Saturday, June 30, 2007

Tarrant County officials seek to cut two tax rates

By AMAN BATHEJA - Star-Telegram staff writer - Sat, Jun. 30, 2007
Most Tarrant County commissioners say they want to cut taxes for both the county and the Tarrant County Hospital District for next year.

County Judge Glen Whitley and Commissioners Roy Brooks, Gary Fickes and J.D. Johnson signaled plans to reduce taxes more than last year, when commissioners cut the county rate by one-tenth of a cent and left unchanged the rate for the hospital district, which operates the JPS Health Network.

Commissioner Marti VanRavenswaay did not return a call seeking comment.

The county tax rate is now 27.15 cents per $100 of assessed value. The hospital district tax rate is 23.5397 cents.

"I will not vote for a budget that does not include a tax rate decrease for the county taxes or the hospital district," Fickes said. "I'm not sure if we'll get to a penny, but I'd like to see a penny [reduction] for both."

Brooks said he hopes to approve at least a half-cent cut in the county rate and up to a full cent off the hospital district rate.

"We're approaching this budget with an eye toward doing the most with the least and being able to give something back in terms of tax relief to the taxpayer," Brooks said.

Johnson said he expected rising property values to allow the county's budget to grow while still cutting taxes.

For the owner of a $100,000 home, the 1-cent drop would mean $10 off a county tax bill of $271.50 and $10 off a hospital district tax bill of $235.40.

Property owners would not necessarily pay less in taxes, however, because many have seen increases in their property values.

Commissioners said they also plan to look closely at the hospital district's budget for next year. At the commissioners' meeting Tuesday, Whitley took the unusual step of asking for the JPS board to meet with commissioners in July before JPS approves its budget.

"I would like to get a sense of their priorities," Whitley said.

In the past year, the hospital district has drawn increasing criticism for amassing a multimillion-dollar surplus while not expanding services for poor and uninsured patients.

"We just have a lot of questions what is going on out there," Johnson said. "Going through their budget in detail and looking at it the same time that the board looks at it would be a wise idea."

A call to Robert Earley, JPS' senior vice president of public affairs and advocacy, was not returned Friday.

See Fort Worth Star-Telegram

Friday, June 29, 2007

Trinity toll road foes say 80,000 signed petition for November vote

By BRUCE TOMASO - The Dallas Morning News - June 29, 2007
Dallas voters will decide in November whether to scrap the Trinity River toll road, if referendum petitions submitted Friday by opponents of the road are certified as valid.

City Council member Angela Hunt said her group, TrinityVote, had gathered more than 80,000 signatures to stop the toll road, a key component of the Trinity River Corridor Project. If 48,000 of those signatures are certified by the city secretary as valid and belonging to registered voters living in Dallas, a measure will be placed on the November ballot.

That measure would prohibit the construction of any road inside the river levees that is more than four lanes wide, with a speed limit of more than 35 mph.

“Here you see before you a mandate from 80,000 people in Dallas who say they want a voice in the future of our Trinity River,” Ms. Hunt said at a City Hall news conference. Behind her stood more than 50 volunteers from TrinityVote, many of them wearing T-shirts that said, “Park or toll road? Let the voters decide.”

Striking a populist chord, Ms. Hunt alluded to the fact that the toll road is supported by many members of the city’s civic, business and political elite.

“There are some politicians who want to pave the Trinity,” she said. “But that option is no longer in their hands. As of today, the decision is in our hands, the hands of the voters, where it rightfully belongs.”

Ms. Hunt contends that the toll road should be scrapped because it will detract from the proposed downtown river park that many perceive as the centerpiece of the Trinity Project. She said that when Dallas voters approved $246 million in bonds for the Trinity project in 1998, many thought they were voting for a low-speed parkway, not a high-speed, multi-lane toll road.

