                                                                                     ACCEPTED
                                                                                13-15-00506-CV
                                                                THIRTEENTH COURT OF APPEALS
                                                                       CORPUS CHRISTI, TEXAS
                                                                          12/17/2015 5:34:25 PM
                                                                               Dorian E. Ramirez
                                                                                          CLERK

                                               Oral Argument Requested

                       NO. 13-15-00506-CV              FILED IN
                                               13th COURT OF APPEALS
                                            CORPUS CHRISTI/EDINBURG, TEXAS
                                               12/17/2015 5:34:25 PM
                  IN THE COURT        OF APPEALSDORIAN E. RAMIREZ
            FOR THE THIRTEENTH        DISTRICT OF TEXAS Clerk



  Scripps NP Operating, LLC, a Wisconsin Limited Liability Company,
   Successor in Interest to Scripps Texas Newspapers, LP d/b/a Corpus
    Christi Caller-Times, and The E.W. Scripps Company, Appellants,
                                     v.
                           Terry Carter, Appellee


 On Appeal from the 214th Judicial District Court, Nueces County, Texas
                   (Hon. Jose Longoria, Presiding)


                       APPELLANTS’ BRIEF
Jorge C. Rangel                       Paul C. Watler
State Bar No. 16543500                State Bar No. 20931600
Jaime S. Rangel                       Andrew D. Graham
State Bar No. 24033759                State Bar No. 24041002
Joseph M. Marcum                      JACKSON WALKER, LLP
State Bar No. 12973000                2323 Ross Avenue, Suite 600
THE RANGEL LAW FIRM, P.C.             Dallas, Texas 75201
615 N. Upper Broadway, Suite 2020     (214) 953-6000 / (214) 953-5822 fax
Corpus Christi, Texas 78401           Email: pwatler@jw.com
(361) 883-8500 / (361) 883-2611 fax   Email: agraham@jw.com
Email: jorge.c.rangel@rangellaw.com
Email: jaime.rangel@rangellaw.com
Email: joe.marcum@rangellaw.com

                       Attorneys for Appellants
                  IDENTITY	OF	PARTIES	AND	COUNSEL	

Appellants:

Scripps NP Operating, LLC, a Wisconsin Limited Liability Company,
Successor in Interest to Scripps Texas Newspapers, LP d/b/a Corpus
Christi Caller-Times, and The E.W. Scripps Company

Lead Appellate Counsel:               Appellate Counsel:
Jorge C. Rangel                       Paul C. Watler
State Bar No. 16543500                State Bar No. 20931600
Jaime S. Rangel                       Andrew D. Graham
State Bar No. 24033759                State Bar No. 24041002
Joseph M. Marcum                      JACKSON WALKER, LLP
State Bar No. 12973000                2323 Ross Avenue, Suite 600
THE RANGEL LAW FIRM, P.C.             Dallas, Texas 75201
615 N. Upper Broadway, Suite 2020     (214) 953-6000 / (214) 953-5822 fax
Corpus Christi, Texas 78401           Email: pwatler@jw.com
(361) 883-8500 / (361) 883-2611 fax   Email: agraham@jw.com
Email:
jorge.c.rangel@rangellaw.com
Email: jaime.rangel@rangellaw.com
Email: joe.marcum@rangellaw.com

Appellee:

Terry Carter

Lead Appellate Counsel:               Appellate Counsel:
Rene Rodriguez                        Craig Smith
State Bar No. 17148400                State Bar No. 18553570
LAW OFFICE OF RENE                    Law Offices of Craig S. Smith
RODRIGUEZ                             14493 S.P.I.D. Suite A; P.M.B. 240
433 S. Tancahua Street                Corpus Christi, Texas 78418
Corpus Christi, Texas 78401           (361) 728-8037
(361) 882-1919 / (361) 882-2042 fax   Email: csslaw@stx.rr.com

                                                                            2
Email: rene.rodriguez@rdrlaw.com
                                   Appellate Counsel:
                                   Angelica E. Hernandez
                                   State Bar No. 24027279
                                   AEH Law Firm
                                   410 Peoples Street
                                   Corpus Christi, Texas 78401
                                   (361) 726-0054 / (866) 759-9272 fax
                                   Email: aehlawfirm@yahoo.com




                                                                         3
                                         TABLE	OF	CONTENTS	

IDENTITY OF PARTIES AND COUNSEL ......................................................... 2 
INDEX OF AUTHORITIES .................................................................................... 6 
STATEMENT OF THE CASE .............................................................................. 11 
ISSUES PRESENTED ............................................................................................ 12 
STATEMENT OF FACTS ..................................................................................... 16 
      A.                Introduction............................................................................... 16 
      B.                Chamber Treasurer Raises Questions about Carter ............ 17 
      C.                Carter Takes Tape; Bentley Denied Access. ......................... 23 
      D.                Issues presented to Chamber Board of Directors. ............... 24 
      E.                Chamber Leaders and Members Publicly Petition for
                        Special Meeting ......................................................................... 28 
      F.                Lawsuits Filed; Carter Placed on Paid Leave ....................... 28 
      G.                Chamber Adjustments to 2007 Financials ............................ 29 
      H.                Carter Resigns from the Chamber ......................................... 29 
      I.                Chamber Obtains Audit of 2007 Financials.......................... 30 
      J.                Caller-Times Articles Report on the Chamber Events as
                        They Unfold .............................................................................. 30 
   STANDARDS OF REVIEW ............................................................................. 35 
      A.                Elements of Libel ...................................................................... 35 
      B.                Traditional Summary Judgment Standard ........................... 36 
      C.                No-Evidence Summary Judgment Standard ....................... 37 
      D.                Standard of Review in Media Libel Cases ............................ 37 
   SUMMARY OF ARGUMENT ......................................................................... 38 
   ARGUMENT ...................................................................................................... 39 
      A.                The Articles Are Not Defamatory of Carter ......................... 39 
      B.                The Articles Are True or Substantially True ........................ 45 
      C.                The Articles Are Non-Actionable Opinion........................... 56 

