Other People’s Money
A man with big ambitions, Paul Rush bought his way into San Antonio society. Too bad the money he spent wasn’t his.
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It was a humid evening during fiesta season in 1989, but the waiter at San Antonio’s Republic of Texas restaurant was not in a festive mood. A short, balding thirtyish man wearing a dark blue apron with the name “Paul” monogrammed on it, he became distracted, even flustered, when such passing VIPs as chamber of commerce head Joe Krier or Congressman Lamar Smith stopped to greet him before hurrying off as if pressing business awaited.
The waiter understood the reason for their discomfort all too well. Just weeks earlier, he had been wearing not a waiter’s apron but a custom-tailored pin-striped suit. As Frost National Bank’s most promising young vice president, Paul Adams Rush was being groomed for a top position. His ascent had been mercurial. In 1983 the local Jaycees had named Rush, then only 24, their Outstanding Young Man of San Antonio. A year later, he was on a first-name basis with the city fathers. By the late eighties, the loyal GOP team player and political fundraiser was the rising star in local Republican circles, and in 1988 his painstaking thoroughness won him the co-chairmanship of George Bush’s Bexar County presidential campaign.
Rush’s financial prospects seemed to be as stellar as his political ones. No matter what the occasion, Rush always had a supply of money. Despite his moderate $47,500-a-year salary, he attended GOP fundraisers at $1,000 to $2,500 a pop, got friends invited to Bush’s inauguration, and generously contributed to campaigns. He was such a soft touch that former Bexar County GOP chairman Lonnie Wulfe called him a “modern-day Robin Hood.”
Everyone assumed that Paul Rush would become a major behind-the-scenes operative, if he didn’t wind up in a prominent political office in Washington, D.C. But those luminous prospects were eclipsed on April 14, 1989, when Rush was summoned before a group of stone-faced bank officers and an auditor. Under close questioning, Frost Bank’s golden boy admitted that over three years he had systematically embezzled more than $500,000 from the bank. After being interrogated by the FBI, he was tried and convicted of misapplication of bank funds and willful tax evasion, and in September 1990 he began serving a 27-month sentence at a federal minimum-security facility in Millington, Tennessee.
What made Paul Rush do what he did? By the time he was 29, an age when most ambitious young men are still laying the groundwork for a career, Paul Rush had risen, peaked, and crashed. Granted, the eighties in Texas were a time of spectacular successes and equally spectacular failures, but even in that context, Rush’s rise and fall were stunning. Why did he self-destruct? Was it greed? Was it a lust for power? Did he become addicted to embezzling, like a gambler who can’t stop rolling the dice?
Among many of Rush’s detractors, the prevailing theory was blind ambition. They scoffed that his stealing from the rich was simply an attempt to buy social access and influence among the rich. They contended, as one bitter fellow banker put it, that Paul Rush was a “con artist who used his filthy lucre to become a big muckety-muck.”
But there was another, more forgiving theory. According to that scenario—summed up by George Ames, a real estate professional who is related by marriage to Rush’s wife—Rush stole not for money or power but because “he desperately wanted to be somebody—in a hurry.” He wanted to be part of a group that mattered to him very much. Those who had known him well understood that Rush was so desperate to change his image that he took a disastrous shortcut. It was Rush’s misfortune to come of age when Michael Milken and Ivan Boesky were culture heroes. Like too many people in that heady era, Rush believed that money could buy him friends.
Paul Rush had grown up in Dallas’ notoriously snobbish Park Cities area, a place that fueled his drive to excel and at the same time seemed to confirm his fear that he was a nobody. As a pudgy teenager at Highland Park High School, Paul was always in the shadow of his identical twin, Parker, who was everything Paul wasn’t. Handsome, thin, muscular, Parker was confident and popular with the girls, and in his senior year he was elected class president. Paul worked on the school newspaper and was a member of ROTC. He never had a steady girlfriend and rarely had a date; he was considered something of a nerd.
