A Federal Grand Jury Rocks the Senate

Sen. Frank Madla, D-San Antonio, is under investigation by a federal grand jury that has peppered Texas government with subpoenas over the last several weeks. The panel is apparently trying to find out whether Madla or a member of his family benefited from some action he took while in office, but none of the information that has so far become public appears to support any such claim.

Sen. Frank Madla, D-San Antonio, is under investigation by a federal grand jury that has peppered Texas government with subpoenas over the last several weeks. The panel is apparently trying to find out whether Madla or a member of his family benefited from some action he took while in office, but none of the information that has so far become public appears to support any such claim.

The San Antonio panel asked for copies of three pieces of legislation and all of the notes and other materials around them, about contacts and correspondence between the senator, his staff and the Texas Ethics Commission, and about some state case files held by the Attorney General's office.

Madla didn't return calls, and a spokesman for the U.S. Attorney's office in San Antonio gave that agency's standard "no comment" when asked about the investigation.

One subpoena dated June 27th -- apparently the earliest of the lot -- was sent to Attorney General John Cornyn on June 27, asking for several letters and statements written in the last week of March 1998 and in early September of that year -- before Cornyn took office -- by individuals who were involved in a still-open Medicaid fraud case at that agency.

It also asks for records from a now-closed case, which also predates Cornyn, involving an enforcement action against Mary Alice Peralta's Boarding Home. The subpoenas themselves are considered public records, but the documents sent to the grand jury might not be; the AG's office temporarily held them while the lawyers work that out.

Another set of subpoenas was apparently sent to several members of Madla's state Senate staff asking for documents and for personal appearances before the grand jury.

Looking at Legislation, Ethics Inquiries and Old State Cases

Two later subpoenas, sent August 11, asked the Texas Legislative Council for three pieces of legislation from the last session (Senate Bills 1197, 1365 and 1521), and asked the Texas Ethics Commission for correspondence between the agency and the senator and his staff, including requests for opinions and the like. That material from ethics is also being temporarily held by the AG.

The legislation includes a Madla bill involving speed limits near schools (it failed in committee), a bill by Sen. Chris Harris, R-Arlington, that would have abolished the Department of Human Services (it was sent to a committee and never saw the light of day), and a bill by Sen. Mike Moncrief, D-Fort Worth, which had to do with the appointment of trustees for nursing and convalescent homes. That bill went into law a year ago and included an amendment by Madla governing trustees' qualifications.

Helen Madla, the senator's wife, is a vocational coordinator who makes her living working for Bexar County Home Care and Assisted Home Care, Inc., both based in San Antonio. Nothing on the senator's most recent financial disclosure filings lists him or anyone else in the family as the owner of a nursing or convalescent home. And none of the immediately available documents the grand jury requested from various agencies seems to link Madla's public and private business.

Several years ago, both Madla and his wife were employed by Home Health Care Solutions, and questions were raised at the time in the San Antonio Express-News about whether that presented a conflict of interest. The issue didn't attract official interest, however, and died out.

Each time it asked for records, the grand jury allowed a month for the agencies involved to bring them in. Cornyn's office was told to deliver case files by the end of July, and the other subpoenas gave the recipients until last week to produce the requested records.

GOP Conjures up a Tax Poltergeist

The Republican Party of Texas revamped its web site (www.texasgop.org) and is adding regular updates from campaigns in so-called "battleground" areas to give their candidates a little backing from Austin. The first race mentioned, not surprisingly, is in Senate District 3. That's the seat the GOP has to hold if it is to maintain its one-vote majority in the Senate. In their inaugural snippet, they accuse Democrat David Fisher of Silsbee of getting too much of his campaign money from trial lawyers, pretty much repeating the line that his opponent, Rep. Todd Staples, R-Palestine, has been hammering on. That total includes money from the law firm where Fisher, himself a lawyer, works.

The Republicans are also stoking a charge that Rep. Dan Ellis, D-Livingston, voted against tax breaks on over-the-counter drugs. Ellis, who is running against Ben Bius of Huntsville, is also being accused of voting against a two-week sales tax holiday and in favor of one that lasts only three days.