                                                                                                                    4
       D.                 The March 19, 20 and May 29, 31 Articles Are Privileged
                          Fair Reports of Judicial Proceedings Under Common Law
                          and Texas Statute. ..................................................................... 58 
       E.                 Article-by-Article Analysis Shows the Caller-Times
                          Appellants Are Entitled to Summary Judgment. ................ 59 
       F.                 The Articles Were Published Without Negligence ............. 83 
       G.                 Carter Cannot Recover Exemplary Damages Because the
                          Articles Were Published Without Actual Malice ................ 85 
       H.                 Tag-Along Tort Claims Also Fail ........................................... 90 
       I.                 Appellant E.W. Scripps Has No Publisher Liability ........... 91 
PRAYER .................................................................................................................. 91 
CERTIFICATE OF SERVICE ............................................................................... 93 
CERTIFICATE OF COMPLIANCE .................................................................... 94 
APPENDIX ............................................................................................................. 95 




                                                                                                                          5
                                          INDEX	OF	AUTHORITIES	

Cases

Ackly v. Bartlesville Examiner-Enter.,
  No. 06-CV-529-TCK-PJC, 2007 U.S. Dist. LEXIS 87897 (N.D.
  Okla. Nov. 29, 2007) ......................................................................................... 51

AMS Constr. Co. v. Warm Springs Rehab. Found.,
  94 S.W.3d 152 (Tex. App.—Corpus Christi 2002, no pet.) ...................54, 55

Assoc. Press v. Cook,
  17 S.W.3d 447 (Tex. App—Houston [1st Dist.] 2004, no pet.) .............56, 58

Belo Corp. v. Publicaciones Paso del Norte, S.A. de C.V.,
   243 S.W.3d 152 (Tex. App.—El Paso 2007, pet. denied) ............................. 38

Bentley v. Bunton,
   94 S.W.3d 561 (Tex. 2002) ....................................................................53, 57, 58

Bich Ngoc Nguyen v. Allstate Ins. Co.,
   404 S.W.3d 770 (Tex. App.—Dallas 2013, pet. denied)............................... 56

Burbage v. Burbage,
  447 S.W.3d 249 (Tex. 2014) ........................................................................37, 86

Church of Scientology Int’l v. Time Warner, Inc.,
  903 F. Supp. 637 (S.D.N.Y. 1995), aff’d, 238 F.3d 168 (2d Cir.
  2001) ................................................................................................................... 87

City of San Antonio v. Pollock,
   284 S.W.3d 809 (Tex. 2009) .............................................................................. 55

Coastal Transp. Co. v. Crown Cent. Pet. Corp.,
  136 S.W.3d 227 (Tex. 2004) .............................................................................. 55




                                                                                                                            6
Coronado v. Freedom Commc’ns, Inc.,
  No. 13-13-00525-CV, 2015 Tex. App. LEXIS 10128 (Tex.
  App.—Corpus Christi, Sept. 30, 2015, no pet.) (mem. op.)........................ 58

Danevang Farmers Coop. Soc’y v. Indeco Prods., Inc.,
  No. 13–04–445–CV, 2006 WL 2885058 (Tex. App.—Corpus
  Christi Oct. 12, 2006, no pet.) (mem. op.) ..................................................... 55

Dolcefino v. Randolph,
  19 S.W.3d 906 (Tex. App.—Hou. [14th Dist.] 2000, pet.
  denied) ...................................................................................................38, 49, 89

Farias v. Garza,
   426 S.W.3d 808 (Tex. App.—San Antonio 2014, pet. filed) ........................ 61

Foster v. Laredo Newspapers, Inc.,
   541 S.W.2d 809 (Tex. 1976) ..................................................................84, 85, 86

Freedom Commc’ns Corp. v. Salinas,
   No. 13-13-00702-CV, 2015 Tex. App. Lexis 10129 (Tex.
   App.—Corpus Christ, Sept. 30, 2015, no pet.) ............................................. 42

Freedom Newspapers v. Cantu,
   168 S.W.3d 847 (Tex. 2005) ........................................................................89, 91

Global Relief Found. v. New York Times Co.,
   390 F.3d 973 (7th Cir. 2004) .................................................................51, 52, 57

Hancock v. Variyam,
  400 S.W.3d 59 (Tex. 2013) ....................................................................40, 41, 45

Hearst Corp. v. Skeen,
  159 S.W.3d 633 (Tex. 2005) ........................................................................53, 90

Hearst Newspaper P’ship, LP v. Macias,
  283 S.W.3d 8 (Tex. App.—San Antonio 2009, no pet.) ............................... 48




                                                                                                                     7
Henry v. Nat’l Ass’n of Air Traffic Specialists, Inc.,
  836 F. Supp. 1204 (D. Md. 1993), aff’d, 34 F.3d 1066 (4th Cir.
  1994) ................................................................................................................... 87

Holly v. Cannady,
  669 S.W.2d 381 (Tex. App.—Dallas 1984, no pet.) ...................................... 85

Hotze v. Miller,
  361 S.W.3d 707 (Tex. App.—Tyler 2012, pet. denied) ..........................38, 39

Huckabee v. Time Warner Entm’t Co. L.P.,
  19 S.W.3d 413 (Tex. 2000) .........................................................................passim

KTRK Television, Inc. v. Robinson,
  409 S.W.3d 682 (Tex. App.—Houston [1st Dist.] 2013, pet.
  denied) ......................................................................................................... 43, 45

Laidlaw Waste Systems (Dallas) v. City of Wilmer,
   904 S.W.2d 656 (Tex. 1995) .............................................................................. 55

Liberty Lobby, Inc. v. Dow Jones & Co.,
   838 F.2d 1287 (D.C. Cir. 1988)......................................................................... 88

In re Lipsky,
   460 S.W.3d 579 (Tex. 2015) ........................................................................45, 53

Lohrenz v. Donnelly,
   350 F.3d 1272 (D.C. Cir. 2003)......................................................................... 90

Main v. Royall,
  348 S.W.3d 381 (Tex. App.—Dallas 2011, no pet.) ....................38, 39, 41, 46

McIlvain v. Jacobs,
  794 S.W.2d 14 (Tex. 1990) .......................................................................... 46, 49

