A Grave Injustice

Agency Comes Down Hard on One Funeral Operator, Goes Easy on Another

Michael Bill
Michael Bill (Photo By Steve Lowry)

Robert Waltrip and Michael Bill are both from Houston. Both are in the funeral business, and both are having difficulties with the Texas Funeral Service Commission (TFSC). But to hear Bill tell it, he is not getting the same treatment as Waltrip. Instead, he claims the beleaguered state agency is treating him too harshly while Waltrip's funeral homes are getting away with a slap on the wrist. Bill's claims are the latest chapter in the ongoing saga at the tiny agency that's responsible for regulating the state's 1,300 funeral homes. Eighteen months have passed since three commissioners at the agency voted to assess a $445,000 fine against Waltrip's company, Houston-based funeral giant Service Corporation International (SCI), for allegedly violating numerous provisions of the state's funeral laws. Another seven months have passed since the entire commission voted to assess a $2,000 fine against a Wichita Falls funeral home -- also owned by SCI -- that allegedly mishandled the corpse of local TV anchor Tres Hood.

Neither fine has been paid, and agency officials are expressing doubt about their ability to collect the proposed $445,000 fine because many of the agency's records on the matter are missing. In addition, commission officials explain that SCI, a publicly traded company, is fighting the $2,000 fine levied against it last June on the Hood matter.

Meanwhile, the TFSC, which recently hired its first full-time executive director in nearly a year, is actively pursuing $12,500 in fines against Bill, who operates two Houston-area funeral homes.

"The scales are unbalanced here," says Bill, the owner of the Bill Clair Family Mortuary. "If they have a $445,000 fine against SCI that they haven't done anything about, why are they trying to collect a $12,500 fine against a funeral home that has never had any fines levied against it? Why are they fining me when they are letting SCI off the hook?"

Bill also contends that the penalties are too harsh. The $12,500 fine is being sought on four different complaints which, for the most part, concern clerical matters such as incorrect information on death certificates. By comparison, in the Hood case in Wichita Falls, family members were shown a body that had embalming fluid leaking from the mouth and nose. The body later leaked so badly that the crypt in which it was put began leaking and was attracting vermin. The situation became so bad that the body had to be disinterred and put into another casket.

According to members of Hood's family, even after the crypt began leaking, the SCI funeral home refused to take care of the matter. So why, asks Bill, did SCI only get a $2,000 fine for such a glaring error while he has been hit with fines totaling six times that amount? "It is not fair," he says angrily.

TFSC officials insist that they are not letting SCI off the hook, nor are they picking on small operators like Bill. O.C. Robbins, the new executive director at the TFSC, says that the SCI matter is "not going to be put aside." Instead Robbins says that the fines against Bill are part of the agency's tougher stance on funeral homes that do not comply with the law. Robbins says that since he was hired last fall, the agency has levied more than $53,000 in fines. By comparison, he said, the agency levied about $3,000 in all of 1999, a year in which the agency did not have an executive director for 11 months. While the agency tries to get tough on offenders, Robbins and TFSC chairman Harry Whittington agree that they are having a hard time getting tough on SCI. They said their investigation of SCI is being hampered because many of the documents used during the agency's 1998 investigation are, according to Whittington, "incomplete and insufficient. When our new board came in, the files were still not all accounted for. We were trying to find out all the facts on the case and the status of the procedure that are available."

SCI at Center of Scandal

The controversy over Bill's fines and the still-unpaid fines levied against SCI are part of the TFSC's struggle to regain its footing in the wake of a scandal that erupted early last year with the firing of former executive director Eliza May. Under May's direction, TFSC investigators uncovered evidence which allegedly showed that SCI's funeral homes were using unlicensed personnel to perform embalmings and were not informing consumers that embalmings were being done by third-party contractors. The allegations led to a showdown between the TFSC and SCI, a showdown that SCI won.

The trouble began in early 1998 when TFSC investigators noticed discrepancies in some of the paperwork being filed by SCI's Dallas-area funeral homes. After SCI refused to release documents to investigators, TFSC personnel issued subpoenas to a number of SCI funeral homes and later showed up unannounced at several funeral homes to collect the requested documents. The raids occurred on April 10, 1998, and within a few days, Waltrip, SCI's founder, chairman, and CEO, was sitting in the office of Gov. George W. Bush's chief of staff, Joe Allbaugh, complaining about May and the TFSC. Allbaugh later held another meeting in his office, in an effort to "get the two sides together." May later characterized the meeting as one in which Allbaugh and SCI officials trying to intimidate her and make her halt her investigation into SCI's activities.

