ustxtxb_obs_1956_01_18_50_00004-00000_000.pdf

Lots of companies Sell life insurance BUT: OIL INDUSTRIES LIFE SELLS MORE INSURANCE SETS MORE RECORDS AND IS FRIENDLIER Than Most. Western Indemnity Life Insurance Company Home Office : 5011 Fannin, Houston, Texas AGFATIES THROUGHOUT TEXAS OIL INDUSTRIES LIFE affiliated with THE SENATORS IN A BRAWL person of honesty and integrity would assert or imply to the contrary.” Daniel added he is for open legislative hearings. Bracewell had promised that all people connected with the mysterious $50,000 in checks Shoemake wrote to cash during or just before the last legislative session would be subpoenaed by the committee. After Bracewell resigned, the committee gave the Cavness report to the Attorney General and promised it to grand juries. Rep. Wade Spilman of McAllen, chairman of the House investigating group meeting this week, said that Bracewell’s resignation “shifted the burden over to us.” Senator Rogers assured the Observer that “nothing that is secret” happened at the closed session. The committee adjourned last week without hearing from Renne Allred, Jr., who next day told the press he had evidence with him of at least one case of fraud, graft, bribery, or negligence in at least ten cases in receivership. “The Board \(of Insurance proof because the -evidence of it is in the Receiver’s office,” Allred . said. Phillips asked if the committee was “afraid of what. Allred might say.” D.A. Tom Moore in Wacoalready being discussed as an Attorney General candidate as -a resultannounced his opinion that the Senate majority had muffed the inquiry and said he would therefore take it to the Waco grand jury. BRACEWELL said that the committee had met the Saturday and the Tuesday night before last week’s meeting. At the night meeting, he walked out before the other senators studied the Cayness report. \(State Auditor C. H: Cavness. was questioned at length by the four who remained that night, the Observer has learned. This may explain the need the senators felt to establish a precedent for Bracewell revealed he walked out on the committee Saturday rather than accept the Gayness report then; that on Monday he asked for authority to subpoena the writers and endorsers of the checks payable to cash but was not granted it ; and that Tuesday night, after the committee decided to go into executive session to receive the Cavness report, Bracewell walked out. Bracewell refused to say what he talked about with Lieutenant Governor Ben Ramsey in his early in the week conference y except that it was about “the general insurance situation.” ‘ Secrecy Precedent Is . Set; Income Disclosure Asked He said U.S. Trust’s regulatiOn was “a highly lobbied matter” last session. He said he had refused a retainer from Shoemake because he thought it would be “morally wrong, knowing he had a matter coming up in the Legislature, and offering to employ me immediately before the session convened.” He said he is for lobbyist registration. Cavness met with reporters in the committee room. \(George Sandlin, Shivers aide and chairman of the Texas Democratic Executive Committee, appeared in the doorway for a few moments as Cavness was being phasized he had not made an audit simply a special examination as instructed, leaving the door open for further discoveries. The Cavness report showed that three senators, Rogers Kelley of Edinburg, Kilmer Corbin of Lubbock, and Warren McDonald of Tyler, had received funds from Shoemake companies ; that Rep. Bert McDaniel of Waco who also received thousands from Shoema.ke and Shoemake himself withdrew money froni U.S. Trust the day before the state swooped. down on it; and that R. C. Lanning accepted $10,000 from Shoemake’s firm while he was still chairman of the Board of Control, $5,000 of it on Feb. 9, the day his resignation was announced effective Feb. 15 last year. Cavness did not go into the huge account for claims expenses. Neither was he instructed to look into long distance telephone call records, obviously an explosive subject. McDonald said he turned down a $3,600 offer from’ Shoemake with no work to do for it. He said the offer caused him to tell J. Byron Saunders, the insurance commissioner, that an investigation was needed in February, 1955. Saunders said he had not been AUSTIN Capitol savants are shaking their heads over the most emphatic newspaper condemnations of the state government in memory. The San Antonio Express Sunday called for a return of the Capitol “to the people” and for lobbyist registra tion, annual sessions, and retainer fee Lobbyist registration, abolition or told about such retainer offers. McDonald’s $350 fee from Shoemake in December, 1954, appeared to have been for specific title work. Other Senators who have been paid by Shoemake are Carlos Ashley of Llanowho has not yet said how much he receivedand Jep Fuller of Port Arthur, who says he received about $3,500 from U.S. Trust in about 100 checks for handling the company’s claims in the Port Arthur area. Senator Gus Strauss of Hallettsville has said his law partner worked for Shoemake at one time. Lanning said he had “resigned” before he received any funds from Shoemakethat is, had tendered his resignation to Gov. Shivers in January and that he handled “legal matters” and “briefed all bills on insurance” that might haye affected Shoemake’s “operations.” TETE COMMITTEEROOM. off an aisle behind the Senate .chamber was filled with spectators and reporters as the committee meeting opened. The explosive topic of enaesting spectators : Garland Farmer, the Governor’s press secretary ; John Davenport, press, secretary to Atty. General John Ben Shepperd ; Lyman Jones for candidate Ralph Yarborough, Jimmy Banks for candidate Jimmy