Means v. ABCABCO, Inc.,
  315 S.W.3d 209 (Tex. App.—Austin 2010, no pet.) ..................................... 61



                                                                                                                            8
Milkovich v. Lorain Journal Co.,
  497 U.S. 1 (1990)..........................................................................................57, 58

Musser v. Smith Protective Serv., Inc.,
  723 S.W.2d 653 (Tex. 1987) .............................................................................. 41

Neely v. Wilson,
  418 S.W.3d 52 (Tex. 2013) .........................................................................passim

New Times, Inc. v. Isaacks,
  146 S.W.3d 144 (Tex. 2004) ..................................................................40, 41, 45

NW Commc’n of Tex., Inc. v. Power,
  No. 05-99-01641-CV, 2000 WL 1036327 (Tex. App.—Dallas
  July 28, 2000, pet. denied) .........................................................................44, 47

Randall’s Food Mkts., Inc. v. Johnson,
  891 S.W.2d 640 (Tex. 1995) .............................................................................. 37

Rogers v. The Dallas Morning News, Inc.,
  889 S.W.2d 467 (Tex. App.—Dallas 1994, writ denied) .............................. 91

Ryland Group, Inc. v. Hood,
  924 S.W.2d 120 (Tex. 1996) ..................................................................46, 54, 55

Scripps Tex. Newspaper, LP v. Carter,
   No. 13-09-00655-CV, 2012 WL 5948955 (Tex. App.—Corpus
   Christi Nov. 21, 2012, pet. denied) (mem. op.) ............................................ 37

Scripps Tex. Newspapers, L.P. v. Belalcazar,
   99 S.W.3d 829 (Tex. App.—Corpus Christi 2003, pet. denied) ................. 85

Shipp v. Malouf,
   439 S.W.3d 432 (Tex. App.—Dallas June 24, 2014, no pet.) ....................... 45

Shunta v. Westergren,
  No. 01-08-00715-CV, 2010 WL 2307083 (Tex. App.—Houston
  [1st Dist.] June 10, 2010, no pet.) .................................................................... 91


                                                                                                                 9
Stewart v. Sanmina Texas L.P.,
   156 S.W.3d 198 (Tex. App.—Dallas 2005, no pet.) ...................................... 55

Stone v. Midland Multifamily Equity REIT,
   334 S.W.3d 371 (Tex. App.—Dallas 2011, no pet.) ...................................... 55

Tex. Monthly, Inc. v. Transamerican Nat. Gas Corp.,
   7 S.W.3d 801 (Tex. App.—Houston [1st Dist.] 1999, no pet.) .................... 37

Vice v. Kasprzak,
   318 S.W.3d 1 (Tex. App.—Houston [1st Dist.] 2009, pet.
   denied) ............................................................................................................... 44

Wal-Mart Stores, Inc., 313 S.W.3d 837 (Tex. 2010) (per curiam) ........................ 44



Statutes

Tex. Civ. Prac. & Rem. Code §§ 73.002(a) .......................................................... 59

Tex. Civ. Prac. & Rem. Code § 73.002(b)(1)(A) ................................................. 79

Tex. Civ. Prac. & Rem. Code § 73.002(b)(1)(D) ...........................................78, 81



Other Authorities

Restatement (Second) of Torts § 611 (1977) ....................................................... 59

Tex. R. Civ. P. 166a(c) ........................................................................................... 37

Tex. Const. art. I, § 8.............................................................................................. 75

Tex. R. App. P. 9.4(i)(2)(B).................................................................................... 95

U.S. Const. amend. I .................................................................................57, 75, 90




                                                                                                                         10
                          STATEMENT	OF	THE	CASE	

Nature of the Case            Appellee Terry Carter, former president and
                              CEO of the Corpus Christi Chamber of
                              Commerce, filed suit against Appellants
                              Scripps NP Operating, LLC, a Wisconsin
                              Limited Liability Company, successor in
                              interest to Scripps Texas Newspapers, LP
                              d/b/a Corpus Christi Caller-Times, and the
                              E.W. Scripps Company alleging libel and
                              related non-libel claims based on 25 articles
                              published in the newspaper in 2008.1

Trial Court Disposition       Appellants filed their second motion for final
                              summary judgment2 on all claims against
                              them and Carter responded.3 The trial court
                              denied the summary judgment motion.4
                              Appellants timely perfected this interlocutory
                              appeal pursuant to Tex. Civ. Prac. & Rem.
                              Code § 51.014(a)(6).5




1   CR801-16.
2   CR41–1225.
3   2CR1228–6CR12703.
4   6CR12748.
5   6CR12743–747.
                                                                         11
                          ISSUES	PRESENTED	

    Did the trial court err in denying Appellants’ second motion for final

summary judgment?

    1.    Did the trial court err because the Articles were not defamatory
          of Carter?

    2.    Did the trial court err because there is no evidence that the
          Articles were defamatory of Carter?

    3.    Did the trial court err because the Articles were substantially
          true?

    4.    Did the trial court err because there was no evidence that the
          Articles were not substantially true?

    5.    Did the trial court err because the Articles are non-actionable
          opinion?

    6.    Did the trial court err because there was no evidence that the
          Articles were not opinion?

    7.    Did the trial court err because certain Articles were privileged
          fair reports of judicial proceedings?

    8.    Did the trial court err because there was no evidence that
          certain Articles were not privileged fair reports of judicial
          proceedings?

    9.    Did the trial court err because the Articles were published
          without negligence?

    10.   Did the trial court err because there was no evidence that the
          Articles were published with negligence?




                                                                       12
11.   Did the trial court err in denying summary judgment on
      Carter’s exemplary damage claim because the Articles were
      published without actual malice?

12.   Did the trial court err in denying summary judgment on
      Carter’s exemplary damage claim because there was no
      evidence that the Articles were published with actual malice?

13.   Did the trial court err in denying summary judgment on
      Carter’s non-libel claims?

14.   Did the trial court err in denying summary judgment because
      there was no evidence to support Carter’s non-libel claims?

15.   Did the trial court err in denying summary judgment to
      Appellant E.W. Scripps Company because it did not publish the
      Articles?

16.   Did the trial court err in denying summary judgment to
      Appellant E.W. Scripps Company because there was no
      evidence that it published the Articles?




