The Man in the Black Hat, Part Two

Can a rancher in South Texas take on the third-largest oil company in the world and win? He can if his name is Clinton Manges and he has made it his business to have friends in high places.

by Paul Burka

July 1984

Spring is the best of seasons in Duval County. The dust that hangs in the South Texas air for the rest of the year has returned for the moment to the pebbly soil, tamped down by the rains that accompany the dying thrusts of winter. The huisache is in bloom, and for once the brush seems almost benign. Spring is the most welcome time in Duval County for another reason. It is the season for politics, an activity that has attained the status of a sport in the land the patróns once ruled. In towns like Benavides and Realitos and San Diego, the county seat, not a telephone pole escapes the placards of the candidates. If one is so inclined, he can dine almost every night on beans and barbecue at a rally somewhere in the county.

Early in the spring of 1982, several hundred people gathered for such a rally on a large ranch west of Freer. In many ways it was typical. The food tables were loaded with mesquite-smoked brisket and short ribs, pinto beans and jalapenos, tortillas and white bread, sliced onions and pickles. Set up outside, the tables were illuminated with lights strung on temporary poles. In a nearby building, a country-and-western band sawed away while a solitary couple danced. One of the hostesses wore a brown double-knit pantsuit, house slippers, and enormous diamond earrings.

But this was no ordinary rally. Few local candidates were present. Instead the grounds were overrun with supplicants for statewide office, for the state senate, for judgeships. State comptroller Bob Bullock was there. So was Jim Mattox, now the attorney general; Garry Mauro, now the land commissioner; Jim Hightower, now the agriculture commissioner; Ann Richards, now the state treasurer; Bill Kilgarlin, now a Texas Supreme Court justice. The dance hall was actually an airplane hangar, and an adjacent landing strip, complete with night lights, remained busy throughout the evening as candidates and guests flew in and out while guards directed traffic with flashlights. This was Clinton Manges’ coming-out party. The owner of the 100,000-acre Duval County Ranch was making his move to expand his political influence beyond the brush country. In the next few weeks Manges would invest more than $1 million in political contributions and would transform himself from a regional power broker into a statewide front-page figure.

•••••

THE LESSON OF CLINTON MAGES

His allies end up fighting him.
His enemies get ensnared in fights that never end.
One of his politicians is under indictment.
When Clinton Manges is involved, nothing is ever smooth or simple.

•••••

Late in the evening the guests assembled in the hangar to hear speeches. The oratory was as unusual as the rally. Most of it was directed not at self-promotion but at Manges: he was a loyal Democrat; he sided with the little man; he helped the underdog. Finally Bob Bullock, the only candidate whose friendship with Manges predated his quest for public office, got up to speak. “I am a Clinton Manges man,” Bullock told the crowd. “If you don’t like Clinton Manges, don’t vote for me.”

There seem to be more and more Clinton Manges men in Texas politics these days. Manges is unquestionably in the top rank of Texans with political influence, a rank that includes names like Perry Bass of Fort Worth and Walter Mischer of Houston. Moreover, he has done something that none of his peers have attempted: he has enriched himself directly—and enormously—as a result of that influence. Their empires are not dependent on the rulings of government. Clinton Manges’ empire is. He has used state agencies to pursue wealth; he has used state courts to enhance wealth and to defend it from others. Not since George and Herman Brown’s friendship with Lyndon Johnson has a Texas financial empire been so dependent on political influence.

Early this year the influence Clinton Manges began to accumulate with that 1982 rally paid off in a big way. To settle a major lawsuit brought by Manges and the State of Texas, Mobil Oil gave up its oil and gas lease covering 64,000 acres of the Duval County Ranch. The press portrayed the outcome as a $100 million windfall for the state treasury and gave Manges most of the credit. The Mobil case is indeed one of the major stories of contemporary Texas politics, but not one of the major reasons that have appeared in the papers. It is important because it shows how the state and the press were taken for a ride by Clinton Manges. It is important because it represents the apotheosis of political influence. It is important, most of all, because it shows what it can mean to be a Clinton Manges man.

THE LAST CHANCE

“Don’t worry about the state,” said Clinton Manges. “I can take care of that.”