There's some truth and some stretch in both slaps, but they've already been cut-and-pasted to at least three other GOP campaigns, including the HD-21 race between Rep. Alan Ritter, D-Nederland, and Republican Mary Jane Avery of Beaumont, the HD-59 race between Rep. David Lengefeld, D-Hamilton, and Republican Sid Miller of Stephenville, and the HD-73 race between Rep. Bob Turner, D-Voss, and Republican Steve Fryer of Brownwood.

One of the votes is easier for the challengers to spin than the other. The Democrats voted against a Republican-backed floor amendment that would have added over the counter drugs for kids and older people to the sales tax holiday. The Democrats argue they were sticking to the deal their leaders had worked out, but a vote against a tax break is a vote against a tax break.

The three-day vs. two-week deal is a little tougher to spin, because it wasn't a straight up-or-down vote. The two-week holiday croaked when the author of the bill, Rep. Harold Dutton, D-Houston, asked the House to send it back to committee for repair or replacement. They voted to do that. If you're on one side of that, you say it amounted to a vote against any good thing in that bill, including the two-week sales tax break. If you're on the other side, you say two things: First, you were doing what the author wanted you to do with his legislation; second, Texas got a sales tax holiday after all. Then you change the subject and talk about your vote in favor of George W. Bush's tax relief plan.

Straightening Out the Wannabe Rumors

When Rep. Kenn George, R-Dallas, dreams of higher office, he dreams first of a dark-paneled room on the first floor of the Lyndon Baines Johnson State Office Building in Austin, where the Comptroller of Public Accounts is headquartered. If he decides to leave the Texas House for higher office, that's the first place he would look. And the rumor you might have heard about his dream of being the Texas Land Commissioner? That's not really new. In fact, George is saying just what he's been saying all along, and he'd just as soon not be appearing on all of the aspirant lists.

George says he'd like to run for comptroller, but won't run against Carole Keeton Rylander and has no gripes with her. If she decides to stay put, he'd consider the land office, assuming that the current occupant, David Dewhurst, decided to move on to something else.

What's certain in all of this? Jerry Patterson. The former senator will tell you, if you call him, that he is hard at the race for the land office on the assumption that Dewhurst won't run for reelection in two years. If he does, Patterson won't. And Patterson is the only one out there who seems to be planning a race no matter what happens in the presidential domino game in November. He's not a current officeholder and doesn't have an employer or client who is telling him to quit thinking about politics. That gives him unique freedom to ponder, he says: "It's way too early for anybody but me."

News Flash: Fat Cats Fund Politics

Forgive the cynical headline, but is it really surprising that people with lots of money sometimes use it to try to advance their own views in political years? The case du jour involves a business group's consternation over trial lawyers pouring a ton of money into PACs that support Democrats.

It's certainly true that the words "Texas 2000" don't instantly lead to a better understanding of a political movement. And it's safe to say that "Constitutional Defense Fund" is on the lite end of the descriptive scale. If you wander to the Texas Ethics Commission, either in person or on your computer, you'll find both groups listed as contributors in some campaign finance reports. And with a couple of clicks, or steps, as the case may be, you'll find that both are almost entirely funded by trial lawyers. Their reports show particularly large contributions from some of the trial lawyers who successfully represented the state in the tobacco lawsuit. They're Democrats, as you might have heard, and they're against tort reform, which cuts into their trade.

That's why relatively little attention went to a press conference blasting the two groups for trying to hide their nefarious causes behind such benign names: There weren't many surprises to it. Jon Opelt, who heads Houston Citizens Against Lawsuit Abuse, said the political action committees should have names that more clearly describe who they are and what they do, and said he would file a complaint with the ethics agency to see if that can be forced under current law.

He said voters can't immediately tell what's going on when such names are used and said that the amount of money in those efforts so far this year is alarming enough to bring the issue to the attention of the press and public. The two PACs pulled in just a shade under $2 million by the midyear point, which is, in fact, a boodle of money for that stage.

But it was something else he said that made the ears of the newsies twitch, since it's generally something said by people on left end of the political teeter-totter, and they didn't expect it: In blasting the "Trojan Horse" tactics of the trial lawyers, Opelt said the public should be nervous when a small group of people pours a huge amount of money into political races. He said getting to the bottom of political contributions is "always going to be a fishing expedition" but said the contributors in this case were hiding behind vague names that hide the true purpose of those donors. He pulled up short of calling for campaign finance reform or any such thing, but said the groups should be forced to change their names so that their occupations or purpose would be clearer.

