Wednesday, April 27, 2011

The Brilab Scandal and the Fall of Bill Clayton

In 2010, the University of Texas Press published "The House Will Come to Order: How the Texas Speaker Became A Power in State and National Politics," a book I co-wrote with Dr. Patrick L. Cox. In this passage, we describe how the Brilab Scandal derailed the career of one of the most important Texas political leaders of the 1970s and 1980s, House Speaker Bill Clayton.

Billy Clayton's hopes for higher statewide office crashed in 1980 when the FBI announced it was investigating the speaker as part of a sting operation involving corrupt union officials bribing politicians that came to be known in the press as “Brilab.” On October 19, 1979, Clayton had met with L.G. Moore, regional director of the Operating Engineers International Union and former member of the Texas Constitutional Revision Commission, and Joe Hauser, identified to Clayton as one of the top people with the Prudential Insurance Company.

In fact Hauser, previously convicted in California and Arizona on insurance fraud charges, had been sent to Clayton as part of an FBI bribery sting. During his meeting with Clayton, Hauser complained about the State Employees Retirement Board’s acceptance of a bid from the Metropolitan Insurance Company and claimed that Prudential could save the state $1 million a year. At the end of their conversation, Moore and Hauser said they wanted to make a contribution to Clayton’s political fund. Clayton admits he was handed $5,000 and then Moore and Hauser said they could contribute up to $600,000 in the future. Clayton later said he told his secretary to put the money in an envelope in a safe place because he intended to return the money, believing it would be a political embarrassment for him to receive so much from a liberal labor leader and for Moore to be seen by his union colleagues as backing a conservative. Clayton never reported the receipt of cash because, he said, he intended to return it. He said he didn’t refuse the money, however, because he didn’t want to embarrass his friend Moore. In a 2004 interview, Clayton said:

I would’ve done the same thing again had I been approached the same way. A friend of mine brought this guy in my office, and he said we could save the state a million dollars if we can open the bidding so we can bid. . . . I couldn’t see anything wrong with that . . . My friend wanted to give me a $5,000 contribution at that time. I said, “No, you don’t -— you can’t afford this and I don’t want it.” And he just insisted. So I took the cash and put it in the . . . cadenza drawer. And it lay there and lay there . . . And consequently . . . the only violation that . . . . really occurred, because we didn’t do anything to benefit the guy, was to not report that $5,000 . . . And I didn’t report it because I was going to give it back . . . So that cost me about $400,000 and a six weeks trial to prove my innocence . . .
On February 9, 1980. the Dallas Times Herald ran a front-page story leading with this explosive paragraph:
FBI agents posing for a year as Prudential Insurance Co. agents paid thousands of dollars to union leaders, organized crime figures, and elected officials in four Southwestern states in connection with an insurance kickback scheme . . . [P]olitical leaders involved in the investigation included . . . Billy Clayton, Speaker of the Texas House . . .

Clayton’s five-year sway over the House weakened immediately after the Brilab allegations, and members started floating their names as possible replacements. Potential speakers included Fort Worth Rep. Gib Lewis, who began collecting pledges of support from House members committed to Clayton should the speaker step down. “I don’t see how Clayton could remain a candidate under indictment regardless of his guilt or innocence,” said Rep. Bob Maloney, a Dallas Republican. “We couldn’t have a speaker under that kind of cloud.”

An extraordinary meeting of 12 leading lobbyists convened in Austin to see if they should cut off the momentum of a liberal speaker candidate, John Bryant of Dallas, by anointing a successor. The committee decided that Clayton’s defense seemed plausible. “We decided, kind of informally, that God-almighty, let’s hang loose for awhile,” Durward Curlee of the Texas Savings and Loan League told the Dallas Times Herald. “Clayton’s looking better. This is not a Sharpstown.” Amazingly, the Times Herald did not comment on the spectacle of lobbyists holding a private meeting to contemplate whether they should handpick a new speaker.

Clayton’s position became more perilous when a federal grand jury indicted him on June 12, 1980. During Clayton’s trial that fall, his performance on the witness stand impressed jurors. Defense lawyers even turned the ten minutes of wiretapped conversation between Moore and Clayton to their advantage. Clayton could be heard saying during a November 8 meeting with Moore and Hauser, “You know, our only position is we don’t want to do anything that’s illegal or to get anybody in trouble, and you all don’t either.” Jurors later said they could not identify any specific illegal act Clayton supposedly committed, and they accepted Clayton’s story that he considered opening up bidding for a state contract only as an attempt to save the state money. By contrast, jurors were heavily put off by Hauser’s criminal record, which undercut his credibility. Prosecutors made a monumental goof when they called to the stand Assistant Secretary of State Chip Holt, director of that office’s Campaigns and Ethics division, who told jurors that Clayton had not violated the law by failing to either report or return the $5,000 given by Moore. Jurors were also swayed by the fact that Clayton put the money away and never deposited it in his campaign fund.

