ustxtxb_obs_1964_05_01_50_00005-00000_000.pdf

Report on a Situation Connally and the Richardson Estate Fort Worth, Austin Gov. Connally presumably continues to be an independent executor of the estate of the late Sid Richardson, who left about one hundred million dollars when he died in 1959. In response to an Observer inquiry, the governor states that he has not performed -any services for the Richardson estate or received any compensation from it since he became the governor early last year.* Connally’s insistence that he continue as one of the three executors of the estate caused controversy over his nomination as Secretary of the Navy. He resigned various corporate connections, but he maintained that he would be letting down . Richardson’s trust in him if he did not continue as executor of the oilman’s will. It was pointed out in floor debate in the Senate that Connally enjoyed an income of from $40,000 to $80,000 a year by virtue of being one of the directors of the distribution of this huge estate, and that while he would forego that income while Secretary of the Navy, it was implicit that he would resume getting it when he went back to private life. Examining deed records in Tarrant County, the Observer learned that on Jan. 8, 1962, a month after he quit as Navy Sec. retary, Connally joined with the other two executors of the estate, Perry R. Bass and Howell E. Smith, in conveying three tracts totaling 2,509 acres of land from the estate to the Sid M. Richardson Foundation, to which Richardson left the bulk of his fortune. In Texas, independent executors are entitled to take five percent of the value of property coming into the estate of which they are executors, and five percent of . property going out of the estate. This is called the “five in, five out” rule.. The total amount of compensation under this rule is limited to five percent of the total gross *The Observer asked Connally, through George Christian, his press aide, two questions: whether he is still an executor of the Richardson estate, and whether, while he has been governor, he has performed services for or received compensation from the estate. Christian gave Connally’s response, but said he did not know whether Connally is still executor. On April 17, the Observer told Christian it was presuming, on the basis of Connally’s answer, that he is still executor, and would appreciate being advised if the contrary was true. On April 20, the Observer provided the governor’s office a carbon copy of the story here published and invited Christian and the governor to advance any corrections, additions, or comments about it by our deadline for this issue, April 24. On that date, Christian said he had not showed it to the governor and could not say anything as to whether Connally is still executor. Under these circumstances, the article is here published on the basis of the original presumption that Connally’s one reply to the Observer’s two questions means he is still an executor of the Richardson estate. In addition, a reporter from Washington advises us he asked Connally if he is still an executor of the estate and that Connally said he is.Ed. ‘ value of the estate, the Observer is informed. The Jan. 8, 1962, instrument on file in the deed records of Tarrant County says that Connally, Bass, and Smith had been designated independent executors of the will in 1959 “and have continued at all times since to serve in such capacity.” There being three independent executors of the Richardson estate, it is possible for the estate to be managed by one or two of the executors without all three acting under Texas law, the Observer understands. This would account for how Connally could be inactive, but still one of the executors, and not thereby delay the winding up of the estate. The fundamental purpose of an executorship, of course, is to distribute the deceased party’s assets the way he wanted them distributed and then to close up the estate. There seems to be an exception in the law which this explanation does not encompass, however. During the. Senate debate on Connally’s nomination as Navy Secretary Jan. 23, 1961, Sen. Richard Rusof several executors can pass title to any part of the estate except the realty without consulting the others.” \(Emphasis projoined the other two executors in passing title to the Fort Worth land so soon after Connally left the Kennedy Administration. William Blakley, a U.S. senator from Texas in 1961, contributed the observation in the Senate debate that in Texas, “under a will independent executors are . . . able to act independently and separately, and no executor is held liable for the act or endeavors of another executor; neither is he held responsible for the result.” Independent executors under Texas law are not answerable to a court unless a party of interest files a complaint. All the executors have to do is file the will and an inventory of the estate in court; from then on they manage the estate as they see fit. In court-supervised . estate managements, there is a three-year limit for winding up estates, after which permission of the court is required for further delay, but this time limit does not apply to independent executors. In the Richardson estate, the executors filed, not an inventory of properties, stocks, and so on, but an inventory specifying only the value of the properties in the estate by category. RICHARDSON DIED on Sept. 30, 1959. On Nov. 16, 1959, Connally filed, on a preliminary inheritance tax report, an inventory of the “net estate for distribution” of $30,230,000. In May, 1961, the supervising judge, Marvin Simpson of Fort Worth, and Comptroller Robert Calvert officially recorded, on a form called “Re port of Appraisement by County Judge and Comptroller,” that the “actual market value of the property” Richardson owned when he died was $86,624;668.11. On the basis of this appraisal, the estate paid only $886,440.40 state inheritance tax to Comptroller Calvert. However, this appraisal and tax were subject to the final determination of the estate by the federal government. On Dec. 20, 1961, according to the records of the will in Judge Simpson’s court, Simpson approved the federal government’s valuation of the, “gross estate” at $105,346,328, roughly twenty million dollars more than Simpson and Calvert had certified and seventy five million more than on Connally’s preliminary inheritance tax report. On the basis of the federal valuation, which Simpson and Calvert approved, an additional state inheritance tax of $5,853,596.73 was then assessed against the estate, and it was paid Dec. 21, 1961. Connally’s resignation as Navy Secretary was submitted on Dec. 11, 1961, and became . effective Dec. 20, 1961. Late in 1962, the Houston Press ran a copyrighted book-length feature, “The Connally Life Story,” by Louis Hofferbert, in which Connally was quoted that the Richardson estate was “in round figures, about one hundred million dollars.” Hofferbert stated that the principal part of Connally’s own fortune was built during his years as Sid Richardson’s lawyer. Hofferbert asked Connally for an estimate of his personal net worth at that timethe end of 1962 and Connally replied, “About a half-millionmost of it represented by my home and ranch.” Hofferbert reported that Connally owned in his name or the names of his children about half of the Connally family’s 4,000 acres in Wilson County. CONNALLY WAS HIRED by Congressman Lyndon Johnson as his secretary in Washington after Connally got out of University of Texas law school in 1939. Connally met Richardson for the first time, Hofferbert said, at the Democratic National Convention in Chicago in 1940. After the war, during which he served in the Navy, Connally was president and general manager of radio station KVET for three years. In 1949 he joined the firm of Powell, Wirtz & Rauhut in Austin. His law practice has always been a corporate kind, and he has never practiced criminal law or done much trial work. When Brown & Root, Inc., filed a lawsuit against the Texas State Federation of Labor, et al., alleging conspiracy whereby “through use of secondary boycotts, pickets, unfair lists and other illegal weapons because [Brown & Root] would not yield to [labor’s] demands that it violate the Texas ‘right-to-work act’ by discriminating May 1, 1964 5