Lawsuit against Bryan Congressional candidate and his former company dismissed

By Michael W. Shapiro Tribune-Herald staff writer

Saturday February 6, 2010
 
 

Bryan Republican and retired oil and gas company executive Bill Flores has been spending most of his time these days stumping across Texas’ 17th Congressional District, which includes Waco.

However, until recently, Flores had to keep an eye on a federal courthouse in New Orleans, where his former company, Phoenix Exploration, was one of 31 businesses sued in August by the Terrebonne Parish tax assessor, who alleged the companies lied about their tax obligations to avoid more than $100 million in tax payments.

Bill Flores
Bill Flores

That situation changed Friday when the lawsuit against Phoenix Exploration and Flores, who, as CEO, was also named in the suit, was dismissed.

‘Reckless’ allegations

After the company’s release from the litigation, which was negotiated with the assessor, Gene Bonvillain, Flores’ campaign put out a statement calling the allegations in the suit “reckless, defamatory, and abusive.”

“(The suit) was dismissed because it had no merit and was an improper use of the federal court system to attempt to extort money from companies, their employees, and executives,” the statement said.

The assessor alleged that Phoenix, as well as the other companies, “were fraudulently and falsely underreporting their . . . tax liability,” according to the original complaint filed in the case.

Under Louisiana law, oil and gas companies are responsible for reporting their own tax liabilities to the parishes — the Bayou State’s county-government equivalents.

Suspecting inaccuracies in the companies’ tax documents, Terrebonne assessor Gene Bonvillain hired an Oklahoma firm to inspect the parish’s 1,546 oil and natural gas wells.

The lawsuit alleged that Phoenix purposely reported artificially low values for expensive industrial equipment to reduce its tax liability.

It also alleged that the company falsely listed an unspecified number of fuel-producing wells as producing no or not much gas or oil.

The assessor sought to recover $2.3 million in allegedly unpaid taxes.

Flores said in an interview Friday that in meetings between company representatives and the Terrebonne Parish assessor’s office, which occurred after the lawsuit was filed, the sides determined the actual amount of unpaid taxes was closer to $51,000.

Flores said it was his understanding that his old company will be paying that amount back through normal channels and not the court system.

Flores campaign spokesman Matt Mackowiak stressed during an interview over the weekend that the lawsuit lacked merit, pointing to the fact that the tax assessor was seeking unspecified damages for unreported taxes for previous tax years when Phoenix Exploration wasn't in business. The company was formed in 2006 but the suit states the parish's assessor would be seeking unpaid taxes going back to 1998. [note]

Pat Martin, a law professor at Louisiana State University, said the coastal parishes have a history through the years of suing oil and gas operations, but the success rate of suits has been mixed.

“I’ve watched lots of controversies over the years with claims of wrongdoing and often they don’t pan out,” Martin said.

After hearing a list of the businesses sued in the recent litigation, Martin — who has prosecuted oil and gas companies as a state regulator and also represented them — said, “The companies you’re talking about are, by and large, companies that do not play loosey-goosey with their responsibilities.”

Flores, who is running in a five-person GOP primary for the House seat held by Waco Democrat Chet Edwards, said, if anything, the lawsuit reflects the need for lawsuit reform.

“In Congress, I will demand medical malpractice, tort and forum-shopping reforms from further needlessly hurting our economy,” Flores said.

mshapiro@wacotrib.com

757-5707


Editor's note: This paragraph did not appear in the original story in the Saturday, Feb. 6 edition of the Tribune-Herald. It was added to the online edition following a weekend interview.

 

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Feb. 22, 2010, 9:16AM

(Report Comment)

By the way, I have forwarded the link to this and other articles to the Chet Edwards campaign. Don't think he does not know about this. Quit now Bill, before it gets realy embarassing.