The statement took Tom McDade, a Houston lawyer for Mobil, by surprise. He was in McAllen taking Manges’ deposition, when the talk turned to settlement of Manges’ $1.5 billion lawsuit. But there was a problem. The State of Texas had jumped into the lawsuit on Manges’ side, but no one from the state was at the meeting. That was when Manges informed McDade that he had the power to bargain for the state.

Everything Manges had been working toward for years was symbolized by the scene inside that room. There was wealth, represented by the money Manges hoped to get from Mobil. There was power, represented by Mobil’s very presence: Mobil, his enemy through eleven years of court battles; Mobil, which had sworn never to negotiate with him, to fight him to the last lawyer; Mobil, which had insisted from the beginning that Manges didn’t deserve a dime. And there was influence, represented by Manges’ assertion that he could handle attorney general Jim Mattox and land commissioner Garry Mauro. Both Mattox and Mauro had benefitted from tens of thousands of dollars in campaign contributions from Manges a year earlier; now they had in effect given Manges the state’s proxy.

The Mobil case was the culmination of Manges’ career, the chance to apply all of the lessons he had learned from more than a quarter century operating in the remoteness of the brush country. He had been close to the masters of South Texas and had seen them at work—Lloyd Bentsen, Sr., at land dealing, George Parr at politics, Oscar Wyatt at oil and gas—and he had made their skills his skills and their knowledge his knowledge. The battle lines were drawn: the rituals and mysteries of South Texas against the third-largest oil company in the world.

Everything he had gone through since moving to Duval County in 1971 was riding on this case. Long on land but short on cash, Manges was besieged by attacks on his empire of ranchland and oil and gas interests. The Seattle-First National Bank was hounding him to repay $35 million in loans. He had had trouble before, and would have trouble again, making the mortgage payment on the Duval County Ranch, the heartland of his holdings. The extensive land and mineral interests he had pried loose from the Guerra family of Starr County had been drastically reduced in the initial rounds of a continuing court fight. He was delinquent on his property taxes; creditors were suing him for unpaid bills; his former lawyers were suing him for unpaid legal fees; former friends and business associates were suing him for broken promises. It was eat or be eaten, and Mobil was the only nourishment available. He had to win. It was his last chance.

THE TIME BOMB

The state gained a foothold in the Mobil case because of events that took place decades before Clinton Manges bought the Duval County Ranch. The original ranch had covered 144,000 acres before Exxon acquired the northern 44,000 acres, but it did not include all the mineral rights underneath. Some still belonged to the state. Around 14,000 acres of state-owned minerals were included in the original Mobil lease. That was permissible, however, thanks to one of the most controversial laws ever passed by the Texas Legislature —the Relinquishment Act.

In early years of the Texas oil industry, the state had found that owning minerals and getting money for them were two very different things. As in the case of the old Duval County Ranch, much of the state’s oil and gas lay beneath backcountry property to which there was no access except through the surrounding lands of the surface owner. In theory, the law gave the owner of the minerals the right to produce them; in practice, shotguns, fences, gates, and impenetrable brush gave the owner of the surface superior rights. The state owned the minerals but couldn’t lease them. Meanwhile, there was nothing to stop landowners from leasing adjacent property where they owned the mineral rights. Down in the reservoir, oil that supposedly belonged to the state flowed out of the… state-owned area and into private wells. Deciding that half a loaf was better than none, the Legislature in 1919 passed the Relinquishment Act. It authorized the owner of the surface to lease state-owned minerals. In return, the state gave up half its royalties to the landowner. When the ranch company made its bargain with a predecessor of Mobil in 1925, the lease included 50,000 acres where the ranch owned the minerals and another 14,000 acres where the state owned the minerals.

•••••

THE FORMER ALLIES OF CLINTON MANGES

JOHN BOYD: Manges’ Seafirst banker wanted to get in on the Southwest oil boom —over his head.
OSCAR WYATT: Once they did deal together. Now they’re fighting, and Wyatt is moving to Manges’ home turf.
FRANK NIGRELLE: He didn’t take heed of others’ experience with Manges when he bought the Mobil lease. Now he’s suing Manges.

•••••

Pages: 1 2 3 4 5 6 7  next »