ustxtxb_obs_1971_08_27_50_00007-00000_000.pdf

The Barnes Factor Dallas It was late Wednesday afternoon, Aug. 11, in a Houston courtroom when SEC attorney James Sims began a new line of questioning with the witness, Frank Sharp. Sharp told Sims that after the now-famius banking bills had been passed and before Preston Smith had vetoed them, John Osorio appeared in Sharp’s office, sat himself down and said, “Well, Ben delivered for us.” “Are we obligated to him the same way we are to the others?” Sharp asked Osorio. Osorio replied that he was afraid the office might be bugged and suggested that they go for a walk. They went for a stroll on the Sharpstown Mall and Sharp again asked Osorio, “Are we obligated to Barnes the same way we are to the others?” “No,” Osorio replied. “He’s smarter than the others: he wants his in cash.” At that point the testimony ended for the day. It was, of course, incredibly damaging to Barnes at that point. Word of Sharp’s testimony began to spread almost at once. There were more than a dozen lawyers in the courtroom when Sharp gave his testimony and some of them had tape recorders. They represented the other defendants in the SEC suit. As far as the Observer can determine, the first news medium to get the story was The Dallas Morning News. News reporters called Robert Spellings, Barnes’ executive assistant, Wednesday evening. Spellings apparently knew of the testimony when he was called and was “crawling the walls,” according to one source. Spellings reportedly located Barnes that night and the two of them prepared a statement and Spellings gave it to the News, emphatically denying the implications of Sharp’s testimony. Later that night, they prepared another statement. According to some Observer sources, UPI was either giv,en the statement or was told they would get it. Spellings expected the story to break in the Thursday morning editions of the News, so that it could be picked up late Wednesday night by the wire services. Kyle Thompson, UPI bureau chief in Austin, told the Observer Thursday that UPI had not been given any release from Barnes’ office and that no word of any such release had been sent out on the wire. However, according to other newspaper sources, the UPI budget carried an item Wednesday night that read: “450 words, Barnes denies Sharp’s allegations.” Since the story was not in the News, there was no call for UPI to carry the denial. THE TOP management at the News reportedly decided Wednesday night of the story could not be identified. The News thus lost one of the biggest beats Photo by J. R. Compton, Hooka Barnes at Dallas Press Conference. year. By noon the next day, word of Sharp’s testimony was flying all over the state. Everett Collier, editor of The Houston Chronicle, told several people that he had received more than a half dozen phone calls about it by 9 o’clock Thursday morning. But the Chronicle did not break the story in its Thursday afternoon edition. By the end of Sharp’s testimony Thursday, the picture was considerably less bleak for Barnes. Had the story been broken on Thursday, it would probably have been a mortal blow to Barnes’ career, since even the later testimony would not have mitigated the harsh impact of that first testimony in the public mind. However, Sharp’s Thursday testimony cast considerable doubt on the “payoff” theory. It became clear that Sharp had no first-hand knowledge of Barnes having done anything for the banking bills. Sharp was only repeating what Osorio had told him. Sharp also indicated that Osorio had said that Barnes’ $60,000 loan at Dallas Bank & Trust_ had been arranged as consideration for passage of the banking bills. The media and the public have known about that $60,000 loan for months. Although there are still unanswered questions about the loan \(see story this contained was the allegation that the $60,000 loan was a payoff, and that allegation was based on Sharp’s recollections of his conversations with Osorio, not on personal knowledge. IN THE MEANTIME, Barnes’ people were preparing to offset the impact of Sharp’s testimony. Someone in Barnes’ camp \(Barnes identified him only as “a testimony to New York and showed it to John Osorio. According to Barnes’ people, Osorio scribbled in the margin “Cheap trick. Part of SEC script. Nothing like this ever took place with Ben.” \(Or at least that was the most often-repeated version of what he scribbled two other versions are While Spellings was denying to the Observer that he knew anything about the matter, he was giving statements to the News, The Houston Post and The Austin American, all of which carried the story on Friday morning. It should be noted here that the SEC hearings in Houston are not grand jury proceedings; the participants are not, according to our sources, sworn to secrecy. Judge Sarah Hughes has ordered that newsmen not be permitted in the hearing room; however, all the testimony at the hearings is eventually filed on public record anyway. It is difficult to sympathize with Barnes’ charge that word of the testimony is being deliberately leaked in the most damaging manner possible to harm his reputation. The Observer has been able to obtain bits and dribbles of information from various sources who are clearly not acting in concert. While the testimony being given in Houston is now or soon will be a matter of public record, it should be noted that even if it were not, it is still considered good journalistic practice to print even secret testimony if you can get it from a reliable source. One of the more recent cases in point was in Chicago. All the Chicago papers printed leaks from the grand, jury investigating the death of Black Panther leader Fred Hampton. There is some confusion at this point as to whether Sharp’s immunity, granted him by the Justice Department in exchange for his testimony, extends to perjury. Barnes said during his Friday press conference in Dallas; “He’s [Sharp’s] been granted complete immunity from everything. Now, the federal government has a right to remove this immunity anytime they want to, but right now he’s even immune from perjury.” Attorneys with whom the Observer has talked do not believe that immunity can be extended to cover perjury on the witness stand, but, to our knowledge, there has been no clarification of that point from the Justice Department. STILL ANOTHER point to be considered in Barnes’ denials is that he has impeached Sharp’s credibility on the August 27, 1971 7