 

Feb. 22, 2010, 9:13AM

(Report Comment)

This was not a shyster lawyer who filed a lawsuit to shake down an individual. This was a tax collector who had to employ extreme methods in order to collect the taxes he is charged with collecting. Your argument is the same as all the "innocent" convicts in prison. I assume, Richard, that your legal expertise comes from your background in representing Mr. Flores. Do you ride around in his private jet with him to the events the other candidates schlep to in their cars? This is not going to go away. The primary candidates cannot afford to properly label Bill Flores as the tax cheat he is, and they cannot afford to shout from the rooftops that it took a RICO lawsuit to get him to pay even a tiny sliver of what was actually owed. But lets assume he wins the primary. Do you believe Chet Edwards will hold back? Absolutely not. He will expose Bill-the-tax-cheat-Flores for what he is, and not only will the district know it. The whole country will know it. The best thing Bill can do for the country is quit because a vote for Bill Flores is a vote for Chet Edwards. If you want to support the Obama/Pelosi/Reed bunch, go ahead, vote for Bill Flores...because he CAN'T WIN!!!

 

Feb. 22, 2010, 9:13AM

(Report Comment)

This was not a shyster lawyer who filed a lawsuit to shake down an individual. This was a tax collector who had to employ extreme methods in order to collect the taxes he is charged with collecting. Your argument is the same as all the "innocent" convicts in prison. I assume, Richard, that your legal expertise comes from your background in representing Mr. Flores. Do you ride around in his private jet with him to the events the other candidates schlep to in their cars? This is not going to go away. The primary candidates cannot afford to properly label Bill Flores as the tax cheat he is, and they cannot afford to shout from the rooftops that it took a RICO lawsuit to get him to pay even a tiny sliver of what was actually owed. But lets assume he wins the primary. Do you believe Chet Edwards will hold back? Absolutely not. He will expose Bill-the-tax-cheat-Flores for what he is, and not only will the district know it. The whole country will know it. The best thing Bill can do for the country is quit because a vote for Bill Flores is a vote for Chet Edwards. If you want to support the Obama/Pelosi/Reed bunch, go ahead, vote for Bill Flores...because he CAN'T WIN!!!

 

Feb. 10, 2010, 7:44AM

(Report Comment)

Mr. Big Rig - apparently you are not aware of how our modern legal system operates. There are thousands of shyster law firms throughout the country that file b.s. lawsuits all the time. They file these suits to extort money from companies and individuals. Phoenix (not Flores) settled this situation out of court. The company paid $51,000 to settle the matter. It's unfortunate the his former company had to pay this extortion fee, but that's the nature of our modern legal system.

 

Feb. 08, 2010, 11:54AM

(Report Comment)

Sorry Robert. The suit was dismissed because the parties settled. The $51,000 in agreed upon delinquent taxes would never have been paid unless tax-cheat Flores's arm had not been twisted behind his back with a lawsuit. He is not a victim. He is a criminal. And with the money and the political machine Chet hs behind him, Flores would be doomed in the general election. He is damaged goods now. It's OVER for him. Chet will mop the floor with Flores. I understand your job is to spin this, but the twenty or thirty people reading these comments are probably too savvy for your attempts at damage control to have a meaningful effect. You should save your energy for the radio and TV spots that will hammer "Tax Cheat Flores...Tax Cheat Flores..." a hundred times a day. Quit now Bill. Use some of that tax money you saved, and buy a boat. Get some sun. You deserve the break.

 

Feb. 07, 2010, 6:50PM

(Report Comment)

Apparently some folks need to actually read the article before they comment. The suit was dropped. It's gone. The industry expert quoted in the article, who has actually prosecuted oil companies for not paying taxes, admits that these types of suits are filed all the time, and that they are often found to be baseless. Come on guys, get real. We're talking about a case where a tax accessor in the most politically corrupt state in the country chose a sleazy law firm to sue virtually every oil company that does business in the parish. This case has 'shakedown' written all over it. And responding to 'big rig,' why would Edwards want to raise this issue before a primary is over? Because Flores has the background, the experience, the local dedication to public service, and the financial connections that will allow him beat Chet like a drum. Raising a silly lawsuit right before early voting is the best chance he has to knock out his main rival.

