Political Intelligence

Attack of the Clowns



Citing an “organizational structure and corporate climate that created a lack of independence, integrity and objectivity,” the Texas State Board of Public Accountancy notified Arthur Andersen on May 23 that it would seek to revoke the firm’s license to operate in Texas. An Andersen spokesman called the announcement a “rush to judgement,” but it seems a little slow to us. Andersen is nearly dead anyway; the Board beat the buzzards to the body, but not by much. Most of the firm’s clients jumped ship in April, and Andersen has laid off hundreds of Texas employees and allowed hundreds more to shift to other outfits. The Governor’s office apparently knew months ago that Andersen’s number was up in Texas. In a February 6 memo to all state agency heads, Perry’s Budget, Planning and Policy Director Mike Morrissey–without mentioning Andersen by name–directed each agency to “review their financial or consulting contracts to ensure that such contracts safeguard state interests in the event the contractor fails to meet professional standards or otherwise performs inadequately.” In other words: If you haven’t fired Andersen yet, now would be a good time to do it. “I’d be very surprised if any agencies still have active contracts,” Accountancy Board Exe-cutive Director Bill Treacy told T.O. on May 24, referring to the Gov-ernor’s memo.

In an uncharacteristic burst of regulatory energy, the Board also got around to sanctioning Andersen for two other, unrelated screw-ups involving audits conducted by the firm in 1989 and 1993 for World Cycle Corp. and Randall’s Food Markets, respectively. On May 23, the board assessed fines of $125,000 for each faulty audit (no word on whether that will by 1989 dollars or 2002). Our personal favorite was the accompanying reprimand for a former Andersen partner. In the Board’s own words: “The Board also reprimanded former Arthur Andersen partner Wilbur J. Armatta of Houston for his role in one of the cases. As part of the reprimand, Armatta, who retired from the firm in 1991, agreed to remain retired from practicing public accounting.” Remain retired! Armatta probably read the press release while sipping a highball on the 16th hole.

We note that the Board is up for sunset review next session. How about some more enforcement staff?


We reported on May 10 (“Harris County Hijacking,” by Brad Tyer) that a coalition of Houston-area industries calling themselves the Business Coalition for Clean Air was preparing a back-door assault on the state’s cleanup plan for Harris County’s air pollution. The state environmental agency, the TNRCC, adopted the plan in 2000 in an effort to comply with the federal Clean Air Act. The Coalition immediately sued, citing inaccurate information in the plan. As Tyer reported, the group is currently in the process of conducting its own study, the results of which are expected to be much more favorable to the industries footing the bill for it. Word on the street now is that the TNRCC may be ready to cave in without a fight. After closed door meetings with industry in May, the agency is reportedly set to announce a “compromise” on pollution reduction levels. This probably shouldn’t come as a surprise: The agency’s commissioners serve at the pleasure of the governor, and this governor serves at the pleasure of industry. On May 29, Texans for Public Justice reported that Perry’s campaign has accepted $408,256 from members of the Coalition over the last four and a half years.


There may be some evil-doers in Cuba, but the Cuban brand of evil-do does not include germ warfare, according to Jimmy Carter, who, much to the chagrin of the U.S. State Department, recently toured the country and pronounced it germ-free. San Antonio, on the other hand, could use a closer look. The Sunshine Project, a bio-weapons watchdog group based in Austin and Hamburg, Germany, recently obtained under the Freedom of Information Act a copy of a bio-weapon proposal made by the Armstrong Laboratory at Brooks Air Force Base in San Antonio. The lab proposed to develop genetically engineered bacteria that destroy enemy materials, including plastic, asphalt, fuel, and other substances. The proposal was sent to the Marine Corps in 1997, but only recently passed on to the National Academy of Sciences (NAS) for review, which is how the Sunshine Project became aware of its existence. The group also obtained two other proposals for offensive bio-weapons, including one from the U.S. Naval Research Laboratory and one from Idaho National Laboratories, both of which had also been sent to the NAS by the Marines.

All three proposals discovered by the Project are for anti-material, not anti-personnel weapons. Yet such weapons would still clearly be illegal under the Biological Weapons Anti-Terrorism Act of 1989, which implemented the Biological and Toxin Weapons Convention (BTWC), an international treaty signed by the United States (which officially renounced biological warfare as far back as 1969). The Act specifically prohibits production of biological agents that cause deterioration of food, water, equipment, supplies, or material of any kind. On May 24, the Sunshine Project sent copies of all three proposals to Johnny Sutton, the U.S. Attorney for the Western District of Texas, who has the authority to enforce the 1989 law. According to the Sunshine Project’s Edward Hammond, the Pentagon has apparently taken an interest in the flap, and the Marine Corps has officially directed the NAS not to release any more related documents. Hammond said it was unclear exactly what the existence of these three proposals (and presumably more in the possession of the NAS) meant, but it didn’t look good from any angle. “There are two possibilities,” he said. “Either there has been a huge institutional failure to implement the law, or people in the Pentagon are trying to undermine it.”


Last time we checked, terrorists were using visas to get into this country, not rowboats. But if, after regrouping in the lawless badlands of Western Pakistan, Al Qaeda does switch to the rowboat method, the Marfa Sector of the U.S. Border Patrol will be ready. On May 10, a sizeable contingent of agents, accompanied by a helicopter, swept down on the unofficial border crossing at Lajitas, the Rio Grande resort town just outside the western entrance of Big Bend National Park. According to the Big Bend Sentinel, the raid netted 21 persons attempting illegal entry, one ferryman, and one rowboat. Border Patrol Spokesman Pablo Caballero told the Sentinel that the agency was acting on “recent intelligence information” about illegal crossings. Hope they didn’t pay too much for that inside info, since the Lajitas crossing has been operational for as long as anyone can remember. That goes for any number of unofficial crossings, including two in the National Park itself, which are so well established that Park Rangers keep an eye on the cars of Ameri-can tourists while they goof off in Old Mexico.

Most people who cross the river from Paso Lajitas, Mexico, to Lajitas are coming across to work for the day (many of them legally) or coming to the grocery store for supplies. A legal crossing to Lajitas, Texas–about 500 yards from their houses–would require a 50-mile drive to the bridge in Presidio (and 50 miles back), just to get to work in the morning. Or to get a pack of smokes, for that matter. They’d better get used to it post-September 11, according to Caballero, who predicted that such raids would become “routine” in the future. And in fact, just before press time word came that a second raid had been conducted at Lajitas, and that the two crossings in the national park are now officially closed. This will be a blow to the residents of Boquillas, Mexico, many of whom do their shopping at a campground convenience store just across the river.