By Chris Lane
By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
GOP courthouse kingmaker emeritus George Bishop, the spouse of Judge Caprice Cosper, faced arraignment before federal magistrate Calvin Botley on federal tax evasion charges Friday. Meanwhile, across town, his old archenemy, state Judge Russell Lloyd, was cleaning out his office at the county civil courthouse after stunning fellow judges with his resignation from the 334th District bench.
While neither man's change of circumstance directly relates to the other, each is undoubtedly delighted by the other's predicament. Bishop has long been part of an inner circle of Republican lawyers viewed as influential in helping judicial candidates get appointed or elected, and reaping ad litem assignments from those judges. Bishop and Lloyd have been locked in a bitter feud since 1992, when Lloyd blamed Bishop for failing to support his wife, Mary Lloyd, in her losing judicial campaign.
At the time, Bishop claimed Lloyd vowed "to smash him like a bug." In 1996 Bishop tried unsuccessfully to have Lloyd removed as the judge in a case where he claimed Lloyd was refusing to sign an order that would give Bishop $40,000. All in all, good reason not to invite Lloyd and Bishop to the same party. In fact Bishop claimed Lloyd once tried to get him removed from the guest list for a social gathering.
Lloyd's resignation caught associates off guard, and his future plans are even more jarring. Associates say he told them he will join the law firm of mega-plaintiff's attorney John O'Quinn, a move that could kick up more controversy. Lloyd was the lead judge on breast implant litigation in Harris County, and O'Quinn's firm handles the bulk of those cases, even though the litigation has long since passed its mid-'90s peak.
"I'm just going to go into private practice. I'm talking to a couple of people, and I'll know by the end of the week," said Lloyd, when the Insider caught up with him.
Asked if he was joining O'Quinn's firm, Lloyd reiterated, "I'm talking to people. I can't say any more than that. Some opportunities have come up, and I'm looking into 'em."
Lloyd dismissed the suggestion that joining the Breast Implant King after serving as lead judge in those cases might create at least the appearance of impropriety.
"The breast implant docket is an open matter, and everything is done on the record," said Lloyd. "If anybody wants to look at what's happened in the breast implant docket, it's out there to look at, and everything has been done on a routine basis."
Lloyd noted that no one has faulted his supervision of breast implant litigation. "There's nothing there that would not bear the closest scrutiny, and anybody who wants to take a close look at it, I invite them to do so."
The judge didn't seem nostalgic about his decade on the Harris County bench. "I'm cleaning out my desk even as we speak," he said tersely. "No sense in lingering around here."
If Russell does join O'Quinn's firm, he'll be entering troubled territory. Although O'Quinn beat the State Bar of Texas's efforts to pull his law license several months ago, he has had more trouble getting another monkey off his back. The lawyer has had stays at substance abuse clinics for chronic alcoholism and was rushed to the hospital again last month after calling friends for help from his River Oaks mansion on Shadder Way. Rumors circulated that O'Quinn nearly died of complications during the latest episode. However, he seemed hale and hearty when honored by University of Houston regents several weeks later for his $6-million gift for the renovation of Robertson Stadium. A pastor testified at a hearing this week that O'Quinn had bottomed out and has turned to God for a new beginning.
Meanwhile, attorney Bishop faces a May 24 trial with federal Judge Ewing Werlein on two counts of income tax evasion and one count of filing a false income tax return. According to the indictment, Bishop received a 1991 legal fee of $933,333 and failed to report it as income. The IRS audited Bishop after he did not file 1040s for 1989-91. The government claims he concealed the purchase of a spread near Brenham he named "Inglenook Farm," a $52,000 Tiffany's diamond engagement ring for Cosper and "an out-of-town farm account" where he deposited the fee and wrote checks to pay for those purchases.
Prosecutors also claim Bishop employed three different accountants during the period, one of whom terminated his relationship with Bishop after discovering the unreported fee and asking Bishop about it. The government alleges Bishop concealed the whereabouts of that bookkeeper when the IRS audited him in 1994.
Last week, Houston Press writer Richard Connelly met with a federal prosecutor and three investigators concerning an article he wrote for Texas Lawyer in 1994. Connelly had reported on a $565,000 ad litem fee Bishop received for his work in a class action suit by 900 plaintiffs alleging toxic exposure from Hoechst Celanese, which operated a chemical plant in Pampa, Texas. In that article Bishop was quoted as saying he did not believe he had any responsibility to report his fee on a county computer system tracking payments to ad litems. "I thought the clerk had to file it," commented Bishop. "I haven't got anything to hide."
Later in the article Bishop stated, "I did get paid a large fee, but as far as I'm concerned I earned it." The Hoechst Celanese case is apparently the source of the $933,333 fee cited by the feds in the indictment.
Bishop and Cosper also have sued the IRS, claiming they filed an amended tax return in 1994 that overstated their income. As a result, they paid $78,108 more than they owed. Bishop filed for a refund and then sued when the IRS did not return the money.
Bishop claims the IRS is persecuting him with the indictment, as retaliation for the lawsuit and because his wife is a public official. "I paid the money," he told the Chronicle. "I don't owe any money. They owe me money." According to Bishop, his accountant explained it all to the IRS but died in 1998.
Whereas Bishop blames the tax man for creating his problems, another source familiar with Bishop's situation believes his current legal problems were triggered by a source closer to home. Bishop had an unamicable divorce from former wife Martha in 1991, paying $140,000 to get a settlement agreement. The feds claim that payment came from Bishop's hidden farm account. When the ex-wife learned about the hefty account, suggests this source, it didn't take long for the IRS to get wind of it as well.
The Bishop tax evasion trial is expected to last about a month. As for character witnesses, it's a safe bet Russell Lloyd's name won't be on the list.
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