                                                                13
                      REFERENCES	TO	THE	RECORD	

CR301      Volume 1, Clerk’s Record (filed October 28, 2015), page 301

2CR1268	   Volume 2, Clerk’s Record (filed October 28, 2015), page
           1268 (Volume number included only in citations to volumes
           2-6).

    	

	                 	




                                                                    14
                  STATEMENT	REGARDING	ORAL	ARGUMENT	

     Appellants request oral argument because it will assist the Court in a

case which implicates freedom of speech and press. Although Appellants

believe the legal principles entitling them to summary judgment are well-

settled and readily applied here, oral argument is appropriate as this libel

suit impacts the role of the news media in reporting on leadership

controversies at institutions vital to the economic well-being of the

community.




                                                                         15
                              STATEMENT	OF	FACTS	

      A.     Introduction	

      In early 2008, the treasurer and two executive committee members of

the Corpus Christi Chamber of Commerce raised concerns over the

financial stewardship and management of the organization by Terry

Carter, president and CEO.6

      The questions arose in the course of the executive committee

considering an annual raise and bonus for Carter. Because the controversy

about Carter and the Chamber was newsworthy and a matter of public

concern, the Caller-Times covered it in 24 news articles and an editorial

(collectively, the “Articles”), published February 15, 2008 through June 13,

2008.7 The Articles are the basis of Carter’s libel suit against the Caller-

Times Appellants.8




6 CR299–308.
7  See CR461-62, CR523, CR535-37, CR566-67 (copies of the Articles attached to the
reporters’ affidavits). The Articles are also found at Appendix Tab 1.
8 In his petition and discovery responses, Carter identified certain statements from the

Articles as allegedly containing defamatory, false statements about him. CR669-96;
CR807-09. Appellants moved for summary judgment on all such Articles and
statements.
                                                                                     16
      B.       Chamber	Treasurer	Raises	Questions	about	Carter	

               1.   Chamber	leadership	conducts	Carter’s	annual	review.	

      In January 2008, the Chamber asked its executive committee to

conduct Carter’s 2007 annual performance review.9 That month, Carter

presented financials to the Chamber showing a profitable year in 2007. 10

      Chamber chairman Freddie Martinez11 requested treasurer Damon

Bentley, a local business owner, to review the 2007 financials in connection

with Carter’s request for a raise, performance bonus, and contract

extension.12

      That review led Bentley and executive committee members Judy

Hawley and Sylvia Whitmore13 to demand an emergency executive

committee meeting to address issues related to the 2007 financials.14




9 Mtg. minutes, CR116; Hawley Deposition (hereafter “Dep.”), CR1006–07.
10 Martinez Dep., CR1047–48.

11 Martinez, a local business owner, had served on the Chamber board since 2005 and

as chairman since March 2007. Martinez Dep., CR1037–38.
12 Martinez Dep., CR1043, 1048–49; Bentley letter to Chamber board, CR301; Bentley

Dep., CR842–44; Trevino Dep., CR1125. Bentley’s letter to Chamber board is also found
at Appendix Tab 2.
13 Hawley is a former state representative, port commissioner, Chamber board member,

and Chamber executive committee member. Hawley Dep., CR1004–06. Whitmore is a
former chair of the Chamber. Whitmore Dep., CR1192–93.
14 Martinez Dep., CR1040, 1049–50, 1057.

                                                                                  17
             2.    Financials	 linked	 to	 Carter’s	 performance	 review	 are	
                   questioned.	

      On February 15, Bentley and others addressed serious financial and

management concerns about Carter to the executive committee.15 The

meeting was audio-recorded.16

      Bentley stated that Carter’s performance measures were “directly

linked to the performance of the [2007] financials” but that a salary deferral

by Carter in 2007 altered the Chamber financials by “minus $19,992.”17

Bentley also revealed that Carter had asked a senior staff member “to

forego his pay in October because we were under a financial strain.”18

Bentley summarized that the “big picture is we were presented” financial

statements reflecting $40,000 in net income for 2007 but which was really

“zero or a minus, and maybe even a really big minus.”19

      Bentley said he was concerned that Chamber expenses were charged

to the Chamber’s foundation, that money from the building fund was



15 Tape, CR324; Bentley Dep., CR 850-51, 854-55; Martinez Dep., CR1041, 1054.
16 Tape, CR324-25; transcript of tape, CR705-94; Martinez Dep., CR1041, 1052; Trevino
Dep., CR1127-29.
17 Transcript, CR717-19; Trevino Dep., CR1121-22.

18 Transcript, CR 721-23; Trevino Dep., CR1124.

19 Transcript, CR721-23, 732-33, 744-46.

                                                                                  18
shifted to the foundation, and that the Chamber accrued 2008 membership

dues in year 2007.20 Bentley discussed that special events were accounted

for “off the books” and reported to the board only on a net basis.21 Bentley

stated that checks were not signed by the treasurer as required by the

Chamber’s bylaws.22

      Carter’s responsibility for the Chamber’s financial performance and

the link to his bonus had been provisions of his employment since he was

hired in 2004.23 His employment contract vested him with responsibility

for the Chamber’s finances and called for a “performance” bonus “based

on the attainment of financial goals for the Chamber.”24 Although Carter’s

contract was later amended as to his bonus,25 his annual reviews

consistently reflected a link between the financial performance of the

Chamber and his compensation.26             Whitmore, Hawley, Martinez, and


20 Transcript, CR724-33; Trevino Dep., CR1123-24.
21 Transcript, CR734-36. See also Bentley’s PowerPoint, CR168, 171; Carter Dep., CR901;

FY2007 audit report, CR252; Martinez Dep., CR1039; Hawley Dep., CR1011-12, 1017.
Bentley’s PowerPoint is also found at Appendix Tab 3.
22 Transcript, CR738; Chamber bylaws, CR292.

