Ben Barnes: John Kerry’s Unbelievable Last-Ditch Weapon

Ben Barnes: John Kerry’s Unbelievable Last-Ditch Weapon By Lowell Ponte FrontPageMagazine.com | September 8, 2004

"THE LAST SMEAR,” THE DOOMSDAY WEAPON that John F. Kerry’s sinking campaign desperately hopes can snatch victory from the jaws of defeat, is ready and is scheduled to be launched against President George W. Bush on Wednesday night, September 8, on CBS’ weeknight version of “60 Minutes.”

This bomb is an already-taped Dan Rather interview with former Texas Lt. Governor Ben Barnes in which Barnes will hint, and deceptive CBS editing will strongly imply, that during the Vietnam War the Bush family pressured him to use politics to get a young George W. Bush into the Texas Air National Guard.

“Barnes comes off as very sympathetic,” the American Spectator quotes an unnamed CBS news producer with whom its reporter spoke. “This is a guy who has been under intense, brutal pressure from a family that is very powerful in Texas. You get the impression that he just can’t take it anymore.”

This story “is clearly the Kerry campaign’s response to the Swift Vets controversy,” noted one source quoted by the American Spectator. It is an attempt to undermine President Bush’s credibility in the same way that testimony by 254 of Kerry’s fellow Swift boat veterans undercut his carefully-cultivated Kennedy-esque image of honor and heroism during the Vietnam War.

But before anybody swallows the story Ben Barnes tells, America needs to know some things about Mr. Barnes that CBS and the rest of the establishment media are unlikely to mention.

Ben Barnes was born in 1938 in De Leon, Texas southwest of Fort Worth. After graduating from the University of Texas and earning a law degree from Texas Tech University in Lubbock, Barnes in 1960, at age 22, was elected to the Texas House of Representatives. He served there until 1969, the last four of these years as the youngest Speaker of the House in Texas history. From 1969 until 1973 Barnes was the state’s Lt. Governor.

President Lyndon B. Johnson compared the young political wunderkind to Thomas Jefferson and predicted that Ben Barnes would be the next Texan elected President. The leftwing Texas Monthly called Barnes the “golden boy” of Texas politics.

But “after he was involved in a bribery and stock fraud scandal in the early 1970s,” wrote leftwing Mother Jones Magazine, Barnes “never held office again. He was involved with a number of banks and thrifts that were mentioned during the S&L crisis, and forced into bankruptcy when the Texas thrift industry cratered in the late 1980s.”

By the late 1990s Barnes had become a millionaire lobbyist working for GTech, a company that operated lotteries in 37 states including Texas. The Texas lottery was losing money, in part because of a sweetheart deal in which Barnes received 3.5 cents for every ticket sold – more than $3 million per year. When the Texas lottery commission re-bid GTech’s contract, the company sued and – after buying Barnes out for $23 million – hired a new lobbyist. A fired Texas lottery director sued, claiming that he had taken the fall for GTech because Barnes had a National Guard story embarrassing to then-Governor George W. Bush.

Barnes, facing potential charges of yet more wrongdoing, told his National Guard story in a deposition in a successful effort to politically deflect his own responsibility in this matter. In multiple re-tellings since 1999, the details of Barnes’ story have changed several times. Its gist is Barnes’ claim that when he was the Democratic Lt. Governor he intervened to get Republican Houston Congressman George H.W. Bush’s son George W. into the Texas Air National Guard (alongside the sons of Governor John Connally and Senator Lloyd Bentsen, Democrats). Barnes now says he is “ashamed” of this. Trouble is, George W. Bush began the first of six years’ service in the National Guard in 1968, but Barnes did not become Lt. Governor of Texas until 1969. Barnes has acknowledged that no member of the Bush family sought his help, but claims he was approached by a Bush family friend (who died three years before Barnes began telling his self-serving story).

Because Barnes’ tale rests solely on his word, how good is his word? Given his long past of shady dealings, the shipwreck of his career on scandal, and the changes and inconsistencies of his story, Barnes appears to be less than a credible witness.

More doubt is raised by this partisan Democrat’s motives. Barnes promoted an earlier version of his story in 1999 and 2000 in a clear attempt to damage the presidential campaign of George W. Bush. And Barnes apparently has had the same aim in reviving this story, long ago discredited by an investigation by the liberal Los Angeles Times, in 2004. As CNN reported in 1999, “the Los Angeles Times said it found no evidence that either Bush or his father, former President George Bush, had personally tried to influence or pressure anyone to get the younger Bush a place in the Texas Guard.”

