The Silence of the Dan

The AG Keeps a Lid on It

During the final days of the last legislative
session, Representative John Hirschi was fed up with the Attorney General's (AG) Office. Frustrated by his inability to obtain the agency's internal financial analyses of the potential costs of a major piece of pending legislation, Hirschi made a final attempt. He called Deputy AG Drew Durham to his office, and, in an ironic twist, demanded that he fork over the goods under the Texas Open Record Act - the very act for which the AG's Office is chief enforcer.

"I became aware of the fact that I could use the Open Records Act to get what we wanted," Hirschi says. "We felt we needed that information to make an informed decision on a major bill."

Durham balked, Hirschi recalls, and tried to dissuade him from seeking the reports, for two reasons. First, it would compromise the agency in a lawsuit with another party seeking the same information, and second, because the information the AG's lawyers had gathered on the financial impact of Senate Bill 14 was exaggerated.

But Hirschi refused to back down. Not that it did him any good - the AG subsequently delivered a batch of documents so heavily censored with black ink, the papers would have been laughable had they not been such a startling attempt to hide the truth. Rather than satisfy Hirschi, the redacted materials piqued his curiosity even more.

"It just confirmed our suspicions that [the AG's staff] had come to the conclusion that there would be substantial costs to enacting SB14," Hirschi says.

What did Attorney General Dan Morales have to hide? Judging from other recent Open Records Act disputes and allegations that one of Morales' top brass may have lied under oath, critics say plenty.

"All these attempts to hold back information clearly and sadly show that rather than being the lawyers for the people, the AG's office is now serving the political interests of one person: Dan Morales," says James Marston, the director of the Environmental Defense Fund's Southwest office.

Marston says the proof lies in Morales' attempts during the last legislative session to keep lawmakers, public policy experts, and reporters from getting their hands on internal reports the office had prepared on the fiscal and legal consequences of SB14, otherwise known as the "takings" bill. Morales fought tooth and nail to keep his agency's internal predictions concerning the cost of the takings legislation from seeing the light of day, even as some lawmakers, like Hirschi, clamored for access.

But why? After all, the other state agencies that were asked to predict the financial ramifications of the then-proposed legislation handed over their information without a fight. State employees at the AG's Office using taxpayers' money had gathered information on the possibly profound impact that pending legislation might have on landowners, ranchers, and industry and environmental regulators alike. What right had Morales to hide that information?

Several lawmakers and policy-watchers have come to the conclusion that Morales did not want to provide info that might have obstructed passage of the takings bill because it was backed by the powerful property-rights crowd - a group with which Morales has increasingly aligned himself. "One would have to assume that [Morales] thought the legislation was okay, and didn't want to provide any information that would have damaged the chances for passing the bill," says Hirschi, a Democrat from Wichita Falls who opposed SB14. "I was very dissap-pointed in the position and attitude [the AG's office] took... but this is politics, let's not forget. [Morales] has to run for office."

The takings bill, which was drafted by cattle business interests and sponsored in the senate by Senator Teel Bivins, a rancher with a large spread in the Panhandle, was heralded by property rights activists. The law creates a new legal avenue for property owners to sue governmental agencies that enforce a regulation which devalues their property, or even a small part of their property, by 25%, otherwise known as a "taking." Before the takings bill, which will go into effect next month, the only redress property owners had was to file a hard-to-win takings suit under provisions in the U.S. or Texas Constitutions.

SB14 also provides that, if a property owner wins a takings suit, the agency enforcing the regulation devaluing the property can decide to overturn the said regulation, or continue to enforce it and pay damages to the owner. Sponsors of the bill argue that the purpose of the legislation is to keep government from making overly stringent environmental rules that don't make sense in a "look before you leap" analogy. However, opponents counter that the bill's goal is to intimidate government agencies from enforcing environmental, health, and safety regulations with the threat of costly litigation.

During the legislative battle over passage of the bill, opponents of SB14 hoped to reveal that the cost to local governments and taxpayers from the resulting boom in litigation caused by the takings legislation would be too high. Mary Kelly, director of the Texas Center for Policy Studies (TCPS), a non-profit environmental research group based in Austin, took it upon herself to try to pry the AG's internal memos from Morales' tight grip. Kelly sued the AG for the information last May, in the middle of the legislative session, under the Texas Open Records Act. The absurdity of the situation - the fact that the AG is charged with enforcing the open records requirements as they apply to state agencies - was not lost on Travis County Judge John Dietz, who presided over the dispute. During a hearing, Dietz asked a representative from the AG's office: "Is there any irony that the Attorney General, chief enforcement officer for [open records], says that these records aren't public?"

