ustxtxb_obs_1958_12_05_50_00002-00000_000.pdf

Allred and Wilson Clash on ICT-Bank Case ring bill, as well. However, Sen. Wardlow Lane of Center opposed the Herring bill and asked Wilson to prepare a bill giving the insurance board authority, which Wilson had his office do. “That day, immediately after that hearing, Judge Betts \(Dist. called me, because he became convinced the Senate wasn’t going to do anything about it,” Allred said. On Feb. 8, 1957, Betts appointed Allred attorney for the receiver in the U. S. Trust & Guaranty receivership case, and eleven days later he made him chief attorney in the ICT case. \(This, incidentally, came as a vindication for Allred, who had been fired on Sept. 15, 1954, by the Garland Smith Byron Saunders insurance board, with the consent of the three Austin district judges, because, Allred maintained, he insisted on joining the commission’s chief examiner as a defendant in the damage suit by the creditors of Texas Mutual, a collapsed insurance company. T h e board never gave a specific reason for “Thereafter,” Allred continued to the Observer, “Will Wilson told me that he had no objection to my appointment by Judge Betts, my relationship to Judge Betts, and that he thought my experience with receiverships was valuable, but that to some extent he felt he would be charged, even if he didn’t have actual responsibility as attorney general, with the conduct of that liquidation office, and would like before any other attorneys were appointed by Judge Betts, to be conferred with.” Allred told him Betts planned for him to do this anyway. “I wanted to see the records of the Mercantile and Republic National Banks, so Will Wilson appointed me as his authorized agent, in letters addressed to those two banks, in early March,” Allred said. “Mr. Wilson I assume thought that I was checking on BenJack Cage, and I was, but I also, having been in banks before on these type things, knew some of the things I would find, that I did find in the Mercantile and Republic.” The banks would not let him photostat certain records and letters, so Betts appointed him a master in chancery, after which he photostated what he wanted, he said. Wilson suggested that Cap Richards, the assistant attorney general who later was to prosecute a suit by which Wilson tried to set aside Alfred’s appointment, be employed as another attorney for the receiver for ICT. “He said he would release him if Judge Betts would appoint him,” Allred said. \(Wilson confirmed to the Observer that he had made told him that Rudy Rice of San Antonio was preferable to him because of his experience in insurance investigations. `Flabbergasted Allred had several conversations with Wilson in the late spring and early summer of 1957. “He knew I was thinking about a conspiracy-fraud case in ICT,” he said. In one of these conversations, Allred continued, “I told him very briefly in substance some of the things I found in the banks which in my judgment implicated the banks, and he made the statement to me, ‘I would hate to see the Republic bank involved because they were heavy contributors in my campaign.’ .. That’s exactly what he said. I was rather flabbergasted …. I didn’t say anything.” Had Allred pressed the point? the Observer asked. “No. In fact, I quit talking with him about any facts that involved the banks.” \(Meantime, Allred said, Wilson said the officers and directors of U. S. Trust & Guaranty, another defunct company, ought to be filed against, and his office would provide two lawyers for the purpose if Betts would agree. Allred said Betts said all right, provided the lawyers would be under Allred’s “direction and supervision.” Allred told Wilson this, he said, and Wilson assigned two lawyers “In the meantime,” the Bowie lawyer went on, “Mr. Wilson ing, if I knew any way that we could get up the question of the authority of the court to appoint the attorneys. I told him I didn’t know any wayI was satisfied. “Up until he made that remark to me, he never had any idea about attacking my appointment, so far as I know,” Allred said, “but it was after that time, about June or July, when he began trying to determine how he could get the question of the authority of the district judge to appoint me before the courts.” “It was at or about this time that Mr. Wilson’s attitude toward my appointment by J u d’g e Betts changed, and I was informed by Judge Bettis’ that Mr. Wilson and some of his assistants had talked with Judge Betts about trying to find some way to test out the court’s authority of appointment of attorneys for the receiver,” Allred said. \(On the question of who first had the idea of taking the matter to the courts, Insurance Commissioner Harrison told the Observer “It was ours here, we conferred with the Attorney General’s office as our attorneys.” Will Davis, board legal adviser, who was an assistant to