It's no secret that Waltrip and SCI are among Bush's biggest financial backers, that Waltrip is a personal friend of former president George Bush, and that SCI donated $100,000 toward the construction of Bush's presidential library. SCI also paid the elder Bush's $70,000 speaking fee at a funeral convention in Houston last year.

SCI has also spread its money around the Texas Capitol. Within days of the unannounced inspections at the company's funeral homes in 1998, six legislators, including Sen. John Whitmire, whose district includes Waltrip's first funeral home, sent nearly identical letters to TFSC officials complaining about SCI's treatment by the TFSC. All six got major campaign contributions from SCI's political action committee.

Robert Waltrip
Robert Waltrip

Despite the political pressure, in August of 1998, a three-member panel of the TFSC recommended the massive fine against the company. According to documents obtained by the Chronicle under the Texas Public Information Act, the fine was levied for 241 specific violations of state regulations. However, the fine was never voted on by the full commission, a fact which has prevented the TFSC from issuing sanctions against the company. Some observers have claimed that the reason the fine never reached a vote was because two of the commissioners who were serving on the TFSC board at the time were SCI employees. Whenever the matter was suggested, say the observers, the two SCI officials blocked consideration of the fine. At about the same time the panel voted to fine SCI, the funeral giant began using other means to put pressure on May. In August of 1998, it used a private investigator who called several of May's friends to ask them about May's past. The company's representatives also began insisting that May had a political agenda and that she was, in the words of SCI's lawyer, Johnnie B. Rogers Sr., "running for governor."

The proposed fine and the agency's investigation of SCI began causing problems for the TFSC and for May. And in February, after several rancorous TFSC board meetings, May was forced out. Last March, she filed a whistle-blower lawsuit against the agency and SCI, claiming that SCI and Waltrip "engaged in a civil conspiracy" against her which caused her severe mental stress, invaded her privacy, and violated state statutes.

And that wasn't the end of the bad news for SCI. Instead, it got worse. Last June, Hood's family sued SCI, claiming that the company had mishandled his body. Adding fuel to the controversy is the fact that Hood's body was embalmed at one of the funeral homes that was being examined by May and her investigators for allegedly using unlicensed embalmers. Gayle Johnson, Hood's mother, said that one family member, upon seeing Hood's body, remarked that it looked like an inexperienced worker did the embalming. The family's case against SCI in the Hood case is pending in a Wichita Falls court.

Similar Paths

Like Waltrip, Michael Bill grew up in the funeral business. And like Waltrip, he learned the funeral trade from his mother. Waltrip's mom operated a funeral home in Houston's Heights neighborhood. Bill's mother operated a mortuary in Orange. But unlike Waltrip, who parlayed the Heights funeral home into a global colossus with 3,823 funeral homes, 524 cemeteries, and 198 crematoria, Bill has carefully nursed his way along in the funeral trade. Bill got his mortician's license in 1986 and opened Bill Clair Family Mortuary in 1991 with the purpose of providing low-cost funeral services to families. He later opened another location. And although Bill has always been considered a minority operator, he resists the idea that his two funeral homes, one in Stafford and one in Houston, cater to blacks. Instead, he says, his funeral home serves people of all colors and nationalities. Last year, his two locations handled 587 bodies.

Bill gets angry when he compares his modest funeral homes with those run by SCI. And he gets madder still when he compares how much SCI charges its clients with how much he charges. For instance, according to price lists on file at the TFSC, Settegast-Kopf a Houston funeral home owned by SCI, charges $3,275 for direct cremation. Bill's funeral home charges $575.

Bill also objects to the charges the TFSC is pursuing against him. He says that two of the four complaints the agency is pursuing have to do with faulty information that he entered on death certificates, a matter that he contends is fairly minor. "Some of our families call us on the phone. We take their information over the phone. Sometimes the information is not available at the time of death. On a cremation, some of the data has to be filed within 48 hours of the cremation. If the family doesn't get the information to us within that time, there's nothing we can do," he said.

