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SUIT, COUNTERSUIT Austin When Bill Brice and Joe Reynolds took Sissy Farenthold’s deposition on Sept. 23, 1974, they demonstrated a strong interest in Farenthold’s own campaign reports. There was speculation in the Farenthold campaign reporting law was both stringent and confusing and that any candidate, including Sissy Farenthold, might have become entangled in technical violations of the law. At least on the surface, there were parallels between the two gubernatorial campaigns. Both Briscoe and Farenthold took in some contributions in 1973, long before they announced for office or designated campaign managers. A Farenthold appreciation dinner had been scheduled for Dec. 1, 1973, in Austin. The ticket price was $12.50 and checks were to be made payable to Friends of Farenthold, P.O. Box 66, Austin, 78767. ‘But Farenthold cancelled the dinner, because the nation was in the throes of a gas shortage that winter, and she decided she couldn’t ask supporters to drive to Austin during the crisis. Farenthold said in deposition that the purpose of the dinner was to raise funds to reduce her campaign debts. When the affair was cancelled, contributors had the choice of getting a refund on dinner tickets or donating the money to Friends of Farenthold. Was any of the money subsequently used in the 1974 campaign? she was asked. Farenthold said she didn’t know. Creekmore Fath, her campaign manager for both the ’72 and ’74 races kept the books, she said. He would know. Farenthold was also questioned about the Austin office she maintained from the end of her legislative term in January, 1973, until she announced again for governor in 1974. She said that an office staff of two helped her to coordinate speaking engagements and her work as head of the National Woman’s Political Caucus. Farenthold sounded as vague about her financial affairs as Dolph Briscoe himself. Q. I’m trying to find out You were not holding public office at that time, as I understand your testimony. And you were not a candidate for public office at that time. I’m asking you what the source and nature of these funds were. A. Well, you will have to ask him [Creekmore Fath]. I know there was something set up, Friends of Farenthold. And there was an account set up like that. Q. I guess funds were raised by Mr. Fath for this Friends of Farenthold or whatever it was, is that right? A. Yes. Fath never got to give a deposition because the suit was settled. When the Observer called him to discuss the questions raised in the Farenthold deposition, he seemed happy, no, gleefully anxious to talk about Friends of Farenthold. “Not a penny of the Friends of Farenthold money was spent in Sissy’s campaign,” Fath said. “I kept all the books and accounts, and I can assure you we didn’t use any of the Friends money in the campaign. We set this thing up to raise money on the 1972 debt, and we defrayed over $60,000 of that. The whole ’72 debt was wiped out, one way or another, and we came out of the 1974 campaign with no debts,” he said. At any rate, had the suit not been settled, Farenthold might well have been countersued by Dolph Briscoe. Both Brice and a source close to the Farenthold attorneys said they believe that Joe Reynolds was going to prepare such a suit. K.N. Farenthold was convinced to settle, why the lawyers wanted to settle is extremely difficult for the Observer to answer. We have some facts and a lot of clues, but we’ve had to do some creative mingling of fact and speculation to come up with an explanation. It seems fairly obvious that from Farenthold’s point of view the decision was politically and personally difficult. It just wasn’t the sort of thing Farenthold would normally do. From her lawyers’ point of view, there would have been various rationales for settling. First of all, there just wasn’t enough money to carry the suit forward. Farenthold didn’t have the money and neither did they. Needham and O’Rourke is a young and struggling firm. Neither Needham nor O’Rourke nor any of the attorneys who later joined the firm is independently wealthy. The lawyers were not in a position to personally finance the suit, even if they believed the suit would pay off in the end. There would have been another reason for settling if they thought they were going to lose the suit. A third possible reason could have been that the lawyers thought they might win down the line, but saw that the amount it would take to try the case would be equal to or more than the amount they could get in settlement and “reasonable attorneys fees.” The Observer gets the impression that the Farenthold lawyers thought they had or could in time develop a pretty good case. One cource close to Needham and O’Rourke insists that if anyone in the firm had had the personal funds to continue the suit, it would have been continued. \(But if the case was good enough to win at double damages for Farenthold plus attorneys fees, a skeptic might argue, then Farenthold and the attorneys should have been able to raise money for the suit, purely on the basis that These lawyerly considerations get very complicated. The Observer is not competent to judge the legal merits of the case because, for one thing, we don’t know the law well enough and, for another, we are not sufficiently acquainted with the information developed by the attorneys. One thing seems fairly certain: the pre’73 campaign laws were sufficiently full of loopholes to make it very hard to take any action on ’72 violations \(and, besides, the statute of limitations in the civil matter some serious quirks in the ’73 campaign reporting law. It is the Observer’s understanding that the attorneys went to Farenthold a number of times to ask her permission to probe the possibility of a settlement with the defendants. At first she was adamantly opposed to settlement and angered by her lawyers’ willingness to contemplate it. It is alleged that for a time she refused to even speak to them. Eventually, though, they laid out four alternatives to her: get more money and pursue the suit \(Farenthold, on a number of occasions, reportedly said she just couldn’t raise the go to trial right away and lose the suit on technicalities, drop the suit, settle out of court. Given these four alternatives, there wasn’t much choice but to settle. Farenthold will not talk about the suit. It is a very painful subject to her. She does concede, however, that it was impossible to continue the suit without additional funds. BRICE SAYS, “The first overtures were made by Needham to me in December. Needham talked to me about a separate settlement of the Hay matter on what he described as a ‘nominal’ basis.” At that point, however, Hay was linked to defendants Briscoe and Kilgore in the suit. August 22, 1975 9 -Kme ,voloolearktro,–,Arie*.tev _ ,04104fflphten …1.\(00144k441000r..swok