George W. Bush's race to the White House hit a speed bump last week when he received a subpoena in a lawsuit that could raise questions of influence peddling about the man who would be president and his campaign manager, Joe Allbaugh.
Bush is one of a half dozen Texas politicos caught up in what appears to be an influence-buying scandal. Half a dozen legislators and Texas Attorney General John Cornyn are accused of taking action to block the Texas Funeral Service Commission's investigation into funeral-home giant Service Corporation International.
After a May 1998 meeting in Bush's office between SCI CEO Robert Waltrip and Allbaugh -- and possibly Bush -- the Funeral Service Commission completed no more inspections of SCI's facilities, and the agency's general counsel quit. In February 1999, commission Executive Director Eliza May was fired. A few months later, the Republican-controlled Texas Legislature passed a bill to reorganize the agency and strip it of its general counsel position. (The bill's sponsor received more campaign funds from SCI than anyone in the Texas House.) The Legislature also forced out the agency's current chairman, Dick McNeil, a Fort Worth funeral director who had approved the investigation into SCI's operations.
May has sued the state over her firing; it is in that lawsuit that Bush received his subpoena. So far, the issues in May's suit have been ignored by the mainstream media. But as soon as May's lawyers get permission to depose Bush, and they probably will, the issue of influence buying will be put clearly in focus. And what started out as a simple investigation into a few funeral homes in Dallas last year could become a major issue in Bush's push for the White House.
Bush's lawyers will file a motion to quash the subpoena in an effort to avoid an unwanted distraction for the Texas governor during his drive for the presidency. "Gov. Bush was not involved in this case and has no personal knowledge of the facts in this case," says his spokeswoman, Linda Edwards.
But on July 9, attorneys representing May subpoenaed Bush. The deposition has been scheduled for Aug. 26, but it's unclear if Bush will actually be deposed on that date.
May's lawsuit, filed March 23, alleges that state officials and SCI's Waltrip worked to thwart an investigation by the Funeral Service Commission into SCI's embalming practices. It also alleges May was fired in February because she reported violations of the law. Last year, under May's direction, the agency began investigating two of SCI's Dallas-area funeral homes, which were allegedly operating without proper licenses. The investigation ultimately led the agency to recommend a fine of $445,000 be levied against SCI, the world's largest funeral company. So far, the company hasn't been required to pay a dime and the matter is still pending.
Adding intrigue to the lawsuit are a conflicting set of documents recently issued by SCI's lawyers. On June 11, Waltrip's lawyers issued documents that say Waltrip talked with Bush on April 15, 1998, in the governor's office about SCI's problems with the state investigators. Five days later, Waltrip's lawyers changed their story.
In a highly unusual "supplemental" response to the interrogatories, the lawyers said Waltrip did not talk to Bush about his problems with state investigators. The supplemental document says that while Waltrip was in Bush's office waiting to talk with Allbaugh, the governor "passed by on the way to a press conference or other appointment," and although Bush "exchanged pleasantries" with Waltrip, their discussion was "not substantive; they did not discuss the content" of a letter Waltrip wrote complaining about the investigation.
Perhaps that's true. But why, then, did SCI's in-house lawyer, Daniel Reat, swear that Waltrip talked to Bush? In a sworn, notarized court statement that accompanied the June 11 interrogatory, Reat said that Waltrip's answers "are either within his personal knowledge or based on information obtained from other persons, and are true and correct."
May's lawyers want to question Bush about the discrepancy in Waltrip's statements. They also want to question Bush about the $35,000 in campaign contributions he has received from SCI's political action committee since 1996.
In addition, there are a number of questions to be asked about a meeting that occurred on May 18, 1998, in Allbaugh's office. The meeting took place one month after investigators from May's agency had done a surprise inspection of two SCI funeral homes that were believed to be embalming bodies without proper licenses.
The surprise inspections infuriated Waltrip, a surly, burly multimillionaire with close ties to the Bush family. Five days after the surprise inspections, Waltrip wrote a nasty letter to the head of the Funeral Service Commission and sent a copy to Bush. In the letter, Waltrip said the agency's "'storm trooper' tactics have no place in responsible government," adding that the agency had engaged in an "abusive and pointless display of power."
Waltrip was able to make his own display of power and he did it in Allbaugh's office, just a few steps away from Bush's office in the Texas Capitol. During the May 18 meeting, May says she was interrogated by state Sen. John Whitmire, a Houston Democrat, who received $5,000 in campaign funds from SCI's PAC, more than any other member of the Texas Senate.
Whitmire, whose district includes the Heights neighborhood where Waltrip's first funeral home is located, demanded to know the details of her agency's investigation into SCI's operations. Whitmire did this even though Waltrip and an SCI attorney were sitting in the same room. According to May, Allbaugh did nothing to stop Whitmire or advise him that it was improper for him to ask May for facts about an ongoing investigation.
May says the meeting "was clearly designed to intimidate me and to obtain information about what we were doing. They were unhappy with the fact that I was doing this investigation."
The effect of SCI's power play is an agency left virtually powerless and unable to police the 123 funeral homes that SCI operates in Texas. "They've dismantled the agency so that there's no one competent enough" to enforce the law, says one former agency staffer.
While the legislators received lots of cash from SCI, the ties between the Bush family and the world's largest funeral company appear to be more binding. In March, former President George Bush appeared at a meeting of the International Cemetery and Funeral Association in Houston. The elder Bush charges up to $100,000 per appearance and he is known for being selective in accepting offers.
So why speak to a bunch of funeral-home and cemetery owners? According to sources in the funeral industry and articles in the Death Care Business Advisor, a trade newsletter, Bush's appearance at the confab was paid for by SCI, which had 1998 revenues of $2.8 billion. Funeral industry sources say Waltrip is a longtime friend of the former president and has supported him since Bush ran for Congress in the mid-1960s.
May's lawyers are eager to ask the Texas governor about his family's friendship with Waltrip. And they have a hearse-load of other questions, such as: What did Allbaugh tell Bush about Waltrip's problems with the state investigation? Did Bush authorize Allbaugh to hold the meeting in his office? Or did Allbaugh, as Bush's chief of staff, simply make his own decision to intervene on behalf of SCI? And perhaps most importantly, what did Waltrip and Bush really talk about when the funeral magnate visited Bush's office on April 15, 1998?
Even if Bush manages to skate away from this lawsuit, Allbaugh won't be so fortunate. One of SCI's own lawyers, Johnnie B. Rogers Sr., said, "There's no question" that Allbaugh was involved in SCI's efforts to get state officials to pressure the Funeral Service Commission to halt its investigation. So Allbaugh, the man who makes the trains run on time in the Bush campaign, will be an unwilling star witness when May's case goes to trial.
Shares