CORMAC P. CREAVEN

ATTORNEY AT LAW
21107 CRYSTAL GREENS DRIVE
KATY, TEXAS 77450

October 14^th, 2011

AltonFrailey@KATYISD.ORG

 joeadams@KATYISD,ORG

 henrydibrell@KATYISDORG 

rebeccafox@KATYISD.ORG 

NealHoward@KATYISD,ORG

 robertshaw@KATYISD.ORG

 BillProctor@KATYISD.ORG

 TerryHuckaby@KATY1SD.ORG

Dear Superintendent and Board of Trustees:

The purpose of this letter is to provide you with some background on the Linebarger, Goggan, Blair & Sampson ("Linebarger") law firm. Once you have read this letter and supporting documentation I am confident you will make the right decision with respect to which law firm is best suited to represent Katy Independent School District in the collection of delinquent taxes. The additional background I am referring to is as follows:

APRIL 2003 (See Attached Petition Case No. SA-03-CA-0269; Gila Corporation v. Linebarger Goggan Blair & Sampson; In the United States District Court for the Western District of Texas)

The Linebarger law firm is sued for violations of the Racketeer Influenced and Corrupt Organizations Act. The suit alleges a pattern of racketeering activity that touches every major city contract within the State of Texas. The case was dismissed by agreement of the parties only after a confidentiality order was put in place. The settlement agreement and its terms, including the amount paid by Linebarger, are to remain confidential with the exception of disclosures compelled or required by law, court order, subpoena, or to a party's financial advisers, financial institutions, accountants, and attorneys as necessary for the rendition of professional or lending services, or financial disclosures necessary to comply with bidding and contracting requirements  of clients or prospective clients of the parties (Exhibit 1).

Katy ISD should demand disclosure of this settlement agreement as part of its contracting requirements.

SEPTEMBER 2004

On September 15^th 2004, Juan Pena, formerly with the Linebarger law firm, pleads guilty to
conspiracy to commit bribery and bank fraud. Pena was found guilty of bribing two San Antonio
city council members in an attempt to wrestle a San Antonio fine-collection contract away froanother firm that was preferred by city staff. Pena was sentenced to 30 months in federal prison (Exhibit 2).

JAN 2005- JAN 2009

Linebarger law firm fired by the City of Chicago after it was revealed that Linebarger had "bankrolled a vacation for city official who oversaw its contract".

Class Action lawsuit filed in New Orleans against Linebarger for excessive unauthorized attorney fees totaling millions of dollars collected by the firm.

I have omitted various incidents that occurred during this period that involved Linebarger. However if the district wishes to educate itself with respect to this time period I suggest further research of events that occurred in Chicago, New Orleans and Philadelphia (Exhibit 3).

FEBRUARY 2010

Linebarger employee in the Houston office indicted for stealing tax payer payments (Exhibit 4). JUNE 2011

FBI investigation. Linebarger office manager in Shelby County quits job after more than $800,000.00 goes missing in tax payer refunds. (Exhibit 5).

JULY 2011

FBI investigation. Commissioner Price in Dallas investigated on corruption charges. Who's who on the FBI warrant list in connection with the corruption probe - a senior named partner at the Linebarger law firm's Dallas office. (Exhibit 6).

JULY 2011

Allegations of impropriety directly related to recent Fort Worth School Board Elections. Over $4,000.00 was "donated" by a partner in the Linebarger, Goggan, Blair & Sampson law firm to underwrite Tobi Jackson's successful election campaign.

Incredibly, the size of this very generous donation from the Linebarger partner went unreported for almost a year. It now appears the donation was not a donation at all. In fact, Trustee Jackson has filed a sworn affidavit stating she had no knowledge of this "loan\donation". It was subsequently revealed that Trustee Jackson neither knew about nor consented to Mario Perez ("Linebarger partner") paying a Pennsylvania-based company for calls made on behalf of the Jackson Campaign. Trustee Jackson has filed an affidavit verifying these facts! Clearly, this unsolicited interference in a school board election must be considered one of the most egregious and alarming developments to date (Exhibits 7 and 8).

It should also be noted that the Linebarger Law firm "won" the Fort Worth ISD collection contract immediately after the election. However these recent events have caused the school district to reconsider its decision and the contract has been cancelled.

OVERALL COLLECTION RATES

During my address to the School Board a question was raised by trustee Rebecca Fox with respect to which firm would be best suited to provide Katy ISD with the strongest possible collection rates. The answer to this question is clear and unequivocal. Katy ISD tax collections can only be maximized by engaging a firm other than Linebarger. This is due to the fact that Linebarger has a potential conflict when representing Katy Independent School District in the collection of delinquent taxes. This conflict is created as Linebarger has a duty "to serve too many masters" located within the boundaries of Katy ISD. This can best be demonstrated by way of a hypothetical example as follows:

Let's say that delinquent taxpayer Smith lives in Kelliwood Greens, Katy, Texas. Mr. Smith's property falls within the boundaries of Fort Bend County and Katy Independent School District. Currently, the Linebarger law firm collects delinquent taxes for both these taxing entities. If Mr. Smith makes a partial payment of say $1,000.00 toward the outstanding delinquent amount, the Linebarger law firm would be compelled to divide that payment between Fort Bend County and Katy Independent School District. This would naturally result in Katy ISD receiving only a portion of the $1,000.00 payment.

If on the other hand, a different law firm was hired to collect delinquent taxes for Katy ISD the result would be very different. In the above example a competing law firm would collect the $1,000.00 payment on behalf of Katy ISD and no portion of that payment would be provided to Fort Bend County. A firm serving one master, Katy ISD, would be in the best interests of the district. This is not possible with Linebarger since it currently represents Harris, Waller and Fort Bend Counties, which comprises over 90% of Katy's tax roll.

I anticipate Linebarger will respond by suggesting that all delinquent taxes are prorated amongst all taxing entities when collected. Such a response would be disingenuous as proration of taxes amongst taxing entities only occurs after litigation or the sale of a property. In Katy, as in most taxing jurisdictions, the vast majority of taxes are collected prior to litigation. Therefore, any taxing entity that receives a payment for delinquent taxes prior to litigation retains the total amount collected.

Linebarger may also argue that all firms collect for multiple overlapping taxing jurisdictions. For example the Purdue law firm collects for the city of Katy. Again, such an argument would be disingenuous as Linebarger has a duty to collect for over 90% of all competing taxing entities in the Katy area. Thus, any comparison of the law firms based upon these facts would be a complete distortion that lacks creditability.

Finally, I would like to thank the administration and board for their diligence in looking into this matter and for all the excellent work you provide for the district.

Cormac Creaven

INDEX OF ARTICLES

Exhibit 1.         Lawsuit alleging violations of the Racketeer Influenced and Corrupt

Organizations Act (RICO) relating to contracts in Houston, Austin, Dallas, Corpus Christi and other cities. Linebarger settled the lawsuit for an undisclosed sum.

Exhibit 2.    Article relating to the bribery conviction of Juan Pena of the Linebarger, Goggan,

Blair, Pena & Sampson law firm.

Exhibit 3.     Article relating to Linebarger, Goggan, Blair & Sampson's conduct in Chicago,

New Orleans and Fort Worth and the subsequent firing of the law firm.

Exhibit 4.   Indictment of Linebarger employee ("Houston office") for theft of tax payer

funds.

Exhibit 5.         FBI investigation in Shelby County concerning the embezzlement of over

$800,000.00.

Exhibit 6           FBI investigation in Dallas corruption probe.

Exhibit 7            Fort Worth school board election.

Exhibit 8    Correction Affidavit filed by Tobi Jackson attesting to have no knowledge of an

alleged loan from Linebarger partner Mario Perez.

EXHIBIT1

\k          '03 \ \OC

, CP .. IN THE UNITED STATES DISTRICT COURT ^,R'k\\                ^-c‘^-'\Jc                                FOR THE WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION

,14

¹6ILA CORPORATION, d/b/a

MUNICIPAL SERVICES BUREAU

§                                                                                                     CASE NO. SA-03-CA-0269

LINEBARGER GOGGAN BLAIR &

SAMPSON, LLP, f/k/a LINEBARGER         §

GOGGAN BLAIR PENA & SAMPSON, § LLP, and JUAN M. PENA

COMPLAINT

TO THE HONORABLE UNITED STATES DISTRICT COURT:

Gila Corporation, d/b/a Municipal Services Bureau •(MSB), plaintiff, pursuant to Rule 15(a), Federal Rules of Civil Procedure, submits its Complaint against Linebarger Goggan Blair & Sampson, LLP, f/k/a Linebarger Goggan Blair Pena & Sampson, LLP (Linebarger), and Juan M. Pena (Pena), defendants, as follows:

Introduction

1. This is an action to recover actual, exemplary, and statutory damages, attorneys' fees, interest, and costs, for defendants' violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1962(a), (c), & (d), and 1964, for defendants' tortious interference with MSB's contracts and prospective contractual and business relationships, and for defendants' unfair competition and civil conspiracy to commit unfair competition in violation of Texas law. The suit was originally filed on February 26, 2003, in the 225^th Judicial

District Court, Bexar County, Texas, and was removed to this Court by Lineberger (joined by Pena) on April 4, 2003.

2.   Pursuant to Rule 15(a), Federal Rules of Civil Procedure, and prior to the service by defendants of any responsive pleading, MSB submits this Complaint amending its state court pleading.'

Background

3.   Established in 1991, MSB collects delinquent fines and fees for municipal, county, and state courts throughout the country. MSB is one of the largest companies of its kind in the United States, and represents more than 600 governmental entities nationwide.

4.   Lineberger is a law firm with offices in numerous cities throughout Texas, and in addition, Jacksonville, Florida; Memphis, Tennessee; New Orleans, Louisiana; Philadelphia, Pennsylvania; and Chicago, Illinois. Its practice is devoted exclusively to providing collection services to governmental entities, including collection of delinquent property taxes, student loans, and federal debts, and beginning in about 1999, court fees and fines. At all relevant times Pena was a name partner of and principal in Lineberger.

5.   Generally, the procedure for awarding government contracts for the collection of court fines and fees involves the following:

The motions to dismiss for failure to state a claim filed by each defendant on April 9, 2003, are not responsive pleadings within the meaning of Rule 15(a). Elliott v. Foufas, 867 F.2d 877, 882 (5^th Cir. 1989).

a.   the governmental entity issues a request for proposal (RFP) for collection services;

b.   the proposals of qualified contractors are evaluated and rated by government staff; and

c.   the governing body awards a contract based upon staff recommendations and scores of the applicants.

6.   From its inception in 1991, until Lineberger began seeking government contracts for collection of court fines and fees, MSB never lost a contract after receiving the recommendation of government staff or obtaining the highest score in a formal evaluation. Since then, however, as more fully discussed below, MSB has lost numerous government contracts to Lineberger, even after receiving the recommendation of government staff, obtaining the highest score in the formal evaluation, and in at least one case, even after being awarded the contract.

