Following Governor Rick Perry’s presidential campaign announcement over the weekend, major media outlets around the world have set their sights on Texas, examining the state of the State after over a decade of Perry’s reign.

On the fiscal conservatism front, the Wall Street Journal has run into a certain political quandary often mentioned at Texas Budget Source that may have some questioning the limited government bona fides of the Texas Governor. The issue of contention is the Texas Emerging Technology Fund – one of several taxpayer-maintained bank accounts Texas politicians use to give handouts to private interests in the name of “economic development.”

No matter how you feel about this sort of government program (it does draw mixed opinions here in Texas), one thing most can agree on is that when large sums of money are at stake, oversight is generally a good thing. As we have seen, this lack of oversight and accountability – not necessarily on behalf of any one lawmaker or the Governor himself – can spell political turmoil. Here’s the Wall Street Journal with the story:

The Emerging Technology Fund was created at Mr. Perry's behest in 2005 to act as a kind of public-sector venture capital firm, largely to provide funding for tech start-ups in Texas. Since then, the fund has committed nearly $200 million of taxpayer money to fund 133 companies. Mr. Perry told a group of CEOs in May that the fund's "strategic investments are what's helping us keep groundbreaking innovations in the state." The governor, together with the lieutenant governor and the speaker of the Texas House, enjoys ultimate decision-making power over the fund's investments.

Among the companies that the Emerging Technology Fund has invested in is Convergen LifeSciences, Inc. It received a $4.5 million grant last year—the second largest grant in the history of the fund. The founder and executive chairman of Convergen is David G. Nance.

In 2009, when Mr. Nance submitted his application for a $4.5 million Emerging Technology Fund grant for Convergen, he and his partners had invested only $1,000 of their own money into their new company, according to documentation prepared by the governor's office in February 2010. But over the years, Mr. Nance managed to invest a lot more than $1,000 in Mr. Perry. Texas Ethics Commission records show that Mr. Nance donated $75,000 to Mr. Perry's campaigns between 2001 and 2006.

ThromboVision, Inc., a medical imaging company, was also the recipient of an award from the     Emerging Technology Fund: It received $1.5 million in 2007. Charles Tate, a major Perry   contributor, served as the chairman of a state committee that reviewed ThromboVision's  application for state funding, and Mr. Tate voted to give ThromboVision the public money. One month after ThromboVision received notification that it would receive a $1.5 million state grant in April 2007, Mr. Tate invested his own money in ThromboVision, according to the Dallas Morning News. The Texas paper later found that by 2010 Mr. Tate owned a total of 200,000 preferred shares in ThromboVision.

Many of us have heard these conspiracies before. But true or not, this is exactly the type of thing that happens when governments get into the venture capital business (or any other business venture). No matter who ends up capitalizing on a taxpayer-funded program, there will always be public speculation when a connected individual comes out on top. The only way to avoid this speculation is to limit government spending to essential services and allow the market to choose worthy economic players.

"It is fundamentally immoral and arrogant," says state representative David Simpson, a tea party-backed freshman from Longview, two hours east of Dallas. The fund "opened the door to the appearance of impropriety, if not actual impropriety."

In April, the state auditor's office called for greater transparency in the fund's management, and some legislators began looking for ways that the fund might be reformed. With the state facing a $27 billion budget shortfall in the last legislative session, Mr. Simpson filed a motion in the Texas House in May to shutter the fund and redirect the money to other portions of the budget. That measure passed 89-37 to cheers from the chamber. But the fund was kept alive by the legislature's conference committee. The fund currently has $140 million to spend, according to the governor's office.

Michael Quinn Sullivan, the president of Texans for Fiscal Responsibility, sees in the Emerging Technology Fund a classic example of the perils of government pork. "The problem with these kinds of funds is that even when they're used with the best of intentions, it looks bad," says Mr. Sullivan. "You're taking from the average taxpayer and giving to someone who has a connection with government officials."

From liberal Obama supporters to Tea Party independents, one common question folks seem to be asking is this: how fiscally conservative has Rick Perry been while occupying his current seat? For the sake of Texas, I encourage this kind of examination and look forward to the debate that ensues.