I was in Pebble Beach last week, and everyone in California kept asking me about Rick Perry. He is the California Republicans’ hero because of our strong Texas economy. In fact today, I think he’s leading in the polls. While in Cali, I recalled a story I wrote last summer about Perry’s real estate deals, a story which is bound to crop up. It all began with this article in The Dallas Morning News about a real estate flip. Or how  “a series of professional courtesies and favors helped Perry buy a lot at the toney Peninsula at Horseshoe Bay, the “Pebble Beach” of Texas,  for $139,000 below market value and sell it for $350,000 above market value.” Bloomberg coughed up much of the same stuff last week.

Just like any rich guy, the guv made some good real estate deals, probably based on some info from his friends. And commissions are always negotiable between parties in Texas.

Here’s what I think went down in Horseshoe:  the developer, Troy Fraser, probably gave Perry a good deal at $300,000 for the “cheapest” lot on the block so he could flaunt Perry’s name to influence other buyers to sign on the dotted. That’s the way the game is played. In Pebble at our booth, one of the developers asked me to help find celebrities in Texas who he will basically give second homes to so they can come down with their entourage. The hope is folks in the entourage will buy property. That’s how entourage rules work – celebs get freebies, minions pay. Buyers tend to flock to where the rich and famous roost.

Horseshoe Bay is indeed the Pebble Beach of Texas. The Hill Country is right to the west, and Lake Lyndon B. Johnson is loaded with boats and jet skies and mega million dollar homes. Horseshoe Bay is one reason why, last year, Forbes listed Ilano County as one of the top five U.S. places where, based on IRS data, the rich are moving.

What’s the beef here?

Critics say Perry didn’t buy these properties as a squeaky clean consumer. He had pre-existing relationships with parties of the transactions, which may have given him a leg up.

State officials are bound by a set of ethics standards the rest of us aren’t.

“Public officials have a responsibility around conflicts of interest to avoid even the appearance of impropriety,” Thomas Donaldson, a University of Pennsylvania Wharton School business ethics professor who hasn’t reviewed the transactions in detail, told Bloomberg.

Perry’s place as governor or even President does mean he could potentially find himself in a situation to sway a decision or do a favor in return for parties, in this state or others. Critics say one of the sacrifices state officials make when elected to an office is to give up the ability to make normal transactions off of contacts.

Perry buys an upscale lot for $300,000 in 2001, Sleepy market, totally pre-boom. In fact, pretty scary market conditions post 9/11. He then sells it to a willing buyer for $1.15m in 2007 for a tidy profit — top of the boom before the Bear Stearns Lehman Brothers fiasco.  Then the buyer tried to flip it fast for $2.65 m — no go, and then he got caught when the real estate bubble burst. Horseshoe Bay real estate is not moving like it was in 2007. Perry was smart to get out when he did. Did he know John Paulson?

Then, in 1995, Perry has a big name attached to a real estate transaction: Michael Dell. A lot he purchased in August, 1993 was sold for a gain of $343,000, according to his tax returns. Dell needed the land for his company to access public sewer lines. Mike Toomey, a former Republican state representative, lobbyist and buddy of Perry, was given power of attorney to complete Perry’s purchase of the land. Toomey also served as Perry’s chief of staff from 2002 to 2004.

As much as it pains me to say it, Perry’s real estate timing was perfect. Maybe the same guy giving him real estate advice is telling him to run for the Oval office?

Maybe he relied too heavily on friends, but is it illegal for the governor of Texas to make a shrewd real estate deal?

I also seriously doubt  Alan Moffat is the only man in the nation who bought property in the heyday with a slightly inflated bank appraisal. In 2007, remember, we thought the party would never end.

Then there’s the commission Perry did not pay:

Perry did not pay a real estate commission on his sale to Moffatt. Mitchell said the waiver of the fee was a favor to Moffatt. The fee, typically 6 percent of the sales price, could have amounted to as much as $69,000.

About the only part of this whole piece that I found fishy — or at least really stupid on Perry’s part — was the lawyer he had appointed who didn’t charge him for appealing the appraised property’s value with the Llano or Burnet Appraisal District. I mean, she wasn’t even a real estate lawyer:

Perry asked attorney Colleen McHugh to handle his tax appeal. A corporate labor lawyer from Corpus Christi, McHugh had just been appointed by Perry as chairman of the Texas Public Safety Commission.… McHugh was not compensated for the appeal because Perry had paid her $2,850 for earlier work on the property purchase.

That appeal, says the News, kept Perry’s value at purchase price level while he owned the property. Let’s get real: raise your hand if you volunteer to raise the appraisal on your home just so you can pay more in property taxes. Meantime, he did do the state a favor: when he sold that parcel for $1.15m. Moffat probably coughed up way more cash for property taxes.

Here’s Roger Staubach’s Horseshoe Bay pad: