Campaign extortion claim is investigated - Dan Morales' brother suspect in scheme Re: Tony Sanchez

AUSTIN - Federal prosecutors are investigating whether a brother of former Texas Attorney General Dan Morales attempted to extort between $200,000 and $300,000 from Democratic candidate Tony Sanchez during the governor's race last fall.

Music producer Michael Morales, 40, has been identified by federal agents as the person who called Mr. Sanchez's campaign manager and threatened to make public an allegation that Mr. Sanchez committed a felony while a law student in San Antonio more than 30 years ago, sources speaking on condition of anonymity told The Dallas Morning News.

Michael Morales did not return calls, though Dan Morales said his brother has denied the allegation. Michael Morales' lawyer, John Pinckney of San Antonio, said he would return a call Friday afternoon but did not return that call or numerous other messages to his home and office.

Deputy U.S. Attorney Robert Pitman, whose district includes Austin and San Antonio, had no comment. "I cannot confirm or deny the existence of any investigation," he said.

The sources said evidence gathered over several months against Michael Morales, of San Antonio, includes: tape recordings of telephone calls the suspected extortionist made to Sanchez campaign manager Glenn Smith in late September or early October, traced to a phone in Michael Morales' control; a facsimile sent to the Sanchez campaign containing terms of a proposed deal; and unspecified items that federal agents seized in executing a search warrant on Michael Morales' San Antonio business. The government has sealed all records pertaining to the search.

About six months before the alleged extortion attempt of the Sanchez campaign, the campaign of Gov. Rick Perry received a letter dated April 25, in which the writer offered to sell the same information pertaining to Mr. Sanchez, The News has learned. The letter - accompanied by a partial affidavit - was signed with the same, apparently fictitious, name as that used by the person who had called the Sanchez campaign: "Wendell Smith."

The Perry campaign declined the offer because it had no interest in the information, said campaign manager Dierdre Delisi. Federal authorities have not contacted the Perry campaign about the investigation, she said, and do not have a copy of the letter.

The writer asked for a "reasonable research fee," and promised in exchange to provide the remainder of an affidavit by the alleged victim to the campaign, according to a copy of the letter and a partial affidavit obtained by The News.

"I have done an excellent job in gathering this research and it is an invaluable asset," the writer told the Perry camp. "I now wish to turn over the information to you and wash my hands of it.

"Please keep in mind that this is worth millions and the very office of the Governor to your campaign or another party."

The letter, in an envelope bearing a fictitious return address in the San Antonio suburb of Kirby, did not include any way for the Perry campaign to contact the sender.

It was followed up by repeated phone calls from an anonymous caller wanting to make a deal, Ms. Delisi said.

Making an extortion attempt via phone lines is punishable by fines and up to two years in federal prison. Wire fraud, another possible charge, can carry a sentence of up to five years imprisonment.

The letter to the Perry camp could be legally significant if the writer is shown to be the same person who phoned the Sanchez campaign. If so, and if the mailing and the subsequent phone call are found to be part of the same criminal scheme, the alleged extortionist could additionally face charges of mail fraud carrying penalties of up to five years in prison.

Dan Morales, who lost to Mr. Sanchez in a bitter Democratic gubernatorial primary and ended up endorsing Mr. Perry, the Republican, said his brother Michael has assured him that the extortion allegation against him is without merit.

"He indicated there was nothing to it," he said. "I have no knowledge about any of that."

A spokesman for Mr. Sanchez had little to say about the case, other than to confirm that the Laredo businessman's campaign got a call attempting to extort the money during the week of the Oct. 9 candidates debate in Houston.

"When the extortion attempt was made, the campaign immediately contacted law enforcement," said spokesman Mark Sanders. "We turned over evidence that we had and we cooperated completely with the ensuing investigation."

He also said Mr. Sanchez emphatically denied any truth to the underlying allegation that the alleged extortionist threatened to reveal.

The alleged illegal activity, dating to Mr. Sanchez's days at St. Mary's University School of Law in San Antonio in the late 1960s, was never reported to police. The matter could not be corroborated adequately to make it public, Dan Morales said.

"I do recall the individual who brought the allegations to the campaign, and we determined there was nothing to do with it," he said.

According to sources and the partial affidavit obtained by the Perry campaign, the person who made the allegation expressed concerns about Mr. Sanchez to a therapist in San Antonio in early 2001. The counselor, who knew Michael Morales, arranged for them to talk.

Michael Morales informed his brother's campaign staff about the allegation, and the Morales campaign asked San Antonio lawyer and former Bexar County District Attorney Sam Millsap to look into it, the sources said.

Mr. Millsap did not return calls seeking comment. He has represented Dan Morales in other matters, notably a federal investigation into the handling of lawyers' fees in the state lawsuit brought by Mr. Morales as attorney general against tobacco companies.

Michael Morales launched his music-recording venture, Studio M, with his brother Ron in 1990. As a rock performer, Michael Morales had his own hits including, "Who Do You Give Your Love To," and "That's What I Like About You," which reached 14 and 28 respectively on the Billboard pop charts in 1989.

Michael and Ron Morales have also won Grammys for producing records, most recently for Freddy Fender's 2002 album La Musica de Baldemar Huerta.

During Dan Morales' gubernatorial campaign last year, his two brothers produced a pair of television commercials that attracted attention for their novel style: They had no spoken words, just an anti-Sanchez message displayed on the screen to a silent or bossa nova soundtrack.

In an interview at the time, Michael Morales said politics has "has always been about family," noting that he and Ron Morales worked on Dan Morales' state legislative and attorney general races as well.

I think I am missing something here, or this article is missing information.
What exactly is the allegation that Sanchez is denying?...

What exactly is the allegation that Sanchez is denying?...

God only knows: "The alleged illegal activity, dating to Mr. Sanchez's days at St. Mary's University School of Law in San Antonio in the late 1960s, was never reported to police."

Democrats, by definition, are without ethics. They are evil and vile, with no redemning features to their disgusting personalities.

It's all pretty hilarious, and a classic non-denial denial: The "alleged activity" apperently happened, but "was not reported to police."

Sounds like Sanchez could not take "no" from a "date."

Sounds like Morales might be a low level sexual predetor, a kind of Chicano Clinton?

"Put some hielo on it, babe."

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