A Parade of Horribles

That's as good a preface as any for legislative hearings that start on the date of this issue; a House committee looking at campaign finance reform is finally meeting to hear proposals for everything from limits on donations to deeper disclosure to higher fines for violations. That's a perennial, but it's gained a little strength each year and might actually amount to something in the next legislative term.

There could be some movement from both Republicans and Democrats on campaign finance. U.S. Sen. John McCain's calls for reform on the federal level might bring some Republicans into the game who haven't been there before, and grass-roots organizations are pushing hard on Democrats who haven't mounted particularly sweeping reforms in the past.

Expect a parade of horribles in these first hearings, possibly with faces that aren't the regular goo-goos (FDR's term for Good Government types) who usually show up for these things. The reformers on the outside say they'll push for better employer/occupation disclosures on donors, make it harder for "non-campaign" political spenders to hide and fix a loophole so that statewide candidates have to file reports right before Election Day just like their legislative counterparts.

The insiders and the outsiders alike are talking about higher penalties for people who file late or not at all, and although embarrassment has even more political power than money, they're talking about raising the fine amounts rather than increasing any shame that might come with non-disclosure. Candidates, especially those who already hold office, don't like non-filers because they can't always get to the bottom of who's for 'em and who's against 'em, at least not in time to act.

An Incumbent Endorsement List (Mostly)

The Texas Farm Bureau's political action committee -- AGFUND -- is sticking with incumbents in all but two Texas races. The PAC is picking Democrat Loy Sneary over U.S. Rep. Ron Paul, R-Surfside, and likes Republican Sid Miller over state Rep. David Lengefeld, D-Hamilton. The decisions are made locally and passed up to the state group. The PAC endorsed Sneary's previous unsuccessful run against Paul. Likewise, the group was on the other side of Lengefeld's race two years ago. While we're on the subject of Lengefeld: He picked up a Legislator of the Year award from the Texas Public Employees Association for working on prison pay raises.

The Farm Bureau's snub of Lengefeld apparently followed a call from Rep. Suzanna Gratia Hupp, R-Lampasas, to the head of the group's Hamilton County branch. Steve Watson wrote to Lengefeld saying he'd had a long conversation with Hupp wherein she trashed the incumbent in what Watson called "one of the most hateful, negative conversations I have ever been a part of." In his letter, Watson ended up asking Lengefeld whether he has done anything for the district, whether it's true that he doesn't support agriculture and whether it's true that he's a liberal. The endorsements came out a few days after the letter was sent.

Not THAT SD-1, Not THAT SD-2, and Hopeful Spin

Rep. Leo Berman, R-Tyler, says it is true that he wants to run for the Texas Senate, and that he's been telling people so. But he'd like to add that he's not planning to run against his current senator, Republican Bill Ratliff of Mount Pleasant, and he's not really even talking about the current design of the district. Berman figures that Smith County, which is now represented by three different senators (Ratliff, Democrat David Cain of Dallas and Republican Drew Nixon of Carthage), will only have one senator after redistricting next year. He's betting there will be a Smith County seat without Ratliff's name on it; if that's the case, he's hoping to end the contest with his own name on the seat. He'd also run if, for some reason, Ratliff left office. But he won't under any circumstances launch a challenge.

• The Denton County Republican Party was just trying to be helpful, but they might want to pull out a map next time. There's no Senate race there this year, so the county GOP's newsletter encourages partisans to jump in the car and go east to help Dr. Bob Deuell of Greenville, a first-time candidate who is running against Cain. They listed dates to go help knock on doors on Deuell's behalf, including a September 30 day of organizing in Gregg County. The problem? Gregg County isn't in the district; it belongs, in a political sense, not to Sen. Cain, but to Sen. Ratliff.

• Curtis Clinesmith has taken to the phones to spin finance folks, political reporters and others on how he plans to win a seat in Congress. The Democrat, who's challenging U.S. Rep. Mac Thornberry, R-Clarendon, argues that the difference between what he's raised and what Thornberry has put together is smaller than the incumbent advantage in other contested races. That said, Thornberry got to the midyear point with a two-to-one advantage in the size of his bank account. Clinesmith says further that he's raised more than $300,000 so far, which is certainly enough to be taken seriously, and he closes his talking points by saying Thornberry had less cash on hand at midyear than any other incumbent in the Texas delegation (save Kevin Brady, R-The Woodlands, who has no opponent).

