Tuesday, March 8, 1988/The Battalion/Page 7
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Paper says FBI investigating
brokers hired to aid Connally
§AN ANTONIO (AP) — Former
U.S. Treasury Secretary John Con
nally, scrambling to save his crum
bling real estate empire, paid two
novice brokers to search for refi
nancing, but the plan fell through
and the men are now under investi
gation, the San Antonio Light re
ported in a copyright story.
Bexar County prosecutors, fed
eral banking officials and the FBI
are looking into whether the money
brokers swindled Connally, former
Lt. Gov. Ben Barnes and others des
perate for cash when the Texas
economy was scraping bottom, the
Ligbt reported Sunday.
“The very reason Ben Barnes and
John Connally — otherwise smart
and shrewd businessman — were
taken by these guys was because they
were incredibly desperate,” said an
investigator who requested anonym
ity. “They needed cash and they
needed it fast.”
As lenders began closing in on
Barnes and Connally, former Texas
governor, in 1986, they began
searching worldwide to find new fi
nancing avenues, but it was not easy.
“Texas was literally red-lined all
over the country financing-wise,”
Barnes told the newspaper.
Barnes turned to Ed Harper, a
former real-estate agent and used-
car salesman, and David Rowold, an
oil-and-gas leasing agent, who were
doing business as Tascosa Holding
Inc. of San Antonio. Barnes and
Connally paid the men $20,000 to
help them out of their worsening fi
nancial conditions, he said.
Barnes said Tascosa’s failure to
come through as promised was not
the last straw that hurled him and
Connally into bankruptcy, but, if it
had actually come through, it might
have staved off some of their disas
ter.
Harper and Rowold said they
were conned by international schem
ers who were using them as middle
men and they went bust as a result.
While Barnes and Connally were
their biggest-name clients, Tascosa
also worked for other Texans in
need of millions to save failing pro
jects, but none got the financing they
were promised by the two men, the
newspaper reported.
“These men weren’t just some lo
cal guys,” an investigator told the
Light. “They were hitting up people
all over the country.”
Barnes and Connally did not im
mediately return telephone calls to
the Associated Press on Monday.
Harper and Rowold have unlisted
telephone numbers and could not be
contacted.
Barnes told the newspaper that in
early 1986, Harper and Rowold
walked into his Austin office and of
fered him a quick fix to soften the
possible blow of his financial prob
lems.
The first loan they promised to
line up for Barnes and Connally was
a $16.8 million loan to refinance a
200-acre mixed-use project in Aus
tin, theLie-htreported.
Rowold said the refinancing he
and Harper were trying to arrange
for Barnes and Connally totaled
$200 million, but they never deliv
ered a penny of the money, the
newspaper said.
Rowold and Harper said they
were enticed into a new career in in
vestment banking more than two
years ago by men who operated a
Hong Kong money brokering firm
and wanted a Texas base to help in
crease their business.
Rowold and Harper said the com
pany, DINVON Investments Ltd.,
never closed any of the loans they
sent it.
“I guess I’ve got about $9 in my
pocket right now,” Rowold said.
Rowold said they also got sucked
into deals with the International
Bank of the South Pacific, based in
the island nation of Tonga.
In March 1986, the U.S. Comp
troller of the Currency informed
American banks that the Tonga
bank was doing business illegally and
warned them not to conduct busi
ness with it because of the problems.
The offshore bank was to have
backed the Barnes-Connally loans
and several others with standby let
ters of credit that never materia
lized..
The owner of the bank, Dennis
Lyle Walker, was found dead in a
Las Vegas hotel room in July 1987,
and it was unclear whether he was
directly involved with Tascosa or
DINVON, the newspaper reported.
Barnes, meanwhile, said he spent
thousands of dollars on travel and
hotel accomodations in the Tascosa
deal.
Barnes said he spent a week in a
Hong Kong hotel room waiting for
DINVON to get the letter of credit
approved. He said he also spent
three weeks in New York trying to
get a U.S. lender, G.E. Capital
Corp., arranged by Harper and
Rowold, to approve the loan.
That loan was to have been se
cured with a letter of credit from the
offshore bank, according to a May
12, 1987, letter that investigators
found among Tascosa’s files.
Personal details about Harper and
Rowold are sketchy.
Rowold, 49, said he was an oil and
gas attorney for Exxon in Houston,
until 15 years ago when he struck
out to start his own business.
Harper, who is in his 70s, oper
ated a tire store near downtown San
Antonio before moving to Rockport
in the early 1960s, where he was
sales manager for a real estate firm.
He also said he was Barnes’ cam
paign manager in Rockport when
Barnes ran for governor in 1972.
Pari-mutuel betting taxes drop
ji across country as tracks suffer
AUSTIN (AP) — Under pressure
from race track owners, state law
makers across the country have cut
pari-mutuel taxes to shore up tracks
in the wake of declining attendance
and reduced betting.
While the first legal on-track bets
probably won’t be placed until the
end of the year in Texas, many peo
ple are already giving odds the same
thing will happen here, despite the
initial optimism.
“I would wager that whoever
builds a track in Texas within two
years will be before the Legislature
asking for a reduction in the state
share g ofthe pari-mutuel pool, Don
Pnce director of the M;"n«o,a Rac
ing Commission, told the Dallas
Morning News.
Sponsors of the Texas pari-mu
tuel betting bill said they don’t ex
pect to see any cuts in the state’s 5
percent tax, the newspaper reported
Monday,
“I sure don’t want us to, and I
don’t think we will have to,” said
state Sen. O.H. “Ike” Harris, the
Dallas Republican who co-sponsored
the bill.
But Harris said there already was
talk about lowering the tax in the
“start-up years” and allocating the
difference to the tracks in an effort
to encourage investors.
“They say they cannot build a
track” because of the expense, Har
ris said. “It’s going to be tough. But I
say that they don’t have to build a
$75 million track. They can build
something less expensive and allow
for expansion.”
Texas betting advocates last No
vember relied heavily on the pitch of
new jobs and new state revenues to
win voter approval of the proposal
to legalize on-tracking betting.
Texas betting advocates last No
vember relied heavily on the pitch of
new jobs and new state revenues to
win voter approval of the proposal
to legalize on-tracking betting on
dog and horse races for the first time
in 50 years in Texas.
Texas voters overwhelmingly ap
proved the measure amid the state’s
worst economic slump in decades.
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