Big Deal

Did the Sharpstown Scandal really make any difference?

The scene on the floor of the House was bedlam: representatives clustered around the Speaker’s desk whispering advice; others gathered at the back microphone bellowing for recognition; and smaller groups huddled at scattered spots across the giant chamber where members passed rumors or strained to hear them. It was the closing hour of the 1971 regular session of the Texas Legislature, and the legislative process had broken down under the weight of the Sharpstown Scandal. The heavy-handed tactics of Speaker Gus Mutscher, under attack for shepherding two suspicious-looking banking bills through a previous special session for discredited Houston promoter Frank Sharp, had divided the House into three groups: blind loyalists, troubled conservatives, and a coalition of liberals and Republicans known as the Dirty Thirty. A huge backlog of legislation was hopelessly stalled, and time was running out. Would Mutscher ask the governor to call a special session? Or would he order the hands of the clock turned back at midnight, extending the session while he tried to arm-twist members into passing a few of the more important bills? Or perhaps he would make a dramatic appeal to the House, asking members to put aside animosities and try to pass  something in the little time remaining.

“May I have your attention, members?” Mutscher for once had no trouble with this request; all eyes were on him. “The Chair recognizes Mr. Nelms.”

The legislators were stunned. Why Nelms, everyone was thinking. Johnny Nelms of Pasadena was only a freshman, and a mediocre one at that. What could he do? The silence was broken by the sound of a guitar. Johnny Nelms could sing, that’s what he could do. And as the clock at the back of the chamber ticked away the final minutes of Gus Mutscher’s hegemony over the House, Johnny Nelms serenaded his colleagues with a song the Speaker particularly liked. It was called “Everything I Touch Turns to Dirt.”

It has been five years now since the federal Securities and Exchange Commission (SEC), in a neat–and not accidental—bit of timing, filed suit against Frank Sharp for a stock manipulation scheme on the very day that Governor Preston Smith was inaugurated for a second term. Supporting documents in the case indicated that Smith and Mutscher had traded heavily in the suspect stock just prior to the special session when Sharp’s banking bills would be before the Legislature. The SEC, backed by Republican Administration in Washington, expected the scandal to produce a voter reaction that would finally end Democratic dominance of Texas politics. Liberals saw Sharpstown as an opportunity to wrest control of the Democratic Party away from the entrenched conservatives. Reformers decided this was their chance to change the way state government worked by making it more accountable to the people. Everyone said the scandal would be a watershed in Texas’ political history.

On the surface it appears that they were right. The voters reacted by forcing one of the biggest legislative turnovers in years. Mutscher loyalists were destroyed by slogans like, “Why fire the ventriloquist and hire the dummy?” Tarnished Preston Smith sought vindication from the voters in the form of a third term; he was rewarded with a pathetic 8 per cent of the vote. Voters adjudged Lieutenant Governor Ben Barnes, the one-time Golden Boy of Texas politics, guilty by association even though he had never been tied directly to the scandal. Two years earlier Barnes had carried all 254 Texas counties, but he could run no better than a poor third in the 1971 gubernatorial primary with less than 20 per cent of the vote. Mutscher and two key lieutenants were indicted and convicted for accepting bribes, and several other legislators were successfully prosecuted by Travis County District Attorney Bob Smith for misusing state funds in their expense accounts.

The reform spirit dominated the 1973 Legislature, as new House Speaker Price Daniel, Jr., threw his weight behind a series of bills designed to clean up the mess in Austin. The package included an ethics bill, a strict campaign finance law, a lobby registration act, and requirements for open meetings and open public records. Daniel guided the bills through the House and sent them to a reluctant Senate which considered itself untouched by the scandal. Still, public pressure carried the day and forced the Senate to enact the bills into law. Sharpstown was given credit for changing Texas politics.

But did it really? We have to come to view politics so much as a game between two sides—call them liberals and conservatives, Republicans and Democrats, ins and outs; it doesn’t really matter—that we gauge success and failure according to our idea of how points are scored. Aha, we say, reformers must have won the Sharpstown game—after all they beat X candidates and passed Y bills. The trouble is, of course, that these are only statistics, not the final score, and statistics quite often tell very little about who won or lost. The only important question is: did it make any difference?

Randall Wood is someone who believes that Sharpstown did change things for the better. Now executive assistant to State Comptroller Bob Bullock, Wood was the lobbyist for Common Cause, a self-style citizens’ lobby, during the 1973 reform session. He points to campaign financing as one area where reform laws have had a major impact.

“Before 1974, candidates just didn’t report any contributions they didn’t want to report,” Wood says. “They could conceal donations under the Harris County Committee for Joe Doaks and didn’t have to tell who made up the committee. Or they could just list the contributions under someone else’s name. Corporations gave their upper management people bloated expense accounts and generous bonuses which would then be channeled to sympathetic candidates. You just can’t do that any more.”

So score a point for liberals and reformers, right? Well, maybe. Some liberals paint a different picture. “The campaign finance law hurts liberals more than conservatives, there’s no doubt about it,” says one veteran Texas politician. “Liberals used to

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