Ben Barnes has a large vested interest in the outcome of the 2004 election. He is a co-chairman of John F. Kerry’s 2004 presidential campaign. Barnes, as CBS News reported in June 2004, has made bundled contributions of more than $500,000 to Kerry’s campaign. Barnes owns a home near his friend Kerry’s home in Nantucket on the Massachusetts shore.

For many years Barnes and the lobbying firm he founded in Austin, EntreCorp, have made many millions of dollars by acting as the go-between bringing special interest groups and companies together with highly-placed Democrat officeholders. The Center for Responsive Politics has listed Barnes as the third largest all-around Democratic donor in America 1999-2004. So influential and important is Barnes to the Democratic Party, as this column reported last January, that Senate Democratic leader Tom Daschle has nicknamed this fat cat money man and lobbyist “the fifty-first Democratic Senator.”

If Kerry becomes President, reported the Fort Worth Star-Telegram in July 2004, Ben Barnes is at the top of the list of those close to the Kerry Administration likely to become “gatekeepers and endorsers for…appointees and job-seekers.” Given his sticky-fingered past, Barnes would likely also become a toll-collector at this gate, charging everybody he allows through it, and overnight he could become an even wealthier and more influential political lobbyist and “fixer” serving special interest groups, corporations, nations and individuals.

Given Ben Barnes’ shady past, dubious reputation and selfish mercenary motive to defeat President Bush and elect Barnes’ close friend and partisan ally John F. Kerry, what honest reporter would give credence to an unsubstantiated Barnes tale calculated to damage President Bush in the final days before the November election?

CBS Anchorman Dan Rather, according to the American Spectator, “has been pushing for months” to get his network’s most watched news program “60 Minutes” to air this non-credible story in an already-videotaped interview with Ben Barnes. This interview, the Spectator reported in September 2004, has been edited deceptively to imply that the Bush family directly pressured Barnes to get George W. Bush into the Air National Guard. Rather only half succeeded. His Bush-smearing interview will air on “60 Minutes,” but on its lightly-watched Wednesday version this week, not its far more widely seen Sunday night version.

(Dan Rather is an extreme partisan who, while Anchor for the CBS Evening News, participated in a Democratic Party fundraiser in Texas. The leftwing slant of CBS itself has been documented by that network’s former reporter Bernard Goldberg in his 2002 best-seller Bias: A CBS Insider Exposes How the Media Distort the News.)

What is the truth about George W. Bush and the Texas Air National Guard? He apparently was chosen to defend his nation in this service for a reason so obvious that few notice it. Mr. Bush was accepted by the Guard less than two weeks before his graduation from Yale University, and Guard commanding officers logically concluded that any young Texan bright and hard-working enough to graduate from such a prestigious university had thereby demonstrated both excellence and high character.

Mr. Bush served in the National Guard for six years. During the first four of those years George W. Bush far surpassed the time and work requirements for National Guard service, and during his remaining two years Mr. Bush complied with those basic requirements. (After returning from his four months in Vietnam, metamorphosed radical anti-war leader John Kerry was required to serve for several years in the Naval Reserve, but the establishment media has refused to investigate charges that Kerry shirked this required duty.)

In mid-1968, when George W. Bush joined the National Guard, Democrats controlled the White House and both houses of Congress, and Texas was still a yellow-dog Democratic one-party state that would take another decade to elect its first Republican governor in more than 100 years. The Republican Bush family had no power to twist then-Texas House Speaker Democrat Ben Barnes’ arm, even if it wanted to. The notion that Barnes was “pressured” by the “powerful” Bush family to get George W. into the National Guard is absurd. But this phony claim is apparently what CBS, to rescue the desperate Kerry campaign, is preparing to broadcast.

President Bill Clinton, a master at extracting donor cash in exchange for political favors, once told a group of Methodist ministers: “If you all will take a sinner like [Ben] Barnes, you might take me.”

If people can be C-BSed into believing a disreputable sinner like Ben Barnes, America might yet suffer the devastation of a President John Kerry.

-------------------------------------------------------------------------------- Mr. Ponte hosts a national radio talk show Saturdays 6-9 PM Eastern Time (3-6 PM Pacific Time) and Sundays 9 PM-Midnight Eastern Time (6-9 PM Pacific Time) on the Liberty Broadcasting network (formerly TalkAmerica). Internet Audio worldwide is at LibertyBroadcasting .com. The show's live call-in number is 1-866-GO LOWELL (1-866-465-6935). A professional speaker, he is a former Roving Editor for Reader's Digest.

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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