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A Project of The Annenberg Public Policy Center

Texas-Size Mudballs in GOP Senate Runoff

A bitter GOP primary contest in Texas for a U.S. Senate seat has come to this: an ad featuring a grieving mother who links one of the candidates to her son’s suicide.

A Texas super PAC is airing a TV ad that features a distraught mother who says Ted Cruz, a lawyer, “should be absolutely ashamed of himself” for representing a key figure in Pennsylvania’s infamous “kids for cash” scandal. In that case, two judges were convicted of taking $2.1 million from Cruz’s client in exchange for sending kids to private juvenile detention centers — which were built by Cruz’s client. The woman’s son was among the kids sentenced to prison by one of the disgraced judges. Her son later shot himself to death.

The woman’s story is heart wrenching and the scandal is beyond awful. But Cruz had nothing to do with the criminal case. Cruz represented the prison builder in a related civil suit brought against his client by an insurance company. The ad falsely claims that Cruz argued that his client “should not have to pay” for his role in a bribery scandal, when in fact his client had already agreed to pay $17.75 million in restitution to the victims, and would in fact have paid more if Cruz succeeded in his only role: getting the insurance company to kick in additional sums.

Big Race in Texas

The boast that “everything is bigger in Texas” certainly applies to the state’s race for the Republican Senate nomination — the most expensive race in the country. Nine candidates competed in the May primary and the two survivors — Lt. Gov. David Dewhurst (45 percent) and Cruz (34 percent) — are facing off in a runoff election on July 31.

The winner likely will be the state’s next U.S. senator, replacing the retiring Republican Sen. Kay Bailey Hutchison, so the GOP primary has been hotly contested — to say the least.

Dewhurst alone has spent nearly $20 million — more than twice as much as Cruz. Dewhurst also has benefited from a super PAC, the Texas Conservatives Fund, that is headed by one of his longtime aides, Rob Johnson. The fund has spent $2.5 million as of July 11 — not including its latest TV ad, “Ted Cruz Should Be Ashamed,” which was released July 23.

In the ad, Sandy Fonzo speaks about the “kids for cash” scandal in Pennsylvania. In that case, two state judges, Michael Conahan and Mark Ciavarella Jr., were convicting of taking more than $2.6 million in exchange for sending juveniles to for-profit detention centers.

Fonzo’s 17-year-old son, Edward Kenzakoski, was sentenced to prison by Ciavarella for what the Associated Press described as a “minor drug paraphernalia charge.” Fonzo said her son later killed himself, and she blames Ciavarella.

The case is complicated, and the TV ad is confusing and disjointed — in part because of the choppy editing of Fonzo’s interview, which deals with two separated but related cases.

A Criminal Scandal and An Insurance Dispute

The ad opens with Fonzo saying, “Corrupt judges put my son in a for-profit juvenile detention center … to make millions of dollars.” That’s clear enough, and accurate.

But then she says, “Ted Cruz says his client should not have to pay, that the IRS is the victim, and not the kids here.” The accompanying text on the screen says, “Ted Cruz’s client paid judges to put kids in jails he built.” Here, the ad is not talking about the criminal case against the judges — and those who paid them — but rather a related civil suit.

Cruz’s client was Robert Mericle, owner of Mericle Construction, who built two new for-profit prisons in Pennsylvania. Mericle testified that he gave the two judges payments totaling about $2.1 million. The owner of the facilities, Robert Powell, testified that he gave the judges an additional $600,000. The former judges argued in court that the payments were “finder’s fees” for helping put Powell, owner of the facilities, in touch with Mericle, who built them.

Mericle accepted a plea agreement and testified on behalf of the prosecution. He pleaded guilty to failing to report a felony and is awaiting sentencing.

Cruz had nothing to do with the criminal charges against Mericle.

The young victims of the kids-for-cash scandal sued Mericle for civil damages. Mericle settled the case by agreeing in December 2011 to create a $17.75 million fund for the victims. The agreement (page 11) also says that Mericle will pay an additional $1.75 million into the fund — if he wins his appeal of a lower court finding that his insurance company, Travelers Property and Casualty, did not have to pay for the victims’ claims against Mericle.

Here’s where Cruz comes in. Cruz represented Mericle in the appeals case of the insurance dispute. On June 20, 2012, the U.S. Third Circuit Court of Appeals ruled against Mericle.

Now, let’s go back to Fonzo’s statement: “Ted Cruz says his client should not have to pay, that the IRS is the victim, and not the kids here.”

It’s true that Cruz, while arguing the insurance case, said (at the 4:30 minute mark): “The victim of that crime was the IRS, it was the federal treasury. It wasn’t the kids.” But Cruz was talking about the crime to which Mericle pleaded guilty. As the U.S. Attorney’s office explains, Mericle was charged with (and ultimately pleaded guilty to) failing to report the “commission of a felony, a conspiracy between Michael T. Conahan and Mark A. Ciavarella, Jr. to defraud the United States of income tax due and owing for tax years 2003 and 2005 through 2007.”

Also, confused viewers may be left with the impression that Cruz was trying to help Mericle shortchange victims when Fonzo says, “Ted Cruz says his client should not have to pay.” That’s misleading. As we explained earlier, the victims and their families — presumably including Fonzo — would have benefited if Cruz won the insurance dispute for his client. The $17.75 million victims’ fund could have gained an additional $1.75 million, as stated in a press release issued by a law firm involved in the settlement when it was announced.

One last thing: The editing of Fonzo’s interview makes it impossible to know what she means when she says, “That’s what my son’s life was worth, $500,” or whether she is blaming Cruz for such meager compensation. Rob Johnson, the executive director of the Texas Conservatives Fund, did not return a phone call. We also tried to reach Fonzo without any luck.

It is possible that Fonzo is talking about how much her family is entitled to under the agreement reached between Cruz’s client (Mericle) and the victims. The Scranton Times-Tribune reported on Feb. 29 that a state judge approved the agreement and that it would pay juveniles sentenced by the two judges between $500 and $8,200. But Fonzo said her son served time in prison, and those children would receive at least $5,000 if they were imprisoned in one of the new prisons built by Mericle and at least $1,000 if imprisoned in another facility.

In either case, Cruz had nothing to do with the creation of the fund or how much it pays victims. He was not one of the attorneys listed on the agreement. If anything, Cruz’s only involvement in the case would have resulted in more — not less — money for victims.

— Eugene Kiely