• HD-11 candidate Chuck Hopson enlists former Comptroller John Sharp to headline a fundraiser next month, says he has banged on 3,000 doors and opens (officially) his campaign office in Palestine, where his opponent resides. Meanwhile, Republican Paul Woodard proposes a "Prescription Drug Patient Protection Act," which would require Hopson and other pharmacists to disclose deals with drug companies that give them incentives to sell certain drugs, would ban sales of patient prescription lists and to make drug costs in the U.S. more similar to lower costs in other countries. He topped it off by asking Hopson to sign the program. We'll let you know how it comes out...

Mistakes: We misspelled Attorney General John Cornyn's name in some editions last week. It might have looked intentional to some, but it most assuredly was not. We also put the wrong first name on Rep. David Lengefeld, D-Hamilton, in that same issue. In both cases: Sorry, sorry, sorry.

An Arresting Press Conference

Comptroller Carole Keeton Rylander held a press conference to announce the firing of an alleged thief from her agency, then proceeded to take questions for 10 minutes without answering almost all of them. The employee, arrested in Houston after a bank there noted some unusually large transfers in its accounts, is accused of falsifying fuel tax refunds with help from a confederate on the outside.

Rylander apparently wanted to announce that before someone else did so, but was told by her lawyers and by the investigators that if she had to say anything at all, to limit what she said to a careful statement. That's supposedly how she ended up in a room with 20 reporters with a million questions and just one answer: "I am not going to talk about the details right now."

That oddness got some small attention in the stories about the fuel tax scam the next day.

What really steamed the comptroller's folks, however, was when Harris County District Attorney John B. Holmes Jr. said the next day that he wished she had said nothing at all and that he hoped his office could still get hold of a remaining suspect who might have left the country. His staff and the comptroller's staff had agreed in advance that a Rylander announcement would do no harm, but Holmes -- at least according to the folks on the Austin end -- didn't stick to the deal.

Put This in Your Pipe and Smoke It

The state's prospects for tobacco money are right where they were last time we visited the subject in May, but this is new: The final numbers won't be available for another four months. Budgeteers have been expecting income from the state's tobacco lawsuit to come in $75 million to $90 million short of the mark set during the last legislative session, largely because declines in cigarette sales have outpaced expectations. That drop is harder on counties, which could lose $154 million that they were expecting. The numbers represent the difference between what the industry says it owes and what the state expected, so there are some hard facts still out, and some lawyer haggling still to be done. Final numbers won't be ready until the end of the calendar year.

Doctors vs. Bidness

The itchy relationship between physicians and the Texas Association of Business and Chambers of Commerce isn't smoothing out. Look at this latest bit: The Abilene Chamber fired off a letter to the Texas folks noting their disagreement with the "anti-medicine rhetoric of the TABCC Health Partners Task Force." The letter says there are plenty of health-care types in the Abilene Chamber and takes issue with materials from TABCC that refers to doctor cartels and that implies "that physicians only care about their pocketbooks" and says the Abilene group "cannot support an endeavor that is hostile to a segment of our membership." The letter says TABCC should make sure none of the Abilene group's dues are used in support of the task force, and it's copied to a number of elected officials. It's signed by the chamber's chairman, Dr. Royce Money.

Earlier this summer, the Texas Medical Association pulled out of TABCC altogether, citing some of the same concerns. It was apparently based on the same letter. The business group sent out a pre-legislative session solicitation for members, and the whole pitch was on the rising costs of health care. That's where the "Doc Cartels" phrase came up. It's also where you'll find an underlined sentence that sent some doctors through the roof: "You can rest assured the Docs will be back next session in an effort to make the law more amenable to their pocketbooks."

TABCC's specific problem is with federal legislation (similar to legislation that passed in Texas last year) that would allow doctors to bargain in groups when they're dealing with insurance companies. If done now, that would be a violation of anti-trust laws. In this case, the business group wants government oversight. In their Texas Business Report earlier this summer, TABCC wrote that "allowing doctors to unionize and form cartels without [Federal Trade Commission] oversight will do nothing to improve the access to or quality of healthcare."