When Paul Rush moved to San Antonio to attend Trinity University in 1978, his immediate goal was to earn a business degree. But his hidden agenda was to make himself over. By the end of his freshman year, he had lost weight, become more outgoing, and been tapped by a popular fraternity, Chi Delta Tau. In due course, the new Paul Rush was elected president of his pledge class and became a member of the student senate, a resident assistant, and a vocal member of several campus committees. By his sophomore year, Rush had attracted the approving eyes of Trinity’s administration, especially those of the school’s president, Ron Calgaard. He became the administration’s darling, inspiring such trust that neither students nor faculty objected when he, as student body president, was allowed to sit in on committee meetings of Trinity’s board of trustees.
Despite the difference in their ages, Rush and Calgaard had many goals and interests in common. During Rush’s last semester, Calgaard was only too happy to call his good friend C. Linden “Corky” Sledge, the CEO of Frost Bank, and urge Sledge to hire his promising young protégé. Within a month of graduating in 1982, Rush was working at the bank as a credit analyst.
Rush worked hard, but he also understood that success meant putting in more than bankers’ hours. He cultivated his new boss as a mentor, just as he had Ron Calgaard, and he networked relentlessly. “His appointment calendar was really phenomenal to behold,” says a colleague. Most Saturdays, Rush labored at one campaign headquarters or another—doing nuts-and-bolts things most volunteers thought were beneath them. Soon a favorite of such party stalwarts as civic leader Joci Straus, he was promoted to positions of authority. Rush returned the favor by calling on his growing raft of contacts, using his carefully honed charm to fill Republican party coffers.
Sunday was not a day of rest for the ambitious social climber. He would always attend the eleven o’clock service at First Presbyterian Church, the service favored by the congregation’s most prominent members. When he was at Trinity, Rush met the church’s pastor, Louis Zbinden (who was also a Trinity trustee), a contact that facilitated Rush’s swift ascent in First Presbyterian’s hierarchy. From 1988 to 1989 he was the secretary of the board of deacons, and he also served as a youth adviser on Sunday nights. His generous financial donations to this close-knit community did not go unnoticed.
Such contacts helped Rush move swiftly through the ranks at Frost Bank. A 1984 press release from the bank announced that Rush—then a 25-year-old commercial loan officer—had been promoted to assistant vice president, and it touted his involvement with Big Brothers and the Brighton School, his post as corporate-ticket chairman for the San Antonio Festival, and his Jaycees honor. Rush had made himself into the bank’s de facto community representative.
At Frost Bank, Rush became the fair-haired boy. As one loan officer noted, “Paul literally had management—even bank chairman Tom Frost—under his spell.” If there was resentment among some of his co-workers, it was because Rush had a tendency to ignore anyone who couldn’t be useful to him. He also could be impeccably polite to a person, only to tear him apart behind his back.
But politics, not banking, was Paul Rush’s real love, and it was in that realm that another, less pleasant side more often surfaced. When Bexar County’s 1980 winner-take-all convention was narrowly won by the Reagan forces, Rush—who was then a leader of the Bush campaign at Trinity—was irate. On the floor of a precinct convention, he shouted at the Reagan group’s leader, Anglican Church minister Knox Duncan, and poked him in the chest. The mild-mannered man of God turned the other cheek as long as he could but finally slapped the younger man. Rush was also an expert political opportunist, sometimes pledging his support to opposing candidates. Everything was part of his plan to become a major player, but as his profile increased, so did his expenses.
The demand on his bank account required a bigger cash flow. In 1983 Rush began buying and renovating homes, then flipping them for resale. By that time, however, the real estate market was too flat to provide quick profits. Rush then decided to speculate in the stock market and started taking out loans from Frost Bank and other institutions. “He was totally obsessed with making money,” says a Frost banker. “Paul never mentioned his family without making fevered comparisons about who was making how much.”
Soon Rush was spending as if he had won the New York lottery. He would buy three or four custom-made suits at a time from Satel’s, along with $300 shoes. In 1984 he traded in his Saab for a Jaguar. Before long, he had major credit card debts and fell behind on his loan payments. He couldn’t even keep up his payments on a $10,000 to $15,000 loan from Frost loan officer Tom Hawkes. A few months later, however, Rush paid the note off, explaining that his grandmother had died and left him a lot of money, Hawkes recalls.
