Page 14


Caveat Emptor Continued from Cover tant AG, was interviewed by Sam Donaldson of ABC News, invited to testify before a Congressional committee looking for mechanisms to regulate non-profit hospitals and abruptly fired by Morales. W. Scott McCollough, the head of consumer protection’s public agency representation section who, according to the Texas Lawyer, last September “had argued for state agencies in a key utility ratemaking case before the Texas Supreme Court” was given several hours notice to clear out of his office. When told he had less than a day to tie up the loose ends of 10 years with the Attorney General’s consumer protection office, McCollough told First Assistant Attorney General Jorge Vega that he was working on 92 cases, many of which involved arcane utilities and communications law. McCollough said he pleaded with Vega for at least one additional day, as he had a trial scheduled the following morning at 9 o’clock and there was a possibility that the case, involving rate structures and $5 million in benefits for the state, could be settled. Vegawho dismissed most of the attorneys generals that were sent packingtelephoned McCollough latter the same day to tell him that he had discussed his request with Morales: “I met with the, with Dan and we discussed what we had talked about this morning. And we’ve decided that we are going to go ahead and proceed with your termination, effective today … Before you leave today, you could go visit with Tom Perkins and turn over your keys and whatever else you think you need to give him,” \(McCollough, expecting the ax to fall, taped and transcribed his conversations Others who left the agency were Mary Keller, a first assistant attorney general who moved on to the Department of Insurance; Rose Ann Reeser who had directed the charitable trust division; Stephen McIntyre, director of the consumer protection office in Lubbock, who made news when he intervened with the Federal Reserve Board in a bank acquisition and compelled the new bank owners to provide $25 million in credit in the minority community, and to stop all redlining practices; Gary L. Bledsoe, a 14-year veteran and director of the civil rights division; Nancy Lynch, who headed Morales’ environmental division until she was fired, and Steve Gardner, director of the consumer affairs protection of fice in Dallas. “Dan Morales didn’t gut the agency when he took over,” his press secretary Ron Dusek said in a telephone interview. “He gave nearly everyone the opportunity to show that they could adapt to his style, that they could promote his agenda. It took him two years of watching the agency slowly before he could see what he wanted to do.” What Morales wanted to do with consumer protection, Dusek said, was file lawsuits that helped “the little guy.” “Some people,” according to Dusek, “resisted and wanted to continue to do the “high-profile, press-generating” cases against cereal companies rather than the nursing-home cases that are filed day after day.” Those people, Dusek said, all “at-will employees,” had to go. Many went quietly to other government agencies or private practice, leaving Morales or his press office to explain what happened. Some, particularly those who moved to other government agencies where they could use the subspecialties they developed working for the AG, are reluctant to talk for the record. Others, now in private law practice, are more outspoken. “Absolutely untrue,” Crews said when asked about employees in his division resisting Morales’ attempts to remake the agency. “Nobody ever received any notice that we were doing anything wrong … I would talk to Dan before I would take on one of these wild-eyed notions. I would give him all the caveats, warn him that we were going to piss people off, tell him `You’re not going to like some of the problems this will create.’ He never once said, `that’s a little too far out there, let’s not do that.'” In fact, Morales’ hiring of Joe Crews suggests that the AG did not initially intend to shut down his consumer protection division. Crews had established a reputation as one of the state’s more progressive lawyers and when first interviewed by Morales he laid out an aggressive consumer protection agenda, suggesting that he would push the division harder than it had been pushed under Jim Mattox. \(The staff at consumer protection came to refer to his e-mail messages encouraging them to pursue investiCrews would later encounter Morales’ lack of enthusiasm for what Dusek might describe as a “high-profile, press-generating case.” After Lubbock consumer affairs attorney Steve McIntyre intervened with the Federal Reserve Board and compelled a Minnesota bank to end redlining in a Texas bank it was acquiring, Crews said, “There was not even a press release. He didn’t seem to want any publicity.” Nor did Morales want to push the bank to do anything more that it had readily agreed to do. “Steve wanted a permanent injunction and 15 to 20 million more in lending [in the minority community that had been redlined]. We were told ‘no,’ to take what was offered and shut down.” WEN ASKED TO respond to Dusek’s account of Morales’ program to change the way the agency, and in particular the consumer protection division, operated, every former assistant attorney general interviewed for this story \(some on the record and others off the “That simply never happened,” McCollough said. “And if it were true, what’s the point? The point isn’t that we had two years notice. The point is that he wanted to create folks that wouldn’t be aggressive and take on utilities, that wouldn’t take on insurance companies, that wouldn’t do health-care cases. It would have taken me longer than two years to learn that system.” “Mattox would always tell us to push, push, squeeze, squeeze,” said Ed Salazar, who has sued Morales over his firing. “We were the good guys, we were suing on behalf of consumers. And our office made money for the agency.” Like the other former assistant AGs, Salazar said he never got the word from “the eighth floor” that he should be anything but aggressive in his pursuit of consumer protection lawsuits. “If anything, we were being given the green light,” Salazar said, producing an e-mail printout from his supervisor, dated less than a month before Salazar was firedurging him to “Push!” THE TEXAS OBSERVER 5