The Brothers Graham (Part I)

Once upon a time in Humble, there lived two guys named Pat and Mike. They had a way of making people believe, and those people included some of Texas' highest public officials. While it turned out that their stories usually were just too good to be true,

It was about noon on the fourth day of the new year, and Pat Graham was pretending to be someone else while sitting in a car parked outside a restaurant near Greenspoint Mall.

The person he was pretending to be was Harold Robert of the Texas Department of Criminal Justice, and in conjunction with that masquerade, Pat Graham was also attempting to transfer $150,000 in cash from a delivery-service box into his briefcase. Apparently over-tasked, he failed to notice the battalion of law enforcement agents preparing to engulf his life, which, as his use of an alias might suggest, was already full of complications.

A little later, down at the Harris County Jail, they charged Pat Graham with money laundering. That was the only crime the U.S. Attorney's Office felt it could pin on him, since investigators had no idea whether the non-existent Harold Robert would have kept his ostensible end of the bargain for which he was being given the $150,000 down payment: to arrange the escape of convicted wife-murderer Dana McIntosh from a maximum-security unit of the TDCJ.

The FBI had learned of the alleged plot from McIntosh's girlfriend. According to investigators, the plan called for the woman to facilitate payment of Graham's total $750,000 fee, then bolt to Costa Rica with her beau and his liberator. Instead, she tipped the feds. After several months of surveillance, FBI agents, working in tandem with other law agencies, instructed her to arrange a meeting with "Mr. Robert."

For the Greenspoint rendezvous, the Harris County District Attorney's Office had provided $150,000 in cash for the down payment, put it in the delivery box and given the box to the girlfriend. As instructed, she told Graham the money had been stolen by McIntosh. To knowingly accept ill-gotten currency is a federal crime, so Graham was arrested as soon as he slid the first stack of bills into his briefcase.

While it's easy to rule out the possibility that Pat Graham is a smooth operator (in this instance, anyway), he could be one of three other things: the victim of a mix-up while working his own undercover sting to prevent McIntosh's escape; the brains behind a plan so ludicrous that even a woman dull enough to date a man who murdered his wife knew it would fail; or a con artist hoping to make off with at least $150,000, maybe more.

This last theory is favored by a great many people who know Pat Graham.
"When this last deal about old Pat came up," says one of them, a former elected official from West Texas, "I read it in the paper and thought, 'Goddamn, somebody's getting conned, and it's probably the con.' I could see him stringing them along long enough to get all their money, and then say, 'Well, we tried, but we didn't quite make it.' "

Pat Graham likely could have used that $750,000. He probably would have settled for just the down payment. Given the end result of his effort, he might have been happy with $100 and all the liquor in Costa Rica. But he sure didn't need to get ensnared in any weirdness associated with the state prison system.

Graham's arrest immediately renewed curiosity about his relationship with the TDCJ, in particular his association with the agency's former executive director, Andy Collins.

Collins had been the head of TDCJ's institutional division in 1989, when Pat Graham and his older brother Mike launched a project to develop private jails in six rural Texas counties. Three years later, five of the six facilities sat empty, and bond investors who put up $78 million to build and operate the jails filed a lawsuit alleging securities fraud.

In October 1994, a jury in the trial of that so-called Apex suit ruled that Pat and Mike Graham, operating as N-Group Securities, along with construction contractor H.A. Lott Inc. and the law firm of Keck, Mahin and Cate, had conspired to defraud the investors. The plaintiffs were awarded some $80 million in damages, but the judgment was later reduced by U.S. District Judge Sim Lake by $36 million -- the same amount of public bond money authorized for the purchase of the failed facilities by Collins, who had since been appointed TDCJ's executive director.

At the time of his arrest three months ago, Pat Graham was carrying a business card identifying himself as a representative of VitaPro Foods Inc., whose large contract to provide soybean food products to TDCJ had been approved by Collins last year. An ongoing internal investigation by the prison agency into Graham's ties to VitaPro found that Collins had been paid a $1,000-a-day consulting fee from the company since January 1. Collins recently resigned that position, after earning about $30,000.

Collins quit as TDCJ chief last fall, after Governor George W. Bush caught wind of his involvement in a private corrections facility on the drawing board in LaSalle Parish, Louisiana. The Louisiana project also involved Pat and Mike Graham, along with N-Group treasurer Jim Brunson and former Houston mayor Fred Hofheinz.

In the early stages of the LaSalle Parish project, Hofheinz had got to talking with then-governor of Louisiana Edwin Edwards, who mentioned that what he really wanted for his state was a professional basketball team. Hofheinz figured that was as close to the inside track as he would ever get, so he put the private jail on hold in late 1994, formed a group called Top Rank of Louisiana and, with Pat and Mike Graham handling the financial details, set out to buy the Minnesota Timberwolves.

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