Dallas Morning News, The (TX)
March 2, 2004
Edition: SECOND
Section: METRO
Page: 1B
Memo sheds light on Bright tax district
News is paid $165,000; document released in open-records settlement
Author: TERRI LANGFORD and BROOKS EGERTON; Staff Writers
Article Text:
After a lengthy legal battle, The Dallas Morning News has obtained a public record withheld by a special taxing district controlled by the family of former Dallas Cowboys owner H.R. "Bum"Bright.
As part of a recent settlement, the Denton County taxing district has paid the newspaper $165,000 in legal fees and released a memo that reporters first sought nearly three years ago. The document, prepared by the district's law firm, questioned the district's election practices and qualifications of district officials.
In June 2001, The News asked for public records from Denton County Fresh Water Supply District 1-A as part of its investigation of special taxing districts in North Texas and the influence real estate developers had on their creation and day-to-day business. Developers have used the districts to generate public financing for infrastructure to support new subdivisions, with little outside oversight.
Many districts have been formed just outside city limits, using elections in which the few eligible voters have financial ties to the developers. The Brights, for example, used the last remaining ranch hands on their land near Lewisville to elect supervisors - themselves initially, and later Bright business associates or employees of other businesses the family owned.
Texas law says that such elected officials cannot be employees of the developer.
The memo, which was prepared by a paralegal in the law firm that represents the Brights and their water district, raised this issue:
"Aren't the Supervisors employees of Bright Farm Partnership?" Lee Shinault wrote in 1989 to Jay D. Terry, an attorney at the firm, then called Leonard Marsh Hurt Terry & Blinn. It is now Leonard Frost Levin & Van Court. "In the past, we circumvented the statutes by postulating that Bright Management or Bright Development was the developer, or that there was not, in fact, a 'developer,' since none of the property within the District had ever been subdivided."
Ms. Shinault wrote that a district audit had identified Bright Farm Partnership as the developer and stated "that the Supervisors have no business relationships with the major landowners in the District." Ms. Shinault no longer works for the firm and has declined to comment.
Larry York, the attorney who represented the water district and its law firm in the open-records dispute with The News, minimized the importance of the documents sought by the newspaper. The newspaper spent legal fees on a long fight that yielded "a 15-year-old document that is of little use or relevance to anything in the present day and never was," he said.
Today the water district's board includes at least one Bright employee, Charles Lawson, head of the family's trucking business. The district's president, Gaylord O'Con, said he wasn't sure of the names of the district's other three elected officials. Mr. O'Con, an engineer, said he and Chris Bright, head of the family's real estate business, have been friends and "business buddies" for many years.
"The Dallas Morning News had to battle with the water district in this case to obtain materials that the district should have turned over without our having to resort to the courts," said David Starr, assistant general counsel for Belo Corp., parent company of The News. "The district's payment of a substantial portion of our attorneys' fees sends a strong message to other governmental bodies to follow open-records laws."
The News, represented by Deborah Sloan of Jones Day, began its legal fight for release of the memo after the Texas attorney general's office declared that it was not a public document.
During the case, the newspaper established - with records found in the water district's files - that the memo was not an internal law firm document as the district and its attorneys had told the attorney general. Rather, the law firm prepared the memo for the district, billing it for the work. Representatives of the attorney general's office have said that had the district and its attorneys provided an accurate representation, they might have ruled that the memo was a public record.
Reporters for The News found Ms. Shinault's memo in 2001 while reviewing thousands of district documents at the Dallas office of the Leonard law firm, which keeps the government's records.
The firm had agreed to copy all documents the reporters tagged, then refused in a few cases after reviewing the records.
District attorneys - who also represent the Bright family - said the withheld documents had been misfiled and did not belong to the government. They argued that the paralegal's memo was an internal law firm document and that other records belonged to developer Bright, who also was a Leonard client.
The News complained to the Texas attorney general's office, which told the district to release some documents, although not the memo. The district and its law firm then sought a court order blocking any release; the newspaper fought back and, in 2002, won a judge's ruling that declared the memo public.
It remained off-limits, however, until the parties recently settled related claims, with the district paying a portion of the newspaper's legal fees and The News dropping demands for copies of other records.
A reporter took detailed notes upon finding those records and wrote about them as part of the newspaper's 2001 series on taxing districts. The records showed that the water district charged $100 per acre to annex other developers' land, which was sometimes in distant counties, then immediately split it off as a freestanding taxing authority of its own.
Developers have said they pursued this route because it was cheaper and quicker than seeking state or county permission for a new district. After The News published its series, the attorney general's office said it would not recognize new districts formed in that manner.
E-mail tlangford@dallasnews.com and begerton@dallasnews.com
Copyright 2004 The Dallas Morning News
Record Number: 4590059