A jubilant jury acquitted Clayton on October 22, 1980. Several jurors said they felt Moore and Hauser entrapped Clayton. The jury’s decision freed Clayton to win a fourth term in the speakership. Clayton felt so confident after his acquittal that he hinted he might seek a fifth term as speaker in 1983, a statement that caught Gib Lewis, planning to run for speaker that year, completely off-guard. “That’s entirely the reverse of what he’s told me,” Lewis told the Fort Worth Star-Telegram.

House dissidents made a last stab at limiting Clayton’s powers, apparently undiminished by his Brilab ordeal. Frank Gaston of Dallas introduced a package of House rules changes that would have allowed members to select the committees they serve on, based on seniority; curbed the power of committee chairs appointed by the speaker by not allowing them to pass legislation on to subcommittees without the consent of other committee members; and required the House Administration Committee and the speaker to submit itemized reports of expenditures to the House. Gaston argued that committee chairs answerable to Clayton had too much power to kill legislation by referring bills they didn’t like to unfriendly committees. Clayton’s allies dismissed Gaston’s faction as “termites,” and the House rejected the proposals 89-48. Another proposal would have ended the speaker’s power to appoint the House parliamentarian, chief clerk and sergeant-at-arms, requiring these posts to be voted on by the full House, but a majority also rejected that measure.

The power of the speaker’s office had so grown that Clayton could snuff a full rebellion in utero even after the humiliation of an indictment and trial. Nevertheless, Clayton’s chances of winning statewide office suffered a serious blow when voters rejected, by a 57 percent to 43 percent margin, a state constitutional amendment setting aside half the state’s budget surplus to create a water fund. Clayton had campaigned heavily for the amendment, and analysts believed the proposition’s failure reflected general voter distrust of Clayton after the Brilab trial. Clayton’s support among Democrats statewide also declined sharply due to the perception that he cooperated too willingly with the congressional redistricting demands of conservative Republican Gov. Bill Clements during the 1981 session.

In early December 1981, Clayton announced his plan to run for state land commissioner the following year. But by late January he had dropped out of the race, eventually won by liberal Democrat Garry Mauro. The power of the speaker’s office played a role in Clayton’s decision. He apparently decided that the Brilab trial had destroyed his chance of winning a gubernatorial race, but incumbent Democrats Bill Hobby and Bob Bullock already filled the positions of lieutenant governor and state comptroller. State Democratic Chair Bob Slagle said that Clayton probably viewed serving as land commissioner as “at best a lateral move” and probably a “rung down” from the speaker’s post.

After expanding the speakership’s authority over House administration and effectively using his appointment authority to guide legislation, Clayton created an office that would soon be a step up from the governorship. Clayton’s personal power had diminished, but two of the men who followed him in the House leadership -– Gib Lewis and Pete Laney -– would expand the foundation the Springlake speaker laid and make the office one of the most powerful in the United States.


Michael Phillips has authored the following:

White Metropolis: Race, Ethnicity and Religion in Dallas, Texas, 1841-2001 (Austin:  University of Texas Press, 2006)

(with Patrick L. Cox) The House Will Come to Order: How the Texas Speaker Became a Power in State and National Politics. (Austin: University of Texas Press, 2010)

“Why Is Big Tex Still a White Cowboy? Race, Gender, and the ‘Other Texans’” in Walter Buenger and Arnoldo de León, eds., Beyond Texas Through Time: Breaking Away From Past Interpretations (College Station: Texas A&M Press, 2011)

“The Current is Stronger’: Images of Racial Oppression and Resistance in North Texas Black Art During the 1920s and 1930s ”  in Bruce A. Glasrud and Cary D. Wintz, eds., The Harlem Renaissance in the West: The New Negroes’ Western Experience (New York: Routledge, Taylor and Francis Group, 2011)

“Dallas, 1989-2011,” in Richardson Dilworth, ed. Cities in American Political History (Washington, D.C.: CQ Press, 2011)

(With John Anthony Moretta, Keith J. Volonto, Austin Allen, Doug Cantrell and Norwood Andrews), Keith J. Volonto and Michael Phillips. eds., The American Challenge: A New History of the United States, Volume I.   (Wheaton, Il.: Abigail Press, 2012).

(With John Anthony Moretta and Keith J. Volanto), Keith J. Volonto and Michael Phillips, eds., The American Challenge: A New History of the United States, Volume II. (Wheaton, Il.: Abigail Press, 2012).

(With John Anthony Moretta and Carl J. Luna), Imperial Presidents: The Rise of Executive Power from Roosevelt to Obama  (Wheaton, Il.: Abigail Press, 2013). 

“Texan by Color: The Racialization of the Lone Star State,” in David Cullen and Kyle Wilkison, eds., The Radical Origins of the Texas Right (College Station: University of Texas Press, 2013).

He is currently collaborating, with longtime journalist Betsy Friauf, on a history of African American culture, politics and black intellectuals in the Lone Star State called God Carved in Night: Black Intellectuals in Texas and the World They Made.

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