Sharps Town Scandal Analysis

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A stock fraud scandal in the state of Texas city of Houston in 1971 and 1972 was one of the most controversy and transitional governmental scandals in Texas history. It involved nearly two dozen of state officials and former state officials. The term “Sharpstown” is like “Watergate” for public corruption (Pinkerton 2016).
The “Sharps town scandal” was a bribery scheme orchestrated by Houston banker and real estate developer Frank Sharp. Frank had secretly loaned many Texas leaders 600,000 who in turn passed a bill that gave Sharp’s National Bankers Life Insurance Corp. an advantage in ensuring bank deposits (Pinkerton 2016). The officials receiving the loans would turn around and buy stock in National Bankers Life, to be resold later at a huge profit, after Sharp would inflate the company’s value. One victim of the Scandal was Strake Jesuit College Preparatory losing 6,000,000 and a portion of the school’s land following Sharp’s advice (Sam Kinch 2010). The “Dirty Thirty” was the name given to thirty members of the 1971 Texas House of Representatives who grouped together against the Texas Speaker of the House Gus Mutscher and other Texas officials charged with the Sharps town scandal (Pinkerton 2016). The scandal caused immediate and long-lasting effects. The voters conducted a …show more content…
Tommy Shannon, state Democratic Party Chairman Elmer Baum, former Texas Insurance Commissioner John Osorio, and Rush McGinty an aide to Mutscher. In February and March of 1972 Mutscher, Shannon, and McGinty were tried in Abilene TX, on a change of venue from Austin because of all the publicity and exposure. The indictment charged all three men with conspiracy to accept a bribe, and the Governor was an unindicted co-conspirator. The men were convicted on March 15, 1972, by a jury that took 140 minutes of reviewal of evidence (Sam Kinch 2010). They received 5 years
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