The Brief: Sept. 9, 2015

A joint investigation by The Texas Tribune and the Austin American-Statesman delves into the troubling relationship between the Travis County district attorney's office and the Texas Mutual Insurance Company.

Travis County District Attorney's office in Austin, Texas.
Travis County District Attorney's office in Austin, Texas.  Justin Dehn

The Big Conversation

A three-part joint investigation by The Texas Tribune and the Austin American-Statesman being published this morning delves into the troubling relationship between the Travis County district attorney's office and the Texas Mutual Insurance Company, which pays the costs of prosecuting cases of fraud against the company.

"A six-month ... investigation reveals a series of troubling issues with the chummy partnership — including an absence of written procedural safeguards, a lack of awareness of terms and conditions in the contract authorizing the relationship, and what some say are inappropriate statements made on social media by the lead prosecutor of the unit," writes the Tribune's Jay Root and the Statesman's Tony Plohetski.

Part I follows the case of Odessa native Roy Kyees who was prosecuted and arrested in Travis County after Texas Mutual contended that he had not reported finding different work following a workplace injury. The case was eventually dismissed after Kyees' attorney was able to provide proof that Kyees provided notification of the new job.

“They can make people’s lives a living hell, basically,” Kyees said, his voice cracking. “It turns you upside down is what it does.”

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Looking back, Kyees said it seemed to him the whole time that the prosecutors were in Texas Mutual’s “back pockets.”

“Why is a district attorney getting paid by the private insurance company?” he asked. “They just take whatever Texas Mutual hands them, bits and pieces of any basic case, and they can word it, say it however they want to make people look guilty.”

Part II profiles the prosecutor in charge of investigating the fraud cases referred by Texas Mutual who has also caused a stir from her use of social media to express "forceful opinions about everything from political leaders to hot-button issues like abortion and gay rights," writes Root and Plohetski.

Supporters of the arrangement between Texas Mutual and the Travis County DA’s office cite Crosby’s attitude and independent streak as the premier safeguards against any chance she would succumb to pressure to prosecute an unwarranted case.

But one California-based legal ethics expert said Crosby’s posts are inappropriate. Attorney John Steele, who has taught legal ethics at several universities and is a former member of the American Bar Association’s committee on professional responsibility and conduct, reviewed a sampling of Crosby’s tweets and found them troubling.

“This is probably conduct that a prosecutor should not be engaging in, things that a prosecutor should not be saying in public,” Steele said. “Even if they are going to comment, there are more appropriate ways to do it.”

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Part III delves into the history of the formation of Texas Mutual, its subsequent financial success and its clout in the halls of power.

Over the past dozen years, net income skyrocketed, from $27 million in 2002 to $321 million at the end of last year.

The company returns its profits back to policyholders in the form of annual dividends, which this year will exceed $200 million. Since 1999, more than $1.5 billion in profits have been returned to policyholders as dividends.

The company’s size and bankroll make tangling with Texas Mutual in court — or in the halls of the Texas Capitol — a daunting prospect, said Brad McClellan, a workers’ compensation appellate lawyer and former chief of the workers’ compensation section of the Texas attorney general’s office.

“They’re the Goliath out there. They are the big kid on the block,” he said. “They’ve been successful in really limiting any control over them.”

Disclosure: Texas Mutual Insurance is a corporate sponsor of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.

Trib Must-Reads

New Law May Not Thwart Hays County Water Project, by Kiah Collier – A bill that passed late in the legislative session gave some residents and officials hope that they can kill a controversial water-pumping project in western Hays County. But there's no guarantee that Houston-based Electro Purification won't ultimately be able to proceed with its plan.

Cruz, Trump to Headline Rally Targeting Iran Deal, by Abby Livingston – U.S. Sen. Ted Cruz will join real estate developer Donald Trump on Wednesday for a rally decrying President Obama's Iran deal. The pair will speak on the grounds of the U.S. Capitol at noon Central time.

