The Man in the Black Hat
By mastering the mysterious ways of South Texas, Clinton Manges has built an empire, amassed political influence, declared war on the state establishment—and left bitter enemies in his wake.
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The summer of 1961 saw the beginning of what was to become a familiar pattern for Manges. He wrote hot checks, failed to pay numerous bills, and eventually was sued for unpaid debts and taxes. The Small Business Administration, which had advanced Manges the money to get into ginning, foreclosed; it not only sold his equipment but also discovered that he had made a false statement in his loan application, which was a criminal offense. In 1963 Manges was indicted. By that time he was out of the bowling alley business as well. In 1965 he pleaded guilty and paid a $2500 fine. The man who would become an intimate of judges and a crony of the Texas attorney general was now a convicted felon.
Never again would Clinton Manges squander his energies on running a business. He had learned the hard way that in South Texas, where there is no industry and most of the commerce is agricultural, the only real wealth lies in the land – its sale, its acquisition, its hidden riches. Saved from bankruptcy by Lloyd Bentsen’s aid, Manges held on to a few property interests and resumed land trading. He and his family (he has four adopted children) left Raymondville for San Antonio, but in effect Manges lived out of his car as he crisscrossed the southern half of Texas, doing deals as far east as Corpus Christi and as far west as the Permian Basin. In the late sixties he put hundreds of thousands of miles on his cars, driving at breakneck speed. (He was once reported to have collected 21 speeding tickets between 1969 and 1974, and he sometimes hired young drivers, giving them the instructions “Don’t let it get under ninety.”) In the cluttered back seat he carried his guns, including his pride and joy, an elaborately tooled .257 Weatherby, the flashiest, most expensive rifle money can buy.
He picked up a new backer, a respected McAllen investor named Vannie Cook. Although the two men couldn’t have been more different – Cook was a Valley aristocrat, a man of inherited wealth who enjoyed the fruits of his deals more than the deals themselves – the team clicked because having Manges enabled Cook, like Bentsen before him, to remain deep in the background. But while Bentsen had kept Manges under tight rein, remaining the dominant figure, Cook was less assertive. They never committed their own agreements to writing. Manges bought, Cook paid, and they settled later, usually by swapping property.
His long years spent doing deals for others had a lot to do with the making of the combative, relentless adversary that Clinton Manges is today. He was under none of the social constraints that might have inhibited a Lloyd Bentsen or a Vannie Cook. He had no public image to protect, no peers to answer to, no membership in the establishment to keep current. Bentsen and Cook couldn’t afford to step on toes; Manges couldn’t afford not to. Sometimes he’d work on a deal in which his cut depended on how mean and tough he could be. Such a deal was his purchase, with Cook’s backing, of the huge McElroy ranch in the Permian Basin in 1965.
The ranch covered more than 80,000 acres of thinly vegetated land south of Odessa. Manges bought just the surface of the ranch; the minerals already belonged to Gulf, whose orange pump jacks lined the highway for ten miles on either side of the road leading into Crane. (It is said that when old man McElroy signed the lease with Gulf, he had the company send his bonus money to the ranch in an armored car just so he could see it before it went to the bank.) The pump jacks aren’t all that sit atop the land, though. Gulf’s pipelines are clearly visible, parallel to the fence lines. So are giant concrete slabs that Gulf has abandoned at old rig sites.
Soon after buying the land, Manges sent out ranch hands with notebooks to record in detail how Gulf’s operations had damaged the land. The damage was part of his deal: Manges knew that Gulf’s lease contained a provision requiring the company to bury its pipelines (an enormously expensive undertaking) if the surface owner demanded it. Manges demanded it. This was straight out of South Texas. He was the predator, the oil company his prey. He didn’t really want the pipelines buried, of course; he wanted Gulf to pay for the privilege of leaving them on the surface. But Gulf refused to be bluffed, and when Manges filed suit, he found out why Gulf would not pay. The company produced a document signed by a previous surface owner giving the company the right to keep the pipelines on top of the land. Manges lost the fight and sold his interest in the land to Cook, but the experience wasn’t wasted. Once again Manges had shown his grasp of the lessons of South Texas, and although he has lost this time, the day was coming when he would win.
But Manges’ luck was about to change. In 1971, using $2 million advanced by Cook, Manges bought the Guerra ranch in remote Starr and Jim Hogg counties, south of Duval. It was a dream deal, one that every land trader in South Texas knew was there to be made – Lloyd Bentsen, Jr., among others, had tried and failed – but it took Clinton Manges to pull it off.