Dietz was also compelled to comment on the fact that, if the public knew that it would cost the agency $1 million to administer the law as opposed to $1, support for the property-rights legislation might wane considerably. Just before the open records hearing began, an assistant AG tried to head off Kelly and the TCPS with censored versions of the reports, but Dietz ruled that the AG did not provide "any legally recognized privilege or exemption,'' and ordered Morales to hand over the records immediately. But the AG employed an old lawyer's trick to buy more time: His office appealed. According to the agency, the information that AG staffers had gathered on the effects of the takings bill was merely "opinion,'' and thus not discoverable. Despite the agency's efforts, the drumbeat for the secret records grew louder. A group of 30 legislators of the progressive Legislative Study Group (LSG) followed Rep. Hirschi's lead with records requests of their own. According to LSG Executive Director Gary Keith, the LSG members believed that the AG's in-house study of the legal and fiscal consequences of SB14 was crucial to a knowledgeable debate on the house floor. But the AG's office refused to help them out. Again, as chief enforcer of the Open Records Act, the office got to rule in favor of itself to withold the documents. The agency did finally release its internal reports - which predicted millions of dollars in litigation costs for local governments - 30 minutes after the House debate was over. The bill passed by a 91-44 vote.

"The whole reason for getting information is to be well informed," Keith says. "What [the AG's failure to produce the documents] meant was that the most significant round of debate happened in an air of ignorance and suspicion." After the legislative session was over, the AG's Office settled its lawsuit with Kelly, and agreed to pay the TCPP's $19,000 in legal fees. Sonya San-chez, a public information officer with the AG's Office, says that the agency did not release its internal reports because, according to the Open Records Act, certain "advice, opinions, and recommendations" in agency memorandum are excepted from disclosure. "We are also protected by the same laws that apply to other governmental bodies," Sonya says.

But why, then, was the AG's Office the only governmental agency unwilling to give up its internal financial analyses connected with this bill?

"We do not want anyone to take the information produced in a decisision-making process out of context," Sanchez says. "The ultimate decision was made by management and the attorney general, and that was the information presented."

The information that the AG officially "presented" to the Legislative Budget Board in place of the internal reports made SB14 look like an innocuous rule change. It read, "Like the State, local governments would be required to go through a more formalized procedure for performing takings assessments for their activities and would be required to pay monetary compensation for dimunition in property value."

However, the AG's original internal memo, which was kept from the Legislators, had two additional sentences that were deleted in the public version: "Since claimants can collect their awards from local governments without an appropriation from the Legislature, the impact on their budgets is likely to be sizeable. The costs could easily be in the millions of dollars." Critics say that Morales downplayed the effects of the bill because the very people he has been wooing lately - property owners - avidly supported it. Morales drew his property rights line in the sand last year when he filed a lawsuit against the federal government for its attempt to set aside critical habitat to protect the golden-cheeked warbler. The longtime Democrat later showed his Republican stripes when he jumped on Commisioner of Agriculture Rick Perry's bandwagon to wipe out the Endangered Species Act.

Morales continues to surround himself with people who are waving the property rights flag. Marshall Kuykendall, the property rights advocate who once suggested that emancipation of the slaves was a "taking" for which slaveholders should have been compensated, has been spotted more than once on the AG's "eighth floor." Morales has also appeared at events coordinated by Kuykendall in his role as the leader of Take Back Texas. Morales will appear next Thursday, August 31, at a two-day property rights event at the Marriott Hotel in Austin coyly entitled: "Stewards of the Range." Among those taking the dais will be Republican State Representative Susan Combs, who sponsored the takings bill in the House.

"It's no secret that Dan Morales has increasingly courted the political support of the property rights activists and has increasingly aligned himself with Representative Susan Combs and her [takings] bill," noted the TCPP's lawyer, Charles Herring, Jr., in court papers. "To what extent did the cost estimates change as they worked their way up the chain of command to the `eighth floor' in the AG's Office, and as persons close to Morales [e.g., Durham], had input?''

Critics like Marston of the Environmental Defense fund and Tim Curtis of Texas Citizen Action, the state's largest consumer advocacy group, say it's bad enough that Morales hid important information during the last legislative session to protect his new best friends' interests. But they are particularly appalled by the discrepancies between what is offered in the original documents and what the agency told the Legislature. Before the end of the legislative session, Marston and Curtis acquired the reports from an unidentified source, and subsequently leaked the papers in a hastily called press conference on the steps of the Capitol.

"By giving false official testimony and purposefully witholding public documents, the Attorney General is perpetrating fraud against the people of Texas," Curtis said in papers he and Marston disseminated. Curtis and Marston point out that Durham's testimony on March 28 before the House Land and Resource Management Committee directly contradicted the hidden internal memos generated by lawyers within the office just days before. For example, Durham testified, "In reviewing the provisions of the bill, I see nothing that repeals any of the environmental or pollution abatements here, so that I don't see any basis that there's going to be some polluters let loose. As a matter of fact, there's no intent as stated within the provisions of the act itself."

