Sharpstown scandal

The scheme succeeded in generating profits for the investors on the order of a quarter of a million dollars, but the U.S. Securities and Exchange Commission (SEC) stepped in early in 1971, filing criminal and civil charges against former state attorney general Waggoner Carr (D), former state insurance commissioner John Osorio, Frank Sharp, and a number of others.

State Representative Tommy Shannon and Rush McGinty (one of Mutscher’s aides) were also convicted of accepting a bribe from Sharp, and sentenced to five years’ probation.

Attorney General Crawford Martin, who in 1967 issued a legal opinion that was said to have allowed a 2,200% increase in the bank’s capitalization, was defeated in the Democratic Primary for renomination by John L.

The legislation required state officials to disclose their sources of income, forced candidates to make public more details about their campaign finances, opened up most governmental records to citizen scrutiny, expanded the requirement for open meetings of governmental policy-making agencies, and imposed new disclosure regulations on paid lobbyists.

The coalition of thirty Democrats and Republicans, conservatives and liberals, has been given credit for keeping the Sharpstown stock fraud scandal alive as a political issue.