This film from KHOU-TV Channel 11 in Houston contains a series of short news segments that would have aired as highlights to news stories. Many are silent and would have been voiced over by the anchorperson during a live broadcast. The titles for each segment are the originals created by KHOU-TV. The clips on this reel all date from April 1, 1971. This series includes news segments about the Houston Astros, the developing Sharpstown scandal, and a speech by civil rights activist Julian Bond.
This film was donated to the Texas Archive of the Moving Image by the Houston Public Library and is a part of the Houston Area Digital Archives. Many more films from the KHOU-TV Collection are available on the Houston Public Library
Houston Area Digital Archives website.
The Sharpstown scandal was a 1970s stock fraud scandal revolving around Houston banker and insurance company manager Frank Sharp and his companies, the Sharpstown State Bank and the National Bankers Life Insurance Corporation. Sharp granted $600,000 worth of loans from his bank to state officials who would, in turn, invest the money in National Bankers Life stock. He then pushed for legislation (and succeeded, with the help of his investors) that would further inflate the company’s value. The officials then resold their shares at a huge profit. The scheme succeeded in generating a quarter of a million dollars worth in profits.
The US Securities and Exchange Commission (SEC) stepped in in 1971, filing criminal and civil charges against Sharp and former Texas Attorney General Waggoner Carr, among others. Allegations of bribery also spread to Texas House Speaker Gus Mutscher, Jr., Texas Representative Tommy Shannon, Lieutenant Governor Ben Barnes, and Governor Preston Smith.
Later that year, Mutscher, Shannon, and Rush McGinty (one of Mutscher’s aides) were indicted by the SEC. All three were found guilty of conspiracy to accept a bribe from Sharp and sentenced to five years’ probation. (Mutscher successfully appealed the charges and later served as a Washington County Judge.) Sharp was also found guilty of violating federal banking and securities laws and sentenced to three years’ probation and a $5,000 fine.
While no other elected officials were convicted, the scandal’s proximity to the 1972 election brought the political career of anyone associated with Sharp to an abrupt end. Smith was defeated by Dolph Briscoe, while Texas Attorney General Crawford Martin lost his re-election to John L. Hill. In 1973, the Texas Legislature passed a series of ethics reform laws that included legislation requiring better transparency of elected officials’ sources of income and campaign finances.
Share this video
