ustxtxb_obs_1994_01_14_50_00012-00000_000.pdf

LOUIS DUBOSE Kay Bailey Hutchison tributions would later become a key detail in his conspiracy scenario, as spelled out in the lengthy chronologies he distributes to reporters. Hutchison claims Graham along with Mattox had leaned on Bowden in the controversial car discussion to sign an affidavit stating that Kay had promised him a Treasury job in exchange for his endorsement; the secret contributions, with questionable legal status, would explain how Graham was.in a position to pressure Bowden. But Hutchison’s chronologies strip the contributions of their connection to the prison deal in which Bowden, far from being reliant on the Grahams in the future, was receiving their support because of the valuable favor that he had already done them. At the time they were offered, the Grahams’ $25,000 commitment to Bowden served the interest of both the brothers and Ray Hutchison by getting the prison deal passed in San Saba County. The former county judge says he never told Hutchison about his deal with the Grahams. But if Hutchison didn’t know about that particular irregularity, he had other reason to have taken a more skeptical look at the entire set of prison deals in his position as bond counsel to the counties: One participant in the prison financings suggests that Hutchison had reservations about the Grahams’ practices before the deal was sealed but kept them behind closed doors.At a Houston meeting between Hutchison and the Grahams, the bond lawyer dressed down the brothers and threatened to call a halt to the whole deal according to C. Wade Clifton, Jr. a consultant at Southwest Econometrics, who performed the feasibility study for the prisons and is also named as a defendant in the bondholders’ suit. In an interview, Clifton says Hutchison didn’t explicitly name the brothers at the beginning of his meeting tirade, but was staring directly at the Graham brothers as he finished. “Let me get one thing out,” Hutchison blurted, according to Clifton. “Some people are running around making promises. It’s got to stop or this whole thing is going to stop.” Clifton says Hutchison was referring to claims the Grahams had made to investors and county officials that out-of-state inmates might be used to fill the for-profit prisons an unlikely prospect. Although Hutchison yelled and screamed, he never halted the deal. Had he done so, his firm wouldn’t have gotten paid. Hutchison had other reasons to question and perhaps terminate the transaction. In a June 15, 1989, letter, Brent Bailey, a lawyer at Mark White’s firm, then acting as bond counsel on the transaction for the investment banking house Drexel Burnham Lambert, asked the Grahams to detail their agreements with the construction contrac for scheduled to build the prisons in all six counties. In a response dated four days later, the Grahams pointedly avoided revealing precisely how much money would change hands. They stated instead that their company “shall receive a fee” without specifying the amount. Hutchison’s firm received a copy of both the query and the limited response. Had the Grahams answered Bailey’s questions explicitly, they would have reported that the arrangement called for the contractor, H.A. Lott which built the Astrodome to give the Grahams’ company 10 percent of the roughly $48 million it was to receive for building the six prisons. The payments, totaling $4.8 million, represented a kickback to the Grahams, provided by H.A. Lott in return for being awarded the construction contracts on an exclusive and noncompetitive basis, the attorneys for the bondholders would later allege in their pleadings. Asked at his deposition in July about his response to the correspondence and the missing information from the Grahams, Hutchison testified: “I didn’t do anything because that letter was not addressed to me.” His firm had received a copy, the bondholders’ lawyer noted. “Well, I understand but my responsibility is not to question disclosure in the transactions. When you describe the when you see a description of the things they’re going to do and I frankly don’t recall this exhibit, but it may very well have been on. I don’t suggest it’s not but I just don’t recall it but this doesn’t look like 10 percent of the cost frankly.” All told, if Hutchison harbored concerns about the Grahams before closing the prisonbond deal, he didn’t convey them to county officials. In August 1989, he visited county officials to settle the final details of the bond transaction. Frank Baker, president of the Pecos County Jail Commission the countycontrolled structure established to finance the prison recalls that Hutchison was still talking in bullish terms about the project when they had lunch. He didn’t stay on the subject too long, however, Baker says. Instead, he monopolized the conversation at the meal with musings about his wife’s next political move. “All he wanted to talk about,” Baker says in a telephone interview, “was that she was going to run for state treasurer.” On August 23, 1989, Hutchison traveled to Pecos County for a signing ceremony celebrating the creation of the Pecos County Jail Commission a last step before sealing the bond deal. In a picture displayed on the front page of the local newspaper, the Fort Stockton Pioneer, Ray Hutchison and Patrick Graham beam from the back row of a group shot. According to the newspaper’s account, the bond attorney used the occasion to once again tout the private prison concept to the assembled county officials. “This is the last stages of planning underway to help with the prison overcrowding and your local economy,” the paper quoted Hutchison saying. The lawyer predicted, according to the paper, that the demand for the prisons would be so great 12 JANUARY 14, 1994