Sunday, April 17, 2011

The Imperial Speakership and The Sharpstown Scandal, Part II: Richard Nixon and Corruption in Austin

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 discuss the intimate connection between the Sharpstown Scandal embroiling Austin in the early 1970s and the almost simultaneous Watergate Scandal destroying Richard Nixon's White House.

In 1969, Texas House Speaker Gus Mutscher made frequent headlines for his controversial positions on alcohol, revenues, and reform of House procedures. By April 1969, however, Mutscher received pleasant press attention when he announced his engagement to Donna Axum of Lubbock, a speech instructor at Texas Tech University with a master’s degree in speech and drama who had won the 1964 Miss America pageant. Rayford Price, who in the 1969 session ruffled Mutscher’s feathers when he launched an abortive run for the speakership upon rumors that Mutscher would retire from the House to become a beer lobbyist, nevertheless served as one of the ushers at the wedding.

Forgiveness would be short-lived, however, as Mutscher fired Price as chair of the key House State Affairs Committee during the 1971 session, prompting the Palestine representative to again openly campaign for the speakership. “If Mutscher does run [for a third term in 1973,] I will campaign on the issue that we don’t need a third-term speaker,” Price told the Houston Chronicle.

By this time, a broad revolt led by an odd coalition of liberal Democrats and conservative, marginalized Republicans undermined Mutscher’s grip on power. The dissenters, soon to be called the “Dirty Thirty,” bitterly complained about what they saw as Mutscher’s dictatorial management style and the undemocratic way that bills were presented for votes in the House.

Interestingly, ethics scandals involving the United States Congress immediately preceded Sharpstown. House Speaker John McCormack, the successor to Sam Rayburn, resigned under pressure in May 1970. One of the incidents leading to McCormack’s decision involved two assistants who received sentences for influence peddling. In December 1971, a jury convicted Texas Congressman John Dowdy of accepting a bribe. These scandals, combined with the ongoing Vietnam War and high inflation, led many people to hold federal and state elected officials in low esteem. The well- publicized scandals would lead to a reform movement and a change in leadership in the Congress. These national events certainly left an impact on Texas.

Dissent in the Texas Legislature only deepened after the SEC lawsuit concerning Sharpstown. The "Dirty Thirty" revolt began in early March 1971 when a traditional resolution honoring Gov. Preston Smith came before the House for a vote, but two liberal members upset about the governor’s spending priorities and Mutscher’s leadership style, Neil Caldwell of Alvin and Frances “Sissy” Farenthold of Corpus Christi, asked that their names be taken off the resolution. On March 10, Farenthold called for a joint House-Senate investigation of Sharpstown.

Five days later, Farenthold took the floor again to ask that her motion be immediately considered. Mutscher said no, prompting Lane Denton, a Waco freshman, to appeal the chair’s ruling. Thrown for a loop, Mutscher left the chamber, turning the gavel over to DeWitt Hale. The House voted on the motion, which was rejected 118-30. A Mutscher supporter was heard to grumble about “those thirty dirty bastards,” giving birth to a nickname proudly embraced by the House dissenters.

Mutscher tried to silence critics by having close political ally Delwin Jones draw new legislative districts unwinnable for members of the Dirty Thirty. One of his targets was Republican Tom Craddick, first elected from Midland in 1968 (the year Mutscher became speaker.) Delwin Jones’s 1971 election map left Craddick no longer living in his district. “They split my district down the street I lived on in Midland,” Craddick said. Craddick’s hometown of Midland had been united in one district, but after Mutscher rammed his redistricting bill through the Legislature “part of it ran from our side of the street, on Stanolind [Avenue], all the way over to Abilene.” Neighbors across the street lived in another district.

In a landmark case, Craddick’s lawyers argued that it was illegal to split county lines as the Mutscher bill had. The Texas Supreme Court agreed with Craddick and ruled that the redistricting plan was unconstitutional. A federal court in Austin overturned a second attempt at Mutscher-mandering, this time pursued by the Legislative Redistricting Board. The three-judge panel labeled the new Mutscher maps an unconstitutional attempt to dilute the voting strength of African Americans, Mexican Americans and Republicans.

The speaker lost his redistricting battles even as his personal legal troubles mounted. On September 23, 1971, a Travis County grand jury indicted Mutscher, Rep. Tommy Shannon of Fort Worth, and Rush McGinty (a Mutscher aide) on charges they had accepted bribes to draft favorable bank legislation to benefit a Mutscher political supprter, making the speaker the highest-ranking state official charged with a felony since former Texas Land Commissioner Bascom Giles was indicted during the Veterans Land Board scandals of 1954. The once seemingly omnipotent speaker now became politically radioactive with House members afraid to accept even interim committee assignments from him for fear they would be tagged “Mutscher men.”

A court ordered that the Mutscher, Shannon of Fort Worth, and McGinty bribery trial be moved to Abilene because of the extensive coverage the Austin press gave Sharpstown. A jury took only 140 minutes on March 15, 1972 to find the so-called “Abilene Three” guilty. Leaving the courtroom to confer with attorneys, family and friends, Mutscher muttered, “Unbelievable,” but remained stoic for about 15 minutes. Then he and his wife broke down in tears.

The following day, Judge J. Neil Daniel handed down a sentence of five years' probation, though for Mutscher the conviction was the death sentence for his career as speaker. “They destroyed my family and destroyed my politics . . . and my livelihood,” Mutscher stated years later.

On March 21, 1972, Gus Mutscher told his staff he would step down as speaker, the first to resign the office mid-term since A.M. Kennedy in 1909. Mutscher’s formal resignation came the day before a special session opened on March 28. James L. Slider served as interim speaker just long enough for him to preside over the election of Rayford Price as Mutscher’s permanent replacement. Mutscher, however, remained a member of the House.

Decades after the event, Mutscher remained deeply affected by the Sharpstown episode. Mutscher challenged the motives of Frank Sharp and his initial offer to prosecutors, his testimony in exchange for a reprieve from prosecution. Mutscher blames Sharpstown on the Nixon Administration’s desire to embarrass Democratic political leaders in Lyndon Johnson’s home state.

“The politics of it was really obvious because they broke the announcement the night when we were having a Democratic victory dinner to hurt and embarrass all of us,” Mutscher said, “ . . . It was so political . . . it started . . . with [U.S. Attorney General John] Mitchell and [President Richard] Nixon trying to save [Texas Republican Senator] John Tower.” Mutscher believed that Lt. Gov. Ben Barnes, a rising political star in the Texas Democratic Party, planned to challenge Tower for reelection to the U.S. Senate in 1972.

Barnes confirmed Mutscher’s suspicions. “. . . If I had not been on Nixon’s enemies list, I don’t think Gus Mutscher or Preston Smith would have ever been called into the Sharpstown thing,” Barnes stated. Given the excesses of the Nixon Administration during this time, politics most certainly played a role in the timing and the focus of the federal investigation. Furthermore, Nixon’s “Southern strategy” focused on making inroads into the former Democratic strongholds of the South, and destroying the Texas Democratic Party would certainly boost this effort.

Waggoner Carr, in a 1977 book, argues that Sen. Tower worried about Nixon’s appointment of popular former Democratic Gov. John Connally as Treasury Secretary in 1971. Tower had been the conduit through which Texans seeking White House favors reached Nixon, and Tower worried that Connally would eclipse his influence. According to Carr, Tower worried that Barnes’ connection to Nixon’s Treasury secretary might prove a political asset if he challenged the incumbent in the 1972 Senate race.

Carr also noted that former Texas Attorney General Will Wilson, who beat Carr in a race for that office in 1960, had been appointed chief of the criminal division of the United States Justice Department headed by Attorney General Mitchell, who would soon be convicted of crimes related to the Watergate Scandal. “I felt that Wilson had held a grudge against me since I ran against him for attorney general in 1960,” Carr wrote. “ . . . [H]e did not appreciate some of the things I had said and done during the campaign; he grew very hostile.” As a Democrat, Wilson lost races for governor and for U.S. Senate and in 1966 switched to the Republican Party. John Tower helped secure Wilson’s job with the Department of Justice. Wilson returned the favor by helping Tower’s re-election bid in 1972. Wilson himself would have to resign from the Department of Justice when the extent of his legal work for Frank Sharp became public.

Carr eventually faced both a civil suit by the SEC and a criminal case. Carr’s connection to Sharpstown proved tenuous. He served as defendant John Osorio’s law partner and he owned 100 shares of National Bankers Life, which he purchased before Frank Sharp owned the company. Carr and Osorio participated in a discussion with Ben Barnes during which the pair advocated the bill allowing Sharp’s bank to be insured by a state agency. Carr insisted, however, that he believed the bill that became so controversial represented good legislation.

