Page 10


GALLERY 600 Contemporary Paintings, Sculpture, Prints THE FINEST TRADITIONAL FRAMING Custom Plexiglass and Custom Welded Frames 600 West 28th at Nueces . . . phone 477-3229 contingent on the remainder of the cost being contributed by the owners. Schwartz gives this account of the matter: He learned from Shearn Moody, his client, that an option to buy the hotel for between $700,000 and $800,000 had expired. The cost of new state office building space is four or five times as high as the cost of such space would have been in the hotel. Schwartz says he told the members of the conference committee, “in open session people were coming in and out” about the availability of the hotel and that it might be a good deal for the state. Schwartz’ second major self-defense is that he told everyone that Shearn Moody, his client, “could in no way benefit in any way.” The hotel was owned by the National Hotel Co., which “was virtually bankrupt and so is selling things off to pay the creditors.” The company is four-fifths owned by the Moody Foundation and the Libby Shearn Moody Trust, one-fifth by the Moody family, including Shearn Moody. Shearn Moody, as a director of the Moody Foundation and as a life income beneficiary of the trust, would not benefit, Schwartz contended, because the money would go to the hotel company to pay its creditors. Shearn Moody owns stock in the hotel company “which is worthless and has been for 35 years,” and, Schwartz said; “Shearn has no liability to the creditors” of the company. Schwartz concludes his\\ defense on this aspect of the matter, “Shearn couldn’t benefit that was absolutely, irrevocably impossible for Shearn to have benefited by a dime.” “All of this was discussed with the conference committee in open meetings in which I repeatedly made the point that I had no pecuniary interest nor could my client benefit in any way by such an acquisition by the state,” Schwartz writes in his memo. Gov. Preston Smith vetoed the item, Schwartz adds, because the state building commissioner said it would be too expensive to get into it, “which is all right.” What about the reference to Schwartz as a “lobbyist-lawyer” for Shearn Moody? Schwartz concedes he advances his clients interests in relationships with his fellow senators. He said, however, that he “follows the rules” and never votes on legislation directly advancing those interests. “Katz could have done me the courtesy to have picked up the phone and talked to me,” Schwartz said. 5 The book contains this reference to Sen. Charles Herring of Austin in the context of Herring’s upholding of Elmer Baum’s nomination by Governor Smith to the State Banking Board: “In off-season, Herring is a banking lawyer who does considerable business before the board. If he were to help Barnes by turning thumbs-down on the Baum appointment, it is likely that Preston Smith’s substitute appointee would make sure that Herring received very few charters from the Banking Board.” Herring replied by letter: “The quotation to the effect that I am a banking lawyer who does considerable business before the Banking Board is completely false. I have never presented a case to the Banking Board in my life. My firm has handled several charter applications over the last ten years, and I cannot recall the board having granted a single one which was contested. The firm has been employed from time to time to oppose charter applications by competing banks and we have been successful in some of these and lost some.” Herring said he does not know who Katz is. 4 Katz states that according to an U unnamed member of a named lobbyist’s “lobby group,” the named lobbyist “made clear on several occasions that he was ready to employ threats and bribery to secure favorable treatment from the Legislature.” A letter asking the named lobbyist for comment, sent to the mailing address provided on request by the office of the governor, who had proposed the man for a state appointment, had elicited no reply two weeks after it was sent. 1-7 There is a chapter in the book on Iwater districts as boondoggles. In this chapter, Katz quotes an unnamed state representative that “If you’re selected to sponsor one of those water bills, you get a fat campaign contribution for the next election. The most common figure is $750.” Katz also quotes an unnamed employee of the State Water Rights Commission, “You hear it too much for it to be just a rumor. Two thousand dollars, split between the lawyer and the sponsor of the bill.” In the ensuing paragraph, there are opaque references to a named state representative “with expensive tastes and large ambitions.” Later on, Katz refers to “a Legislature that will pass a bill for $750.” Since this is as far as the book goes as to the named state representative, I could not think what to ask him and so did not write him, although it is a matter with an affinity for the others with which this report is occupied. 0 Katz writes, “Glen Castlebury is a o popular Texas columnist who writes for the Austin American -Statesman. The major reason for his popularity is his unabashed and blind loyalty to the conservative Democrats.” Castlebury says he has never voted for a Democrat in a general election and his credentials as a Republican are so unsullied, he has been a delegate or alternate to every state Republican convention since 1964. He also writes, “I was fired from the American -Statesman because of the paper’s paranoia over my willingness to see Harold Davis, Wilson Foreman and Don Cavness gutted and laid bare. There are lots of stories about my firing, but that’s where it is.” Davis, Foreman and Cavness are conservative Democrats. n During a review of Texas history in 7 the book, Katz writes that once Jim Hogg was elected governor of Texas, he “found the spoils of office too alluring. He threw his campaign promises into the wastebasket and joined the conservative Democrats and corporate lobbyists.” Hogg won re-election, Katz continues, “but he stained the ballot box with murder, fraud and the most terrible atrocities. While he was in office, Jim Hogg became exceedingly wealthy. He certainly remains the most notable sell-out in Texas history.” Katz does not give his sources for this information, or further details. I did not write to Hogg. R.D. Sept. 8, 1972 13