Posted on 10/07/2010 2:58:26 PM PDT by anymouse
Galveston County Judge Jim Yarbrough’s position as a director for American National Insurance Co.’s board of directors might run afoul of a little-known state law that prohibits county judges or commissioners from serving on boards of publicly traded companies that do business with the county.
Yarbrough, who’s been county judge for 16 years, said he was unaware of the law that apparently prevents him from serving on the Galveston-based insurance company’s board of directors. Yarbrough joined American National’s board in 2001.
Section 81.002 of Chapter 81 Texas Local Government Code addresses the issue: “The county judge or a county commissioner may serve as a member of the governing body of or an officer or director of an entity that does business with the county, excluding a publicly traded corporation or a subsidiary, affiliate or subdivision of a publicly traded company.”
As a board member, Yarbrough receives about $45,000 in cash a year plus stock and other benefits that total about $197,000 a year, according to American National’s Security and Exchange Commission reports.
American National is traded on the NASDAQ stock exchange. And it would be easy to overlook, but the insurance company does do a small amount of business with the county, but it is not the insurer of financial services.
Instead, the county pays American National $366 a year to lease space atop its headquarters building for a radio tower. It’s a deal struck between the sheriff’s office and ANICO in 1983 and has been renewed by the sheriff’s office every year since.
The lease agreement is part of the sheriff’s office’s supplies budget, and the license to use the roof space atop 1 Moody Plaza was not subject to commissioners court approval, Yarbrough said.
“That was something always handled through the sheriff’s office and not brought to the court for commissioners’ approval,” Yarbrough said.
County commissioners have, however, each year approved the payment of the $366 to American National Insurance, including the last payment approved on Oct. 7, 2009, according to county records. Those invoices, however, are lumped in a group of payments that are on commissioners’ agendas each week and are not considered individually.
Often, the approval of the payment of invoices are voted on by the court as a consent agenda item that has little or no discussion.
The tower served little purpose except as a backup because of the 911 District’s extensive radio and tower system.
When he was first elected to the American National Board, Yarbrough said he reviewed paperwork for any possible conflicts of interest and asked for the county attorney to seek out anything that would have prevented him from joining the insurance company’s board or interfered with his legal obligations as county judge.
It wasn’t until paperwork provided by a Houston TV station surfaced within the last two weeks that he became aware of the $366 deal for tower space, Yarbrough said. The judge insisted he also was not aware of the provision within the law that would prevent him from serving on the American National board.
The law does not appear to indicate his position as county judge would be in jeopardy, just his post as an American National Insurance director.
Yarbrough’s Republican opponent in the November election, Mark Henry, said he also was not aware of the law until recently and only heard “some of” the allegation against Yarbrough.
“I think it looks bad,” Henry said. “If there is a blurred line between my duties in my position as an elected official and my private interest, that just looks bad.
“It doesn’t have to be illegal to look bad.”
Henry alleges Yarbrough’s ties to American National and by association the Moody family’s interests present a perception of a conflict.
“I am not suggesting it is illegal,” he said. “I am just saying I should be able to look everyone in the eye and say, ‘This is why I did this,’ and not because my company made X-number of dollars off a project.”
Yarbrough takes exception to that, but it’s not a new allegation. He has taken heat in the past for his position on the ANICO board, especially since the company’s CEO, Robert Moody, is head of Moody Bank. Moody bank does a significant amount of business with the county. Yarbrough also has been challenged about his position as an advisory board member for Texas First Bank, which is controlled by the family of County Commissioner Patrick Doyle.
“It’s like Groundhog Day every four years,” Yarbrough said. “We are dealing with issues from four years ago and the four years before that. It gets old.
“My life is an open book. I have always tried to give people an honest day’s work for my paycheck. My primary goal is to work for the people of Galveston County.”
Still, Yarbrough asked the sheriff to seek a way to keep the tower where it is but possibly have the 911 District strike a deal with American National so there no longer would be any conflict of interest concerns, he said.
Galveston County ping.
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