Facing the Music

There's no question that record producer Michael Morales—Dan's brother—tried to blackmail the Tony Sanchez campaign. But was he really acting alone?

HI, I’M MR. SMITH. WENDEL Smith calling again,” said the calm voice leaving a voice-mail message at the Austin campaign headquarters of Democratic gubernatorial candidate Tony Sanchez. It was early October 2002, and the man had been calling for several days, trying to reach campaign manager Glenn Smith, claiming he had important information about Sanchez, the Laredo businessman who was spending $60 million of his own money in an attempt to unseat Republican incumbent Rick Perry. “Imperative that I speak to you the next few days here,” the man said politely. “Thanks very much. Good day.”

Glenn Smith had never heard of Wendel Smith. In that last month of the already brutal, bare-knuckle campaign, the Sanchez operation was desperately trying to figure out how to win voters away from Perry, and Glenn didn’t exactly have time to return calls from strangers. But Wendel was not going away. After his calls went unreturned, he faxed Glenn a letter, which began, “In case you did not know, there will most likely be an eleventh hour leak to the media of a story.” He went on to write that a woman was preparing to go public with an allegation that Sanchez had assaulted her more than thirty years ago in San Antonio, when he was a law student at St. Mary’s University and she was an undergraduate at Incarnate Word College. “She (and the story) are said to be VERY credible,” Wendel declared in his fax. “The characters, places and dates all check out… . I believe it will put questions to your candidate that are unanswerable.”

Then he concluded: “I find myself in the position to keep the other side from obtaining the story and therefore the witness. I can have it delivered to you unseen, thereby averting disaster. As I am risking my professional career by squelching this story, I wish to be paid a consulting fee… . Very truly yours, Wendel Smith.”

What happened next can only be described as one of the strangest—oh, all right, squirrelliest—scandals in Texas political history, one that would lead to an FBI investigation, phone taps and traces, a sealed search warrant, and finally, the bewildering revelation in January that “Wendel Smith” was actually Michael Morales, the forty-year-old brother of Dan Morales, the former state attorney general who ran an acrimonious race against Sanchez in the Democratic gubernatorial primary last spring. The FBI’s case was so open-and-shut against Michael, a San Antonio music producer who won a Grammy in 2002 for his work on an album of tejano music, that before a federal grand jury had even gotten the chance to review the charges made against him, he agreed to plead guilty to communicating an extortion threat.

He should have also pleaded guilty to colossal stupidity. In the faxes and the transcripts of the taped telephone conversations between Michael Morales and Glenn Smith—which were made available exclusively to Texas Monthly—Morales seems to be making up his extortion scheme as he goes along. Over the course of three recorded phone conversations with Smith totaling fifty minutes, Morales is utterly unprepared for such basic questions as how the Sanchez campaign can be reassured that the woman will never go public if a deal is made or even how the extortion money will be paid. At one point, he begins making references to a mysterious man named “Stuart,” who he claims is the one who knows the woman making the allegations about Sanchez. It is really Stuart, Morales says, who wants the money to keep the woman’s story secret. When Smith asks for more details about the “consulting fee,” Morales responds, “That I don’t understand. Um, but, um, I guess first things first. We need to see if [Stuart] is gonna let go of this thing. Uh, but, uh, you know, I don’t have a plan there. Um, but I would imagine that um, um, depending on what he says, we’d have to put one together.” Eventually, he told Smith that he would need $280,000, a paltry sum considering that Sanchez is one of the state’s wealthiest men.

Although Michael’s pathetic attempt at blackmail played out like a lowbrow farce, the story immediately set off intense gossip in Austin political circles, especially when it was learned that Michael, under his odd pseudonym Wendel Smith, had approached the Perry campaign in April 2002, six months before he approached the Sanchez campaign, telling the same tale to Perry’s campaign manager, Deirdre Delisi. In that case, “Wendel Smith” asked for “a reasonable research fee” to put Delisi in contact with the woman who was making the allegations about Sanchez, which was not a crime because Michael was not directly asking for a bribe to keep the information secret. Still, inquiring minds wanted to know why Michael would suddenly decide to play hardball politics with major public figures. According to his friends and relatives, Michael wasn’t motivated by financial distress—Studio M, the recording studio that he ran with his other brother, Ron, was constantly busy. His attorney insists that Michael came up with the plan by himself, but would he really have done something so risky during a heated political season without first discussing it with Dan? And when exactly did the Perry campaign find out that “Wendel Smith” was Dan’s brother?

In other words, what did everyone know about Michael Morales’ crime—and when did they know it?

IN SAN ANTONIO, MICHAEL MORALES is regarded as a congenial, easygoing married father of two. People who know him sometimes have trouble believing that he is the brother of the proper, buttoned-down Harvard Law School graduate Dan Morales. Until recently, he wore his

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