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Rice and UT Climb in US News Rankings; A&M Drops, by Matthew Watkins – Texas' top universities saw mixed results in the U.S. News and World Report higher education rankings released Wednesday, with the University of Texas at Austin and Rice climbing in the national ranks while Texas A&M, Southern Methodist, Baylor and Texas Christian dropped slightly. 

Perry Continues to Battle Rumors of Campaign Demise, by Patrick Svitek – Plagued by weekly headlines about his dwindling staff, the stench of political death continues to linger around former Gov. Rick Perry, whose rivals have so far struck a deferential tone in response to questions about his campaign struggles. 

West Texas Company Fined in Deadly Oil Rig Explosion, by Jim Malewitz – Federal regulators have slapped a roughly $50,000 fine on a West Texas oil company six months after a fiery explosion killed three of its workers at a well. 

Coal-Dependent Power Company Eyes West Texas Sun, by Jim Malewitz – The state’s biggest electricity generator is adding solar power to its mix. In the latest sign that solar energy is fast gaining a foothold in Texas, Dallas-based Luminant has announced plans to tap 116 megawatts of West Texas solar power.

King, Weighing Senate Run, Not Seeking Re-election, by Patrick Svitek – State Rep. Susan King announced Tuesday she is not seeking re-election as she weighs a run for the Texas Senate.

Cruz Visits Clerk Jailed Over Gay Marriage Stance, by Patrick Svitek – U.S. Sen. Ted Cruz, R-Texas, visited Kentucky on Tuesday in a show of support for a county clerk there jailed over her refusal to issue gay marriage licenses. 

The Day Ahead

•    The Texas Water Development Board meets at 9:30 a.m. to discuss the second round of funding requests for the State Water Implementation Fund for Texas (SWIFT) financial assistance program. 

•    Ted Cruz and Donald Trump will appear at a rally in opposition to the Iran deal at the U.S. Capitol at noon Texas time. The rally will be hosted by the Tea Party Patriots with partners Center for Security Policy and the Zionist Organization of America. Right-wing talk show hosts Mark Levin and Glenn Beck will also speak.

•    U.S. Department of Housing and Urban Development Secretary Julián Castro will deliver the keynote address for the LBJ School of Public Affairs' 2015 Reimagining Cities Conference at noon. Austin Mayor Steve Adler will also speak. 

Elsewhere

Collin County wants to cap cost of Paxton prosecution at $33KHouston Chronicle

Next move in Rick Perry case belongs to upper courtAustin American-Statesman

UT System questions report on environmental impacts of fracking, Austin American-Statesman

SMU launches Texas-Mexico Program during Gov. Abbott’s visit, The Dallas Morning News

Paxton asks judge to halt EPA water rule in Texas Associated Press

Texas oil production grows despite global job cuts at 200,000Houston Chronicle 

Denials caused by immigration status hold down Obamacare enrollment, The Dallas Morning News

Quote to Note

"If he can't compete in South Carolina this time, our weekly episodes of 'The Walking Dead' are about to come to an end." 

— GOP consultant Bruce Haynes on importance of Rick Perry succeeding in South Carolina

Today in TribTalk

Rate Cuts Will Endanger Injured Texas Children, by Dena Dupuie – Texas’ proposed rate cuts to Medicaid’s acute pediatric care therapy would be devastating to our daughter's care. We must compel the state’s health officials to come up with something better.  

Trib Events for the Calendar

•    The Ticket: A Live Recording and GOP Primary Debate Watch Party on Sept. 16 in Austin

•    A Conversation with UT-Austin President Gregory Fenves on Sept. 21 in Austin

•    A Conversation on The Road from Hurricane Rita on Sept. 22 in Beaumont

•    A Conversation on God & Governing on Oct. 7 in Austin

•    The Texas Tribune Festival on Oct. 16-18 at the University of Texas at Austin