7.   During the 1999 Legislative Session, Lineberger drafted and arranged passage of legislation allowing a city or county to add collection costs to the amount of unpaid fines and fees for collection services rendered by a law firm, but not for services provided by a non-attorney firm such as MSB. The legislation was filed by two legislators who are friends and associates of Pena. The effect of the legislation would have been to put MSB out of business; however, the bill was ultimately vetoed by then Governor George W. Bush. In his Official Memorandum signed June 20, 1999, the Governor stated he was vetoing the bill because it "gives attorneys an unfair advantage over other debt collection businesses."8.  Notwithstanding the Governor's veto in 1999, the same legislation was introduced by the same legislators on behalf of Lineberger in the 2001 legislative session, but collection firms successfully lobbied lawmakers to amend the bill to include non-attorney firms as well as lawyers. Ultimately, the amended legislation passed in the House on a 136-1 vote, and in the Senate 30-0, and was signed into law by Governor Rick Perry on June 15, 2001, but not before a final, surreptitious attempt by Lineberger in the waning hours of the legislative session to change the bill back to the language of the earlier bill favoring attorneys only. After the second of three readings in the House, the language of the amended, non-discriminatory bill was quietly, without discussion or debate, changed back to the original language supported by Lineberger which excluded non-lawyer collection firms; however, this last-minute furtive attempt by Linebarger to eliminate its competition was discovered and the agreed-upon language of the amended bill was restored.

9.   On or about October 9, 2002, Pefia, and H. Jack Pytel, Jr. (Pytel), a San Antonio lawyer who was retained as a lobbyist by Linebarger, were indicted in the United States District Court for the Western District of Texas, San Antonio Division, on five (5) counts of bribery and conspiracy to commit bribery of two (2) San Antonio City Council members, John Sanders (Sanders) and Enrique "Kike" Martin (Martin), in connection with Linebarger's effort to obtain a contract from the City of San Antonio for the collection of unpaid municipal court fines and fees.10.    The arrest and indictment of Pena and Pytel, along with Sanders and Martin in October, 2002, and the resulting media coverage of those events, confirmed MSB's suspicions that its losses of governmental contracts in San Antonio and other municipalities and jurisdictions throughout Texas and elsewhere, were the result of a pattern of illegal and tortious conduct on the part of the defendants and others employed by or associated with Lineberger.

Pattern of Racketeering Activity, Tortious Interference, and Unfair Competition The San Antonio Contract

11.    In 2001 the San Antonio City Council issued a RFP for a four (4) year contract to collect unpaid municipal court fines and fees owed the City. Seven firms submitted bids, including MSB and Linebarger.

12.  After a lengthy review process City staff recommended that council award the contract to MSB because of MSB's substantial experience in collecting municipal court fines, and because MSB guaranteed a higher collection rate and thus more revenues to the City. The staff calculated that MSB would collect $1.8 million more a year in delinquent fines than the City had been collecting, and about $600,000 more a year than the Lineberger firm had promised. However, as more fully discussed below, Pena, Pytel, Peter Estevez (Estevez), who was also retained by Lineberger as a lobbyist, and other principals, employees, associates, and agents of Lineberger, conspired to obtain the fines and fees contract for Lineberger through a pattern of racketeering activity; namely, by bribing and offering gifts to members of city council to support Linebarger's bid and engaging in organized criminal activity, in violation of Title 18, United States Code, §§ 371 & 666(a)(1) and (2), and Texas Penal Code, §§ 15.02, 36.02, 36.09, 34.02 and 71.02.

13.  On or about January 10, 2002, the city council voted on the fines and fees contract. The vote was 5 to 4, with five (5) council members voting for Linebarger's bid, and the Mayor and three (3) council members (including Sanders) voting in favor of MSB. Martin and another council member abstained. Because six (6) votes were needed to win the contract, no award was made at that time.

14.  On or about January 11, 2002, Lineberger and Pena hired Pytel and Estevez to lobby city council members to vote for the Linebarger bid at the next city council vote on the matter.

15.  On or about February 1, 2002, Pena and Pytel met with certain members of the city council at the La Cantera golf course in San Antonio to discuss the Lineberger bid.

16.  On or about March 13, 2002, Pena delivered a check in the amount of $25,000 to Pytel intending that a portion of the funds would be used to pay bribes to San Antonio City Council members to obtain their support of Linebarger's bid for the fines and fees contract.

1 7. Pena agreed to pay Pytel an additional $25,000 to be used in furtherance of the scheme to bribe San Antonio City Council members to vote for Linebarger's bid for the fines and fees contract and arranged a loan to Pytel in that amount from a Rio Grande Valley bank of which Pefia served as a director. Based on information and belief, after Pytel signed a note to the bank and received the funds, Lineberger paid off the loan or provided funds for Pytel to pay off the loan. The above conduct constitutes money laundering in violation of § 34.02 of the Texas Penal Code. Based on information and belief, defendants and their prinicipals, employees, associates, and agents, have used similar methods to fund and conceal bribes to public officials to obtain other government collection contracts.

18. On or about March 14, 2002, Pena and Pytel gave Martin $2,500 cash in return for Martin's agreement to vote for the Lineberger bid, in violation of Title 18, United States Code, § 666(a)(1)(B) & (2), and Texas Penal Code, §§ 36.02, 36.09, and 71.02.

19. On or about March 14, 2002, Pytel and Martin discussed paying a bribe to Sanders in return for his vote for the Lineberger bid.

20. On or about April 1, 2002, Pefia, Pytel, and Estevez paid Sanders $2,500 cash in return for Sanders' agreement to vote for the Linebarger bid, and promised him an additional payment of $2,500 after the vote on the fines and fees contract, in violation of Title 18, United States Code, §666(a)(1)(B) & (2), and Texas Penal Code, §§ 36.02, 36.09, and 71.02.

21. On or about April 8, 2002, Pefia and Pytel paid Martin an additional $5,000 cash in return for Martin's support of the Lineberger bid, in violation of Title18, United States Code, §666(a)(1)(B) & (2), and Texas Penal Code, §§ 36.02, 36.09, 34.02 and 71.02.

22.    On or about April 18, 2002, city council reconsidered the fines and fees contract and awarded the contract to Linebarger on a 7-3 vote. This time Martin and Sanders voted in favor of the Linebarger bid, giving Linebarger the necessary votes to win the contract.

23.  On or about May 1, 2002, Pena, Pytel, and Estevez paid Sanders an additional $2,000 cash as payment for his vote on April 18, 2002, in favor of the Linebarger bid on the fines and fees contract, in violation of Title 18, United States Code, §666(a)(1)(B) & (2), and Texas Penal Code, §§ 36.02, 36.09, and 71.02.

24.  Linebarger obtained the fines and fees contract as a direct result of the pattern of criminal conduct committed by its principal, Pena, its agents and associates, Pytel and Estevez, and other principals, employees and associates of Linebarger. But for the defendants' illegal conduct, unfair competition, and tortious interference, there was a reasonable probability the fines and fees contract would have been awarded to MSB as recommended by city staff. In fact, on December 12, 2002, two months after the arrests and indictment of Pena and Pytel were announced, the city council terminated Linebarger's contract and on January 30, 2003, awarded a municipal court fines and fees collection contract to MSB (the "replacement contract").25.  As a direct and proximate result of defendants' illegal conduct, unfair competition, and tortious interference, MSB has been damaged (a) in the amount of the profits it lost during the time Linebarger operated the contract and while defendants' illegal conduct, unfair competition, and tortious interference prevented formation of a contract between MSB and the City, and (b) in the reduced profit opportunity available to MSB under the replacement contract by reason of the changed circumstances applicable to the replacement contract. This sum is at least $210,000 and consists of the difference between the profits MSB would have realized had it been awarded the fines and fees contract at the time the City initially considered the matter, and the profits it will realize from the replacement contract. The City of Dallas Contract

26.  In 1995, the City of Dallas issued a RFP for a contract to collect unpaid municipal court fines and fees. After a lengthy formal review and evaluation process conducted by city staff, MSB was awarded the contract in June, 1998. In 2001, after the primary term expired, the contract was extended for an additional one hundred eighty (180) day period.

27.  In 2002 city staff was instructed to prepare and issue a Request for Bid seeking bids on a new fines and fees collection contract, instead of issuing another RFP. Unlike a RFP, a bid process requires the City to select the lowest qualified bidder without regard to any other factors. Municipal court personnel involved in the administration of the contract were perplexed by these instructions because

(1) all previous collection contracts, including all fines and fees collection contracts, had been issued pursuant to RFPs, and not requests for bids; and (2) city staff was satisfied with MSB's performance of the fines and fees contract. In fact, figures provided by the City show that during the three year term of the contract, MSB's collection rate averaged approximately 10.3%, which represented an increase of almost 50% over the collection rate achieved by the previous contractor (approximately 10.3% v, approximately 7%).

28.  The bid specifications issued by the City required applicants to guarantee a collection rate and provided for penalties of up to 100% of the monthly fee (depending upon the size of the deficiency) if the actual collection rate fell below the guaranteed rate. The specifications provided for a six (6) month grace period in which to attain the guaranteed rate, after which time the penalty provisions would become effective, and further gave the City the right to cancel the contract after four (4) consecutive months of failure to achieve the guaranteed rate.

29.  Several firms, including MSB and Lineberger, submitted bids in response to the Request for Bid. Lineberger submitted the winning bid, which included a 16.5% guaranteed collection rate and a 30% fee, and in or about February, 2002, was awarded the contract.

30.  The winning bid submitted by Lineberger was not viable because the collection rate it guaranteed was unattainable, and after the expiration of the grace

period, would have inevitably resulted in the triggering of the 100% penalty and cancellation provisions specified in the bid conditions.

31.  MSB officials could not understand why the Lineberger firm would knowingly submit a bid for the Dallas fines and fees contract that was not economically viable. In December, 2002; however, MSB learned that several months after the contract was awarded to Lineberger, and within the six (6) month grace period, the Dallas City Council, in violation of state contract procurement statutes and regulations, allowed Lineberger to amend the contract to eliminate the guarantee and penalty provisions.

32.  In an attempt to justify the proposed amendment of Linebarger's contract, the City Manager's office issued a memo stating that the proposal to eliminate the guarantee and penalty provisions in Linebarger's contract would not have an adverse financial impact on the City. Based on information and belief, at the time this memo was issued, city officials knew that amending Linebarger's contract to eliminate the guarantee and penalty provisions would have an adverse financial impact on the City, and that the City Manager's representations to the contrary were false. Moreover, Linebarger's performance under the amended contract shows that the City has and will continue to suffer financially as a result of the illegal amendment of Linebarger's contract. The City will lose in excess of $1,000,000 in gross revenues as a result of (1) Linebarger's failure to perform (Linebarger's collection rate is approximately 4% versus MSB's collection rate ofapproximately 10.3% under the previous contract); (2) Linebarger's fee, which is approximately 50% higher than MSB's fee under the previous contract (Linebarger receives 30% of gross revenues collected versus MSB's fee of 20.5% under the previous contract); and (3) elimination of the guarantee and penalty provisions set out in the bid specifications and contract awarded to Linebarger.