23 Carter’s contract, CR122; Carter Dep., CR879.

24 CR125, 130; see also CR133-36; Carter Dep., CR909.

25 CR134, 136.

26 Carter’s performance reviews, CR137-45.

                                                                                    19
Bentley understood that Carter’s bonus was based on the Chamber’s

financial performance,27 and Carter acknowledged the connection.28

      Bentley attributed the 2007 financial issues to Carter, stating, “I’ve

lost trust in him, and I don’t think he should be the CEO of the Chamber of

Commerce.”29 Whitmore, Hawley and Martinez also recognized the matter

as an issue of trust between Carter and the Chamber leadership.30

      Bentley recommended an audit for 2007 and other executive

committee members agreed.31 Chair-elect Gonzalez summarized: “I think

all of us in this room agree that we have to have the financials correct, and

they have to be reviewed.”32

      Toward the end of the meeting, Darrell Thompson, the Chamber’s

outside CPA, was asked whether the concerns endangered the Chamber




27  Whitmore Dep., CR1194, 1204-05; Hawley Dep., CR1010; Martinez Dep., CR1044,
1048; Bentley Dep., CR847, 851; transcript, CR717-19; mtg. minutes, CR116.
28 Carter Dep., CR951-53; Carter and Waller emails, CR152; Carter and Martinez emails,

CR268.
29 Transcript, CR743-47, 749-51.

30 Id.; see also Whitmore letter, CR314; Whitmore Dep., CR1200; Hawley Dep., CR1009.

Whitmore’s letter is also found at Appendix Tab 6.
31 Transcript, CR747, 749, 758; Carter Dep., CR893; Bentley Dep., CR862-63; Whitmore

Dep., CR1194-96, 1202; Hawley Dep., CR1011.
32 Transcript, CR747.

                                                                                   20
foundation’s 501(c)(3) nonprofit status.33 Thompson explained the main

concern would be “individual inurement” where an individual “benefit[s]

personally from a donation” made to a nonprofit organization.34 Applied

to the Chamber, Thompson said: “Now, if I say, Terry, if you’ll keep us on

budget, I’ll give you a share of whatever the bottom line is. If your bonuses

are going to be based on how well you do, which it is for us, okay, you may

have a problem.”35

               3.     Carter	 takes	 part	 in	 effort	 to	 remove	 Hawley	 and	
                      Whitmore.	

         Before the February 15 meeting began, Carter took part in an effort to

remove Hawley and Whitmore from the executive committee.                        Carter

asked Bentley to wait outside the meeting in a hallway.36                   Carter and

Martinez then met with Hawley and Whitmore to inform them that they

were no longer eligible to serve on the executive committee, and thus,




33   Transcript, CR791-92.
34   Transcript, CR792.
35   Transcript, CR792-93; see also Thompson Dep., CR1141, 1147, 1152-53.
36   Carter Dep., CR891-92; Bentley Dep., CR861.
                                                                                    21
could not take part in its recommendation to the board regarding Carter’s

contract and compensation.37

      Despite this, Whitmore and Hawley decided to stay and assist

Bentley with his report.38

             4.     Carter	participates	in	contentious	meeting.	

      Carter’s participation in the meeting was contentious.39 As Chamber

employee Lucy Reta would tell Caller-Times’ reporter Elvia Aguilar, she

heard Carter and another man shouting from the meeting room.40

      Whitmore testified that Carter got loud and was yelling at Bentley.41

Chairman Martinez stated “voices were raised and volume levels

increased.”42 Whitmore testified that Carter stood over her, pointed his

finger at her, and spoke loudly to her.43 Bentley testified that Carter “blew




37 Carter Dep., CR880-81, 891, 902, 913-14; Martinez Dep., CR1040-41; transcript, CR752;
Whitmore Dep., CR1197, 1206; Hawley Dep., CR1007-08.
38 Transcript, CR709-17; Hawley Dep., CR1008.

39 Transcript, CR711-13, 751; Hawley Dep., CR1009; Trevino Dep., CR1129.

40 Reta Dep., CR1096-97, 1099-1100.

41 Whitmore Dep., CR1197-98, 1203-04, 1209.

42 Martinez Dep., CR1041.

43 Whitmore Dep., CR1209.

                                                                                     22
up on him” and had an aggressive attitude and body language.44 Carter

was eventually asked to leave so that Bentley, Hawley, and Whitmore

could present their concerns to Martinez and Gonzalez.45

      C.     Carter	Takes	Tape;	Bentley	Denied	Access.	

      Carter admits he took a tape recording of the meeting from the

building.46 Bentley made several attempts to obtain the tape without

success.47 Indeed, the tape was not produced until ordered released by the

trial court after Bentley filed a lawsuit.48 Bentley was also told by Chamber

staff that he must go through Carter to request financial information. 49




44 Bentley Dep., CR849-50. Carter, a former U.S. Army colonel (CR703), called Bentley
“lieutenant commander,” indicating he outranked Bentley in military hierarchy. See
Lieutenant                            Commander,                            Wikipedia,
https://en.wikipedia.org/wiki/Lieutenant_commander (last visited July 6, 2015).
Carter was known for an “aggressive” leadership style. Martinez Dep., CR1047.
45 Transcript, CR714-15; Martinez Dep., CR1041.

46 Carter Dep., CR896; see also Bentley Dep., CR850; Martinez Dep., CR1042, 1045;

Whitmore Dep., CR1198, 1204; Bentley letter to board, CR301.
47 Id.; see also Carter Dep., CR897-98; Bentley letter to board, CR301-02, 314, 316-20;

Martinez Dep., CR1052-53.
48 CR360-61.

49 Bentley Dep., CR861-62; see also Waller Dep., CR1172.

                                                                                    23
      D.     Issues	presented	to	Chamber	Board	of	Directors.	

      Two days after the executive committee meeting, Carter sent a letter

to the Chamber board giving his account of the issues.50

      On February 20, the Chamber board met to consider the matter.51

Carter himself described it as an “issue raised regarding misappropriation

of funds.”52 Carter advised the board that Chamber CPA Thompson no

longer wanted the engagement “due to high risk.”53 A board member

questioned Carter if a complete audit had been performed for the past year

and he acknowledged it had not—only a review.54

      Bentley addressed the board on “irregularities in financials he found

in the month of December” and stated that the “issue was regarding the

performance of the CEO.”55 He made a PowerPoint presentation regarding

his concerns and findings.56 Among other things, Bentley explained that



50 CR240-43. Carter’s letter to the Chamber board is also found at Appendix Tab 5. See
also Bentley Dep., CR859; Carter Dep., CR882; Trevino Dep., CR1131.
51 Mtg. minutes, CR117-20.

52 CR119 (emphasis added).

53 Id.

54 Id.; see also Thompson Dep., CR1138, 1141, 1147.

55 Id.; see also Martinez Dep., CR1042.

56 CR156-72. Bentley’s PowerPoint to Chamber board is also found at Appendix Tab 4.

Mtg. minutes, CR119; Bentley Dep., CR858-59.
                                                                                   24
the building fund had been used without board approval, which was

potentially a “serious problem” for 501(c)(3) status according to CPA

Thompson.57 Bentley’s presentation also included a “summary of 2007

adjustments in which the ‘original NOI [net operating income]’ of positive

$40,425 compared to ‘adjusted NOI’ of negative $61,782 produced a

‘$102,207 swing.’”58

        Martinez presented the executive committee’s recommendation to

“postpone review of CEO until annual audit of finance is complete to

include 2006-07.”59 The board then voted to conduct the audit.60

        Bentley believed Carter’s February 17 letter to the board61 had

“misrepresented both the intent and the facts presented in the treasurer’s

report” at the board meeting and he responded with his own letter to the

board on February 26, 2008.62 In his letter, Bentley described discovering a




57   Bentley’s PowerPoint, CR162-64; Thompson Dep., CR1155-56; Carter Dep., CR883-84.
58   Id.; see also Bentley letter to board, CR304-07; Bentley Dep., CR862.
59   Mtg. minutes, CR119.
60   Id.; Trevino Dep., CR1130.
61   Carter letter to board, CR240-43.
62   CR299-08; Bentley Dep., CR859.
                                                                                  25
“crucial problem with the use of building fund dollars to supplement the

Chamber’s operating expense account.”63 Bentley wrote:

            It is undeniable the financials for 2007 as presented
            to the executive committee and board are
            inaccurate, inconsistent with the process used in
            previous years and a misrepresentation of the
            Chamber’s bottom line.64

      Bentley stated that he “suspected irregularities in booking expenses

and revenues” had “created the ‘Net Operating Income’ for 2007” and that

“these irregularities had the effect of justifying a performance bonus under

[Carter’s] contract.”65

      Bentley then identified three main areas of concern in the Chamber’s

2007 financials:

                  Carter deferred his pay for November and December
                   2007 without booking it as an expense, resulting in
                   $19,992.00 gain for 2007.66

                  Carter used building fund dollars to pay for certain
                   Chamber expenses, resulting in $18,312.00 gain for 2007.
                   The “CEO should have never shifted the building fund



63 CR301; Bentley Dep., CR845.
64 CR302-03.

65 CR303.

66 CR303-04; see also email from Waller to Carter, CR154-55; Waller Dep., CR1168-69,

1172.
                                                                                 26
                  from the Chamber books to the foundation books for the
                  use of supplementing the Chamber’s financials.”67

                 The Chamber accrued January 2008 membership
                  renewals in 2007, resulting in $63,903.00 gain for 2007.68

      On February 28, former Chamber chair Sylvia Whitmore sent a letter

to the board stating that Bentley’s “concerns are very credible, and

appeared to be mostly ignored.”69 She also stated that Carter’s letter to the

board “gloss[ed] over financial irregularities and the declining membership

numbers.”70 Whitmore also expressed concerns with the “interpretation

that I am not officially a member of the executive committee,” “denying the

treasurer access to critical information and advise (sic) of financial

professionals,” and “refusal of Chamber staff to cooperate . . . and refusal

of Chamber CEO to release the tape of the Executive Committee

meeting[.]”71




67   CR304; see also FY2007 adjustments, CR179-83; FY2007 audit report, CR244-66;
Whitmore Dep., CR1195; Carter Dep., CR895, 899; Thompson Dep., CR1145.
68 CR303-05.

69 CR314. Whitmore’s letter also appears at Appendix Tab 7.

70 Id.

71 Id.; Whitmore Dep., CR1202, 1205.

                                                                              27
      E.      Chamber	 Leaders	 and	 Members	 Publicly	 Petition	 for	 Special	
              Meeting		

      Carol Scott and other Chamber members eventually petitioned the

Chamber for a special meeting to provide more information to its

members.72 For example, Scott experienced difficulty obtaining accurate

membership lists to assess the declining membership and the number of

signatures needed for the petition.73

      On March 3, 2008, a news conference was attended by 11 former

chairs of the Chamber and 60 Chamber members to obtain signatures and

support for the petition asking the Chamber to address financial and other

concerns.74

      F.      Lawsuits	Filed;	Carter	Placed	on	Paid	Leave		

      On March 18, Bentley filed a petition in the 214th District Court and

was granted a temporary restraining order preventing Carter and the

Chamber from destroying the tape recording of the February 15 meeting.75


72  Aguilar Aff., CR458; Scott Dep., CR1112. Aguilar’s Affidavit is also found at
Appendix Tab 5.
73 Scott Dep., CR1107-09; Whitmore Dep., CR1199; Hawley Dep., CR1016, 1018. From

Dec. 31, 2006 to Mar. 31, 2008, the Chamber lost 257 members. Compare CR215-39 with
CR184-214.
74 Aguilar Aff., CR457-58; CR 472-75, 515-17; Scott Dep., CR1112, 1114-15.

75 CR337-40.

                                                                                28
The next day, Carter filed this lawsuit seeking damages against the

Chamber, Bentley, Hawley, Whitmore, the Caller-Times and others.76

      On March 26, at a special meeting of the Chamber board, Carter was

placed on administrative leave with pay.77

      G.    Chamber	Adjustments	to	2007	Financials		

      On March 25, 2008, the Chamber adjusted its 2007 financials from

those presented in January.78 The adjustment changed the positive

$40,425.48 net operating income reported in January 2008 to a negative

$95,377.76 NOI, reflecting a total decrease in 2007 NOI of $135,803.24.79

Adjustments were made for special events, accrual of Carter’s salary from

2007 and shifting back money removed from the building fund.80

      H.    Carter	Resigns	from	the	Chamber	

      After reaching a severance agreement with the Chamber, Carter

resigned effective April 30, 2008.81



76 CR341-53.
77 Aguilar Aff., CR457; CR481; Chamber’s interrog. resp., CR799.

78 FY2007 adjustments, CR179-83; Thompson Dep., CR 1139, 1149-50.

79 Id.

80 Id.; see also CR180-83; Waller Dep., CR1171, 1173-74.

81 Martinez Dep., CR1046, 1053-54, 1061; Carter’s resignation CR641-45; Carter Dep.,

CR885-86, 969.
                                                                                 29
        I.       Chamber	Obtains	Audit	of	2007	Financials	

        On August 27, 2008, the Chamber retained an independent CPA to

audit the financial statements for the year ended December 31, 2007.82

        On November 12, 2008, the CPA issued his report, which included

the following findings:

                      “The misstatements detected as a result of audit
                       procedures and corrected by management were material,
                       either individually or in the aggregate, to the financial
                       statements as a whole.”83

                      Various expenditures of the building fund totaling
                       $95,982.00 were “a breach of the intended purpose of the
                       funds.”84

                      Various weaknesses on internal control over financial
                       reporting, including a “very high possibility of
                       management override.”85

        J.       Caller‐Times	 Articles	 Report	 on	 the	 Chamber	 Events	 as	 They	
                 Unfold	

                 1.    Community	leader	tips	newspaper	

        On the morning of February 15, 2008, Caller-Times reporter Jaime

Powell received a news tip about the Chamber from Ruben Bonilla,



82   CR258.
83   CR260-65.
84   CR265.
85   CR264.
                                                                                 30
chairman of the Port of Corpus Christi.86 Bonilla was a well-known and

highly respected local attorney and community leader who had been a

reliable source of information during the years for Powell.87                Veteran

business editor Tom Whitehurst assigned business reporter Elvia Aguilar

to assist Powell with investigating the matter.88

             2.    Newsworthy	developments	reported	

      Whitehurst and other editors and reporters pursued the story

because it was “newsworthy in that it pertained to one of our community’s

most important local organizations, the Chamber of Commerce, and its

CEO and president, Carter.”89          “The fact that high-ranking Chamber

officials were raising questions regarding the CEO and president of the

Chamber made the matter newsworthy.”90 The news was “published in




86 Whitehurst Aff., CR617-18; Powell Aff., CR585; Powell Dep., CR1088.
87 Powell Aff., CR 585.

88 Whitehurst Aff., CR 617-18; Averyt Aff., CR621-22; Aguilar Dep., CR820.

89 Id.; see also Powell Aff., CR587; Aguilar Aff., CR459. Publisher Birmingham was not

involved in deciding news coverage about the controversy. Birmingham Dep., CR873-
74; Averyt Dep., CR836.
90 Whitehurst Aff., CR618-19.

                                                                                   31
good faith for the purpose of providing information to the public on a

matter of public interest and concern.”91

      The Articles informed viewers of the controversy involving Carter

that erupted among leadership of the Chamber.92                 The Caller-Times

reported allegations by Bentley and others; the newspaper itself did not

originate any allegations about Carter.93

            3.     Articles	balanced	with	Carter’s	explanations	

      The Articles included numerous items favorable to Carter.                 For

example, in the first Article published February 15 the newspaper

described the “financial questions” involving Carter “as business practice-

related, not improprieties.”

      The Articles also provided readers with Carter’s version of events in

context. For example, the February 27 Article informed readers in detail

about Carter’s February 17 letter to the Chamber board that disputed

Bentley’s assertions and provided his own explanation, including that:

91  Carter concedes the Articles “involved a public matter.” CR415; CR805; see also
Trevino Dep., CR1123; Whitehurst Aff., CR 618-19; Averyt Aff., CR622.
92 See Aguilar Aff., CR454-60; Averyt Aff., CR 620-23; Birmingham Aff., CR624-28;

Cavazos Aff., CR518-22; Chirinos Aff., CR 530-34; Contreras Aff., CR636-40; Jimenez
Aff., CR 562-65; Malan Aff., CR 608-11; Powell Aff., CR 584-88; Reta Aff., CR451-53;
Whitehurst Aff., CR 616-19; Wilson Aff., CR 612-15.
93 Id.

                                                                                 32
                    “Carter, in a Feb. 17 letter to board members, said he
                     deferred part of his salary in 2006 and 2007 for tax
                     purposes.”

                    Carter said in his “letter that the failure to record his
                     salary deferral as a 2007 expense was a bookkeeping
                     error.”

                    Carter’s “letter says including the January 2008 revenue
                     was consistent with the chamber’s accounting method
                     approved by the board in September 2004.”

                    Carter’s letter “says he discussed the move with
                     Thompson and Bentley before shifting the funds”
                     between the Chamber and the foundation.

                    “The foundation has operated with overhead provided by
                     the chamber and chamber had never been reimbursed for
                     these expenses, according to Carter’s letter.”94

        The March 20 Article likewise presented Carter’s position at length in

reporting on the filing of this lawsuit by him, including that:

                    Carter “was seeking damages against Bentley, the
                     chamber, the Caller-Times and others.”

                    Carter accused the Caller-Times Appellants of “false and
                     defamatory” statements “without regard to the truth.”

                    Carter “disputes Bentley’s assertions that Carter deferred
                     a portion of his salary and transferred funds among
                     accounts in manner that showed a surplus when
                     according to Bentley the chamber should have shown a
                     deficit.”


94   CR241-43.
                                                                            33
                  “Carter also disputes Bentley’s statements that Carter’s
                   bonus was linked to the chamber’s financial
                   performance.”

                  Carter disputed that his “shifting of funds among
                   chamber accounts jeopardized the chamber foundation’s
                   non-profit status.”

                  Carter “offers justification for the Chamber accounting
                   method questioned by Bentley.”

