ustxtxb_obs_1998_10_09_50_00015-00000_000.pdf

Dewhurst answered, “Because I didn’t think it was material.” In his lawsuit, Garcia further claimed that Dewhurst overcharged Garcia for his interest in the wells, and illegally commingled the invested funds with Falcon Seaboard operating moneys, and thereby “embezzled” the money and used it “to fund the essential steps necessary to establish a co-generation plant at Big Spring, Texas.” \(Dewhurst had declared bankruptcy several years earlier, and it appears that he needed outside money cia’s claim of commingled funds, and Garcia contended in his lawsuit that Dewhurst personally acknowledged the diversion of Garcia’s money and promised him an interest in the co-generation plant but later reneged on the deal. Garcia was left with tax liabilities he could not pay, and Dewhurst lent him the tax money, demanding in return that Garcia release his legal claims against Dewhurst and Falcon Seaboard concerning the wells. Garcia initially agreed to do so, but when he read the broad terms of the release drafted by Dewhurst’s attorneys, he refused to sign. In a letter filed as evidence, Garcia wrote to Dewhurst, “As to the release that was submitted to me by your attorney, it presumes that I am either stupid or a fool, but what hurts the most is that it is criminal what your [sic] are trying to do to my family.” Shortly thereafter, Garcia sued Dewhurst and Falcon Seaboard return of his invested funds and an interest in the co-generation plant. According to court papers, Dewhurst countersued, and then delayed the case for several years. \(In his countersuit, Dewhurst alleged that Garcia initiated his complaints about the operation of the Trey-Karen wells simply in an attempt to get his investment back from Falcon Seaboard, and that Garcia had agreed to release all claims against the company in return for $150,000. In July of 1991, the parties finally settled. Under the terms of the settlement, Dewhurst and his company admitted no intentional wrongdoing, but Falcon Seaboard acknowledged “unknowingly and unintentionally” misinforming Garcia about the true nature of the oil wells. Dewhurst escaped individual liability, but Falcon Seaboard paid Garcia a total of $1.2 million in recompense for economic loss and personal injury. \(The parties had earlier signed an “Agreed Protective Order,” declaring confidential all materials and testimony produced in discovery. But the n his campaign literature, David Dewhurst describes himself as / “an early developer, in the mid-1980s, in the cogeneration business,” where he “earned a reputation as an innovative successful businessman.” The case of Arnold Garcia v. Falcon Seaboard Oil Company, et al. casts a harsh light on that reputation and the sort of “innovation” it may in fact describe. In a 1990 affidavit to the court, Arnold Garcia recalled a spring 1986 meeting in Pampa with Dewhurst and his staff, in which Garcia learned for the first time that the Trey-Karen wells were not producing, that he had been overcharged for his working interest in the wells, and that the wells were not in compliance with oil-well regulations indeed, that they were effectively not oil wells at all. Gar cia’s affidavit continues: After that meeting, Dewhurst apologized to me, acknowledged that he had agreed to take care of me and my family by protecting our interest, but asked for my forbear ance. Dewhurst said, “Arnold, I’m sorry. What can I say? Please don’t file a lawsuit. Give me time and I will make things right…. I will find a way to take care of you and your family. I know you need it. I promised that I would protect you and your family, and I fully intend to do so….” According to Garcia, at that time Dewhurst promised him a significant ongoing interest in his cogeneration project, as well as the loan necessary to fulfill his upcoming tax obligations, if Garcia would waive claims against the operation of the Trey-Karen wells. But throughout the rest of 1986, Garcia claimed, the money was not forthcoming, and Dewhurst persistently reduced the promised amount. He finally delivered only a portion of the funds, on the final day of the 1987 tax deadline, when Garcia was desperate. In return, Dewhurst demanded that Garcia release any and all claims against Dewhurst and Falcon Seaboard. Garcia refused and filed suit, claiming that David Dewhurst had abused Garcia’s trust, taken his money under false pretenses, used it without permission to his own ends, and then refused Garcia his rightful share in the profits made from his money. Four years later, Garcia was effectively vindicated by the settlement, although of necessity he relinquished any interest in the co-generation projects which had since made David Dewhurst a very rich man, a major underwriter of the Texas Republican Party, and a leading candidate-by-default for the post of land commissioner responsible, among other things, for protecting the oil and gas interests of the people of Texas. lusine&s Approach ‘ative proven savvy of a conservative OCTOBER 9, 1998 THE TEXAS OBSERVER 15 I