The truth of the matter was that Paul Rush had gotten in so far over his head that by 1986, he could see only one way out. In May of that year, according to court documents, he began to systematically embezzle money from Frost Bank. He did it by charging fictitious fees to commercial clients who came to him for loans or other services. The fees were interest charges, letter-of-credit charges, or commitment fees, which some banks levy, but Frost Bank usually did not. If clients complained that the fees—generally 1 to 2 percent of the principal—were too high, Rush would earn brownie points by returning a portion of that amount, boasting that he had talked his superiors into lowering the fee. After collecting the money, Rush would deposit it in an account he titled “Texans for a Responsible America.”
For a time, it seemed that his scheme was succeeding. Acceptance by San Antonio’s Old Guard, an insular group of families, required a blood connection, which Rush secured in 1987 when he married Sarah Sawtelle, a former Alamo Heights cheerleader, debutante, and Fiesta Duchess. Though no longer wealthy, the Sawtelles remained well-regarded members of San Antonio society. Paul fit readily into their world. “We just accepted him for what he appeared to be,” recalls family member George Ames. A year later, Rush was appointed by Governor Bill Clements to the Texas Motor Vehicle Commission and the Texas Commission on the Bicentennial of the U.S. Constitution. He was also an alternate delegate to the 1988 Republican Convention. Finally, Rush’s years of tireless campaign work paid off when George Bush was elected president. Rush was just a couple of phone calls away from the most important Republican in the free world.
But five months later, on a fateful day in April, that hard-won influence came to a cataclysmic end. A small group of Frost Bank’s officers and its top auditor called Rush into a room at the bank. As Rush recalls, the interrogators then “locked the door and grilled me for an hour and a half without an attorney.” A colleague who saw Rush standing at the elevator at the time said his face was ashen. Three days later, Rush was fired.
After he was confronted with the evidence, Rush admitted that he had “misapplied” fees from numerous loans. In exchange for that admission and a promise to make eventual restitution to the bank in the amount of $537,446, federal authorities dropped all but one misapplication charge and one tax evasion charge. Rush was sentenced to 27 months in a federal facility and two years of supervised release in a halfway house—the maximum allowed by law.
When I visited Rush at his home in August 1990, a month before he began serving his sentence, he had been forced to lease out the spacious Colonial-style house he owned in Terrell Hills (the comparatively humble rental cottage he and his family occupied was still deep in the heart of upper-class Alamo Heights, however). The flashy Jaguar had been replaced by a leased Jeep Cherokee, and the dozens of framed photographs of Rush with George Bush, Bill Clements, and other political heavyweights had been discreetly packed away.
Rush, dressed with starched correctness in a madras shirt, khaki slacks, and loafers, was as round-cheeked as a Cabbage Patch doll. His slightly pursed lips gave him a smug look, but his manner was courteous and soft-spoken. Rush’s wife, Sarah, seemed more relaxed, interjecting remarks as she sat beside him, lending moral support while tending to their lively nine-month-old son.
Characteristically, Rush was more eager to talk about the friends and prominent people who had stood by him than of the crime that caused his downfall. Ron Calgaard had written to federal judge H. F. “Hippo” Garcia on his behalf, he said, as had Louis Zbinden.
“You know,” Rush remarked, a bit self-righteously, “Louis told me something that helps me: Everyone knows what my sins are, but we don’t know what most other people’s sins are.” For his part, Zbinden concedes that “a lot of people feel they have Paul’s footprints all over their backs,” but he still regards his young deacon as a serious Christian.
I had a question. Had Rush felt like a hypocrite, going to church week after week, even teaching Sunday school, while repeatedly breaking a major commandment? “Yeah,” he admitted. The ensuing silence was broken by his wife: “But he asked for forgiveness every Sunday.”
Like most white-collar thieves, Rush insisted that he intended to pay the money back but that once he got into his scam, it became an addictive illness. “Several times I did stop,” he said with a sigh, “but then I would start again.”
As our conversation wound down, I found myself thinking about how Rush’s rise and fall had been driven by a tragic internal logic: He was simply a little man who wanted to be a big man. Rush himself even acknowledged that his altruism was not totally pure. “I think most of my motives were good, but some of them were self-serving,” he said. Was that because he wanted to be accepted by the “in” crowd? He nodded as if affirming the obvious. “Sure. Who doesn’t?”