FR Action Item: Spread the truth about Ben Barnes!

You've probably already seen the hype. Tonight the former Democrat Lieutenant Governor of Texas, Ben Barnes, will be on 60 minutes where he is expected to levy widespread accusations against President Bush by claiming that he used his office to get Bush into the Texas National Guard. The charges are naturally baseless and contradicted by a number of facts including the fact that Ben Barnes was not even Lieutenant Governor when Bush joined the Guard, the leftist media is giving Barnes a COMPLETE PASS on this inconsistency and his own disgraceful record.

Since the press refuses to do its job it is our job to get the word about the real Ben Barnes out there!!!

Most people outside of Texas know very little about Ben Barnes. Those who remember him here though know that he shares the dubious distinction of being on that short list of Texas politicians who puts LBJ to shame when it comes to corruption. Ben Barnes has literally been one giant walking scandal for the last forty years in Texas politics and is probably the most disgraced living political name in our state.

HERE IS WHAT YOU NEED TO KNOW ABOUT BEN BARNES, THE HUMAN COCKROACH OF TEXAS POLITICS:

I. The Sharpstown Stock Scandal:
This was the "Scandal of the Century" for Texas as it took down our Democrat Governor, the Democrat Speaker of the House, the Democrat Lieutenant Governor (Barnes), and a huge chunk of the Democrat legislature. It was also one of the landmark events in the transition of Texas from a Democrat to Republican state. There's lots of information out there on the web about the Sharpstown Scandal. Barnes was an unidicted co-conspirator at the very center of the thing and he paid the ultimate price - it caused the end of his political career in elected office the year before he was expected to waltz into the governor's office on the fast track to the US Senate and, perhaps, eventually the presidency or vice presidency. Here is the synopsis of the Sharpstown Scandal that I posted on another thread:

Barnes was the unindicted co-conspirator with Speaker Gus Mutscher and Governor Preston Smith who ramrodded a banking bill through the legislature as a favor to businessman Frank Sharp. In return Sharp provided a bunch of state officeholders who helped him out with several hundred thousand dollars worth of loans from Sharpstown State Bank, which he owned, that were used to buy stock through another of Sharps' company thus artificially pumping up the price of it, while the stock itself was in turn used as collateral for the loans!

The stock was then boosted to artificial highs then, with a huge killing for Sharp and its owners, it was unloaded onto the educational endowment of a private catholic school in Houston where it soon became worthless, leaving them with the bill. In short, they took the money and ran.

The money was made while Sharp's bill was between the legislature and the governor's desk and then, to cover his tracks, Governor Smith vetoed the thing. Mutscher and a bunch of state reps who helped him went to jail over the thing and he, Smith, Barnes, and dozens of state legislators who were unindicted co-conspirators got the boot in the 1972 elections. This all goes to show just how desperate Kerry is though. He's making his attacks on Bush now by turning to a human cockroach who is best remembered for bilking a bunch of school children out of their educational endowment fund.

There is lots of information on this scandal all over the web. Here are a few links to get you started:

Important Note: The "Dirty Thirty" were a group of renegade state legislators - the tiny group of Republicans who held office in Texas at the time plus some disaffected Democrats - who publicized the Sharpstown Scandal by clogging up the legislature on parliamentary moves and eventually took down Mutscher, Smith, and Barnes. Many of these legislators are still alive and several were conservative republicans. Many of them DESPISED Ben Barnes and may even be willing to give a statement about how corrupt and disreputable he is.

3. Free Republic research and background links on Ben Barnes: Lots of great background stuff revealed on the posts of these threads

Since getting the boot by the voters Barnes has settled into a lucrative career as the sleaziest lobbyist in Texas. He's been involved in one or more major scandals every decade since he left office. He was at the center of the real estate bust that bankrupted John Connolly. He was the force behind the scandal-ridden contracts to run the Texas Lottery. He's behind a controversial and ethically suspect pipeline proposal. The list is endless

III. Ben Barnes' ties to the Democrats and the Kerry Campaign

Every left wing paper in the country has run a front page story alleging a conspiracy web that ties the Swift Boat Vets to Karl Rove. Not one of them has taken notice of Ben Barnes, who is a top fundraiser for the Kerry campaign and DNC causes in general!

Here is the direct proof that Ben Barnes is lying about Bush's national guard record - the quote from the Barnes video being circulated by MoveOn and all the other leftist groups:

"I got a young man named George W. Bush into the National Guard when I was Lieutenant Governor of Texas and I'm not necessarily proud of that, but I did it"

The problem with this quote: Ben Barnes was NOT Lieutenant Governor of Texas in May of 1968 when Bush joined up! He didn't take office until 1969. In 1968 Barnes was a lame duck speaker in the Texas legislature, which was out of session since it was an even numbered year. He was working his other job that spring - a UN position over in EUROPE that LBJ appointed him to! (story)

This all needs to be our message about Ben Barnes as the left starts to replay tonight's interview ad nauseum. People in Texas know all about the human cockroach named Ben Barnes but the rest of the country does not! Write letters to your editor, pass this information on to friends and family, CALL YOUR LOCAL TALK RADIO SHOWS ABOUT IT.

As it stands right now nobody knows who the real Ben Barnes is and he'll sound credible with the complicit leftist media giving him a free pass tonight. It's our job to inform the public and make sure the truth gets out there.

Here is some good dirt about Barnes' association with the Sharpstown scandal (probably the biggest political scandal in Texas history) in the '70s. He's not a credible witness.

SHARPSTOWN STOCK-FRAUD SCANDAL. Texas went through one of its traditional and periodic governmental scandals in 1971-72, when federal accusations and then a series of state charges were leveled against nearly two dozen state officials and former state officials. Before normalcy returned, Texas politics had taken a slight shift to the left and had undergone a thorough housecleaning: the incumbent governor was labeled an unindicted coconspirator in a bribery case and lost his bid for reelection; the incumbent speaker of the House of Representatives and two associates were convicted felons; a popular three-term attorney general lost his job; an aggressive lieutenant governor's career was shattered; and half of the legislature was either intimidated out or voted out of office. The scandal centered, initially, on charges that state officials had made profitable quick-turnover bank-financed stock purchases in return for the passage of legislation desired by the financier, Houston businessman Frank W. Sharp. By the time the stock fraud scandal died down, state officials also had been charged with numerous other offenses-including nepotism and use of state-owned stamps to buy a pickup truck.

In the 1972 electoral aftermath, incumbent Democrats were the big losers, although at the top level of officialdom it was a matter of conservative Democrats being replaced by less conservative Democrats. Using the scandal as a springboard, less conservative Democrats and Republicans carried the "reform" battle cry and also gained a stronger foothold in the legislature. Democrats, defensively, charged that the whole scandal atmosphere in Texas was a national Republican plot, originated in the Nixon administration's Department of Justice. But before the smoke cleared, Will Wilson, an ex-Democratic Texas attorney general, by then one of the top Texas Republicans in the federal government, was hounded from his position as chief of the criminal division of the Department of Justice because of his own business dealings with Sharp.

The political tumult that was to become known as the Sharpstown stock fraud scandal started out meekly, though symbolically, on the day Texas Democrats were gathering in Austin to celebrate their 1970 election victories and inaugurate their top officials. Attorneys for the United States Securities and Exchange Commission, late in the afternoon of January 18, 1971, filed a lawsuit in Dallas federal court alleging stock fraud against former Democratic state attorney general Waggoner Carr, former state insurance commissioner John Osorio, Frank Sharp, and a number of other defendants. The civil suit also was filed against Sharp's corporations, including the Sharpstown State Bank and National Bankers Life Insurance Corporation. But it was deep down in the supporting material of the suit that the SEC lawyers hid the political bombshells. There it was alleged that Governor Preston Smith, state Democratic chairman and state banking board member Elmer Baum, House Speaker Gus Mutscher, Jr., Representative Tommy Shannon of Fort Worth, Rush McGinty (an aide to Mutscher), and others-none of them charged in the SEC's suit-had, in effect, been bribed. The plot, according to the SEC, was hatched by Sharp himself, who wanted passage of new state bank deposit insurance legislation that would benefit his own financial empire. The SEC said the scheme was for Sharp to grant more than $600,000 in loans from Sharpstown State Bank to the state officials, with the money then used to buy National Bankers Life stock, which would later be resold at huge profits as Sharp artificially inflated the value of his insurance company's stock. The quarter-of-a-million-dollar profits were, in fact, made. But they weren't arranged by Sharp, the SEC said, until after Governor Smith made it possible for Sharp's bank bills to be considered at a special legislative session in September 1969, and Mutscher and Shannon then hurriedly pushed the bills through the legislature. (Smith later vetoed the bills on the advice of the state's top bank law experts, but not until he and Baum had made their profits on the bank loan-stock purchase deal.)

The state officials denied all the charges, asserting that they had obtained the bank loans and made the stock purchases purely as business transactions unrelated to the passage of Sharp's bank bills. But as the spring of 1971 droned into summer, political pressure mounted on Smith, Baum, Mutscher, and Shannon-even on Lieutenant Governor Ben Barnes, who had been connected in several tangential ways to Frank Sharp, his companies, and the bank bills. By the fall of 1971, when Mutscher and his associates were indicted, the politics of 1972 had begun to take shape. Incumbents moved as far away as possible, politically, from the "old system" and the current state leaders. New candidates came forward, some of them literally with no governmental experience, under a "throw the rascals out" banner.

Mutscher, Shannon, and McGinty were tried in Abilene, on a change of venue from Austin because of adverse pretrial publicity, in February and March 1972. The indictment charged the three men with conspiracy to accept a bribe from Sharp, and District Attorney R. O. (Bob) Smith of Austin said during the trial that Governor Smith was an unindicted coconspirator. Prosecutors acknowledged from the start that the case would be based entirely on circumstantial evidence, which produced legal technicalities inexplicable to laymen. But the jury needed only 140 minutes on March 15, 1972, after exposure to hundreds of pounds and hours of evidence, to find the Mutscher group guilty. The next day, at the request of the defendants, Judge J. Neil Daniel assessed punishment at five years' probation.

The conviction of the Abilene Three dramatically advanced the momentum of the "reform" movement, coming less than three months before primary elections, at which more legislative seats were contested than in any year since World War II.^qv (Redistricting decisions by the federal courts added to the high percentage of electoral challenges, but the Sharpstown scandal generally was credited as the main factor.) In statewide races "reform" candidates also dominated. The Democratic governor's race saw two newcomers-liberal legislator Frances (Sissy) Farenthold of Corpus Christi and conservative rancher-banker Dolph Briscoe of Uvalde-run far ahead of Governor Smith, who was seeking a third term as governor, and Lieutenant Governor Barnes, whose seemingly inexorable rise to political prominence was ended when his reputation was tainted by the scandal. Briscoe defeated Farenthold in the runoff and later was elected governor; but Republican candidate Henry Grover of Houston and Raza Unida Party^qv candidate Ramsey Muñiz of Waco drew enough votes to make Briscoe Texas's first "minority" governor. For the state's second top executive branch job, voters chose moderate Houston newspaper executive William P. Hobby, Jr., over seven other Democratic candidates as lieutenant governor-also on a "reform" theme. Reform-minded moderate Democrat John Luke Hill of Houston, a former secretary of state, left a successful private law practice to defeat the popular three-term attorney general, Crawford C. Martin,^qv who had been criticized for his handling of the stock fraud scandal and for his own relationship with Frank Sharp. The Democratic primary and the general election of 1972 also produced a striking change in the legislature's membership, including a half-new House roster and a higher-than-normal turnover in the Senate. Most of the newcomers were committed to "reform" in some fashion, regardless of their ideological persuasion. The voters simultaneously indicated that their confidence in the legislature had been restored to some extent, because they approved in November 1972 an amendment allowing the legislature to sit as a constitutional convention in 1974. The convention failed by three votes on July 30, 1974, to approve a proposed new constitution for the voters to consider (see CONSTITUTIONAL CONVENTION OF 1974).

The final impact of the stock fraud scandal on Texas politics occurred during the regular session of the legislature in 1973. The lawmakers, led by new House Speaker Marion Price Daniel, Jr.,^qv of Liberty, a moderate and son of a former governor, with active support from Attorney General Hill and Lieutenant Governor Hobby and with verbal encouragement from Governor Briscoe, passed a series of far-reaching reform laws. Among other subjects, the legislation required state officials to disclose their sources of income, forced candidates to make public more details about their campaign finances, opened up most governmental records to citizen scrutiny, expanded the requirement for open meetings of governmental policy-making agencies, and imposed new disclosure regulations on paid lobbyists.

BIBLIOGRAPHY: Charles Deaton, The Year They Threw the Rascals Out (Austin: Shoal Creek, 1973). Sam Kinch, Jr., and Ben Procter, Texas under a Cloud (Austin: Jenkins, 1972). Vertical Files, Barker Texas History Center, University of Texas at Austin. Tracy D. Wooten, "The Sharpstown Incident and Its Impact on the Political Careers of Preston Smith, Gus Mutscher and Ben Barnes," Touchstone 5 (1986).

Sam Kinch, Jr.

Recommended citation:: "SHARPSTOWN STOCK-FRAUD SCANDAL." The Handbook of Texas Online. <http://www.tsha.utexas.edu/ha ndbook/online/articles/view/SS/mqs1.html> [Accessed Wed Sep 8 23:21:34 US/Central 2004 ].

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