be against it, just like you can be Canadian against government health care without needing to die refusing medical treatment in protest.
Of course they will find tons of these examples seeing how companies are dependent on the government for survival.
It is a little like having only free market solutions and when somebody complains you point out that they all use free market and dismiss them as hypocrites.
Nothing more needs to be said except that Mark Ames once again proves he is the greatest man that has ever lived.
23. StopUSAGiveawayFromTakeItForGrantedInhabitants | June 12th, 2010 at 9:02 am
ANOTHER TAKE ON THE PROBLEM
Never have truer words been spoken …. Some people have the vocabulary to sum up things in a way you can understand them. This quote came from the Czech Republic. Someone over there has it figured out.
“The danger to America is not Barack Obama but a citizenry capable of entrusting a man like him with the Presidency. It will be far easier to limit and undo the follies of an Obama presidency than to restore the necessary common sense and good judgment to a depraved electorate willing to have such a man for their president.” The problem is much deeper and far more serious than Mr. Obama, who is a mere symptom of what ails America. Blaming the prince of the fools should not blind anyone to the vast confederacy of fools that made him their prince. The Republic can survive a Barack Obama, who is, after all, merely a fool. It is less likely to survive a multitude of fools such as those who made him their president.”
24. Aaron DeCoux jr. | March 30th, 2012 at 12:24 am
Sigh…people if you haven’t noticed the last 2000 years no government or politician never lived up to what they have told the masses. Very few have but turned out the public was swayed to hate them. Take napoleon Bonaparte for example, he was trying to create the first European union with France leading the way but of course the monarchies of Europe didn’t like that because he threaten their place of power so they convinced the populace “hey this guy is bad, lets take him out” so that’s what happened. We need some one like napoleon. Minus all the war though it may be impossible not to have a war because of all the corrupt people who are afraid to loose their power. Julius Ceaser is another grate example…you the picture?
25. James Hampton | May 7th, 2016 at 5:16 am
Thomas Jefferson also believed in nullification of idiots’ rights, and both I and she are idiots. Most of the founders would be right at home locking her away.
You libruls are so far left and so off base you think you have something in common with this republic, but —- oops, hold on, my Uncle Jethro got his fee-wee stuck in my eyesocket again…