However, one internal memo that Morales sat on stated that "the proposed legislation will greatly impact environmental regulations, far beyond regular rulemaking."

Again, Durham downplayed the bill's price tag with his testimony that "We're not able to see that we're going to incur any additional expenses out of our office. This does create a new cause of action, but it would be included in a claim that we would be defending those lawsuits anyway. And so, we really don't see that there's going to be a fiscal [cost]."

But another document the AG declined to release predicted a far more pricey scenario. The memo predicted that the office would have to hire a minimum of eight attorneys, four secretaries and two paralegals in the AG's Transportation Division. "How much litigation will be instituted under this legislation is difficult to estimate, but since legislation allows attorneys fees and recovery costs, any estimate should be on the high side."

Just five days before Durham testified, an analysis prepared by a staff lawyer in the AG's Natural Resources Division, (and subsequently witheld by Morales), also contradicted Durham's tesimony. It called for the addition of eight to 12 attorneys, three to five experienced appraisers, four to six paralegals and three to six administrative techinicians.

Having Durham testify before the committee was not a natural choice considering he is head of the AG's Criminal Justice Division, an area that would not be involved in any litigation related to the takings bill. The attorneys who originally generated the buried reports actually work within the affected divisions. "Real lawyers using real numbers said that the bill would hurt the agency big time, but within a week the people on the eighth floor, for political reasons, cooked the numbers and went under oath, claiming it would cost nothing when their own internal analysis said it would be very costly," Marston says.

But a closer look at Morales' choice of Durham as his point man with the Senate committee may make some sense. The former conservative prosecutor from West Texas is considered to be Morales' top gun, and the Deputy AG has fostered his own well-publicized relationship with property owners. At a property rights rally in Georgetown last year he raised eyebrows when he announced that there were no endangered species in Sterling County from where he hails "because we killed them all. I'm the chief executioner. And I don't think that speaks very well for the warbler."

When Durham was deposed later in connection with litigation over the open records controversy, he explained that he viewed the memos from within the affected departments as more of an exaggerated Christmas wish-list than an actual estimate of real needs. But Marston says Durham's creative math was a naked political move to cover up the high cost of the takings bill.

"Somebody ought to look closely at whether [Durham] violated the rules for governing lawyers when he made those statements before the committee," Marston says.

The AG stands by Durham's testimony. "The report before the House committee by the Deputy AG was completely accurate," Sanchez says. "It was a comprehensive and complete presentation - not the thoughts and opinions of one or two specific employees."

Marston declines to say whether his organization will take legal action against Durham, but he does not rule out the possiblity. He says he is awaiting the outcome of another grievance stemming from another open records dispute against Morales' other close associate - first assistant Jorge Vega.

As Morales' chief hatchet man, Vega oversaw the firings of several division and section heads in Morales' remaking of the agency from a consumer protection-driven office to an agency centered around criminal justice issues. The charges against Vega stem from his dismissal of former assistant AG W. Scott McCollough, a high-profile advocate in disputes against telephone and electric utilities over the last decade. After Vega fired him, McCollough made an Open Records request for all documents and phone records related to his termination. After eight months of waiting for the information, McCollough sued the office under the Open Records Act and received what he says was only partial information.

"I find it very interesting that the AG's office has a different timeline when it comes to answering open records requests," McCollough says. "For some people it pops out real quick, for others they choose to take their time."

When Vega testified during the open records suit about the day he fired McCollough, Vega claimed that McCollough never informed him that he was due to appear in a long-running trial the next day. However, McCollough had secretly taped the conversation, in which he repeatedly warns Vega that he should wait until the conclusion of the trial to terminate him. After Vega's statements to the contrary before a judge, McCollough brought the tapes to the attention of the State Bar Panel, which formally charged Vega last June with five violations of professional conduct rules, including two charges of lying under oath. Vega faces possible public reprimand, suspension, or disbarment by the State Bar of Texas, which will render its decision this fall.

Immediately after the State Bar recommended sanctions against Vega, Morales jumped to the defense of his first assistant, dismissing the charges as sour grapes from a disgruntled former employee. Morales was not so quick to go to the mat for former assistant AG Gary Bledsoe when he was investigated for misuse of government funds last year. Morales eventually pressured Bledsoe (who was then state president of the National Association for the Advancement of Colored People), to resign, despite the fact that he had been cleared of wrongdoing.

The recent controversies surrounding Morales' agency don't bode well for the public. Pulling teeth appears to be easier than obtaining records from the AG's office, and Morales has chosen to surround himself with lawyers who, some say, have little respect for the truth. It's politics first, and public service a distant second, critics lament. McCollough warns: "I hope that at some point the people in this state begin to understand the terrible things that have happened to the AG's office under Dan Morales." n

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