THINGS ARE GETTING complicated for the con boys these days. It's no longer quite as easy to ride roughshod over the range six shooter in hand, rustling a few hundred heads here and there. Today's Texas stock is mostly paper not cattle or sheep, but as Harvey Katz's expose of Texas politics demonstrates that same frontier morality still exists, despite the increasing complexities of the world of high finance.
Focusing on a stock scandal perpetrated by Houston promoter Frank Sharp that proved to involve Gov Preston Smith Speaker of the Texas House Gus Mutscher. Houston mayor Louis Welsh former state attorney general Waggoner Carr and even NASA astronaut James A Lovell Katz cracks the golden egg of the Texas state capitol for a broad look at the kind of "business" that state officials are really doing under that dome.
Posing as a legislative aide, Katz travelled to Texas in February, 1971, shortly after the Securities and Exchange Commission announced that it was filing suit against Sharp Smith Mutscher and other state representatives. He quickly befriended Francis "Sissy" Farenthold runner up to I am Eagleton in the balloting for the Democratic Vice presidential nomination as well as Lane Denton Curtis Graves and other state representatives all members of the Dirty Thirty a group of "suicide" liberal legislators who set out to expose the quagmire of corruption upon which Texas politics is based.
The SEC suit alleged that Sharp and a group of business associates were effecting a stock manipulation scheme involving three state banks two insurance companies and a computer firm all owned or controlled by Sharp In a separate series of allegations in the complaint, the SEC charged that Sharp had arranged loans and stock purchases for Smith Mutscher. House appropriations chairman W.S. "Bill" Heatly, State Representative Tommy Shannon and two Mutscher aides, in order to obtain passage of two banking bills that would have helped Sharp.
The House and Senate passed the bills in a special session in 1969, but Smith finally vetoed them after coming under pressure from the state banking commission and former governor Allan Shivers who controls several banks himself.
IF YOU THINK THIS IS ALL like a game of Monopoly played with real stakes, you're right: that's exactly what it was. What's more, the rules of the game and the means for enforcing those rules were in the control of a group of men who had dominated Texas politics for decades--the conservative Democrats. Although their specific interests had changed since the post-Civil War days when they had finally managed to wrest control away from the Republican Recon-structionists, these men only became more sophisticated in their dealings rather than more responsive to the needs of the people whom they had supposedly been elected to serve.
The decade of the sixties perhaps marked the peak of their power in its most modern form when John Connally was in the governor's mansion, and Lyndon Johnson was in the White House. Johnson became more liberal, at least in his domestic policies, while Connally moved even farther to the right as a champion of business, but both men had exercised a lucrative control of state government that was made possible by their sharp minds and close attentiveness to presenting the "right image."
As Katz points out, Connally and Johnson were polished politicians, adept at their art, and in that way much unlike their successors, Smith, Mutscher, and the rest, whom the author calls "second stringers." Only one man among them Lt. Gov. Ben Barnes, seemed to be cast directly from the Johnson-Connally mold. And even Barnes, despite being more clever and more personable than his fellow legislators, had his political fortunes spoiled by his association with the Smith-Mutscher clan.
Katz devotes two full chapters to Barnes. "Ben Barnes: The One and Only" and "Ben Barnes: The Two of Him," showing how the latest version of the Lyndon Johnson success story made his way up in politics after coming from a small West Texas farm town.
We see Barnes the All-American schoolboy working his way through college selling vacuum cleaners. We see Barnes the young candidate defeating a powerful opponent with a door-to-door campaign, then quickly rising to the House Speakership. And finally, we see Barnes as lieutenant governor, concerned with presenting as "progressive" image to the public, while engaging in the same backroom politics as Smith and Mutscher.
KATZ DIGRESSES from the Sharp scandal itself to present it as merely one fortuitously discovered incident of a corruption that permeates and is perpetuated by the entire system of state government in Texas. He discusses the House pledge card system through which the Speaker guarantees the allegiance of House members, documents the use of water districts by land developers in cooperation with state officials to swindle tax dollars, and shows the ways in which powerful lobbyists and House leaders compose the legislative calendar without consulting the rest of the House members.
Of course, the Sharp case has features worth writing about even if no state officials had been involved. For example, Sharp gave the Jesuit Fathers of Houston a tract of land in his residential community (named Sharpstown, of course) for a new preparatory school and made Father Michael Kennelly a director of the Sharpstown Bank. For this he was granted an audience with the Pope. Then Sharp borrowed $6 million from the Jesuits, none of which he ever repaid, and the Jesuits eventually went bankrupt. In addition, he used Kennelly as a middle-man for distributing some very dubious gifts to state officials. In spite of it all, after the SEC and the press had shown what Sharp had been doing, the Pope sent Sharp a telegram in which he expressed his sympathy and told Sharp that prayers were being offered on his behalf.
It was against all of this--and much more--that Farenthold and the Dirty Thirty had to take their stand. Katz analogizes them to the 200 men at the Alamo who held off ten thousand of Santa Anna's crack troops for over ten days. It is an apt metaphor, at least for those who view the mission's defenders as heroes, for in their defeat Farenthold and her comrades at least made the first significant attempt at reforming Texas politics in several decades.
In many ways it is amazing that the attempt even got off the ground. Farenthold had written a resolution to investigate the bribery charges but Speaker Mutscher controlled all the House committees. Any bill calling for a look at the dealings of Mutscher and his friends would surely be killed in committee. On March 15, 1971, rising on a little-known parliamentary tactic called "privilege of the House" whereby a member can call for immediate consideration of a bill to investigate matters that question the integrity of the House or its members. Farenthold asked to be recognized.
Mutscher asked Farenthold her purpose in rising, and when she stated it, he refused to recognize her. The House thought the matter would die quietly. Then Lane Denton rose to appeal the Speaker's ruling. Had Mutscher asked him his purpose in rising, he could have refused to recognize Denton just as he had done with Farenthold. Instead, Mutscher simply said, "Yes, Mr. Denton," and the House was forced to consider his appeal. What is more, Mutscher had to leave the chamber for the duration of the appeal.
THE FINAL VOTE was 118-30 to sustain Mutscher's ruling, but the Dirty Thirty--in a last gasp parliamentary manuever--had finally forced the House membership to take a stand on an issue that most of them hoped would never reach the floor.
Of course, the House never made an honest investigation of the SEC charges: Mutscher and his men maintained too tight a grip for that to happen. However, Mutscher did lose the speakership, and was convicted of the bribery charges. He got a suspended sentence. Smith was never brought to trial.
Ben Barnes made a bid for governor, but finished third to Farenthold and Dolph Briscoe, who were forced into a run-off. Briscoe, a conservative Democrat of the Johnson-Connally line, beat Farenthold, and will be a shoe-in against a weak Republican challenger in November.
Sharp, meanwhile, had negotiated the deal of his life. With the approval of the Justic Department in Washington, he was granted immmunity in exchange for information about his dealings with Texas politicians. It was generally assumed that he had the means to damn Smith, Mutscher, and the rest of them. But when Sharp finally came to trial, all he was willing to do was tighten the noose around Mutscher just slightly, and implicate Barnes and state attorney general Will Wilson, Richard Kleindeinst, then Deputy Attorney General, later said that the Justice Department had been duped. So had the people of Texas.