Wilson until Sept. 1, 1957, said “there was a lot of discussion back and forth” with “everybody” involved but that he first had the idea of a mandamus suit as the legal method and then discussed this with the Attorney General. He said he felt sure he was with the board by then. He said the board wrote Wilson askWilson filed a mandamus suit, as Allred says, “against me” on Oct. 1, 1957. Wilson asked the court “to expunge … any and all orders … appointing Renne Allred, Jr., as attorney” for the receiver in the ICT case as void and illegal. “The conflict is over the separation and division of powers ecutive and judiciary,” the first instrument said. “Renne Allred, Jr., is a competent and capable attorney, well versed in laws of insurance receiverships, and we wish to make it plain that we do not question his professional qualification.” The Observer covered the arguments before the Supreme Court in this first Wilson suit against Allred as attorney for the ICT receiver. Cap Richards, speaking for Wilson, said the suit alleged only that the orders “appointing Mr. Allred are void.” Five other attorneys appointed to work’ in liquidations had not been named in the amended petition; “The other orders are not questioned,” he said. “It is not a question of an attempt to cut them out. They might be proper parties. We do not think they are necessary parties.” Reviewing t h e question of Betts’s authority, Richards told the Supreme Court, “the question involved here is simply, primarily, the appointment of attorneys …. The thing that brought this dispute to a head was the appointment of Mr. Allred …” Chief Justice Hickman asked Richards, “Mr. Allred’s appointment is really the question?” “It is really the question,” Richards replied, “because it was done without the advice and knowledge of the board.” The Supreme Court ruled in January, 1958, “sustaining the orders appointing me,” Allred said. \(In a later case the court was to Allred said that when this suit was pending Wilson called him in and suggested that he and assistant attorney general Joe Carroll go to Cuba to search after ICT records that might be there. Allred said he wasn’t going to Cuba and spend his money, perhaps then not getting it back with Wilson. “attacking the authority of the court to appoint me.” He said Wilson replied that certainly he could get his expenses as master in. chancery. \(Wilson agreed he `No Comment’ Either in January or early February of this year, Allred said, he conferred with Harrison, insurance commissioners Penn Jackson and Joe Gibbs, and perhaps one or two others. “I told them about Will Wilson’s statement to me about the Republic Bank,” Allred said. “They made no comment that I recall.” \(On this point, Cmsr. Harrison told the Observer, “I think that he did mention something to us about that.” Had they regarded it as germane to the suit? “No, no,” Harrison said. “Our concensus was that it was extraneous as far as we were concerned.” Jackson recalled having been told ‘something like that by ‘someone; he did not think Allred had told him, but he said he could not “categorically deny” that it had been In mid-May ; “after I had told the board of Wilson’s statement to me about the Republic Bank,” Allred said, Wilson filed another suit which resulted in a Supreme Court ruling that the liquidation statute was mandatory and not unconstitutional a n d that the court had to appoint the liquidator designated by the board as the receiver. In July the court in effect then had no power over the compensation of the attorneys. Allred believes the Supreme Court were “reversing themselves.” He left the liquidator’s office and his role in the ICT suit, saying his position had “become untenable.” “I felt that I didn’t have the power of the court behind me. I felt that I had not only the Republic Bank against me, but the Attorney General, I didn’t have the cooperation of my own client, the new receiver, Langdeau. I had the hostile lack of cooperation from Mr. Rotsch, appointed as chief attorney by the board, and the board itself. Rotsch just told me, ‘You can’t stay’ … Why? Well, he came from Will Wilson’s office. He was put in that place by Will Wilson.” Allred wrote Herringon Aug. 8, 1958in substance that Allred had formerly told him orally of Wilson’s ‘statement to the effect he would hate to see one of the banks involved or sued in connection with the ICT investigation because they were heavy contributors of his in his campaign. The letter referred to one W. D. White’s contribution. Allred observed that shortly after Wilson made that statement he began seeking ways to get him, Allred, out of the picture, taking a position before the Supreme Court which Allred wrote was opposite to the position ‘he took before the Senate insurance committee early in 1957. “The facts are,” Attorney General Wilson told the Observer, “that when I