Mutscher, who won election as a county judge in Washington County following his departure from the Legislature, echoes Carr’s argument. Mutscher said he backed the bill Sharp lobbied for because it was a good idea for his rural constituents.

I never thought I was involved with a wrongdoing because when I worked the situation with Sharp on buying some of that National Bank stock, I signed my name right there in the open just like if you had a paper now and entered into a contract . . . I told Sharp I said this does not entitle you to call me about anything in Austin . . . I was for that bill anyway. I did not know that he had dived in or made contributions to pay for the Senate and for the governor and so forth.

Barnes agrees that Sharpstown was a Nixon-hatched conspiracy. “I didn’t even know who Frank Sharp was,” Barnes said. “. . . [President Lyndon] Johnson had stood up before 3,000 people . . . and said I was going to be the next president of the United States from Texas. I had all this national honor and recognition and these guys around the South were talking about Barnes doing this and that . . .”

Barnes said the federal government tried to manipulate former state insurance commissioner John Osorio, named in the original SEC suit with Waggoner Carr, to implicate him in the scandal.

". . . [T]he government offered John Osorio total immunity if he just testified that I was involved in Sharpstown. John Mitchell met with me after he got out of prison and expressed his sorrow. But there is no doubt in my mind [this was a conspiracy] . . . I was still winning the governor’s race without a runoff until Gus Mutscher was tried in Abilene and Gus Mutscher was found guilty in Abilene."

David Carr, whose father died of cancer in 2004, said the Sharpstown case embittered Waggoner Carr and disillusioned the former speaker about politics. The former state attorney general went broke and had to defend himself in two criminal trials. In March 1973, a Dallas jury after three hours of deliberation found Carr not guilty of 12 counts of fraud, mail fraud, filing false papers with the SEC, and conspiracy. Another Dallas jury in a second trial found Carr not guilty of other Sharpstown-related charges in April 1974.

David Carr said the public never knew how difficult the Sharpstown case was on his family. “All my dental classmates wouldn’t talk to me during that time,” Carr said. “When my dad finally got through this last acquittal and the word was coming out of Watergate what was going on, my whole class stood up and applauded me when I walked in from the last trial, so it had turned completely around. My dad said that he got down to about two or three friends and that was about all he had . . .Went bankrupt, too. . . . Dad, as a result, could have lost his law license, could have served a total of 64 years in prison. At 50 years of age, he would have spent the rest of his life in prison. This guy had been the chief law enforcement officer in Texas, you know. And he’s facing this kind of charge. . . [H]e never would talk about politics after that.

Surprisingly, even a former member of the Dirty 30, Bill Bass, now entertains some doubts about Mutscher’s guilt. “Sometimes I get the feeling he may have been taken in by Frank Sharp,” Bass said. “Mutscher lost money on the deal . . . When they were tried in Abilene, you could have predicted that anyone in ’73, almost anyone, after Watergate would have gotten convicted . . .” Even if the Nixon administration’s interest in Sharpstown stemmed from selfish political motives, however, Frank Sharp’s connection with Mutscher, Preston Smith and others revealed the too-cozy relationship between lobbyists and officeholders and how Texas campaign financing made the difference between political contributions and bribes difficult to distinguish.

At first glance, the Sharpstown era appeared to be a watershed event in Texas politics. The Legislature initiated several reforms and passed an open meetings and open records law. However, in the long run, no major changes in government structure occurred as a result of Sharpstown. The impetus toward reform did not extend to changing the Legislature’s budgetary priorities regarding social services and education. Business interests still dominated lawmakers’ decision-making.

Yet, 1973 marked a changing of the guard as Texas Democrats of the John Connally/Lyndon Johnson/Ralph Yarborough era made way for younger lawmakers who increasingly came from the ranks of African Americans, Mexican Americans, women and Republicans. A change in the relationship between the media and elected officials marked one of the longer-lasting impacts of the era of Vietnam, Sharpstown and the Watergate Scandal, opening the field to more aggressive and skeptical reporters like Sam Kinch, Jr., Dave McNeely, Molly Ivins and Kaye Northcott.


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.

No comments: