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Texas Ex-Official Charged With Fraud

Democrat who lost bid for governor allegedly tried to direct tobacco money to lawyer friend.

March 07, 2003|From Associated Press

AUSTIN, Texas — Former Texas Atty. Gen. Dan Morales was indicted on federal fraud charges Thursday accusing him of trying to steer hundreds of millions of dollars in attorney fees from the state's settlement with tobacco companies to a friend.

Morales, a Democrat who ran for governor last year, was also charged with trying to illegally use campaign contributions for personal use.

"This is a case of an elected official charged with abusing the public trust," U.S. Atty. Johnny Sutton said. "This indictment alleges that he violated that trust."

Morales, who left office in 1999, was expected to turn himself in to the FBI today, authorities said.

The indictment follows a long-running investigation into the legal fees paid out from the state's $17.3-billion settlement with the major tobacco companies in 1998. Morales and Marc Murr, a Houston attorney and friend, were charged with mail fraud and conspiracy in the tobacco fee case.

Morales hired five private attorneys to handle the state's case, and they received $3.3 billion in fees from the settlement. The fees became the subject of a federal investigation when allegations of wrongdoing surfaced.

Joe Jamail, a Houston attorney who turned down the tobacco work, claimed Morales asked for $1 million in political contributions from lawyers he considered hiring for the lawsuit.

In December 1997, Murr asked for $520 million for his role as an advisor to Morales, but other attorneys complained Murr did little work on the case.

Morales' successor, John Cornyn, now a GOP U.S. senator, joined federal officials in investigating the fees, prompting Morales to accuse the Republicans of pursuing a politically motivated investigation.

Morales and the five lawyers denied wrongdoing.

According to the indictment, Morales transferred approximately $400,000 from his campaign funds to help pay for a new house. Morales has said he used proceeds from the sale of another house.

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