Top Texas GOP donor resigns from company after admitting to prohibited contributions

James Dannenbaum, president and CEO of the high-powered Dannenbaum Engineering, was charged with a scheme to get employees to donate to three congressional candidates in 2017.

James Dannenbaum (right), who previously served on the University of Texas System Board of Regents, has been charged with recruiting employees to donate to congressional candidates in February 2017 and then reimbursing them with corporate funds.

James Dannenbaum, a prolific Texas Republican donor and former University of Texas regent, is resigning from his namesake engineering company after admitting to coordinating illegal campaign contributions in 2017.

Dannenbaum, the president and CEO of Houston-based Dannenbaum Engineering, was charged Monday with recruiting employees to donate over $20,000 to three congressional candidates in February 2017 and then reimbursing them with corporate funds. It is a felony to set up such "conduit" donations, which typically happen when the offender has already given the maximum amount to campaigns, which was $2,700 per election last cycle.

Dannenbaum "this week acknowledged that he made prohibited contributions to various federal election campaigns," Dannenbaum spokesman Bill Miller said in a statement. "His acknowledgement to the federal government has led to his agreement to plea to this offense and he has agreed to step down as Chairman, President, and CEO. Jim has been active in philanthropy and in the community for over 50 years. He deeply regrets these events."

His resignation was first reported by the Houston Chronicle.

Court records do not name the candidates that benefited from the scheme but say they included two candidates for U.S. House and one for U.S. Senate. Federal Election Commission records show the only U.S. Senate candidate who got donations from Dannenbaum and his employees around February 2017 was John Cornyn, the state's senior senator.

“The campaign was not aware of what Mr. Dannenbaum was doing and we will fully cooperate with the US Attorney’s office," Cornyn campaign manager John Jackson said in a statement. "We will be returning the contributions in full to the Treasury, as required by law. We take great strides to ensure all contributions are proper and follow the law."

Dannenbaum is a prominent political donor, mainly to Republicans but also to both parties in his hometown of Houston. Since the beginning of the 2018 cycle alone, he has given hundreds of thousands of dollars at the federal and state levels, including five figures each to some GOP statewide officials.

In 2007, then-Gov. Rick Perry appointed Dannenbaum to a six-year term on the University of Texas System Board of Regents. He later became vice chairman of the board.

The new attention on the Cornyn-Dannenbaum connection comes amid the senator's 2020 reelection race, which has drawn a crowded Democratic field. The campaign of one of the Democrats, MJ Hegar, said in a statement that Cornyn "attempting to erase the fact he took illegal campaign contributions from a corrupt donor is the perfect example of everything that is wrong with his career in DC."

Disclosure: The University of Texas System and Bill Miller have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.