33.    Since the fines and fees contract was awarded to Linebarger in or about February, 2002, another collection-related contract has been awarded by the City of Dallas, pursuant to a RFP rather than a request for bid. Thus, the fines and fees contract awarded to Linebarger is the only instance, before or since, of a collection contract being awarded by the City pursuant to a Request for Bid rather than a RFP.

34.    Based on information and belief, Linebarger, through its principals, employees, associates, and agents, conspired with certain city officials to obtain the fines and fees contract by submitting a bogus and fraudulent bid with the understanding that after being awarded the contract, it would be allowed to amend the contract to its advantage, and to the disadvantage of the City, in violation of state procurement statutes and regulations. This understanding, which was solicited and received by Linebarger, and which was not made public or disclosed to the other vendors bidding for the contract, enabled Linebarger to rig the bidding process, in violation of § 39.06 of the Texas Penal Code and § 552.104 of the Texas Government Code. Linebarger's illegal conduct, as set forth above, constitutes unfair competition and tortious interference with MSB's contractual and

business relationships with the City of Dallas. Based on MSB's previous performance collecting unpaid court fines and fees for the City, and its excellent working relationship with municipal court administrators and staff, it is reasonably probable that the fines and fees contract would have been awarded to MSB, but for Linebarger's illegal conduct, unfair competition, and tortious interference.

35.  As a direct and proximate result of Linebarger's illegal conduct, unfair competition, and tortious interference, MSB has been damaged in the amount of at least $1,914,375, representing the profit MSB would have realized had it been awarded the fines and fees contract instead of Linebarger.

The Dallas County Justice of the Peace Courts Contract

36.  In March, 1997, pursuant to a formal RFP process, Dallas County awarded MSB a six (6) year contract (with renewal provisions) to collect unpaid court fines and fees (the "Dallas County contract"). Initially, only the county courts used MSB's services, but in 2000 MSB began providing collection services for several of the eight (8) justice of the peace courts (JP courts) with the understanding that it would eventually begin collecting unpaid fines and fees for the rest of the JP courts pursuant to the terms of the Dallas County contract. In 2001, however, Linebarger was awarded a contract to collect the JP courts' unpaid fines and fees (the "JP contract"), without issuance of a RFP, request for bid or any other formal review process.

37.  Lineberger, through its principals, employees, associates, and agents, illegally rigged the process by soliciting and receiving a private agreement from county officials that it would be awarded the contract without issuance of a RFP or any other competitive bidding process, in violation of § 39.06 of the Texas Penal Code and § 552.104 of the Texas Government Code. Based on information and belief, MSB further alleges that Linebarger, acting through its principals, employees, associates, and agents, obtained the JP contract by illegal means; namely, by offering, conferring, or agreeing to confer benefits on county officials as consideration for awarding the contract to Lineberger, in violation of Texas Penal Code, §§ 36.02, 36.09, and 71.02. These acts were willfully and intentionally committed by Lineberger, its principals, employees, associates, and agents, and were calculated to and did cause damage to MSB in its lawful business.

38.  Moreover, Lineberger had actual knowledge of the existence of the Dallas County contract and that MSB was performing collection services for county and JP courts pursuant to that contract.

39.  As a direct and proximate result of Linebarger's illegal conduct, unfair competition, and tortious interference with MSB's contractual and business relationships with Dallas County, MSB has been damaged in the amount of at least $225,000, representing the profit MSB would have realized from performing collection services for the JP courts during the remaining term of the Dallas County contract, but for Linebarger's tortious interference. The Fort Worth Contract

40.  Historically, the City of Fort Worth has always issued a RFP for collection of its unpaid court fines and fees. During the summer of 2002, MSB officials learned that Linebarger was lobbying the City in an effort to obtain the fines and fees contract. Thomas Giamboi, the President of MSB, met with Assistant City Manager Charles Boswell, and requested an opportunity to submit a proposal, but was told by Mr. Boswell that the matter was probably out of his hands. Subsequently, other MSB officials met with several city council members. At each of these meetings, MSB simply requested an opportunity to submit a proposal and compete for the contract. One council member suggested that MSB submit a written request and that upon doing so, it would have an opportunity to compete for the contract. Eventually, however, city officials stopped communicating with MSB and the contract was awarded to Lineberger by city council without giving MSB or any other contractor an opportunity to compete for the contract, and without issuance of a RFP, request for bid or any other formal review process.

41.   Lineberger, through its principals, employees, associates, and agents, illegally rigged the process by soliciting and receiving a private agreement from city officials that it would be awarded the contract without issuance of a RFP or any other competitive bidding process, in violation of § 39.06 of the Texas Penal Code and § 552.104 of the Texas Government Code. Based on MSB's experience collecting delinquent court fines and fees and its stellar reputation, it is reasonably

15

probable that the contract would have been awarded to MSB, but for Lineberger's illegal conduct, unfair competition, and tortious interference.

42.    As a direct and proximate result of Linebarger's illegal conduct, unfair competition, and tortious interference to exclude MSB from consideration by the City, MSB has been damaged in the amount of at least $315,000, representing the profit MSB would have realized had it been awarded the contract instead of Lineberger.

The Houston Contract

43.    In 2000 the City of Houston issued a RFP for collection of its unpaid court fines and fees. The RFP included numerous requirements which would have made it difficult, if not impossible for a vendor to profitably perform the contract. These included (1) providing and staffing kiosks at various locations throughout the City; (2) creating and maintaining an electronic interface available through the internet that Internet users could access to make payments and obtain information about their cases; and (3) posting a performance bond. At the pre-proposal conference the court administrator emphasized that these requirements were non­negotiable. As a result, MSB did not submit a proposal, and based on information and belief Lineberger was the only firm to respond to the RFP. Subsequently, the City awarded Lineberger a contract that did not include the requirements which the City previously represented to MSB were non-negotiable.

44.  Based on information and belief, MSB alleges that Linebarger, acting through its principals, employees, associates, and agents, conspired with certain city officials to obtain the contract without the onerous and unacceptable provisions by offering, conferring, or agreeing to confer benefits on those officials as consideration for awarding Linebarger the contract, in violation of Texas Penal Code, §§ 36.02, 36.09, and 71.02. In addition, Lineberger rigged the bidding process by soliciting and receiving a private agreement from city officials that the above requirements in the RFP would be waived for Linebarger, in violation of §39.06 of the Penal Code and § 552.104 of the Texas Government Code.

45.  Linebarger's actions constitute unfair competition and tortious interference with MSB's prospective contractual and business relationship with the City of Houston. Based on MSB's experience collecting delinquent court fines and fees and its stellar reputation, it is reasonably probable that the contract would have been awarded to MSB, but for Linebarger's tortious interference.

46.    As a direct and proximate result of Linebarger's unfair competition and tortious interference with MSB's prospective business relationship with the City, MSB has been damaged in the amount of at least $1,875,000, representing the profit MSB would have realized had it been awarded the fines and fees collection contract instead of Linebarger.

The Corpus Christi Contract

47.  In the fall of 2000, the City of Corpus Christi issued a RFP for collection of its unpaid municipal court fines and fees. An evaluation committee was formed by city staff and a formal process was established by the court administrator to evaluate the proposals submitted in response to the REP. Five (5) firms responded to the RFP, including MSB and Lineberger. The evaluation committee ranked MSB first and Lineberger second; however, the city council overruled the committee and on April 10, 2001, awarded the contract to Lineberger. Perla represented Lineberger before the city council. Linebarger's original proposed fee was higher than MSB's, but after the responses were submitted, Lineberger was allowed to amend its proposal and agreed to a fee .5% lower than the fee proposed by MSB. Based on information and belief, MSB alleges that Lineberger and Pena received from city officials information that had not been made public about the amount of MSB's proposed fee, that enabled Lineberger to rig the bidding process, in violation of § 39.06 of the Texas Penal Code and § 552.104 of the Texas Government Code. Shortly after the contract was awarded to Linebarger, the court administrator resigned and took a similar position in another city.

48.  Based on information and belief, MSB further alleges that Lineberger, Pena, and other principals, employees, associates, and agents of Lineberger, conspired with certain city officials to obtain the contract by illegal means and did obtain the contract by illegal means; namely, by offering, conferring, or agreeing to

confer benefits on city officials as consideration for awarding the contract to Lineberger, in violation of Texas Penal Code, §§ 15.02, 36.02, 36.09, and 71.02. Based on the results of the formal evaluation by city staff, it is reasonably probable that the contract would have been awarded to MSB, but for the illegal conduct, unfair competition, and tortious interference of defendants and their principals, employees, associates, and agents.

49.  As a direct and proximate result of Linebarger's and Peria's illegal conduct, unfair competition, and tortious interference to prevent MSB from being awarded the City contract, MSB has been damaged in the amount of at least $300,000, representing the profit MSB would have realized had it been awarded the contract instead of Lineberger.

The Beaumont Contract

50.  MSB was twice awarded four (4) year contracts by the City of Beaumont to collect its unpaid court fines and fees pursuant to a formal RFP process. The first contract covered the period from about May 1, 1993, through about August 1, 1997, and the term of the second contract was from on or about August 1, 1997, through on or about August 31, 2001. During this eight (8) year period MSB developed an excellent working relationship with city staff, and city employees regularly expressed satisfaction with MSB's performance under the contract. On or about August 28, 2001, however, MSB received a letter from the City stating that there were no plans to issue another RFP or "rebid the contract." The letter gave

no explanation for the City's decision not to issue another RFP. Shortly thereafter, the City entered into a contract with Lineberger without issuance of a RFP or any other formal review process.

51.  Lineberger, through its principals, employees, associates, and agents, illegally rigged the process by soliciting and receiving a private agreement from city officials that it would be awarded the contract without issuance of a RFP or any other competitive bidding process, in violation of § 39.06 of the Texas Penal Code and § 552.104 of the Texas Government Code. Based on information and belief, MSB further alleges that Lineberger, acting through its principals, employees, associates, and agents, obtained the fines and fees contract by illegal means; namely, by offering, conferring, or agreeing to confer benefits on city officials as consideration for awarding the contract to Lineberger, in violation of Texas Penal Code, §§ 36.02, 36.09, and 71.02. Based on MSB's previous performance collecting unpaid court fines and fees for the City and its excellent working relationship with city staff, it is reasonably probable that the fines and fees contract would have been awarded to MSB, but for Lineberger's illegal conduct, unfair competition, and tortious interference.

