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Posted on 03/08/2003 5:57:41 AM PST by Theodore R.
Morales surrenders on fraud charges; claims his innocence
AUSTIN (AP) — Former Attorney General Dan Morales surrendered to authorities Friday on mail fraud and conspiracy charges, the result of a long-standing federal investigation related to his role in the state's $17 billion settlement with the tobacco industry.
Morales was released on a personal recognizance bond after he agreed to give up his passport and to not leave the country. Upon leaving the federal courthouse, Morales declared his innocence.
"Every single allegation of wrongdoing included in this indictment is false. Every single allegation of wrongdoing in this indictment is untrue," a seemingly chipper Morales said, smiling at cameras and reporters.
The indictment comes almost a year to the day after Morales lost his bid for Texas governor in the Democratic primary.
Morales' friend Marc Murr, also named in a 12-count indictment handed up Thursday, surrendered and was released on personal recognizance.
The two are accused of trying to obtain hundreds of millions of dollars for Murr in legal fees from the $17.3 billion settlement with the tobacco industry in 1998.
"At all times throughout his tenure as attorney general, Dan acted in the best interest of Texas," said Morales' attorney Paul Coggins, a former U.S. attorney. "Because of Dan's work and Dan's leadership alone he brought $17 billion to the state of Texas. Not a penny of that money ever went to Dan Morales. Not a penny of that money was ever intended to go to Dan Morales and the government won't be able to prove otherwise."
Coggins called Morales a "hero for the state of Texas."
The indictment also alleges that Morales, made several personal purchases — including contracting in 1998 to buy a $775,000 home — with campaign contributions.
He is accused of making false statements to get a $600,000 mortgage, a charge punishable by up to 30 years in prison if he is convicted.
"This is a case of an elected official charged with abusing the public trust," U.S. Attorney Johnny Sutton said.
"As Texas attorney general, Dan Morales had an obligation to the people of this state to be honest, loyal and fair. This indictment alleges that he violated that trust by backdating contracts, forging government records and converting campaign contributions to personal use," Sutton said.
The indictment stemmed from a long-running investigation into payment of legal fees from the tobacco settlement.
Morales hired five private attorneys to handle the state's case. The lawyers received $3.3 billion in fees from the state's settlement.
The private lawyers included big names in Texas legal circles: John O'Quinn and John Eddie Williams of Houston, Walter Umphrey and Wayne Reaud of Beaumont, and Harold Nix of Daingerfield. And their fees soon became the subject of controversy.
All five have denied any wrongdoing.
The indictment charges that Morales and Murr concealed documents and exaggerated Murr's role in an effort to obtain a share of the attorneys fees for Murr.
Murr asked for $520 million for his role as an adviser, but other attorneys complained that he did little work on the case.
The indictment alleges that Murr did not file pleadings, did not take depositions or statements from witnesses, did not attend any hearing and spent no money to prepare the state's case for trial.
Michael Ramsey, an attorney for Murr, said he believes the scope of the indictment is unfair.
"I'm disappointed that if Marc has to be charged in such a lengthy indictment, that it involves other people," Ramsey said. "My initial take is that it's unfair."
Both Morales and Murr are accused of conspiracy and mail fraud, which can carry a penalty of up to five years in prison and a $250,000 fine. Morales also is accused of filing a false tax return.
The indictment details how Morales allegedly made personal purchases on his credit cards, then paid them using money from a series of accounts in the name of the Dan Morales Campaign.
"As much as we regret the fact that this indictment has been returned, the thing that we welcome, at long last, after four years of rumor, innuendo, half truths, is the opportunity to get into this fray," said Sam Millsap, one of Morales' attorneys.
Arraignment for both Morales and Murr was set for March 18.
Morales, 46, left office in January 1999 after two terms in office. His successor as attorney general, now-U.S. Sen. John Cornyn, R-Texas, joined federal officials in investigating the tobacco lawsuit legal fees. Morales accused Republicans of pursuing a politically motivated investigation.
Morales, a product of Harvard Law School, was a prosecutor in Bexar County and a state representative before being elected attorney general in 1990. He won re-election in 1994 but declined to run again in 1998.
In a separate case, Morales' brother, musician Michael Morales, pleaded guilty in January to attempting to extort $280,000 from Sanchez during the fall campaign against Perry. Dan Morales has not been accused of wrongdoing in that case.
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Since, I've been very sceptical of any of the press conference announcements where State's Attorneys General line up to take credit for some wrong they've righted. Espaecially annoying is the AG from Conn. He is forever bragging about something he's done.
When Morales announced the tobacco settlement, I was sure that we'd never see a penney. Then Morales' buddy got a million when his name was inserted on a list of payees.
Next time there is a class action settlement in your state, ask the AG why outside lawyers are getting half the value when folks already on the public payroll did most of the work and whether there is any conflict of interest between the AG and any outside law firm.
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