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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Manges had become part of a society structured from top to bottom according to the ways of South Texas. Some were already familiar to him: the use of public funds for private purposes (one of the celebrated symbols of Duval County for years was the fire hydrant in the yard of Parr’s Spanish-style home, with a hose permanently attached to bring public water to Parr’s pecan trees) and the treatment of the oil company as the enemy (the Parrs even kept Freer, the Anglo oil town, from having its own school district; they used tax money from the oil fields to run the poor Mexican schools on the other side of the county).
In Duval County the political lessons mattered most of all. There was only one lesson, really: everything is politics, and politics is everything. In South Texas it could not be otherwise, for two reasons. First, ethnic undercurrents raised the stakes; behind every election was the eternal issue of which culture would survive. That’s why men have died over politics in South Texas, lots of men. Second, for many in the brush country, politics was the only hope for improving their lot in life. The oil business was out; those jobs were filled from outside. Only land and government were left. Either a person labored on a ranch or a farm all of his days or he helped deliver the vote to the Parrs and could then aspire to a job in the courthouse or the school district. Politics was the way off the land.
The pervasiveness of politics created its own logic. In a political system that depended on loyalty, loyalty had to be rewarded—and disloyalty punished. In the mid-seventies a number of Duval County teachers lost their jobs because of votes they had cast years before. Because so much hinged on politics, there was no tolerance of fence sitters. In George Parr’s Duval County, anyone who wasn’t known to be for him was presumed to be against him. Finally, just in case some reformer got ideas, Parr recognized that the most important official was the district judge – not just because of his rulings, but especially because of his control of the grand jury, which decided whether an activity was criminal. When a judge hostile to the Parrs took office in the late forties, George Parr backed his own candidate — none other than the same C. Woodrow Laughlin who, years later, presided over the dispute between Clinton Manges and the Guerras.
For a time in the early and middle seventies, there were newspaper reports that Manges aspired to become the next Duke of Duval. But that was not his destiny. He had none of the patrón in him. Other Parr insiders noticed that while Parr always spoke in “we’s,” Manes always spoke in “I’s.” Parr craved power more than property and liked to say, “I don’t have anything but a bunch of friends.” Manges craved assets. The two men shared a contempt for the establishment that ran the rest of Texas, the oil companies that took riches out of the earth they didn’t own and the politicians who didn’t understand South Texas, but otherwise they were as different in their own way as Vannie Cook and Manges had been. What Manges got from Parr was not his legacy but his lessons. Those lessons explain a lot about the person Clinton Manges is today, because a man who has lived by them can never again think of government as a neutral force.
AT WAR WITH BIG OIL
Two weeks after taking full control of the ranch in early 1972, Manges showed up at Mobil’s South Texas headquarters in Corpus Christi. “You’re raping my land,” he began, and the conversation went downhill from there. Manges complained vituperatively about pollution of the surface from saltwater leaks associated with oil production. He had a point. The former owners had been so desperate to encourage drilling that they made all sorts of concessions to oil companies operating on the ranch. The companies had been allowed to dispose of salt water on the surface instead of digging pits to contain it. They had also been excused from burying pipelines. Much of the damage was thirty years old and more. The old ranch company hadn’t really cared; it was an absentee owner and its concern was oil. Clinton Manges, though, was a resident owner and his concern was money. The oil wasn’t doing him much good – the spin-off to the previous shareholders remained in effect, so the ranch’s interest in the minerals was just 20 per cent, or about $200,000 a year at the pre-OPEC oil price. Manges demanded that Mobil compensate him for the surface damage. And, he reminded Mobil, he had the right to require the company to bury its pipelines. Unlike Gulf at the McElroy ranch, Mobil had no document handy to get out of the predicament. Mobil decided to deal.
That April Manges and Mobil reached a settlement. Mobil paid Manges $415,000 for pollution damages and $5000 for the right to keep its pipelines on the surface. Manges took the $420,000 and paid it right back to Mobil for 107 producing wells located on the ranch. The wells were marginal, and many of them were about to be plugged or temporarily abandoned, but for Manges that wasn’t the point. As a neophyte rancher, he had taken on one of the most powerful companies in the world and won.