Supporters of the road say it's needed to alleviate downtown congestion, and that removing it now from the plans could delay work on other aspects of the Trinity project, including the park and flood-control improvements

Wednesday, June 27, 2007

5-4 Supreme Court Weakens Curbs on Pre-Election TV Ads

Ruling on McCain-Feingold Law Opens Door for Interest Groups in '08
By Robert Barnes - Washington Post Staff Writer - Tuesday, June 26, 2007
The Supreme Court yesterday substantially weakened restrictions on the kinds of television ads that corporations and unions can finance in the days before an election, providing special interest groups with the opportunity for a far more expansive role in the 2008 elections.
Read more

Election ad ruling: I told you so
By Martin Frost - June 26, 2007

I almost never crow about a prediction. But Monday’s U.S. Supreme Court decision on the McCain-Feingold campaign legislation passed by Congress is the exception. Damn it, I told you so.

During congressional consideration of this legislation in 2001 and 2002, I repeatedly told my House colleagues that this was a terrible bill that would have truly awful consequences when the Supreme Court got through with it.

I even tried to insert a nonseverability clause into the legislation, which would have provided that the whole legislative scheme would fail if any portion of it were declared unconstitutional.

Almost nobody would listen. Other than Sen. Mitch McConnell (R-Ky.), who also tried to sound the alarm, virtually everyone in Congress turned a deaf ear to my prediction.

You see, my colleagues in the House and Senate did not want to offend the editorial pages of The New York Times and the Washington Post. They did not want to be painted as “anti-reform.”

Here is the crux of my argument made repeatedly to members of the House Democratic Caucus:
The legislation neutered our two major political parties by prohibiting them from raising soft money (large corporate, union and individual contributions) that could be used for issue ads during the closing weeks of a campaign.

At the same time, the legislation enacted a Rube Goldberg scheme that permitted corporations and unions to finance issue ads until 60 days before general elections, after which they were banned until the election.

It was my position (which proved to be 100 percent accurate on Monday) that the U.S. Supreme Court would strike down the ban on corporate and union issue advertising during the two months before an election as an unconstitutional intrusion on free speech.
Thus special interests would have a green light to attack federal candidates during the closing days of a campaign (as long as they avoided using the magic words “vote for” or “vote against”) and the two major political parties would be defenseless to come to the aid of their own incumbents from these attacks because they could no longer raise soft money (the exact type of money being used by outside groups to launch these attacks).

Political parties could use “hard money” for these type ads. But “hard money” is, by definition, raised in much smaller amounts and primarily used for other purposes by parties.

My colleagues ignored my prediction and simply said, “Our lawyers have told us this is legal and we are going to do it,” even though the Supreme Court throughout the 1970s and 1980s had handed down a series of opinions equating the right to spend money on politics with the right to free speech.

And so we now have the worst of all worlds – unlimited special interest spending on federal campaigns and political parties powerless to combat it.

I told you so.

Martin Frost, a Democrat, represented the Dallas-Fort Worth area from 1979 to 2005. He rose to caucus chairman and head of the DCCC. He is now an attorney with Polsinelli Shalton Flanigan Suelthaus PC in Washington and serves as president of America Votes, a grass-roots voter mobilization and education effort.


Tuesday, June 26, 2007

Guilty Verdict in the Case Against Arthur Andersen

Verdict seen as fatal blow to firm
By TOM FOWLER - Copyright 2002 Houston Chronicle - June 19, 2002

"I think everyone understands the firm is dead," said Columbia University law professor John Coffee.

Surprisingly, the jurors said they didn't consider the company's extensive shredding of documents to be an important part of the case.

The nine-man, three-woman jury delivered the verdict at 10:25 a.m., more than five weeks after testimony began and after 72 hours of deliberations over 10 days.

Despite the prosecution's elaborate description of widespread document destruction, jurors told reporters it had been the effort of Andersen in-house lawyer Nancy Temple to remove her name from the draft of a memo that led them to convict the firm.
Jury foreman Oscar Criner described the Temple memo as a "smoking gun."

"You read it, you read the law in the charge, and it just stands out," Criner said.

The memo in question, created and revised several times in mid-October, was designed to document how Andersen handled a disagreement with Enron over using the word "non-recurring" to describe a loss.

In an Oct. 16 e-mail to lead Enron auditor David Duncan and others, Temple said her name should not be left on the final memo because " ... it increases the chances that I might be a witness, which I prefer to avoid." She also mentioned checking into other ways to " ... protect ourselves from potential Section 10A issues," referring to a provision in Securities and Exchange Commission auditing regulations.