Political People and Their Moves

Former state Rep. Richard Raymond, a Democrat who lost the 1998 race for Texas Land Commissioner, is now the Region 6 representative for the U.S. Department of Agriculture. That means a desk in the federal building in Dallas, though he and his family will continue to live in Laredo. Raymond's turf includes Texas and the four U.S. states that border it... Winn Atkins is leaving the Texas Credit Union League to take a job with Casey, Gentz and Sifuentes, an Austin law firm that specializes in phone and electric utility issues... M.J. Nicchio Jr., known to diehard fans of the Juarez (Mex.) Indios as right-handed pitcher Martin Sanchez but to most as a lobster for the Texas Daily Newspaper Association, is taking a chair at Burston-Marsteller's new Austin office. He'll handle legislative consulting for the PR firm, and most emphatically will not be lobbying... Press Corps moves: Robert Elder Jr. will leave The Wall Street Journal's Texas Journal to become technology and assistant business editor at the Austin American-Statesman. He'll be replaced at the Journal by Russell Gold, who's currently in the Austin bureau of the San Antonio Express-News... Off the hook for the nonce: Michael Yarbrough, the former Houston city councilman and candidate for Texas agriculture commission. A judge declared a mistrial after a jury deadlocked 11-1 (in Yarbrough's favor) on charges he accepted a corporate contribution in that state race... Appointed: James Hoggard of Midwestern State University in Wichita Falls as the state's poet laureate for 2000, and Walt McDonald of Texas Tech for 2001. Both poets teach college English...Gov. Bush named John Board of Amarillo to the 181st Judicial District Court, an opening created by Judge Samuel Kiser's resignation... Don Cosby, foster son of former Fort Worth Mayor Bob Bolen, got the nod from Tarrant County Republicans for a spot on the ballot opened by the death of Judge Jon Barton earlier this summer. Then Bush appointed him finish Barton's term, so he'll run as an incumbent... Elected: Fred Baron, who has made more money off of asbestos than most of the people who mined it in the first place, as president of the American Trial Lawyers Association. The regular Democratic giver is a founder of Dallas-based Baron & Budd.

Quotes of the Week

Jon Opelt of Citizens Against Lawsuit Abuse of Houston decrying large political contributions by a small number of Texas trial lawyers: "It is unhealthy when a handful of folks can dictate the political process."

Former Sen. Carl Parker, who operates one of the political action committees being blasted, in response to Opelt and other tort-reformers: "They should change the name of their association to 'The Association to Protect People Who Make Money by Injuring Other People."

Jeff Saitas, the state's top environmental regulator, on proposed restrictions on manufacturing, transportation and construction that are designed to cut into the state's pollution before federal officials punish the state: "It doesn't take a rocket scientist to see we've got a problem."

Rep. Domingo Garcia, D-Dallas, after his Texas colleagues got him booted off the program at the Democratic Convention to punish him for helping recruit Hispanic candidates against Anglo Democrats in Dallas and Fort Worth: "The issue is Latino empowerment and if some of these Democratic incumbents have a problem with that, they're just going to have to deal with that."

Gov. George W. Bush on his tax plan, after Vice President Al Gore scored some hits criticizing it: "I've got to do a better job of making it clear."

Democratic elder Robert Strauss of Dallas on the condition of the Texas Democratic Party: "They're really in terrible shape. I thought we were in trouble back in the McGovern days, but nothing like this."

Georgia judicial candidate George Weaver, on that state's attempts to reign in misleading claims (like one he made) in political ads for judges: "We can't expect that voters are so stupid that they need the government's help to decide what is true or false political speech."

Joel Salazar of the Mexican American Bar Association of Houston, reacting to District Judge Lisa Millard's ruling that requires a mother to speak only in English in front of her daughter: "Would this judge order a redneck to speak proper English?"


Texas Weekly: Volume 17, Issue 9, 28 August 2000. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2000 by Printing Production Systems, Inc. All Rights Reserved. Reproduction in whole or in part without written permission from the publisher is prohibited. One-year online subscription: $250. For information about your subscription, call (800) 611-4980 or email biz@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.


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