 

Feb. 07, 2010, 4:25PM

(Report Comment)

no matter what the ammount is, he has agreed to pay 51,000 of unpaid taxes. it isn't the ammount or if it was dropped. the fact remains he did not pay his taxes. i just don't know what else their could be out there. here we have a big oil guy from huston moving into our district. sound familiar anyone? van taylor? flores has got to go. if this isn't a sign for republicans to chose another nominee i dunno what is.

 

Feb. 07, 2010, 12:29PM

(Report Comment)

So Flores pays out $51K to settle, so his name can be cleared from the RICO charges of conspiracy to commit tax fraud...The other 30 companies have not had their case dismissed.

 

Feb. 07, 2010, 11:28AM

(Report Comment)

The article should be titled: Bill Flores tax scandal amount reduced from $2,300,000 to $51,000. He is STILL a tax cheat. And why would Edwards expose this now, Mike, you doofus. He would much rather expose it after the primary. This just means the field is narrowed. What kind of candidate would announce a run for office with a lawsuit like this? He has demonstrated horrible judgement in addition to being exposed as a tax cheat. I say good riddance. Withdraw now, Bill. Maybe you can save a single shred of dignity that way.

 

Feb. 06, 2010, 11:59PM

(Report Comment)

Whether Flores avoided paying thousands or millions in taxes, he's still failed the responsibility test for public office. We all know he paid his lawyers more than that to get him off. What's worse is if he's elected, Flores will just help special interests pass laws so that companies like his don't have to pay their fair share of taxes. No, this guy's gotta go.

 

Feb. 06, 2010, 10:40PM

(Report Comment)

Are you guys serious? Did you not read the article? Frivilous lawsuits happen in Louisiana all the time, and this one was dismissed! The article states that Mr. Flores and his company was dismissed from the lawsuit--30 other companies have not been. Do you not see that someone is trying to leak frivilous information to get Mr. Flores out of the race? Looks to me like that person might be Chet Edwards! He is not trying to cheat on his taxes. If so, he wouldn't be in the clear. Come on people, you are smarter than this. If you let this be a smear campaign against Mr. Flores, then you have played right into Chet Edwards hands!

 

Feb. 06, 2010, 9:10PM

(Report Comment)

There is a person running for office that does not meet my ethical standards. Rob Curnock beat me our of a VCR when his business was on Valley Mills Dr.. I contacted his company and was givent the run around. For that Reason I will support Mr. Flores in the Primary, and in the general election as well. If Curnock gets to run in the general election I will have to vote for Mr. Edwards as he did not steal(misappropriate) a VCR from ME. Rob if you can't keep up with a VCR the taxpayers of this district cannot trust you with something big.

 

Feb. 06, 2010, 8:05PM

(Report Comment)

How convenient. How about we send Flores back to Mexico? Rah rah rah!!

 

Feb. 06, 2010, 6:59PM

(Report Comment)

I'm glad that this frivoulous, unfactual court case was dropped.

 

Feb. 06, 2010, 6:44PM

(Report Comment)

You have got to be kidding me. Chalk this up as another acceptable tax "mistake" for someone in public office. You can bet that if I "forgot" to report income that resulted in the $2.8 million tax liability he was sued for or even the $51,000 his sharksuit lawyers finally settled for, I would have been in jail and all of my assets would have liens. I am also a little aghast at how the Trib soft-pedaled this story. I guess money really can buy anything. Even journalistic integrity.

 

Feb. 06, 2010, 3:16PM

(Report Comment)

Ha, good luck in the primaries, Flores. We're not idiots, and anyone who thinks we are and can't see their true intentions, clearly doesn't deserve our vote.

 

Feb. 06, 2010, 2:02PM

(Report Comment)

What a hypocrite! How can you convince us that you have the morals our party needs when you're not paying your taxes?? Another example of not practicing what you preach, just what we need in Washington! Unbelievable!