52.    As a direct and proximate result of Linebarger's illegal conduct, unfair competition, and tortious interference with MSB's contractual and business relationships with the City, MSB has been damaged in the amount of at least

$76,056, representing the profit MSB would have realized had it been awarded the fines and fees contract instead of Lineberger.

The Port Arthur Contract

53.  On or about August 3, 1993, MSB and the City of Port Arthur entered into a contract for the collection of the City's unpaid court fines and fees. The contract provided for automatic annual renewals unless one of the parties took affirmative action to terminate the contract. MSB performed collection services for the City pursuant to this contract for eight (8) years, until on or about August 31, 2001. At that time MSB and the City entered into a new contract effective September 1, 2001, which changed MSB's fee arrangement. The new contract contained the same automatic annual renewal provision as the previous contract. During this eight (8) year period, and continuing under the new contract in 2002, MSB had an excellent working relationship with city staff and city employees regularly expressed satisfaction with MSB's performance under the contract. In the spring of 2002, however, the City verbally terminated the contract without explanation, and almost immediately thereafter entered into a fines and fees contract with Lineberger.

54.    Based on information and belief, MSB alleges that Lineberger, acting through its principals, employees, associates, and agents, obtained the fines and fees contract by illegal means; namely, by offering, conferring, or agreeing to confer benefits on city officials as consideration for terminating the contract with

MSB and awarding a contract to Lineberger, in violation of Texas Penal Code,

§ §36.02, 36.09, and 71.02. These acts were willfully and intentionally committed by Linebarger, its principals, employees, associates, and agents, and were calculated to and did cause damage to MSB in its lawful business.

55.    Moreover, at all relevant times, Linebarger had actual knowledge of the existence of MSB's contract with the City.

56.    As a direct and proximate result of Linebarger's illegal conduct, unfair competition, and tortious interference with MSB's contractual and business relationships with the City, MSB has been damaged in the amount of at least $43,755, representing the profit MSB would have realized from performing collection services under the contract, but for Linebarger's illegal conduct, tortious interference, and unfair competition.

The Miami-Dade County, Florida Contract

57.    In the fall of 1999, Miami-Dade County (County) issued a Request for Qualifications seeking proposals for the collection of its unpaid court fines and fees and announced it would select up to five (5) vendors. Eleven firms submitted proposals, including MSB and Lineberger. An evaluation committee was formed to review the proposals and rate the firms in various categories. A New York company received the highest overall score and MSB and another firm tied for the second highest score. Lineberger finished fourth. In November, 2000, the County selected three firms to collect delinquent fines and fees: the New York firm thatreceived the highest rating from the evaluation committee, the company that tied for second place with MSB, and Linebarger, despite the fact that MSB scored higher in the evaluation process and proposed a lower fee for services than Lineberger.

58. Based on information and belief, MSB alleges that Lineberger, acting through its principals, employees, associates, and agents, obtained the fines and fees contract by illegal means; namely, by corruptly giving, offering, or promising to give pecuniary or other benefits not authorized by law to County officials in return for selecting lower-ranked Lineberger as one of the three contractors instead of higher-ranked MSB, in violation of §§ 838.015 and 838.016 of the Florida Annotated Statutes. Based on the results of the County's formal evaluation, it is reasonably probable that the contract would have been awarded to MSB, but for Linebarger's tortious interference.

59. As a direct and proximate result of Linebarger's illegal conduct, unfair competition, and tortious interference to prevent MSB from being awarded the County contract, MSB has been damaged in the amount of at least $1 35,000, representing the profit MSB would have realized had it been awarded the contract instead of Lineberger.

The Missouri City, Texas Contract

60. In or about 2001 the firm that had been providing collection services to Missouri City went out of business. City staff began negotiating contract termwith MSB and was prepared to recommend that city council award MSB a contract to collect the City's unpaid court fines and fees, After a city council member who is an attorney advocated awarding the contract to Lineberger, proposals were solicited and the city council awarded Linebarger the contract.

61.  Based on information and belief, MSB alleges that Lineberger, acting through its principals, employees, associates, and agents, obtained the fines and fees contract by illegal means; namely, by offering, conferring, or agreeing to confer benefits on city officials as consideration for awarding the contract to Lineberger, in violation of Texas Penal Code, §§ 36.02, 36.09, and 71.02. Based on MSB's experience collecting delinquent court fines and fees, its stellar reputation, and the contract negotiations initiated with city staff, it is reasonably probable that the contract would have been awarded to MSB, but for Linebarger's tortious interference, and unfair competition.

62.  As a direct and proximate result of Linebarger's illegal conduct, unfair competition, and tortious interference to prevent MSB from being awarded the city contract, MSB has been damaged in the amount of at least $45,000, representing the profit MSB would have realized had it been awarded the contract instead of Lineberger.

Illegal use of racketeering proceeds invested in the enterprise

63.    Historically, the largest and most lucrative part of Linebarger's collection business for governmental entities has consisted of the collection of delinquent taxes.

64.  Over the years, Linebarger and Pefia, their principals, employees, associates, and agents, have engaged in a pattern of racketeering activity to obtain and maintain government contracts to collect taxes; namely, by bribing and conferring benefits on public officials, in return for their votes and support, in violation of Title 18, United States Code, § 666(a)(1)(B) & (2), and state criminal laws including Texas Penal Code, §§ 36.02, 36.09, and 71.02. Typically, these bribes consist of cash payments and other benefits given to public officials, such as trips to Las Vegas and other destinations; hunting trips to private ranches where public officials are furnished food, drink, and entertainment of their choosing; and substantial payments characterized as campaign contributions. In addition, to curry favor with public officials who have control or influence over the award of tax collection contracts, Linebarger has refrained from prosecuting claims against public officials who were delinquent in their tax payments to governmental entities with which Linebarger contracted to perform tax collection services.

65.    Defendants have received and continue to receive substantial amounts of income from these racketeering activities consisting of the revenues to the firm generated from the tax collection contracts illegally obtained and maintained.66.    This income was invested in an enterprise, the Lineberger firm, and since Lineberger began seeking government contracts for collection of court fines and fees in about 1999, part of this income has been used by Lineberger, Perla, and other principals, employees, associates, and agents of Lineberger, to illegally obtain fines and fees contracts, which but for the defendants' tortious and illegal conduct, would have been awarded to MSB.

67.    As a direct and proximate result of the defendants' use of these racketeering proceeds to illegally obtain court fines and fees contracts, MSB has been damaged in an as yet undetermined amount, believed to be at least $5,000,000.

Claims for Relief

Violations of 18 U.S.C. § 1962(a) and (d) by defendants and others

68.    Lineberger is a person within the meaning of 18 U.S.C. § 1961(3),. and an enterprise within the meaning of § 1961(4). Pena is a person within the meaning of § 1961(3).

69.  As more fully described in the above paragraphs, Lineberger and Pena, their principals, employees, associates, and agents, have for years engaged in a pattern of racketeering activity to obtain and maintain tax collection contracts by bribing and conferring benefits on public officials in return for their votes and support in violation of federal and state criminal laws. The income received from these racketeering activities was invested in Linebarger, and since Lineberger began

seeking contracts for collection of court fines and fees in about 1999, part of this income was used by Lineberger, Pena, their principals, employees, associates, and agents, to illegally obtain court fines and fees contracts, which but for the defendants' tortious and illegal conduct, would have been awarded to MSB. In addition, defendants, and other principals, employees, and associates of Linebarger, conspired to violate § 1962(a) by conspiring and agreeing to use the income received by Lineberger from the above-described racketeering activities to illegally obtain court fines and fees contracts. As set out above, defendants' violations of 18 U.S.C. § 1962(a) and (d) have caused and continue to cause substantial injury to MSB's business, giving rise to this action to recover from defendants treble damages and costs of suit, including reasonable attorneys' fees pursuant to Title

18 U.S.C. § 1964(c).

Violations of 18 U.S.C. § 1962(c) and (d) by Pella and others

70.  Lineberger is an enterprise within the meaning of § 1961(4). Pena is a person within the meaning of § 1961(3).

71.  As more fully described in the above paragraphs, since Lineberger began seeking government contracts for collection of court fines and fees in about 1999, Pena, Pytel, Estevez, and others employed by or associated with Lineberger, an enterprise engaged in and affecting interstate commerce, have conducted and participated in the affairs of the enterprise through a pattern of racketeering activity; namely, by bribing and conferring benefits on public officials to obtain

government contracts for collection of court fines and fees, in violation of state and federal criminal laws and 18 U.S.C. § 1962(c). In addition, since Lineberger began seeking government contracts for collection of court fines and fees in about 1999, Pena and others employed by or associated with Lineberger, have conspired to violate § 1962(c) by conspiring and agreeing to conduct or participate in the conduct of Linebarger's affairs through a pattern of racketeering activity within the meaning of § 1961(1); namely, multiple acts of bribery in violation of state and federal criminal laws. As set out above, Pena's violations of § 1962(c) and (d) have caused and continue to cause substantial injury to MSB's business, giving rise to this action to recover from defendant, Pena, treble damages and costs of suit, including reasonable attorneys' fees pursuant to Title 18 U.S.C. § 1964(c). Tortious Interference by defendants ²

72. As more fully described in the above paragraphs, defendants' conduct constitutes tortious interference with MSB's contractual and prospective contractual and business relationships, proximately resulting in substantial damage to MSB's business in the principal amount of at least $5,139,186. Moreover, defendants acted with actual malice and the specific intent to cause substantial injury to MSB's business, warranting the imposition of exemplary damages in an amount to be determined by the trier of fact.

'Pursuant to 28 U.S.C. § 1367(a), this Court has supplemental jurisdiction over the state law claims because they derive from a common nucleus of operative facts and are so related to the federal claims as to form part of the same case or controversy.

Unfair Competition and Civil Conspiracy to Engage in Unfair Competition

73.  As more fully described in the above paragraphs, defendants engaged in a pattern of racketeering and bribery of public officials to gain a commercial advantage over, interfere with, and divert business from, competitors, including MSB, and such business conduct interfered with MSB's ability to conduct its business, is contrary to honest practice in commercial matters, and constitutes unfair competition under Texas law. In addition, defendants agreed and conspired to engage in a pattern of racketeering and bribery of public officials to gain a commercial advantage over, interfere with, and divert business from, competitors, including MSB, and interfered with MSB's ability to conduct its business, and such business conduct is contrary to honest practice in commercial matters and constitutes unfair competition.

74.  As a direct and proximate result of the foregoing acts of conspiracy and unfair competition, MSB's business has been damaged in the principal amount of at least $5,139,186. In addition, defendants' unfair competition has resulted in the gain of wrongful profits by the defendants which are subject to disgorgement in an as yet undetermined amount.

75.    Defendants acted with actual malice, warranting the imposition of exemplary damages in an amount to be determined by the trier of fact.

Request for Relief

WHEREFORE, MSB requests that upon final trial it have judgment against the defendants, jointly and severally, as follows:

1.   actual damages in the principal amount of at least $5,139,186, trebled in accordance with 18 U.S.C. § 1964(c);

2.   reasonable attorneys' fees and expenses pursuant to 18 U.S.C. § 1964(c);

3.   exemplary damages as determined by the trier of fact;

4.   disgorgement of all profits wrongfully gained by Lineberger;

5.   costs of court and interest on the judgment until paid; and

6.   such other and further relief to which MSB may be entitled. Respectfully submitted,

Goode Casseb Jones Riklin Choate & Watson

A Professional Corporation John E. Clark

State Bar No. 04287000 Rand J. Riklin

State Bar No. 16924275 2122 North Main Avenue San Antonio, Texas 78212 Tel: (210) 733-6030

Fax: (210) 733-0330 Law Office of Glenn Grossenbacher 1800 McCullough

San Antonio, Texas 78212

State Bar No. 08541100

Tel: (210) 271-3888

Fax: (210) 271-3980

Robert J. Myers

Robert John Myers & Associates 2700 Bee Caves Road, Suite 210 Austin, Texas 78746

State Bar No. 14765380

Tel: (512) 306-1919

Fax: (512) 328-1156

By:  64A-\                 /144,—„,

ATTORNEYS FOR PLAINTIFF

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing has been delivered by certified mail, return receipt requested, on this 18^th day of April, 2003, to:

John M. Pinckney, Ill

Judith R. Blakeway

Strasburger & Price, LLP

300 Convent Street, Suite 900 San Antonio, Texas 78205

R. Laurence Macon

Donna K. Schneider

Akin Gump Strauss Hauer & Feld, LLP 300 Convent Street, Suite 1500

San Antonio, Texas 78205

Rand J. Riklin V

EXHIBIT 2

This was printed from San Antonio Business Journal

Lawyer enters final guilty plea

related to City Hall corruption

San Antonio Business Journal

Date: Thursday, September 16, 2004, 2:02pm CDT - Last Modified: Thursday, September 16, 2004, 2:03pm CDT

Attorney Juan Pena -- formerly with the law firm Heard, Linebarger, Goggan, Blair, Pena & Sampson -- pleaded guilty Wednesday to federal charges of attempting to bribe City Councilmen Enrique "Kike" Martin and John Sanders.

Appearing before U.S. District Judge Royal Ferguson on Wednesday, Pena pleaded guilty to one count of conspiracy to commit bribery and one count of bank fraud, according to U.S. Attorney Johnny Sutton.

In pleading guilty, Pena conceded that from January 2002 to October 2002, he conspired with lobbyist Jack Pytel to bribe Martin and Sanders to vote in favor of awarding a collection services contract for unpaid fines and fees to Heard, Linebarger.

He also admitted to securing a guarantee on a $25,000 loan from Lone Star National Bank to Pytel, knowing that the credit application submitted was false and that a portion of the loan was to go toward the two council members. He could face up to 35 years in federal prison and a $1.25 million fine.

Pena is the fourth person to plead guilty in connection with the City Hall corruption case. On Aug. 24, Martin pleaded guilty to one count of conspiracy to commit bribery by accepting cash in return for his vote. On Aug. 26, Sanders also pleaded guilty to accepting $2,500 to support the Heard, Linebarger bid.

On Sept. 9, Pytel pleaded guilty to conspiracy to commit bribery and one substantive bribery charge. Specifically, he admitted to paying Martin $5,000 to support ...

Attorney Juan Pena -- formerly with the law firm Heard, Linebarger, Goggan, Blair, Pena & Sampson -- pleaded guilty Wednesday to federal charges of attempting to bribe City Councilmen Enrique "Kike" Martin and John Sanders.

Appearing before U.S. District Judge Royal Ferguson on Wednesday, Pena pleaded guilty to one count of conspiracy to commit bribery and one count of bank fraud, according to U.S. Attorney Johnny Sutton.

In pleading guilty, Pena conceded that from January 2002 to October 2002, he conspired with lobbyist Jack Pytel to bribe Martin and Sanders to vote in favor of awarding a collection services contract for unpaid fines and fees to Heard, Linebarger.

He also admitted to securing a guarantee on a $25,000 loan from Lone Star National Bank to Pytel, knowing that the credit application submitted was false and that a portion of the loan was to go toward the two council members. He could face up to 35 years in federal prison and a $1.25 million fine.

Pena is the fourth person to plead guilty in connection with the City Hall corruption case. On Aug. 24, Martin pleaded guilty to one count of conspiracy to commit bribery by accepting cash in return for his vote. On Aug. 26, Sanders also pleaded guilty to accepting $2,500 to support the Heard, Linebarger bid.

On Sept. 9, Pytel pleaded guilty to conspiracy to commit bribery and one substantive bribery charge. Specifically, he admitted to paying Martin $5,000 to support the Heard, Linebarger bid.

Pytel and Sanders each face up to 10 years in federal prison and a possible $250,000 fine. Martin could face up to five years in federal prison and a $250,000 fine.

"Elected officials are in office to serve the people, not line their pockets. No one can have faith in a government that can be bought," Sutton says. "With this guilty plea, the people of San Antonio will know that bribery and corruption will never be tolerated and will always be punished."

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Partner resigns after charge of bribery

New storm brews over law firm

Partner resigned after he was charged with bribing two San Antonio councilmen

JOHN W GONZALEZ, Copyright 2002 Houston Chronicle San Antonio Bureau Published 05:30 am., Sunday. October 13. 2002

SAN ANTONIO -- The late Oliver Heard was known for his legal savvy, political shrewdness and an uncanny ability to win tax-collection contracts in the face of stiff competition, a legacy that survives at the law firm he founded.

As close as the flamboyant Heard sometimes came to being formally accused of wrongdoing, he avoided prosecution, although two political allies -- a congressman and a Texas House speaker -- didn't share that fate.

The firm Heard launched in 1980, now known as Linebarger Goggan Blair Pena & Sampson TIP, has been criticized but not sanctioned for its political rainmaking and hardball collection tactics.

However, last week a new storm cloud appeared over the organization when one of its name partners was arrested by the FBI after being indicted on charges of bribing two San Antonio city council members in a bid to win more business.

Attorney Juan M. Pena of Edinburg declined comment about his indictment, which also names a lobbyist hired by the firm to wrestle a San Antonio fine-collection contract away from another firm that was preferred by city staff.

Pena resigned from the firm because of the controversy, the firm announced late Friday afternoon. The firm also offered to rescind the contract in question.

His lawyer, Jerry Goldstein, proclaimed Pena's innocence, saying, "He's shocked and outraged. ... Juan's reputation is impeccable, not just in the Valley but anyplace he's been."

The 800-employee practice, with 30 offices in five states and contracts coast-to-coast, no longer carries Heard's name.

But it still has a reputation for aggressively pursuing clients and generously wooing decision makers. And it's still the subject of whisper campaigns that paint it as an over-the-top competitor that works in mysterious ways to win and keep business.

Innuendo aside, the firm representing 1,600 taxing jurisdictions -- 34 in Bexar County alone -­suddenly has two high-profile problems.

Not only are San Antonio officials reviewing the validity of the fine-collection contract. Last week, city officials in New Orleans said they are examining a similar contract amid FBI probes into the legacy of former Mayor Marc Modal.

New Orleans Mayor Ray Nagin, who replaced Modal in May, told reporters last week "we had concerns about this contract coming into office and we were already in the process of renegotiating -- in effect, looking at eliminating that contract."

Even so, the Linebarger firm has many steadfast supporters, including elected officials who praise it for efficiency and diligence in squeezing revenue from deadbeats. The firm has been credited with saving some jurisdictions from financial ruin by collecting overdue revenues -­570o million a year -- that almost were written off as unrecoverable.

They are aggressive about their practice and hanging on to the contracts they have, but they generally try to be pretty careful because that's their business and they want to protect it," said Austin political consultant Bill Miller, who helped manage the firm's image in the 199os.

The fact that the firm donates to politicians is hardly unusual, Miller said. "They're asked to contribute," he said, adding, "there is no culture of corruption" at the law firm.

"They have too much to lose" to engage in illegal conduct, Miller said,

Dale Linebarger noted that no one in his firm or its predecessor was ever charged with a crime before Pena.

"There is no question that we are aggressive and fierce competitors," he said, "(but) we will not tolerate even the remotest hint of impropriety."

And Linebarger vehemently denied that Heard established a pattern of wrongdoing at the firm. "That is a bunch of bull," he said.

"Oliver was as charismatic and gregarious an individual as one would want to meet. Ile was also controversial. You either loved him or you hated him and Oliver had a lot of people who were in the latter category," lie said.

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Private tax-collecting firm has troubling record

Submitted by SPINS on Fri, 04/04/2008 - 12:16.                    By DAN WALTERS,

Sacramento Bee        editorials and opinion

A California employee union is complaining about an embryonic scheme in the state Board of Equalization to hire one or more private collection firms to track down those who owe taxes to the state.

The Service Employees International Union says the state's own tax collectors could do the job just as well, for far less cost, if they were equipped with up-to-date tracking tools.

SEIU obviously wants to bolster civil service worker ranks and stave off privatization. But in this instance, given the identity of the tax collection firm that is most aggressive in seeking a contract, the union's concerns appear to be well placed.

A Texas-based law firm called Linebarger, Goggan, Blair and Sampson (LGBS) has hired a veteran politician and former Board of Equalization member, Johan Klehs, to lobby his former colleagues and, it hopes, secure a contract that would give it a juicy piece of the state's estimated $8 billion in uncollected taxes.

LGBS is huge, with operations in dozens of states and contracts, it says, with 1,800 state and local government agencies to collect taxes, parking fines and other overdue accounts. It even had a collection contract with the Internal Revenue Service, one of three firms to receive the business under an experimental IRS program. However, a year ago the feds dropped LGBS for reasons they never would specify, while retaining the other two private tax collectors.

Although the IRS case has received the most national attention, a perusal of the firm's dealings with state and local governments reveals a pattern of using political persuasion to

secure lucrative collection deals, some of which have devolved into scandal.

Just a couple of months ago, for instance, LOBS was fired by the city of Chicago after it was revealed that it had

bankrolled a vacation trip for the city official who oversaw its contract to collect unpaid parking fines, which had generated $33.6 million in commissions for the firm.

"Because this is a law firm, we believe it should be held to the highest ethical standards," Chicago's corporation counsel, Mara Georges, said in a statement announcing that LOBS had been fired. For this reason we are terminating their engagement with the city."

Meanwhile, back in Texas, the mayor of Mansfield, a Dallas-Fort Worth suburb, resigned rather than face a recall election. One of the allegations against him was that he accepted a campaign contribution from LOBS, the city's tax collection contractor, after his election. Mansfield also terminated the LGBS contract.

LOBS has a huge business in Texas. The Dallas Morning News revealed that it has contracts with nine of the state's 10 largest tax-collecting agencies, and uses "an army of lobbyists and has millions to spend on political campaigns" in its efforts to become the nation's premier private tax collector.

Last year, one of its contracts, collecting overdue property taxes for New Orleans, backfired when a state appellate court ruled that the city's imposition of a 30 percent penalty on taxes to cover fees to LGBS was unconstitutional.

The firm had partnered with a local group, United Governmental Services that had what the Times-Picayune of New Orleans described as "strong political ties." Its principals, the newspaper reported, were part of the inner circle of the mayor who arranged the contract.

And so it has gone as LOBS has attempted to expand its already immense portfolio of government business. But the most cautionary episode occurred in 2002 when one of LOBS' partners, Juan Pena, pleaded guilty to bribing two San Antonio city councilmen to win a tax collection contract.

The insider lobbying campaign being waged by Klehs on behalf of the firm in California is part of a questionable pattern. Do we really want to open this door?

EXHIBIT 4

STANDS FOR HOUSTON

Harris County contractor charged with

stealing money from taxpayers

by Kevin Reece / 11 News khou.com

Posted on February 25, 2010 at 7:15 PM

Updated Friday, Feb 26 at 1:42 PM

HOUSTON—A former employee of a major Houston law firm is charged with collecting property taxes for the City of Houston, forging checks given to him by property owners and depositing the money in his own personal bank account.

The Harris County District Attorney's Office has charged Roel Garcia, 39, with felony theft after accusations surfaced during his employment at the law firm Linebarger, Goggan, Blair & Sampson. The firm acts as a debt collector for municipalities and school districts throughout Texas.

Court documents, obtained by 11. News, show Garcia was hired by the law firm in

November 2001. He is accused of forging documents and stealing from at least two taxpayers in late 2007.

Prosecutors say Garcia quit his job in October 2009 after learning that Linebarger had launched its own internal investigation.

The law firm says Garcia was fired.

One of his alleged victims is Frances McCowan of Houston.

"That's not good when I pay you to steal my money," McCowan said of the taxpayer funding that goes from counties and cities to the Linebarger firm. "That's not good."

McCowan inherited a vacant lot in Acres Homes. Tax bills became delinquent on the family-owned property and, in accordance with City of Houston protocol, she was eventually contacted by the Linebarger firm. Their representative was Roel Garcia.

McCowan said Garcia asked her to pay the delinquent fee of $794.06 by money order.

Photocopies of the money orders show she paid him a $500 money order first, followed by a second money order of $294.06. Both were written to Paul Bettencourt, the Harris County Tax Assessor at the time.

But McCowan continued to receive delinquent property tax notices, so she asked

Western Union for photocopies of the cleared checks. She was appalled by what she found.

The same checks with the exact same Western Union check numbers were no

longer written to Paul Bettencourt. Each money order had the name, home address and signature of Roel Garcia. Photocopies of the reverse side showed a Roel Garcia signature endorsement on the back as well. Prosecutors say he deposited

McCowan's money in his own bank account and never forwarded the money to her property tax account.

McCowan says she confronted Garcia.

"He laughed in my face and told me to get an attorney to prove it. I said, 'You think you're laughing now. I'm gonna get the last laugh."'

Prosecutors charged Roel Garcia with theft last month. An additional taxpayer also included in the lawsuit said Garcia stole $1,400 from him using the exact same method.

"Only one person has been charged and only two people have been identified has having their money orders forged or altered by this man," said Assistant District Attorney Joshua Somers. "And at this point, further investigation is pending."

The Linebarger law firm, citing the sensitivity of the ongoing investigation, agreed only to respond in the form of a written statement:

"When this individual's alleged misconduct came to our attention we quickly commenced an internal investigation. Upon confirming the allegations we terminated him and worked with the Houston Police Department, the Harris County District Attorney and our local government clients to secure criminal indictments against him. We appreciate the efforts of everyone involved and are committed to making sure that no taxpayer and no local government is harmed in any way as a result of this person's illegal actions."

McCowan said the firm has since repaid her missing taxes.

News was unable to reach Roel Garcia for comment. He is free on bail and faces up to two years in prison if convicted.

As for Frances McCowan, the last laugh she promised does appear to be hers. "I told him, 'You messed with the wrong person,"' she said.

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EXHIBIT 5

chMICAVE•VOI 111•17 Ida WhCOnYi • SHIM ran rows
	OP $100 OFF EACH WINDOW 0% FINANCING FOR 60 MONTHS

 

`TI I E CONIMERCIAL APPEAL, 11 ?obile

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GREATER MEMPHIS

THEFTS IN SHELBY COUNTY CHANCERY COURT TOP $800,000

By Marc Perrusquia

Published Sunday, June 5, 2011

Losses in a Shelby County Chancery Court embezzlement scheme appear to have topped $800,000 and may go higher.

Officials will say little about the thefts, which are under investigation by the FBI.

Yet, an investigation by The Commercial Appeal has identified 32 checks used to funnel as much as $865,000 to two companies -- payments made without judicial orders or documentation.

The FBI's probe focuses on bookkeeper Brandon Gunn, who resigned in April. Gunn, 46, has not been charged.

Records tie him to dozens of suspicious transactions that tapped hundreds of thousands of dollars from surplus tax sale funds maintained by the court.

Checks reviewed by the newspaper show at least $157,000 was paid last year to Sunset Thirty-Three LLC, a firm Gunn set up in early 2010.

The probe affects not just county government but the law offices of Linebarger, Goggan, Blair & Sampson, which contracts to collect delinquent taxes for the city of Memphis.

The Dallas-based firm's Memphis office manager, who has close ties to Gunn and has been linked to Sunset Thirty-Three, left the firm last month after five years on the job. A Linebarger spokeswoman declined to discuss particulars of the manager's departure, saying in an e-mail message the firm "is cooperating with investigative authorities" and is conducting an internal probe.

Records also now make clear the probe originated, not from any internal county controls but following the February complaint of Johnnie Taylor, 52, a grandmother who lost a house in a county tax sale.

Records show Taylor's three-bedroom house in Cooper-Young was sold in a July 2008 tax auction for $20,000, paying off Taylor's $5,273 delinquent property tax debt and generating an additional $14,727. By law, Taylor was entitled to claim that surplus money.

But when her lawyer asked for the money in February he found it was gone -- paid toSunset Thirty-Three LLC.

In March, as investigators began to suspect wrongdoing, the court released Taylor's surplus $14,727. She said she got just $8,000 after paying her attorney and a private asset recovery firm.

"Thank God we did get something," she said.

The newspaper's review found repeated incidents in which surplus tax sale funds were moved from Chancery Court's primary account at Regions Bank:

Five checks totaling $157,403 were written between May and October 2010 to Sunset Thirty-Three, a limited liability corporation that Gunn set up that March.

Twenty-seven checks totaling $707,726 were written between September 2008 and this February to either Correy Isom or a company called First Family LLC.

The $865,129 is in line with numbers provided by sources knowledgeable of the probe. One official, Chancery Judge Kenny Armstrong, said he's been told the loss could reach $1 million.

Records reviewed by the newspaper revealed no judicial orders or paperwork authorizing the payments. Sources close to the probe say there's evidence orders were faked to fool court staff to issue checks but those orders weren't recorded in the court's permanent record.

Often, those checks tapped specific surpluses generated in tax sales, as was the case with Taylor's house. But at times transactions appear to be fabricated.

In as many as 12 cases, memos on checks referenced properties purported to have been sold in tax sales, yet those properties did not appear in official tax sale records.

Other times, the checks reference actual properties auctioned in tax sales. Yet records and interviews revealed no explanation as to why checks were issued in those cases.

For example, the court issued Isom a November 2009 check, authorized by Gunn, in connection with the tax sale of a three-bedroom house at 1309 Timothy Drive in Whitehaven. Tax sale records show the house was sold at auction in June 2006 for $17,000. The sale generated a $10,698.87 surplus -- the precise amount paid to Isom three years later.

Tax sale records make no mention of Isom in connection to the property, which was purchased at the auction by M. Annette Mund, now deceased.

Mund's son-in-law, real estate investor Mark Littrell, who handled Mund's estate and is knowledgeable of the house on Timothy, said Isom had no connection to the property and had no right to collect the surplus money.

"I've never heard of Correy Isom," Littrell said.

Sources identified Isom as an employee at Southwind Fish restaurant near the intersection of Winchester and Hack's Cross roads, where restaurant workers confirmed his employment. But a reporter was asked to leave the property when attempting to speak with Isom.

Isom has not responded to messages left at his Hickory Hill home.

Isom's role remains uncertain and it's not known if his name might have been unknowingly used, as others have claimed.

His endorsement appears repeatedly on the back of court checks issued to First Family LLC, but no business office or corporate charter could be located for the firm.

Reached by phone last week, Gunn hung up on a reporter.

Gunn's county e-mail account shows when supervisors first confronted him in February following Taylor's complaint, he offered a more elaborate explanation for Sunset Thirty-Three. Gunn said the firm was a partnership established to buy foreclosed homes. The business focus later morphed into helping homeowners who lost homes in tax sales get surplus funds owed them, he said.

Gunn said he provided tax sale information to his partners, but limited his involvement to avoid a conflict.

"I didn't want to have any other contact with these individuals due to the fact that I worked in Chancery Court," Gunn wrote in an e-mail. "...There was NO contact with me at all, at work or after work."

However, each of the supposed partners named by Gunn in the e-mail -- two Tennessee real estate investors and a California couple -- denied Gunn's assertions in interviews with The Commercial Appeal.

"I'm just blown away," said Kim Cagle, a San Clemente, Calif., investor who often bids on tax sale properties in Memphis. Cagle said she knew Gunn, and liked him, but had no business dealings with him. "None of us were investing with him," she said.

Sunset's corporate charter on file with the Tennessee Secretary of State lists one member -- Gunn.

Corporate papers list Sunset's principal executive office as 645 S. Main, No. 111, an apartment where, utility records show, Linebarger's recently departed office manager, Gloria Rubin, lived from April 2009 to June 2010.

Gunn, who was divorced last year, maintained steady communication this year with Rubin, according to his county e-mail account. The two planned trips, hosted a Super Bowl party and coordinated online shopping for vehicles, clothing and other goods.

Efforts to reach Rubin, 36, including a message sent to her private e-mail account, were unsuccessful.

In a series of brief e-mails, Linebarger partner Pamela Pope Johnson said Rubin's employment ended last month, but she declined to say why.

We were made aware of the investigation at the court and we are cooperating with investigative authorities in every way," Johnson wrote. "We also have undertaken an internal investigation in response. At this time, our investigation is incomplete. We will proceed in accordance with the highest professional and ethical standards in response to what the investigations reveal."

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EXHIBIT 6

John Wiley Price: Who's who on FBI warrant list for Dallas corruption probe - Dallas Pol... Page 1 of 2

Log in I Become an Examiner Dallas          64°

Dallas, TX

John Wiley Price: Who's who on FBI warrant list for Dallas

corruption probe

Devonia Smith, Dallas Political Buzz Examiner

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FBI warrant: John Wiley Price business pals in corruption probe under scrutiny

Credits: WFAA DALLAS news

Slideshow: John Wiley Price: Who's who on FBI warrant list for Dallas corruption probe

Related Topics

John Wiley Price FBI Investigation John Wiley Price

FBI Dallas Corruption

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Dallas County Commissioner

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Dallas WFAA reporter, Brett Shipp, reports Thursday night that "The search warrant served on Commissioner Price is much more than a round-up of evidence in a public corruption case. What we are learning tonight is this case is more complex and potentially damaging to high profile businesses and

individuals than anyone could have guessed."

See the slideshow, available on the left sidebar, for photos and information regarding their relationship to Price of some of the high-profile North Texas individuals caught in the web of the FBI net to investigate Commissioner John Wiley Price. The warrant, view here, includes investigation of these key players in the probe :

·     Kathy Neely

·     Karen Manning

·   Willis Johnson

·     DeMetris Sampson

·   Jon Edmonds

·     Pettis Norman

·     Leon Backes

·   State Sen. Royce West

"There's some connection to John Wiley Price in the items the feds are looking for here. It may be an entirely innocent, innocuous connection," explains Jeff Ansley, a former federal prosecutor specializing in public corruption - adding, "It may be something far worse."

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EXHIBIT 7

Fort Worth school board trustee's finance report draws questions I Linda Campbell I Fort ... Page 1 of 2

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BY LINDA P. CAMPBELL Icampbell@star-lelegram.com

So there I was a couple of months ago, digging into phone records showing a local lawyer's chattiness with several Fort Worth school board members while his firm was competing for the district's coveted delinquent tax collection contract.

Then, the first week of May, two of those board members filed amended campaign finance reports that were a year late in disclosing that same lawyer had contributed to their 2010 election efforts.

Trustees Ann Sutherland and Tobi Jackson reported that Mano Perez of the Lineberger, Goggan, Blair & Sampson firm had underwritten robocalls for their campaigns in May 2010: $171.37 for Sutherland and $144.53 for Jackson.

The amounts were small enough that they might have looked like minor oversights. But Jackson's report included this eye-popper: A $4,200 "loan" from Perez dated May 10, 2010.

How was that much money overlooked for a year?

Within three days, Jackson filed another amendment with a detailed explanation. Bottom line: There was no loan; she had paid her debts; and she neither knew about nor consented to Mario Perez paying a Pennsylvania-based company for calls made for her campaign.

Her report, now available online at wwwfwisd.org/boe, includes a narrative of the events and an itemized statement from her campaign consultant, Austin-based Murphy Turner & Associates. showing her account was paid in full and no expenses were covered by Perez

So, what happened?

Jackson told me she initially declared a loan because Perez contacted her in late April of this year and said she had to report the money quickly or risk being accused of an ethics violation. He was an adviser to her campaign and became a friend; their daughters play together and she trusted him.

After researching her records and talking with Murphy Turner staff, Jackson said, she documented that Perez never paid the firm anything on her behalf and she hadn't known what he was up to.

Perez told me he paid the calling company, Painter Communications, in June 2010 because owner Denise Painter was a friend who hadn't been paid immediately after the election. He said she reimbursed him after receiving funds Jackson sent Murphy Turner.

Perez said Jackson didn't know he had Intervened and that "No monies from me were ever paid to her."

If he never actually gave Jackson any money, why did his e-mail answers to my questions keep referring to the money as a "loan/expenditure"?

A

Arlington

(Switched tax collection

contract to Lineberger in 2009, from Perdue, Brandon, Fielder, Collins &

Mott)

Aaron Reich (2009 election)

Lineberger and its lawyers: $3,250

Perdue, Brandon lawyers: $550

Gloria Pena (2009 election)

Lineberger: $2,500

Perdue, Brandon lawyers: $1,600

Tony Pompa (2011 election)

Lineberger: $1,000

Follow the money

Political donations by individuals and limited liability partnerships are legal, as long as they're properly reported. Here's a sampling of money that law firms competing for delinquent lax collection contracts have given to Fort Worth and Arlington school board members in recent years.

(Note- The Perdue,

Brackett, Flores, UN and Bums Joint Venture

involved the firms of Perdue, Brandon, Fielder, Collins & Moll and Brackett & Ellis, plus several individual lawyers.)

Fort Worth

(Switched tax collection contract to Lineberger, Goggan, Blair & Sampson in 2010, from Perdue, Bradrett, Flores, Utt and Burns Joint Venture)

Carlos Vasquez (For 2000 campaign debt)

Lineberger and Its lawyers: $2,250

Juan Rangel

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Fort Worth school board trustee's finance report draws questions1Linda Campbell I Fort ... Page 2 of 2

 

The whole business is convoluted. Perez's answers to my questions don't clarify things.

I wonder whether this is simply a case of an amateurish political operative and sloppy paperwork -- or something that merits more scrutiny.

I wonder because of the way Perez and Fort Worth school board members Carlos Vasquez, Juan Rangel and Sutherland manipulated the process of awarding the district's tax collection contract to Lineberger, where Perez works.

After the May 2010 elections reconstituted the school board, Lineberger muscled out Perdue, Brackett, Flores, Utt and Burns Joint Venture, which had done the district's tax collecting for 17 years.

As I wrote in a Sunday column, Perez was phoning and testing with Vasquez, Rangel, Sutherland and Jackson during a three-month no-lobbying period before the board voted on the contract. And Perez fed questions to Vasquez, Rangel and Sutherland to ask during the board meeting at which lawyers for the firms presented their proposals.

Vasquez, Rangel, Sutherland, Jackson and Trustees T.A. Sims and Judy Needham approved the switch to Linebarger. Three board members dissented.

The evidence Is strong that Vasquez, Rangel and Sutherland discussed the contract with Perez before the vote. Jackson said she deliberately didn't talk with him about it and made up her mind after studying the proposals.

For years, competition for tax collection work from cities, counties and school districts has involved political maneuvering. In late 2009, the Arlington district switched to Lineberger from Perdue, Brandon, Fielder, Collins & Mott, which was part of the Joint venture handling the

Fort Worth schools' contract at that time. Vasquez used that to launch

the effort to get Fort Worth trustees to follow suit.

Both Lineberger and Perdue have donated to candidates, including for the Fort Worth and Arlington

school boards, presumably in hopes of making a good impression.

But the $4,000 being moved around in Jackson's campaign doesn't make sense. If she didn't know

anything about Perez doing it until this spring and nothing proves otherwise then it didn't Influence

the vote. If Perez was just trying to help, why not ask her before acting? If it wasn't a loan, why tell

Jackson to report it as one? If it was merely a straightforward gesture by him, why the discrepancies and

Intrigue?

Linda P. Campbell is a Star-Telegram editorial writer.

817-390-7887

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EXHIBIT 8

Texas Ethics Commission

P.O. Box 12070

Austin, Texas 78711-2070

512)463-5800

TOO 1-800-735-2989

FORM COR-C/0 H CORRECTION AFFIDAVIT FOR CANDIDATE/OFFICEHOLDER

i     ACCOUNT II

2      Total pages filed:

OFFICE USE ONLY

3       CANDIDATE/ OFFICEHOLDER NAME

MS /MRS i MR                                       FIRST                                                                      MI — ,..r                                                                                                       -72.-. .b /' NICKNAME                                           LAST                                                                         SUFFIX ü61 C-g---T-043

Dale

Dale Resolved MgEgWE MAY 0 5 2011 4.                                      44.,                   ar" le                       M. mall CVed0APP5t11180(01••••

4 •

4     ORIGINAL REPORT TYPE

I___ I January 15 I     I                                      Runoff                          I         Oilier                                (specify) 1 ________________ y 15                                                                           1       I Exceeded $500 limb

30th day before election         1      115th day after IreaSurer           appointment (officeholder only)     I1 8th day before election                   Final report

Receipt It

I Amount

Dote Processed

5     ORIGINAL PERID COVERED

Month                        Day               Your                                          Month                                     Day             Year     041 tze /20 /O       THROUGH          0c-/So 4,6 /0

Dale Imaged

6    EXPLANATION OF CORRECTION                          , ,r44:raele- r-eSeA-PCA c,s                                                   kvt-1 ,,t, 0,.,        Xa         a §A ,L i IT ,   Of 'e, rn an ek‘lieg              -0,.... snst./Fics    0.,C                nib- g-ze.,&,,               cho      ,-/-4    ea< - LAIll 7( i s le (4/ ell-)  02 M7 4ell Q 14 • 11‘24, 4T ti,4e- Fir/50          Cc. A7 hid 401171, A t i ./Y4 4Dil g 0 / /1.77.             ,, -7 71•C,         41^U`f.,-         ci..,,,J 5a 1-ecorrec__ kon   i...5 -111Vti; s3 ASS la 4. i Ae-re /..0,          d.--h I Sil-ovi.,. 0      4a-v.4. 6.4.4„,...)       12..,..              rolc         CO/-rtc.-4,n de.... ltd elm./            Z Md-c7 ZeOfir     4eter, 646' c/a/4 I All4CaLrb:       qtro C-164    p I.) 1'2 i      St4kk-oi'Le. 4 j ege14,1,ab.,,    61  t..--rv- v., st et.i.Gic r 6 J 0 2 A 2ii -Lb I I  f...6 c-cpiti. i s 4-44yrea*. 71 <4.4 hi                 &WI 47 -2:: rit.,••••i•

7               AFFIDAVIT

NCnscalcieKtna....Csrp.ra:Ac2oCoCkCame......d.a•4( 0 ' il41,,       CONNIE BERRY .--/j,,,.."0           Notary Public, Stale ol Texas - k     ,..1 \ Ci         ft Commission Expires ''''31e674:Y     SEPTEMBER 9, 2012

I swear, or affirm, under penalty of perjury, that this corrected report is true and correct. Check ONLY if applicable: I swear, or affirm, that l am filipg this corrected report not '  _____________ later than the 14th bu • et"     day after the date I learned that the report as ,4            le n  Ily filed is inaccurate or incomplete. I swear, or a                  at ny error or omission in the report as original            .:*   as        de in good faith. m------------- i 0

AFFIX NOTARY STAMP / SEAL ABOVE                                         Signature Of Candidate or Officeholder r Sworn to and subscribed before me by—YO:hi '--c;i(i,,,:iiri  I              the iday of            ,

20     i                  to certify which, witness my hand and seal of office.

