ustxtxb_obs_1978_03_31_50_00013-00000_000.pdf

The editors and the tax man While Lubbock Avalanche Journal reporter Jeff South was ferreting through city-school tax records to see which governmental officials and local political candidates were delinquent on their taxes, he also found a number of executives of his own newspaper who hadn’t satisfied the personal property tax collector. Never a pot to call the kettle black, South dutifully wrote a sidebar about the errant editorsand an advertising executive. The story about the candidates and office-holders was bannered Feb. 16. The story about the news executives never made it. Reportedly, advertising director Carl Cannon ponied up his back taxes while the sidebar floated through the upper levels of the A-J , but managing editor Burle Pettit shrugged, “I didn’t know a damn thing [about the story].” According to tax office records, the m.e. owes more than $250 for the years between 1961 and 1977, and has an abstract of judgment filed in the courts for some of the taxes. Executive editor Dave Knapp was succinct. “We didn’t run it [the sidebar] because we’re not public officials.” Asked if that wasn’t a bit like lobbing boulders from a see-through villa, Knapp, who’s listed as owing $33.24 back to 1974, said, “I don’t know. You just asked me why we didn’t run it.” Cliff Avery Are bankholding companies against the law? One of the major questions facing Texas’ next attorney general is whether bankholding companies exercise so much power over their member banks that they violate the state’s constitutional prohibition against branch banking. The Observer asked each of the four candidates for attorney general to comment on the matter, and we reproduce their replies for your edification: ‘ATTORNEY GENERAL I am sorry that a change in my schedule prevented our meeting recently and since my future schedule keeps me out of town a great deal, I felt it would be better to answer the question you submitted to me in writing. “If elected Attorney General, I would certainly give this matter, along with a comprehensive review of the operations of the entire office, a very thorough study.” FRED REYNOLDS By a careful examination of the laws of Texas, starting with the Texas Constitution, and by applying normal business operations to bankholding companies, one can reach the conclusion that such companies are illegal. At present, I understand that certain agencies of the state government are alleged to be studying the problem of whether bankholding companies are legal or not. The usual practice of not coming to grips with an issue is to set it down for more studies. Just keep studying the question, that way you don’t have to take any sides. The fact remains that Texas’ bankholding companies are directing the operations of many banks in the state. You even see TV commercials that use the term “bank family” when applied to the parent bank and other members of a holding company. Just because these companies are illegal does not mean that the law will be enforced. If the law is to be enforced, the issue must become a political issue. JIM BAKER FOR ATTORNEY GENERAL If elected Attorney General, I will review the evidence gathered to date, as well as any facts which might later come to my attention, in order to determine whether a full-fledged state investigation of bankholding companies is warranted. If elected Attorney General, I would, of course, resign as a Director of Texas Commerce Bancshares, just as I did before to serve as Undersecretary of Commerce of the United States. In any matter involving Texas Commerce Bancshares, I would disqualify myself since I have a substantial stock interest in TCB. This is analogous to John Hill’s situation with regard to Allied Bancshares, in which he owns substantial stock. In any case, my disqualification would not hinder any proceeding since the First Assistant Attorney General would take over pursuant to the statute which provides for this. The problem of entrenched power growth, including that of state government itself, is an area in which the Attorney General has special responsibilities. Should any clear violation of the state’s branch banking prohibition be brought to my attention as Attorney General, I would aggressively pursue the matter in court. I will also be prepared to represent the State Banking Department with vigor in any action it may decide to bring. PRICE DANIEL,JR FOR ATTORNEY GENERAL As a general rule, whenever a citizen presents facts that appear to constitute a violation of a statute or provision of the Texas Constitution, it is incumbent upon the Attorney General as the people’s lawyer to look into the matter. This procedure is crucial to the performance of such divisions as environmental and consumer protection, which by their very nature rely on citizen complaints. This general rule should and in my opinion does apply to branch banking specifically. What the public can demand of their Attorney General is constancy and diligence in ensuring that bankholding companies stay within bounds. As the public watchdog the Attorney General also enforces state and federal antitrust law, which can itself be utilized to deter too great a concentration of power in the financial marketplace. But the Attorney General does and must handle such matters on a case-by-case basis and cannot resort to a shotgun approach against an entire industry. Likewise, the Attorney General cannot arbitrarily overturn the guidelines set forth in our Constitution and statutes, and the relevant case law. Nor would any court in Texas, practically speaking, approve a wholesale dismantling of bankholding companies. THE TEXAS OBSERVER 13