Jurors said by changing the memo and mentioning the SEC issues, it was clear Temple's intent was to keep information away from investigators.

Discussing the verdict afterward, prosecutors said they were not initially aware that the memo was central to the verdict.

But when told what jurors had said to reporters about the Temple memo, they said the jury's finding was consistent with many aspects of their case.

"That memo was an important one that we referred to several times in our case," said Assistant U.S. Attorney Andrew Weissmann. "She made every effort to sanitize their files."

Jurors also said they all agreed Temple was the "corrupt agent" in the case, indicating that a ruling on Friday that the jurors did not have to agree on a single culprit was not as significant as previously thought.

Lead Andersen attorney Rusty Hardin praised the jury for its diligence but said the firm was a victim of "a system out of balance."

He criticized prosecutors for bringing the charges against Andersen and U.S. District Judge Melinda Harmon's rulings on a variety of issues.

"Our position as to whether Arthur Andersen committed a crime has not changed. They did not," he said.

The company plans to appeal after it is sentenced Oct. 11. Andersen officials said in a statement Saturday that the company expects to cease its audit practice by Aug. 31.

Andersen partner C.E. Andrews, who sat through much of the trial, said the company has no regrets about fighting the charge.

"We started with what was supposed to be an open-and-shut case and kept up the fight for our honor and dignity," Andrews said.

Andersen is already a shell of its former self. The firm has lost 690 of its 2,311 public company clients since Jan. 1. It has shrunk from 27,000 employees in the United States to no more than 10,000, a result of layoffs and departures of whole offices and practices to competing firms.

Prosecutors were cheered by the verdict, saying it will help them as they seek indictments against Enron and its executives.

Weissmann denied Andersen's accusations that the Justice Department destroyed the livelihood of 28,000 U.S. workers with the indictment, saying it was Andersen's management decisions that led to the trial, the verdict and the likely death of the accounting firm.

"No other audit firm in the nation has more problems with the SEC than Andersen," Weissmann said, referring to fines and warnings the firm received for its work with companies Waste Management and Sunbeam. "They chose to handle it this way and made martyrs out of their employees."

The case was initially thought to be an easy win for prosecutors, but Assistant U.S. Attorney Sam Buell said he never assumed it would be a slam-dunk case.

"We were prosecuting the largest, most resourceful defendant in the country that brought the most resources it could to bear," Buell said.

Indeed, up until a few days ago the lengthy jury deliberations had many assuming the trial would end with an acquittal or a deadlocked jury.

The jury did indicate that it was deadlocked at the end of day seven, on June 12, but was told by Harmon to keep trying.


Martin Bienenstock, an attorney for Enron, said he didn't want to pass judgment until the appellate process was completed, but he acknowledged he was surprised by the verdict.

"The verdict accentuates how so many innocent, hard-working people at Andersen and Enron have been hurt badly by the actions of a few people," said Bienenstock. "I was hoping the acts of at most a handful of people wouldn't destroy a fine institution."

Andersen was the auditor for Enron, the Houston-based energy trading giant that collapsed in a crisis of investor confidence late last year. Government investigators charge that Enron used complicated accounting schemes, many of which were sanctioned by Andersen, to report misleading financial results.

Enron officials have denied the charges.

Former Enron CEO Jeff Skilling had no comment, according to his wife, encountered pulling out of the family's River Oaks home driveway.

Kelly Kimberly, spokeswoman for former Enron Chairman Ken Lay, said Lay had no comment. And efforts to reach former chief financial officer Andrew Fastow were unsuccessful.

Neither side disputes the events in question behind the trial. They differ on how those events should be interpreted.

In October 2001, as the scope of the accounting problems for Andersen client Enron became clear, a number of Andersen employees in Houston and other offices destroyed documents related to their work with Enron.

The directive to destroy the documents was passed from Temple to the Enron team via e-mail, and later discussed in staff meetings and conference calls. It wasn't until the SEC subpoenaed Andersen on Nov. 8 that the document destruction stopped.

But what prosecutors called an organized effort to hide documents from the SEC was described by Andersen officials as an effort to catch up with long-overdue housekeeping motivated not by criminal intent but fear of reprisals from superiors at company headquarters in Chicago.

Before the trial began May 6, many observers said those differing views on the events would not -- and should not -- have led to a courtroom.

Andersen reported the shredding voluntarily in early January, and went so far as to fire lead Enron auditor Duncan, and put other top partners on administrative leave.

The company initially believed it could reach a settlement with SEC officials and investigators, a route followed by many corporations since major criminal cases against companies rarely make it to the courtroom.

But during February and March, attempts to settle never came together. Prosecutors saw Andersen's previous SEC problems, particularly its probationary status after accounting problems with client Waste Management, as too serious to ignore. Andersen wasn't willing to concede guilt in the case and kept insisting that a small group of Houston partners acting alone led to the document destruction.

An indictment against the entire firm for one count of obstruction of justice was unsealed March 14. Andersen clients began to flee the firm in droves and employees took to the streets to protest what they said would be the death of the 90-year-old firm.

There were other settlement efforts, and it was widely believed an eleventh-hour settlement would prevent the trial. But it never came.

"The Justice Department saw the prior record of Andersen and wanted blood, and Andersen didn't believe it had done wrong and didn't want to negotiate," said Art Bowman, author of a monthly accounting industry newsletter. "So they were both hard-headed and both fighting to the death. That's why it ended up in trial."

Prosecutors seemed to have the clear advantage going into the trial May 6, bolstered by a plea agreement with Duncan that had him admitting his guilt and agreeing to testify against Andersen in exchange for a chance at a lighter sentence.
... When Duncan finally began testimony on May 14, he appeared to deliver as promised for the prosecution. On cross-examination, however, his story appeared to wilt.

Hardin questioned him closely about his testimony that it wasn't until a couple of weeks before he signed the plea agreement that he really believed he was guilty. He suggested that it was fear of prison, not honest soul searching, that led Duncan to plead guilty.

The calm precision of many of Duncan's answers also came across as coached, particularly as Hardin asked him about whether he tried to keep information away from the SEC. Duncan repeatedly used the phrase that he "knew the documents that I destroyed would not be available for others to review," a statement that fell short of admitting a crime.

"We couldn't have paid David Duncan to be this good a witness," Hardin said when he finished testimony May 17.

Prosecutors came back with a vengeance the following week, however, introducing into evidence handwritten notes from Temple, which seemed to indicate that early in October 2001 she and others at the firm knew the SEC would be interested in Enron's accounting problems.

In notes from an Oct. 9 phone call with a handful of Andersen partners, Temple wrote, "Highly probable some SEC investigation," and that there was the " ... probability of charge of violating (cease and desist order agreed to after the firm was prosecuted for auditing violations involving Waste Management)."

The Temple notes, and many other pieces of evidence, had to be introduced by FBI agents simply reading them into record since Temple and two other witnesses refused to testify based on their Fifth Amendment right against self-incrimination.

The manner of presentation appeared to undermine the strength of the evidence, as indicated by comments from alternate juror Gloria Antia, who told the Chronicle she found it unseemly that the government spoke so badly about Temple without her being brought before the jury.

"I don't know if she refused to testify or if they didn't call her, but it seemed like they were talking behind her back," Antia said.

Just as Duncan proved beneficial to the defense, the defense's first witness on May 27 ended up benefiting the prosecution.


Andersen attorneys later tried to challenge key points in the indictment, such as the date the document destruction began and where it took place, through the testimony of several employees.

One former Andersen manager, Emily Madison, testified that she and a supervisor had e-mailed Andersen senior partner Michael Odom on Oct. 8 asking how the document-retention policy should apply toward a client that had just fired Andersen as its auditor.

The defense suggested that question may have been the motive for comments Odom made in a videotaped conference two days later, where he talked about how it was appropriate to destroy documents up until the day before litigation was filed against the firm.

Other Andersen employees testified that they didn't take the reminders about the policy to mean they should destroy documents, while Duncan's former administrative assistant, Shannon Adlong, said the Houston office was worried that their superiors in Chicago would see how far behind they had gotten in their regular document cleanup.

While Andersen is likely to be out of business before a full appeal can be heard, the company and its defense team is determined to go down fighting. The most immediate fight may be with state accounting regulatory agencies that will try to use the conviction to ban Andersen from doing audit work, a process the state of Texas has already begun.

"Everybody can jump in and pile on, and if an accounting board wants to, we say come on down," Hardin said. "We'll be there."

See full article, links to legal documents, Indictment, Andersen's ex-employees site, and timeline of Andersen event and Chronicle's archives of Andersen coverage
and Chronicle Archive of Enron coverage.

U-S marshal admits selling govt information

© 2007 The Associated Press - June 26, 2007

McALLEN, Texas — A South Texas lawman faces up to five years in federal prison after admitting he sold government information.

Sentencing is October ninth for U.S. Marshal Jose Magallan, who was assigned to the McAllen office.

A federal judge in Houston yesterday accepted the guilty plea involving two counts of Magallan exceeding his authorized access to information in a computer.

Prosecutors say Magallan last November and in January accepted money to do an unauthorized computer search for a private citizen and then deliver the information.

The 52-year-old deputy overall received -- 950 dollars.

The former McAllen policeman faces fines of up to $250,000 for each count.
Houston Chronicle

ON POLITICS - Greeting the season by closing loopholes

By KRISTEN MACK - Copyright 2005 Houston Chronicle - Jan. 27, 2005

With this year's city campaign season looming, City Council closed — or at least narrowed — a loophole that some believed gave certain candidates a head start in campaign funding.

[Houston] Council this week put a $10,000 cap on the amount that people who hold non-city elective offices can transfer from campaign coffers for those offices to fund city races.

Candidates in November's [Houston] city election cannot begin raising money until Tuesday. Council set the cap out of concern that non-city elected officials who have raised money previously for those offices could transfer unlimited funds into city campaign accounts.

Councilman Gordon Quan, who chairs council's ethics committee, said the changes specifically were prompted by the candidacies of Herman Litt, who is running for District C, and Jay Aiyer, who is running in at-large Position 2. Both are Houston Community College System trustees.

Aiyer held a fund-raiser this fall for his HCC seat, and at least one of his council opponents complained that he would use the money for his council run.

Under the new rules, Quan said, committed contributors can always write checks for the city races.

"It's more honest that way," he said. "Give it to them for what they are running for, rather than false pretenses."

Aiyer said he doesn't believe the change targeted him.

"It is not a problem for me," he said. "Folks that contributed in the past, I assume will be contributors in the future."

Whatever their funding sources, candidates already are declaring for four seats that term-limited members council members will have to vacate at the end of this year.

And a fifth seat may open up if M.J. Khan, first-term councilman in District F, runs for the at-large Position 2. His political consultant, Spencer Neumann, expects Khan will announce this spring that he will be running for the citywide seat.

Some council members see at-large positions as more alluring because they allow them to focus on higher-profile citywide issues instead of con-
stituent-based concerns.

Council members who jump from district to at-large seats still are subject to the city's three-term limit.

Quan, a Chinese-American who is term-limited in Position 2, said he is concerned that Khan and Aiyer, both South Asians, will split the Asian vote.

But Aiyer said the growing Asian community still isn't big enough to swing an election anyway.

Houston Independent School District Trustee Kevin Hoffman, who was eyeing the Position 2 and District B seats, has decided not to run.

Architect Peter Brown is trying to position himself as the front-runner for at-large Position 1, being vacated by term-limited Councilman Mark Ellis. Brown, a Democrat and urban planning advocate who also ran for council in 2003, officially declared in May that he would run again.

Earlier this month Brown began circulating a letter asking people to join his campaign effort. The letter was signed by state Sen. Rodney Ellis, D-Houston, real estate developer Ed Wulfe, attorney Michael Solar and engineer Terry Cheng — covering several ethnic and political bases.

Businessman Jeff Daily, Brown's ideological opposite and also a 2003 City Council candidate, said he still is mulling whether to run for Position 1.

Attorney and former University of Houston track star Jolanda Jones, who along with Brown challenged Councilwoman Shelley Sekula-Gibbs in 2003, has said she also intends to run again, probably for Position 1.

Jones was a contestant on the CBS reality show Survivor, which airs beginning Feb. 17. A confidentiality agreement prohibits her from revealing whether she won the $1 million jackpot when the show taped last year.

If she did, it might help her survive an expensive council race.

HCC Trustee Aiyer charged with felony - accused of tampering with campaign finance report

By KRISTEN MACK - Copyright 2007 Houston Chronicle - June 26, 2007
Houston Community College Trustee and one-time City Council candidate Jay Aiyer is facing a charge of tampering with a governmental record, a felony that could cost him his law license, authorities said Monday.
The Harris County District Attorney's Office accused Aiyer of committing the offense in March 2005, by "unlawfully removing, destroying, and concealing, the original filing" of a portion of his campaign finance report and substituting it with another document.

The charges were filed in the 184th criminal court last Thursday. Aiyer posted a $2,000 bond the following day.

Aiyer, reached Monday, said he could not talk about the charges in detail.

"We will be able to work this thing out in a couple of days," he said. "I think it's going to be resolved."

Aiyer, 38, a lawyer who once served as chief of staff to former Mayor Lee Brown, has hired Dennis Cain to represent him. Cain did not return a call seeking comment.

The charges stem from a complaint initially filed with the Texas Ethics Commission more than two years ago. The complaint, lodged by an associate of Aiyer's then-competitor and now City Councilwoman Sue Lovell, accused Aiyer of trying to hide expenditures from his HCC campaign account, including a loan repayment to himself of $5,000, when there was no record of the original loan. It also accused him of failing to report payments to political consultants and failing to itemize credit card payments.
The ethics commission referred the complaint to the Harris County district attorney's office in April 2006. The DA's office looked into whether Aiyer tampered with government records, but did not investigate potential election code violations, said Donna Goode, the division chief over the DA's public integrity unit.

When Aiyer became aware of the allegations, he met with HCC officials, who keep campaign finance filings. Over a period of a few months he reviewed his reports, according to the affidavit from the DA's office. Officials said it was during that time documents appear to have been switched.

On one occasion, Aiyer arrived with papers in his hand and was left unsupervised. During another visit, Aiyer asked to see a copy of public information requests filed for copies of his reports. He was provided one copy of a report by the legal assistant to the HCC general counsel and never returned with the file. On a third trip to the general counsel's office, Aiyer reportedly asked for a staple remover and stapler.

The DA's office also said different fonts appeared on paperwork Aiyer said he retyped and filed on a typewriter at HCC.

"The allegation is he obtained these records and destroyed or removed them with the intent to defraud to harm," Goode said.
"A state jail felony is pretty serious for anybody. When you add on top of that that he is a licensed attorney and he is in an elected position, it's a very serious concern."

Chronicle reporter Robert Crowe contributed to this report.
Read more

NOTE: This story is a follow-up to an earlier story by Kirsten Mack

HCCS account at root of candidate scrutiny
By KRISTEN MACK - Copyright 2005 Houston Chronicle - Aug. 4, 2005
The race is for the City Council, but campaign-finance reports under scrutiny are for the Houston Community College System.

Two candidates for Council At-Large Position 2 are studying the reports hoping to find an issue against a third candidate, HCCS board member Jay Aiyer. Aiyer says there's nothing to find.
Candidate Sue Lovell says the reports show that Aiyer has attempted to hide expenditures out of his HCCS campaign account — including a loan repayment to himself, unreported payments to political consultants and unitemized credit-card payments.

"Anyone can file a complaint and allege that someone did something wrong," responded Aiyer. "In my case, it's not true. Her allegations are all factually incorrect

Aiyer was appointed to fill a vacancy on the college system board of trustees in 2001 and was elected to a six-year term later that year without opposition. Though his spot isn't up again until 2007, he has kept a campaign war chest.

Monitoring expenditures
Under a city law passed just this year, Aiyer can transfer no more than $10,000 from that account to his city race. But that potential head start has Lovell and another opponent, John Elford, scrutinizing Aiyer's reports.

Lovell produced Aiyer campaign-finance reports from 2004 listing a $5,000 disbursement to Aiyer and recording that it was to repay a loan he had made to his campaign.

Kathryn McNiel, who was Aiyer's political consultant in 2004 and completed the HCC campaign forms on his behalf, said she remembers seeing a $5,000 check to Aiyer and listing it among the campaign's reported expenditures.

"Once those reports left my hands, I do not know what changes Jay made to them, when he finalized them,"
McNiel said.

The $5,000 payment doesn't show up on Aiyer campaign-finance reports provided to the Houston Chronicle by HCC's general counsel office, which keeps reports filed by board candidates.

Neither those documents nor the ones Lovell has record a loan from Aiyer to his campaign.

Many of the documents on file now are affidavits of correction that Aiyer filed in April.

Aiyer maintains his corrections weren't substantive and brushes off Lovell's complaints as "classic political stuff" designed to cast a cloud on his campaign.

Lovell says her complaints have nothing to do with politics.

"Campaign-finance reports tell a lot about the integrity of a person," she said. "Where you get your money and how you manage your money tell a lot about how you will manage taxpayer money when you're on council."

Filing ethics complaint
Allen Blakemore, political consultant to Aiyer's other announced opponent, John Elford, said he also has noticed discrepancies in Aiyer's reports.

"Jay Aiyer is not complying with the letter or spirit of the law," Blakemore said. "They are hiding things and playing fast and loose with the rules."

Kevin Roach, a friend of Lovell, filed a complaint with the Texas Ethics Commission in April alleging Aiyer converted campaign funds to personal use, failed to report political expenditures, failed to report the "payee and purpose" of certain expenditures and failed to itemize payments to credit-card companies.

Ethics complaints are confidential, unless the commission issues an "agreed order," meaning it has investigated allegations and found evidence of a violation.

All of this, remember, is over campaign-finance reports that don't involve the Position 2 race. Lovell also has perused Aiyer's City Council campaign-finance reports and says she sees no problems there.

That doesn't mean you won't hear more talk about campaign-finance issues as the council race gets hotter.
Read story

Federal bribery probe grips El Paso

Investigation links several city leaders to corruption, multiple plotsBy GARY SCHARRER - Copyright 2007 Houston Chronicle Austin Bureau

EL PASO — Alleged bribery payoffs plotted in a bathroom stall. A truckload of county records hauled off by FBI agents. A guilty plea that alleges routine corruption by a web of current and former officials.

This city of 735,000 has been riveted by a federal bribery investigation targeting a chain of suspects, including a former White House appointee.

"It's the Manhattan Project for the El Paso FBI," said one federal agent working the case, referring to the mammoth 1940s effort to develop the atomic bomb.

So far, the former chief of staff for El Paso County Judge Anthony Cobos has pleaded guilty to four counts of conspiracy and fraud, admitting his involvement in alleged payoffs for county contracts.

In his plea document, John Travis Ketner described 17 unnamed co-conspirators in ways that make them easily recognizable to observers of El Paso politics — so recognizable that the principals have not denied that he identified them.

They include Cobos, El Paso County Commissioners Miguel Teran and Luis Sarinana — whose offices and the homes of other civic leaders were raided by 75 federal agents last month — and Luther Jones, a former state representative described as "Co-conspirator One."

Ketner also described Arturo Duran, who was President Bush's former appointee to the International Boundary and Water Commission, as the "bag man" for several alleged bribery schemes.

All have denied wrongdoing.

Contracts in question
Speculation among some community leaders is that the two-year investigation could result in the indictment of 50 people, a number a federal agent called "not unreasonable."
Adding to the intrigue is an acknowledgment from current El Paso County Commissioner Dan Haggerty that he had met secretly with FBI agents for nearly two years.

Haggerty has long been suspicious that county contracts for goods, services and construction were rigged.

"Some of the people I have worked with on Commissioner's Court are really stupid," said Haggerty, brother of longtime state Rep. Pat Haggerty, R-El Paso. "They thought they could do whatever they were doing that was totally corrupt, not knowing that it was totally corrupt.

"If this is OK, why are we meeting in this stall in the bathroom on the basement floor of the courthouse?" Haggerty said. "Why does it smell in here?"

Ketner's pleading described a courthouse restroom meeting between Cobos (described as "Co-conspirator Five") and Duran ("Co-conspirator Seven") involving a promise of money from Duran for contracts benefiting Duran's clients.The document charges that county contracts were selected based on "who offered ... the greatest amount of remuneration in money or other benefits."

Duran and Cobos have denied the allegations.

Placing blame
Duran served on the boundary commission until a scathing report by the State Department's inspector general two years ago forced his resignation. The report blamed Duran for creating internal management problems that engulfed the agency, "threatening its essential responsibilities for flood control and water management in the American Southwest."
After Ketner's plea became public, an indignant El Pasoan, Lisa Turner, showed up at the next commissioners court meeting to urge Cobos, Teran and Sarinana to resign.

Replying for the embattled three, Cobos blamed unnamed local power brokers for the legal storm.

"When you go against the status quo, you better be ready, because that's what I have done," Cobos said. "There are many people in this community with so much money and so much power. If I rubber-stamped what they wanted to do, this never would have happened."

Expanding investigation
After the FBI searched his office, Cobos told local reporters the agents could have simply requested documents and suggested the raid might be a "political blunt instrument to tarnish reputations."
He didn't appear any more rattled after his former chief of staff accused him.

Ketner's allegations did not trouble him, Cobos said, "because I know the truth. Obviously, they are encouraging him to get creative."

The FBI and the U.S. Attorney's Office have not commented except for terse news releases after the searches and after Ketner's guilty plea.

"We have been very tight-lipped about this investigation," acknowledged El Paso FBI spokeswoman Andrea Simmons. "It's an ongoing investigation, so it's not at a stage where we can give any details."

The probe initially focused on the alleged improper use of federal funds at a nonprofit called the National Center for Employment of the Disabled, since renamed ReadyOne. It has expanded to the county courthouse and is expected to reach El Paso school districts. The FBI also has requested documents from a prior City Hall administration, two current City Council members said.

Far-reaching probe
The FBI executed search warrants of 22 El Paso residences or businesses and wiretapped phones for nearly a year, an unusually long time, according to a former federal prosecutor.
"It tells me that the investigation is very far-reaching," said San Antonio lawyer Ron Ederer, a former U.S. attorney for the Western District of Texas under President George H.W. Bush. The probe is based on allegations of wrongdoing, not politics, Ederer said.

The investigation is "the subject of conversation everywhere," said longtime El Paso attorney Tom Diamond, who has served several terms as chairman of the El Paso Democratic Party.

"Out here, we're a little bit desensitized to the mordida (bribes). We have it right across the border. It's something that you don't consider because it's so prevalent in Mexico. I think it kind of bleeds over into our society," he said.

But that's changing, said Ederer, who practiced law in El Paso for 18 years before becoming a U.S. attorney.

"The city is no longer a little border town," he said. "It's growing by leaps and bounds and, as a result of that, law enforcement is becoming more sophisticated."

And industry expanding to border communities won't tolerate backroom deals, he said.

The probe, especially its gigantic scale, has angered some El Pasoans.

"We're shaking our heads. It's terrible. There is shock and outrage throughout the county," said Don Kirkpatrick, a Democratic Party activist. "What we have is a huge interlocking scandal, and at the center of it is Luther Jones."

'Cloud of gossip'
Jones, 60, served four terms in the Texas House in the 1970s. He later became El Paso county attorney and then county judge. For most of the past two decades, Jones has helped elect members to school boards, the City Council and county Commissioners Court, and he helped Ketner get his chief-of-staff job with Cobos.
Critics contend his influence has helped him secure contracts for friends.

"The city is just consumed in a cloud of gossip and rumors," Jones said in a recent interview. "My name is mentioned all the time, everything from being someone who's going to be dragged off in shackles to someone who's actively working behind the scenes with law enforcement people."

FBI agents searched Jones' home last fall.

Jones said he's not worried but acknowledges that "when lay people see your name in the papers associated with anything that has the word 'FBI' in front of it, automatically it conjures up notions that not only are you a criminal, but you're a seriously dangerous criminal."

Seeking a change
The allegations by Ketner "are all beneath contempt and unworthy of any response except categorical denial," Jones said.
The county commissioners whose offices were searched also deny any wrongdoing.

"I am not concerned. I never solicited nor have I ever accepted a bribe or money in exchange for any decision in the court," Teran said.

"I sleep comfortable at night," Sarinana said.

Whatever happens, some young El Paso political leaders are calling for a sea change in local politics.

"If good people are willing to step in and take leadership roles, then good things will happen," said Susie Byrd, a member of the El Paso City Council. "It won't happen on its own."
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