 

Feb. 06, 2010, 1:49PM

(Report Comment)

I most certainly don't want Flores leading our country, let alone our district. Why should I vote for someone who's dishonest, and clearly doesn't have his priorities straight?

 

Feb. 06, 2010, 1:46PM

(Report Comment)

Wow. I can't believe it. This is exactly what we DON'T want in Congress. The last thing this country needs is another cheating millionaire.

 

Feb. 06, 2010, 1:46PM

(Report Comment)

Wow. I can't believe it. This is exactly what we DON'T want in Congress. The last thing this country needs is another cheating millionaire.

 

Feb. 06, 2010, 11:55AM

(Report Comment)

yet another person moves into district that has secrets exposed. isn't it funny how people expect us to pay taxes and then the big oil guy just thinks he can skip out on paying his taxes? does he just think we are stupid?? it will be interesting to see what else comes out on mr. flores.

 

Feb. 06, 2010, 11:32AM

(Report Comment)

Trust matters when a voter is looking into candidates. clearly bill flores is someone we can’t trust if he can’t pay his taxes. does he seriously think we wont see that there is more behind the curtain? we need someone who understands real people and their problems. must be nice just to hire a lawyer to clean up your mess

 

Feb. 06, 2010, 11:04AM

(Report Comment)

Chet Edwards is a legend in these parts. The ranks are: ergeant, lieutenant, captain, major, and legend. Chet Edwards is a legend here. He has saved many houses and suburbans and private educations for people's kids. Republicans don't stand a chance here.

 

Feb. 06, 2010, 9:17AM

(Report Comment)

so this is the rnc's guy? i heard him at a forum here and waco and he seemed great, but jesus. just so i have he facts right, he moves into the district, worked with soros, voted in the democratic primary, and now he isn't paying his taxes for his company. nope, we can't have this guy in office. chet is going to eat his lunch. this guy is def outta the race. think people, think.

 

Feb. 06, 2010, 9:03AM

(Report Comment)

Do you believe the scales of justice tilt in favor of the rich and powerful? To explore this question, "20/20" went to Texas to examine the fate of two men who came before the same judge. Alex Wood was accused of killing a male prostitute in Dallas in 1995. He pleaded not guilty and went to trial. According to prosecutor Rick Jordan, the evidence against Wood was incontrovertible: He had shot an unarmed man in the back. But just as the jury was about to conclude its deliberations, Jordan struck a plea bargain: In exchange for a guilty plea, Wood would be given 10 years of probation and no jail time. Jordan's explanation for striking such a lenient deal? He believed the jury was sympathetic to Wood, and Jordan worried it might acquit Wood altogether. Maybe it would have. Wood had no criminal history and came from a wealthy and well-connected Texas family. Wood's father, the Rev. John Alvin Wood, is a retired pastor of the First Baptist Church of Waco and a former regent of Baylor University. He's also a big game hunter and fossil collector whose private museum was recently featured in National Geographic. Wood's sister is married to congressman Chet Edwards, whose vast district, the 17th Congressional District of Texas, extends from the Fort Worth suburbs in the north to the Bryan-College Station area in the south.

 

Feb. 06, 2010, 8:42AM

(Report Comment)

Great, another millionaire crook running for office.

 

Feb. 06, 2010, 8:40AM

(Report Comment)

Someone needs to inform Mr. Flores that his own party consistently stands in the way of federal (national) tort reform based on Ronald Reagan's contention that it should be a "state's rights" matter, not a federal matter. As for interstate competition, the insurance companies, which run the Republican Party, talk a lot about it but when it comes down to the final analysis, the insurance companies are opposed to it. They don't want to compete nationwide. They want what they have now; a bird-nest on the ground. The enjoy the profits of competing with one or two other companies within a specific state where they can virtually set the prices and the services they will pay for. It is easier to railroad a state legislature and a governor than a congress and a president! Sadly, the "tea partiers" and Republicans either don't grasp the realities or they know them and support them at the expense of thoe who are turned down for insurance or those who are insured & pay too much but get too little. Flores is just another prostitute to the insurance companies.

 





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