TFSC director O.C. Robbins did not want to talk about the specifics of the complaints against Bill, but he said that the TFSC is seeking fines against the funeral director because he wasn't responsive enough to his clients. "We don't try to hammer people on death certificates," said Robbins, "but if people complain about it, we are going to get involved."

TFSC records show that the agency is seeking a $4,500 fine against Bill because his funeral home did not file the proper paperwork when it shipped cremated remains from Texas to Indiana. The agency is also seeking a $2,500 fine against Bill because he failed to refund $289 to a family. Bill does not deny that he was late in refunding the money, but he says that he wanted to make sure the refund went to the right person, one of his longtime clients, rather than to the woman's niece. He says he finally paid the money in question to the niece because she was being so problematic. Whatever the reason for the tardy refund, the TFSC claims that Bill misappropriated funds from the consumer. The investigative summary on the case, signed by Anne Cosper, a TFSC investigator on September 13, 1999, says that after "numerous attempts to collect the full amount of the refund, the Complainant filed a complaint with this agency." The summary goes on to say that Bill's funeral home did not refund the entire amount until nine months after the refund should have been made.

And there's a curious SCI link to Bill's case. Two years ago, when Bill faced similar problems with the TFSC, he called the man he knew could help him, Johnnie B. Rogers Sr., SCI's longtime legal representative in Austin. According to Bill, Rogers took his case in 1998, charged him $2,500, then went into the TFSC and "spanked their ass." But Bill said Rogers refused to represent him on the latest matter, and that Rogers told him that he would not represent any independent morticians as long as he was representing SCI. Rogers confirmed Bill's story, saying that it would "be a conflict" to represent Bill, "because I represent SCI."

The fines against Bill may be justified. During several phone interviews, Bill acknowledged that his funeral homes are sometimes overwhelmed. But even if the fines are justified, why should Bill's funeral home be required to pay bigger fines for clerical issues than the SCI funeral home in Wichita Falls that allegedly botched an embalming, and then refused to deal with the problem even though the body's embalming fluid was clearly leaking from his crypt?

SCI: 'No Comment'

And that leads to another question: Why doesn't SCI go ahead and pay the fine in the Hood case? Terry Hemeyer, an SCI spokesman, refused to discuss the issue. "It is in active litigation so we can't say anything about it at this point," he said. SCI's decision not to pay the fine has some former TFSC officials shaking their heads. "It doesn't surprise me that they would say that they would fight everything," says Marc Allen Connelly, the former general counsel at the TFSC. "But business-wise it seems kind of stupid, especially in the Tres Hood case, because it seemed like such an egregious case. They should pay the fine and make it go away. To my way of thinking, that would be a good business decision."

TFSC officials said that the Hood matter and the fines against Bill's funeral homes will be dealt with in the next few weeks. And they say that the agency will likely need several more months to work through its current backlog of complaints and other problems. TFSC chairman Harry Whittington says that the agency is "still limping along from the previous disruptions," and that it will deal with the $445,000 fine against SCI as quickly as it can. "We haven't really taken any action other than to initiate an exploratory look at what has been done in the past," Whittington said. "We know a committee of the old board recommended fines, and the full board never did act on it. So we are attempting to see what our alternatives are."

Evelyn Collins, a former TFSC commissioner who was on the three-member complaint review committee that recommended the $445,000 fine against SCI, was surprised to learn that SCI has not been required to pay the fine. Collins, who lives in Texarkana and was appointed to the commission by Bush, has not changed her attitude toward the fine or toward SCI. "I feel good about what we did," she said. "We could have fined them much more. We weren't down there to see how high we could fine someone, but we took an oath to uphold the constitution of Texas. And I expected them to pay the fine."

Collins and others may have expected SCI to pay the fine, but the disarray at the TFSC may prevent that from ever happening. Meanwhile, Bill continues to be dismayed over the harshness of the fines he is facing, particularly when he compares it to the treatment given to Waltrip's company in the Hood matter. "I don't understand it," says Bill. "I can't balance this out at all." TFSC officials say that both Bill and SCI will get their due process, and both funeral home operators will get hearings before the commission some time in the next few weeks. end story

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Michael Bill, Robert Waltrip, Service Corp International, SCI, Texas Funeral Service Commission, TFSC, Eliza May, Bill Clair Family Mortuary

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