ustxtxb_obs_1970_04_17_50_00008-00000_000.pdf

Recall election in Mission Mission A member of the Mission city council accepted a $1,500 real estate fee from Bentsen Development Co. in a real estate transaction in which the city was buying land for a parking lot. The fee was discovered, an uproar ensued, and the councilman returned it. The councilman, Al Ady, is one of three members of the city commission against whom a recall election has been directed and is now pending. The district attorney, Oscar McInnis, said the fee came under the heading of “official misconduct” and required grand jury action. A provision of the city charter was cited, prohibiting any officer or employee of the city from having a financial interest in any contract with the city or any sale of land to the city and defining any such interest as “malfeasance in office.” All this was reported in the Mission Times of Aug. 21, 1969. Lloyd M. Bentsen, Sr., in a letter to the district attorney, said Ady, a Mission real estate dealer, had paid him $1,500, which “represents the same amount paid him as commission” on the $25,000 land deal. Bentsen, Sr., continued: “I am entirely satisfied that Mr. Ady certainly did not know this was a violation at the time he received the commission and I certainly thought it was entirely proper inasmuch as he had a listing on the property probably a year before he was elected to the city commission.” Ady said he had been “negotiating with certain parties on the building long before I was elected city councilman. It was a business transaction and it never crossed my mind that any conflict of interest was involved.” John Shary, a wealthy Valley landowner who lived near Bentsen in the Valley. In November, 1945, Shary died. Shivers, as general manager of the Shary estate, began making arrangements to pay off the inheritance taxes on the Shary land and other interests. Shivers also ran for lieutenant governor in 1946. Nominated in the spring primary, he was elected in the November voting. When the facts came out eight years later events suggested a damaging political interpretation of his land transactions in 1946. Because of the context of arrangements for estate taxes, there was another plausible explanation, but it was in the nature of this alternative explanation that if it was correct Shivers would have been prevented from availing himself of it. The Shary estate sold about 16,000 acres, the Jackson Pasture, to a Bentsen corporation at about $50 or $60 an acre on March 1, 1946. Shivers said in his deposition later that the money just about paid all the estate taxes. A sale thus timed, and with such a low per-acre price, might naturally affect the valuation, for tax purposes, of the rest of the Shary land. Mcllheran, questioning Shivers, asked him point-blank if his $425,000 profit on a second transaction later the same year was not explained in that he had sold Jackson Pastures to Bentsen, Sr., for less than Bentsen was willing to pay for it, and “this option contract was his [Bentsen, Sr.’s] method of paying you back.” Shivers replied, “No, of course, that isn’t true, Mr. Mcllheran.” On May 31, 1946, before being nominated lieutenant governor, Senator Shivers bought from Bentsen Development 8 Co. for $25,000, payable “on or before one year” from the date, an option to buy 13,000 acres of land later commonly known as Texan Gardens. In Dec. 16, 1946, Shivers sold this same option to Texan Realty Co. for $450,000 in eighteen monthly notes of $25,000 each, payable through the first year and a half of his term as lieutenant governor. Presuming his $25,000 cost of the option should be deducted, his profit on this transaction was $425,000. In his later deposition, he said the second sale was consummated in discussions with Bentsen, Sr., and the papers were signed in the latter’s office. Shivers denied the transaction was part of any other debt with Bentsen, Sr. The governor also said in 1952 that he considered the first half of the transaction the sale of an option contract and that he bought the option intending to develop the land for re-sale. He sold the option, he said, simply to turn a profits The developers of Texan Gardens naturally wanted to get river water to it and applied to the Board of Water Engineers for a permit to take water from the Rio Grande. Water districts are often best understood as legal instruments which work the will of the dominant landholders within their jurisdictions. Texan Gardens fell within Hidalgo County water district 16. A public hearing on this district’s water application was held April 15, 1949, when Shivers was still lieutenant governor. There was a flood of protests from existing water districts against this application. The simple rule of the river is, if you let someone new have water out of it, everybody else who already has a right to do it will have less water to share. Shivers to district 16, encompassing Texan Gardens and other land, was granted on Aug. 3, three weeks later. It was, however, a severely hedged permit, in effect authorizing the district to take river water only after everybody with a prior claim got theirs. These matters are of record in the old files of the board. \(It is a twist to be noted here as well as at any other point that by the ruling by the late Judge James Norvell and his two colleagues on an appellate court in the Valley-wide 1956 water suit, this piece of paper has, in the long run, enhanced the value of the Texan Gardens acreage, for instance, by roughly four million dollars, having been made, by Norvell’s ruling, the basis for a first-class water right. An appeal In June, 1950, there began in earnest the lawsuits alleging that the Bentsen interests and others had defrauded buyers by selling them dry farm land, prepared to resemble much more expensive irrigated citrus land. The test case, \(records of which fill two cardboard boxes in the Fort Worth federal Sr., et al. An Iowa couple, Mr. and Mrs. Alvy Polmateer of Shell Rock, filed suit in federal court in Brownsville, trying to cancel the contract under which they had bought a ten-acre tract in Ramseyer Gardens north of McAllen for $525 an acre. They claimed that a land-selling group, Interstate Investment Co.; Lloyd, Sr., and Elmer Bentsen and associated companies and persons; and Homer Ramseyer, who had owned the land, conspired to defraud them. They said they were put up free at a clubhouse near McAllen, shown the land, and told it was irrigated by water conducted through underground tile, that the land would grow citrus trees, that it was in an irrigation district, and that the $525 was standard. These representations, they said, were false. In irrigated economies, run-off irrigation water, or “drainage water,” is carried off in ditches. It is sometimes re-used, but is saltier than river water and is not considered as good for irrigation. The Polmateers said this was the water they were shown and which, when it was used on their citrus trees, killed them. The land was only worth $90 to $125 an acre, they contended. They said the clubhouse was furnished by the Bentsen group as part of a plan to lead them to think Interstate was a reliable, established company when it was not. They alleged that the Bentsen group bought and cleared the land in “the conspiracy with Ramseyer and the Interstate group to sell it to persons from distant places at prices far in excess of its actual value.” Corporations employed were “dummy corporations,” they said. “No sales were made to persons residing in the Rio Grande Valley.” Bensten, Sr., introduced a letter to him became governor on July 11, 1949, with The Texas Observer the death of Beauford Jester. The permit