The Guerras had been one of the ruling families of South Texas. They traced their Valley lineage back to before there was a Texas, to 1767. Manuel Guerra was the boss of Starr County before World War I; his son, Horace, inherited the mantle and ruled until after World War II. Horace’s legacy was a South Texas aphorism (“Never trust a gringo carrying a Bible or a Mexican smoking a cigar”) and a partnership arrangement for his six children that was supposed to protect the family’s holdings from inheritance taxes and land traders like Clinton Manges.
But things fell apart in the third generation. The five brothers and a sister didn’t get along. Paralyzed by jealousies over who would be the new boss and who had the right to borrow how much from the family partnership, the Guerras had lost most of their political power. They had generous check-writing privileges against the partnership account at the family-owned bank in Rio Grande City, but some abused it more than others and were deep in debt to the partnership. The rivalry among them was so severe that the siblings couldn’t even agree on terms for leasing the jointly owned 72,000 acres for oil and gas development. While the South Texas gas play wet on around them, the Guerra lands remained virgin, waiting for someone who could get everybody together, make a deal, and win the right to act for the family.
The Guerra deal keeps popping up at various stages of Manges’ life, and for good reason. Sixteen years after Manges first got involved, it is still lingering in the courts, some aspects of it unresolved. But there is another reason that the Guerra deal has played such a large role in Clinton Manges’ career. In its many twists and turns it illustrates most of the elements that make him such a controversial and fascinating figure. On the one hand is his craft: his ability to put a deal together, to use his holdings to the maximum advantage, to fend off challenge after challenge to his authority and remain in control. The Guerra deal changed Clinton Manges from an agent into a principal and provided him with the means to build an empire. On the other hand is his craftiness: cozying up to neutral officials, falling out with his benefactors, seizing every advantage for himself at the expense of others, and playing hardball with those who are at his mercy.
Manges bought off the deal not by bringing the Guerras together but by dividing them even more. In 1968 he proposed to buy the land, half the Guerras’ mineral rights, and the right to lease the property for oil and gas. By persuading two of the brothers, Joe and Virgil, each to transfer his one-sixth interest in the partnership to him, Manges was able to go to court to ask for the appointment of an impartial referee, known as a receiver. So far, so good. Manges was certainly entitled to a receiver to break the deadlock, and although the anti-Manges Guerras appealed the appointment, they lost. But then strange things began to happen, the kinds of things that seem to happen in South Texas.
While the receivership question was still on appeal, Joe and Virgil struck again. Claiming the right to act for all the partners, they gave Manges what he wanted: a deed to the entire 72,000 acres and to half the minerals. The other Guerras were distressed that the court had not stopped the wheeling and dealing while the case was under its control. And it didn’t assuage their fears that the judge, C. Woodrow Laughlin of Alice, bore the taint of having been previously removed from office by the Texas Supreme Court. (His first official action upon taking the bench in 1953 had been to dismiss a grand jury that he suspected was about to indict his brother. Under the law then in force, Laughlin could run for his old job in the next election.) The receiver Laughlin appointed turned out to be a buddy of Manges’, Jim Bates of Edinburg, who was then a state senator. When Bates married in 1970, during the receivership, Manges gave his bride a new Pontiac. While the status of the Guerra property was still very much in doubt, Bates served as a director of the First State Bank in Rio Grande City, which Manges had acquired as part of his dealing with Joe Guerra.
One by one, the remaining Guerras gave up the fight and ratified Manges’ deed to the ranch, in exchange for individual settlements. But that wasn’t the end of the strange happenings. Early in 1971 Bates recommended that Manges get his deed – free and clear, with no liens – although the Guerras claimed that Manges still owed them money. Bates’ explanation was that Manges owed nothing “at that time”; later, however, Manges paid the Guerras more than $200,000. By that time, though, Bates’ lien-free deed had enabled Manges to mortgage the property at the Bank of the Southwest in Houston, providing millions just when he was maneuvering to buy the Duval County Ranch and the Groos National Bank in San Antonio. Shortly after the loan, Manges, who had paid around $54 an acre for the Guerra land, sold 2900 acres, without minerals, to a rancher for $5 an acre. The rancher later testified that his son had handled Manges’ loan at the Bank of the Southwest.
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