If Mobil thought that the settlement would satisfy Manges, it was quickly disillusioned. At the very least Manges wanted to renegotiate the leases made by the old ranch company. At the most he hoped to drive the oil companies – at least half a dozen majors and even more independents – off the Duval County Ranch and reclaim their mineral rights for himself.
Either way Manges had a lot to gain. The spin-off that had transferred the royalties to the owners of the old ranch applied only to the old leases. If the leases terminated, so did the spin-off. The old owners would be left out in the cold; Manges would inherit their 80 per cent and his income would increase fivefold. Manges tried to get Mobil to take a new lease. But Mobil knew that it would be risking a lawsuit for defrauding the old owners and refused. Later Manges tried the same tactics with an Exxon lease on the ranch. Same result.
That left the alternative of driving the companies off altogether. Here was the chance for big money. An operative oil and gas lease contains two things of value. One is the working interest – the portion of each barrel of oil (seven eighths, under the Mobil lease) that belongs to the oil company. The other is acreage. The Mobil lease tied up all 64,000 acres, even though its wells were on only a small portion of the land. No one else could operate on the leased property without Mobil’s blessing, which could only be acquired for a price. But if the companies lost their leases, Manges would have both the working interest in the existing wells and the right to lease out (or develop for himself) the remaining acreage.
The difference in dollars is staggering. The current price of oil is about $30 a barrel. Under the Mobil lease Manges received 52 cents a barrel: the one-eighth royalty, less another 30 per cent that Exxon owned as a result of its Depression-era foreclosure, less the old owners’ 80 per cent spin-off of the remainder. If he could break the leases and operate the property himself, Manges would have everything except Exxon’s share of the minerals, or $21 a barrel.
So Clinton Manges declared war on the oil companies. He had already settled with Mobil, which had by far the biggest lease on the ranch. Then he went after the little fish – the independents operating on the ranch. He sued them for pollution. He wanted more than money this time. He wanted the leases forfeited. Moreover, he asked for an injunction not just against pollution but against all production. Such a sweeping remedy was beyond the reach of most courts, but Clinton Manges was in Duval County.
Thanks to a master stratagem by George Parr, Duval County had a hometown judge. The sparsely populated brush country counties where Parr ruled didn’t generate enough litigation to justify having their own judge – traditionally they had been part of a judicial territory that included Alice – but in the late sixties Duval County filed a flurry of delinquent tax suits to provide a statistical justification for a new court. The Legislature went along with the game and created a court for Duval, Jim Hogg, and Starr counties, which together had fewer than 50,000 people. Parr also got his judge, O. P. Carrillo, a member of an old Duval County clan.
What was true for Parr had also become true for Manges: the most important official was the local judge. Carrillo would be presiding over the pollution suit. He would also be taking over the Guerra case, since the property no longer fell within Judge Lauglin’s jurisdiction. What followed was not exactly subtle. Manges wrote a $6915 check to a San Antonio auto dealer to help pay for Carrillo’s new Cadillac. He gave Carrillo stock in, and directorship at, and unsecured loans from the bank in Rio Grande City that Manges had acquired as part of the Guerra deal. He gave Carrillo an eat-now-pay-later grazing lease. Eventually these and other dealings would cause Carrillo to be disqualified from the Guerra case (although he refused to withdraw voluntarily), and they would play a part in his subsequent impeachment by the Legislature and his removal by the Texas Supreme Court in 1976.
But all of that was unforeseen. In 1973 Carrillo gave Manges an injunction in the pollution case, preventing the independents – even some oilmen on nearby land that Manges didn’t have a claim to – from operating their wells. Manges offered to buy the oilmen out for salvage value, making it plain that he intended a long siege and even telling one operator who was well into his sixties, “You’re not going to live long enough to see the end of this.” One of the operators took Manges up on his offer; the rest, including the sexagenarian, fought on. The offending oil wells were shut down for 32 months before an appellate court, calling Carrillo’s injunction an abuse of judicial discretion, allowed them to resume production.
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