'

r .4 4                                 0 ___                  )                 • ü--1 A

ignature, of officer administering oath           9                        Printed name of officer administering /IF               Title of officer adm'   ering oath .

Remember To Attach Any Part Of The Campaign Finance Report Form Needed To Report And Explain Corrections

The Correction Affidavit for Candidate/Officeholder Form COR-C/OH submitted to the FWISD on 02 May 2011 was subsequent to an email I received from Mario Perez dated 27 April 2011. The following denotes the sequence of events:

1.   27 April 2011 email from Mr. Perez included a forwarded email dated 11 July 2010.

2.   The forwarded email of 11 July 2010, requested that the Tobi Jackson Campaign, claim a $4000 loan, from Mr. and Dr. Perez. A verbal discussion at lunch produced a request to report the loan for 10 May 2010, in the sum of $4000.

3.   Mr. Perez stated he paid Painter Communications for campaign calls. He requested that I pay Ms. Painter and that she would reimburse him for his outlay of funds on behalf of The Tobi Jackson Campaign.

4.   I, Tobi Jackson, had no knowledge of this loan, prior to 27 April 2011 and then the sole documentation, was an email addressed to me, which I did not receive until 27 April 2011, although it was dated 11 July 2010, and sent only as a forwarded email.

5.   It was my understanding that The Tobi Jackson Campaign, had an outstanding balance with Murphy Turner of $5946.15 on 09 July 2010, as stated on my balance sheet. The Tobi Jackson Campaign paid $3000 to Murphy Turner on 05 August 2010. An outstanding balance, to Murphy Turner, remained of $2946.15.

6.   On 27 April 2011, The Tobi Jackson Campaign paid Murphy Turner a final payment of $3000.00 to fulfill its financial obligation. This left a balance +$53.85. These funds were derived from my personal funds and will be reported as a personal loan from Tobi Jackson, to The Tobi Jackson Campaign, on the next C/OH due 15 July 2011.

7.   On 02 May 2011, I entered a loan on my Correction Affidavit for Candidate/Officeholder, based on the email from Mr. Perez, in the amount of $4200, as this was the amount The Tobi Jackson Campaign owed Murphy Turner at that time, for the campaign phone calls made by Painter Communications. However, I paid Murphy Turner a larger sum of money on the dates: 05 August 2010 ($3000) and 27 April 2011 ($3000), with a positive balance remaining of $53.85. These payments were made to Murphy Turner to cover all campaign expenses remaining, inclusive of the Painter Communications calls. The Tobi Jackson Campaign is in possession of a statement from Murphy Turner stating that all outstanding campaign charges have been paid and there is a ZERO balance.

8.   There is one accurate component of the 02 May 2011, COR-C/OH submitted to the FWISD on 02 May 2011. The in-kind donation of $144.53 from Mr. and Dr. Perez, dated 07 May 2010 is accurate,

9.   The Tobi Jackson Campaign has paid all outstanding debts, with the exception of a $3000 personal loan from Tobi Jackson, initiated 27 April 2011,

10. Upon inquiry with Murphy Turner, the supporting statement of payment shows no record of a loan or payment from Mario and Dr. Azzah Perez applied to The Tobi Jackson Campaign. The Tobi Jackson Campaign holds no debt at this time to Murphy Turner or any other entities, only a sole $3000 personal loan, from the personal account of Tobi Jackson.

This concludes my explanation of the erroneous Correction Affidavit Form COR-C/OH.

Texas Ethics Commission

P.O. Box 12070

Austin, Texas 78711-2070

(512)463-5800

(TDD 1.800-735-2989)

CANDIDATE / OFFICEHOLDER                                  FORM C/OH CAMPAIGN FINANCE REPORT                           COVER SHEET PG 1

The C/OH Instruction Guide explains how to complete this form.

1 ACCOUNT 4 (Ethics COmmisslon Filers)

2 Total pages filed:

3 CANDIDATE/ OFFICEHOLDER NAME

Nta/MRSIMR                    ,-/..111§J                                                                       MI \I                                        fu b)                             L NICKNAME                                          LAST                                                                         SUFFIX i q, cir.....% 0 n,)

ICE USE ONLY

Dale Received

MEI( V E rp MAY 0 li 2011           —

4 CANDIDATE / OFFICEHOLDER MAILING ADDRESS Ill] change Of address

ADDRESS / PO ROX,               ART 1 SUITEti; it                 CITY;                    STATE,                           ZIP CODE .2/°8 gash-M/M Ci-V---/- 440x4,      TX          /./ ,

Date Hanci•dalivered   Po ,marked / 1/'                                                      .11,2            Ora

Receipt g            wor

Amount­•

5 -CANDIDATE/ OFFICEHOLDER PHONE

AREA CODE                             PHONE NUMBER                                                 EXTENSION ( F/7 )           , 1/57. 7-g /6

Date Processed

6 CAMPAIGN TREASURER NAME

ms/mRs/mn                       IF RST                                                                                                                                               MI .,..-- .5           8-e-,

Dale Imaged

NICKNAME.                                                                                         LAST                                                                         SUFFIX 4VVY).-0

7 CAMPAIGN TREASURER ADDRESS (residence or business)

STREET ADDRESS (NO PO BOX PLEASE),                 APT SUITE ri;                  CITY;            STATE,                     ZIP CODE             . 2.11 z.        y„ r e...fx i Fe r -02.. I" A0,72                 -5 7-4//z

8 CAMPAIGN TREASURER PHONE

AREA CODE                            PHONE NUMBER                                              EXTENSION (1/?- )     6 gi                            ..zrzi

9 REPORT TYPE

i__ I   January 15               0          301h day before election         H j        RUnoff                                   i---1  15th day after campaign treasurer I____ I appointment (oflIcehOlder only) 11...-Sly 15               I      i  8th day before election                L   Exceeded $500 limit                            Final report (Mach COI • FR)

10 PERIOD COVERED

Month                Day               Year                                                                           Month                Day              Year THROUGH 01         06 8 4,oio                                                                                                                                                                         /c?       / U                                              2-0 0

11 ELECTION

ELECTION DATE Month Day                           Year /                          /

ELECTION TYPE q Primary           n Runoff                                                     El General                                                          1_ 1 Special

12 OFFICE

OFFICE HELD (If any) FIN/ S D / riAr 4 ti Al.Cier 2

13      OFFICE SOUGHT (if known)

14 NOTICE OF DIRECT CAMPAIGN EXPENDITURE BY OTHER INDIVIDUALS E additional pages

DIRECT CAMPAIGN EXPENDITURES ARE CAMPAIGN EXPENDITURES MADE BY OTHERS WITHOUT THE CANDIDATE'S PRIOR CONSENT OR APPROVAL, CANDIDATES ARE REQUIRED TO DISCLOSE THIS INFORMATION ONLY IF THEY RECEIVE NOTIFICATION OF THE DIRECTCAMPAIGN EXPENDITURE.

Name

Address / PO Box;       Apt. !SOB H;          City;         Stale:      Zip Code

GO TO PAGE 2

Texas Ethics Commission

P.O. Box 12070

Austin, Texas 76711-2070

(512) 463-5800

(TOD 1-800-735-2989)

CANDIDATE / OFFICE, -DER REPORT:                        FORM C/OH SUPPORT & TO AL                                                                        COVER SHEET PG 2

15 CJOH NAM          i

16 ACCOUNT #       (Ethics Commission Filers)

//et                         oWeir4i-)

17 NOTICE

THIS BOX IS FOR NOTICE OF POLITICAL CONTRIBUTIONS ACCEPTED OR POLITICAL EXPENDITURES MADE BY POLITICAL COMMITTEES TO SUPPORT THE

FROM

CANDIDATE 1. OFFICEHOLDER. THESE EXPENDITURES MAY HAVE SEEN MADE WITHOUT THE CANDIDATE'S OR OFFICEHOLDER'S KNOWLEDGE OR

POLITICAL

CONSENT. CANDIDATES AND OFFICEHOLDERS ARE REQUIRED To REPORT THS INFORMATION ONLY IF THEY RECESS NOTICE OF SUCH EXPENDITURES.

CO MI ITTE E(S)

COMMITTEE NAME

COMMITTEE TYPE

I GENERAL

COMMITTEE ADDRESS

I SPECIFIC

COMMITTEE CAMPAIGN TREASURER NAME

•                  additional pages

COMMITTEE CAMPAIGN TREASURER ADDRESS

18 CONTRIBUTION

1.          TOTAL POLITICAL CONTRIBUTIONS OF $50 OR LESS (OTHER THAN

TOTALS

PLEDGES, LOANS, OR GUARANTEES OF LOANS), UNLESS ITEMIZED

(2C

2.       TOTAL POLITICAL CONTRIBUTIONS

$

(OTHER THAN PLEDGES, LOANS, OR GUARANTEES OF LOANS)

EXPENDITURE

TOTALS

3.          TOTAL POLITICAL EXPENDITURES OF $50 OR LESS, UNLESS ITEMIZED

$

4.         TOTAL POLITICAL EXPENDITURES

$ /0 SY , V 6

CONTRIBUTION

5.          TOTAL POLITICAL CONTRIBUTIONS MAINTAINED AS OF THE LAST DAY

BALANCE

OF REPORTING PERIOD

$                a—.5S '/m

OUTSTANDING

6.          TOTAL PRINCIPAL AMOUNT OF ALL OUTSTANDING LOANS AS OF THE

LOAN TOTALS

LAST DAY OF THE REPORTING PERIOD

19 AFFIDAVIT

I swear, or affirm, under pe                                                                                               y of perjury, that the accompanying report

„.. - . -- ......— .. -- —              --- -

is True and correct and                                                 ,     -s II information required to be reported by

.,e,glak,          CONNIE BERRY

I                   me under Title 15           -    o     Co, e

.7 j,.....t11      Notary Public, State 01 Tams

1

'",,,--              ''5 "                        My Comml3slon Expires

,

'''.* ---- ''''''      SEPTEMBER 9, 2012

:

I n                                                                Signature of Candidate or Officeholder

_ _ _ ..„, _ ...,„ _ _ '''' ... _

AFFIX NOTARY STAMP / SEAL ABOVE                                                                                             ......''', _.--------

Sworn to and subscribed b: ore me, by

the said           g      j           4i`               ,---     this the

P...:____”     day

of                  A.,

, 20 if    to certify which, witness

my hand an, seal of office. 1

r

/.....                                 off 2 "P ...firit,                  -,9 A .4         11                           kijo i             A .,../                                                   ...                                                                                                                                                                       —

[velure of officeradministenng oath                           Printed name of officer admInIstenng oath                               Title of officer adminis                    oath