first got into this thing, there was a good deal of question about the status of that liquidation act; whether it was constitutional or not. “I had conversation with all three district judges and with members of the Senate and House about getting something done to clear up the situation; and with Governor Daniel. I told the district judges and the Senate committee that there was a divided responsibility and that it ought to be placed sqtiarely either one place or the other.” Had he sided either with the courts or the insurance board as the authority in receiverships? “Not at that time,” he replied. Advised that Allred had said Wilson told him and the Senate committee he was for the courts having the authority, Wilson replied, “That’s not true. The position I took with the legislature was that one or the other \(should ance commission or the courts.” He recalled that his office had drafted two bills, one giving the authority “all to the courts” and one “all to the insurance board.” “I then went before the Senate committee and made a public statement that it ought to go to one or the other, that whichever way they wanted it, the important thing was to get it one way or the other.” Neither bill passed the legislature. Allred’s appointment by Judge Betts stirred up hostility to the Herring bill in the Senate, the Observer understood at that time. Firmly denying he had told Allred anything about hoping Republic Bank would not be involved, or that he had said they had been heavy contributors to his campaign, Wilson said, “The Republic Bank has not been a contributor in my campaigns and that part of the story is false also. I’ll just say he’s incorrect on the facts …. I’ve never said that.” Had he discussed campaign contributions at all with Allred? “No, why should I?we had no such relationship.” The Observer inquired whether some directors or officials of the bank had contributed to his campaigns. “Yes, at one time or another, some of those -officials have made personal donations,” Wilson said. Subsequently he amplified this: “Most of those personal contributions are normally from $50 to $200. I’ve got a lot of friends throughout all those banks. I’m confident that a number of the officers made a lot of contributions, generally $100 or $200.” Had he discussed the ICT suit with any Republic officers or directors? “Never have,” he said. W. D. White, Wilson’s Dallas finance chairman, raised $20,000 for his 1956 campaign for attorney general, White told the Observer in Dallas. White, a member of Turner, White, Atwood, McLane, and Francis, said he used to have his office in the Republic National Bank Building; he is now in the Mercantile Bank Building. Wilson said White gave him a list of the contributors to the $20,000 total and that this list was incorporated into Wilson ‘s expense report. May Recover Again disputing Allred’s understanding that he expresed hope that Republic wouldn’t be involved in the suit, Wilson said “The facts were quite the contrary. I was interested in seeing the suit brought … There wasn’t anybody questioning about the bringing the law suit.” He said he took the position at the time that there was “a strong probability of potential recovery” against the banks, following the reasoning of a case while he Was on the Supreme Court involving the Second National Bank of Houston, he said, in which it was held that a bank loan used to form a corporation, “blocked” in the bank for its duration, was held to involve the bank in the liability of the company. “That was the same type of thing involved in some of the banks in Dallas” in ICT, he said. “I told ond National Bank case indicated a strong probability of recovery.” Rotsch called him on obtaining Frank Wilson of Waco to replace Rice, he said, and he told Rotsch if there was liability Frank Wilson would make a recovery on it. “I wouldn’t say now from my previous knowledge of the facts whether there is or isn’t liability,” ‘he said, “but based on the evidence that did come out, I would say there is.” Why had he brought the lawsuit against Allred? “I brought that lawsuit at the request of the insurance boardas their attorney,” he said. The commission told him, he said, that the statute put the responsibility on them: if they didn’t have it, they wanted a ruling to that effect; if they did, they wanted to know that, too. On the ICT suit, Wilson continued: “I think it’s a good lawsuit myselfthat there’s a strong possibility of recovery there if the facts develop as in these hearings; but recognizing that they may n6t have all the facts.” Did Favor Courts The evening after this interview, Wilson telephoned to say: “At the time I testified before the Senate committee on these two different bills, and I think in the preparation of them with Charles Herring, I then said I favored the one which would give the exclusive job to the courts …