Phillips. Senator Wardlow Lane of Center proposed an executive session of the committee. The press was visibly startled. Bracewell immediately rose at the head of the long committee table and told the newsmen and the crowd: “I think that this committee is going to be making the gravest error ever made by a Senate committee if it goes into executive session.” He had not been surprised by Lane’s motion, suggesting the four days of infighting before the meeting which he later revealed. Legislative influence for U.S. Trust is “the public’s business,” he said, “the public recording of retainer .fees received by legislators, and full and public hearings on the insurance scandals are now daily battlecries. The Corpus Christi Caller called for a completely neW Insurance Commission. “… the faith of Texans in their government is at one of the lowest points in history,” said the Caller. The Houston Chronicle .s a i d: “Thexas is being disgraced before the entire nation …. Texans are losing confidence in their state officials, especially since so many of them in the various branches of the goyernment seem to be more interested in covering up than in exposing the unsavory facts.” Fort Worth Star-Telegram said that while the Insurance Commission may not have been vocal enough in calling for insurance reform, the.Legislature has been even more to blame. The Telegram said it favored lobbyist registration and disclosure of retainer fees. El Paso’s Herald Post asked why Gov. Shivers “says little and has done less” about the “most infamous scandals in Texas history.” “The first third term has become the state’s worst,” said the newspaper. The Houston Post stood behind Sen. Searcy Bracewell’s walk-out on the Senate investigating committee. “There has already been far too much secrecy,” said the Post. “Sen. Bracewell is 100 percent right.” The Houston Press said the Insurance Commission must think the people are “stupid” to try to put across a statewide insurance company audit by auditors hired bythe companies. “The public will not trust committee handout reports on an inquiry into scandals in which there is widespread suspicion that legislators themselves are involved,” said the San Antonio News. public generally, I’m sorry to say, it losing confidence in its state govern. merit. If this committee refuses to. have an open hearing on this, I think what confidence is left in the state government will be destroyed. I. don’t intend to be a part of any executive session One of the worst deci -, sions that this committee could make would be to go into executive session,w LANE ROSE to .defend his motion. By this time those present knew they were watching a drama an which many careers might. depend. “I don’t say the report won’t be made public, at all,” . Lane said, “But I was a district . attorney for twelve years and have successfully investigated a number of felons. This committee should proceed in an orderly, fashion.” Lane-said it helps an offender to tip him off “to what you’ve. got” and said the committee should look at the report “and see if we should make it public.” \(He conceded to the press later it had been seen by some commit”I don’t yield to you if a man is guilty of a felony or any other offense. He should stand up in court and face the charge,” Lane said to Bracewell But grand jurors take an oath not to ‘divulge grand jury proceedings, Lane said. “If I’m defending a man the thing I’d most like to know is what was sworn in the grand jury,” he said. He said that under Texas law if a Senate committee “makes him . swear o on himself you can’t prosecute on that offense.” It was not clear what this meant, since only Auditor Cavness was present at committee request : He may have had in mind a precedent for future closed-door sessions. “l’in not trying to shield anybody,” Lane . concluded. Sen. Jarrard Secrest of Temple said lie would vote to make the Cayness report public but added he saw. “some wisdom” in plamiing the procedure for the investigation and favored an executive session. A direct challenge to Bracewell came from Sen. Johnnie B. Rogers of Austin, who said that the Houston Senator had “unfortunately tied together an executive session and secrecy.” Rogers said the secret meeting should “consider some policy matters.” He said to, Bracewell he thought his comments were “unfair” in that they implied such a session: be”to stifle and hide something.” “I won’t say thatI’ll let the people be ‘the judge,” Bracewell replied. Lane, Secrest, Rogers; and Sen. Ottis Lock voted for the secret session. Bracewell, not troublingto vote, rose, picked up his papers, and saidas he started for the door : “Gentlemen, I leave you.” . He went to the Senate secretary’s office, dictated a letter to Lt. Go -v. Ben Ramsey resigning from the committee because of “irreconcilable differences,” and went to the Capitol press room to give reporters background on: what preceded the committee meeting. Llano Misfortune LLANO The Observer learned that Mr. and Mrs. Walter Janner of Llano, with whom Senator Ashley of that town traded for years, invested $10,000 in fore the board moved ‘against U.S. Trust. Their check was cashed Dec. 13 and they received their “certified drafts” Dec. 16a day after the Attorney General brought:, receivership ‘action. The Tanners run a Ma ,b nolia station in Llano. Mrs. Janner said Ashley did not know they were making the investment. All the money was taken out of United States savings bonds, she said. server from Llano. “He said, well, he’s sorry we had put it in. That’s all he said one way or the other.” Ashley has not made any .pher offer to help the Janners get their money back, Mrs. Janner said. The Texas Observer Page 4 0 Jan. 18, 1956 Steaming Editorials