                  Carter’s position was that “his bonus would not have
                   been related to any Chamber condition or status.”95

      At all times during the editing process, Whitehurst directed the

reporters to attempt to reach Carter and other Chamber officials for

comment.96 Carter, his attorney, or his lawsuit were quoted or cited 21

times in the Articles.97 Carter declined to comment or to return calls at least

10 times.98 Aguilar alone attempted without success to contact Carter on

eight separate occasions, and twice she spoke to his attorney, who declined

to comment.99      Moreover, Caller-Times’ sources included high-ranking



95 Compare March 20 Article, 2CR1519, with Carter’s Orig. Pet. CR341-53.
96 Whitehurst Aff., CR618.

97  Aguilar Aff., CR457-58, 481-82, 488-90, 498-500; Cavazos Aff., CR520, 525, 527;
Chirinos Aff., CR 532-33, 536-38, 541.
98 Aguilar Aff., CR456; Chirinos Aff., CR532.

99 Aguilar Aff., CR457; see also Carter Dep., CR909 (agreeing he never returned calls

from reporters). The Caller-Times’ investigated, reported, edited and published the
Articles with diligence, balance and in accordance with common journalistic practice.
                                                                                  34
Chamber officials who were in a position to be knowledgeable about the

matters at issue.100

      The Caller-Times reviewed and relied on documentary evidence such

as the letters and email by Carter, Bentley and Whitmore to the Chamber

board.101 Editorial writer Nick Jimenez reviewed seven Articles for the

editorial.102

      Carter never contacted the Caller-Times to point out that any

statement in the Articles was incorrect. 103

                             STANDARDS	OF	REVIEW	

      A.        Elements	of	Libel	

      To maintain a libel cause of action against a media defendant, a

plaintiff must prove that the defendant (1) published a statement; (2) that



See Pederson Report, CR665; Pederson Dep., CR1068, 1070-79; Aguilar Aff., CR454-60,
462-96, 498-517; Cavazos Aff., CR518-22, 524-27, 529; Chirinos Aff., CR 530-34, 536-43,
545-61; Jimenez Aff., CR562-65, 567, 569-81, 583; Malan Aff., CR608-11; Powell Aff.,
CR584-88, 590-95, 597-607; Wilson Aff., CR612-15; Whitehurst Aff., CR616-19;
Birmingham Aff., CR624-28, 630, 632, 634-35; Contreras Aff., CR637-40; Averyt Aff.,
CR621-23.
100 Whitehurst Aff., CR618; Aguilar Aff., CR459; Powell Aff., CR587.

101 Whitehurst Aff., CR617-19; Aguilar Aff., CR458; Powell Aff., CR586.

102 Jimenez Aff., CR562-64, 569-81.

103 Whitehurst Aff., CR619; Aguilar Aff., CR459; Powell Aff., CR587; Chirinos Aff.,

CR533; Cavazos Aff., CR521; Malan Aff., CR610; Wilson Aff., CR614; Birmingham Aff.,
CR627; Averyt Aff., CR622; see also Carter Dep., CR971.
                                                                                    35
defamed the plaintiff; (3) while acting with negligence regarding the truth

of the statement, if the plaintiff was a private individual.104 A private-

figure plaintiff must prove actual malice to recover punitive damages from

a media defendant.105

       B.     Traditional	Summary	Judgment	Standard	

       A defendant is entitled to a traditional summary judgment upon

establishing that no material fact issue exists and that it is entitled to

judgment as a matter of law.106 To meet this burden, a defendant must

conclusively negate at least one essential element of the cause of action or

establish each element of an affirmative defense.107 The burden then shifts




104 Neely v. Wilson, 418 S.W.3d 52, 61 (Tex. 2013) (citing WFAA-TV, Inc. v. McLemore, 978
S.W.2d 568, 571 (Tex. 1998)). This Court previously affirmed denial of summary
judgment to Appellants on the issue of Carter’s status as a public figure. See Scripps Tex.
Newspaper, LP v. Carter, No. 13-09-00655-CV, 2012 WL 5948955, at *5 (Tex. App.—
Corpus Christi Nov. 21, 2012, pet. denied) (mem. op.). For this appeal, Appellants
assume but do not concede that Carter is a private-figure not required to prove actual
malice as an element of his prima facie case.
105 Burbage v. Burbage, 447 S.W.3d 249, 259 (Tex. 2014) (private figure plaintiff who does

not prove actual malice may recover only damages for actual injury) (citing Gertz v.
Robert Welch, Inc., 418 U.S. 323, 350 (1974)).
106 Tex. R. Civ. P. 166a(c).

107 Randall’s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995); Tex. Monthly, Inc.

v. Transamerican Nat. Gas Corp., 7 S.W.3d 801, 805 (Tex. App.—Houston [1st Dist.] 1999,
no pet.).
                                                                                           36
to the plaintiff to produce evidence creating a fact issue on an element or

defense in order to defeat the summary judgment.108

      C.     No‐Evidence	Summary	Judgment	Standard	

      A no-evidence summary judgment is essentially a pretrial directed

verdict.109 The moving party must specifically state the elements as to

which there is no evidence.110 The burden then shifts to the non-movant to

produce evidence raising a genuine issue of material fact regarding each

element challenged.111

      D.     Standard	of	Review	in	Media	Libel	Cases	

      The denial of summary judgment to a media libel defendant is

reviewed on interlocutory appeal under the same standards applicable to

the granting of summary judgment.112 On appeal, the court conducts a de




108 Hotze v. Miller, 361 S.W.3d 707, 712 (Tex. App.—Tyler 2012, pet. denied); Dolcefino v.
Randolph, 19 S.W.3d 906, 916 (Tex. App.—Hou. [14th Dist.] 2000, pet. denied) (non-
movant bears shifted burden to raise material fact issue to defeat summary judgment).
109 Hotze, 361 S.W.3d at 712; Belo Corp. v. Publicaciones Paso del Norte, S.A. de C.V., 243

S.W.3d 152, 157 (Tex. App.—El Paso 2007, pet. denied).
110 Belo Corp., 243 S.W.3d at 158; Tex. R. Civ. P. 166a(i).

111 Hotze, 361 S.W.3d at 712; Main v. Royall, 348 S.W.3d 381, 389 (Tex. App.—Dallas

2011, no pet.).
112 Hotze, 361 S.W.3d at 712.

                                                                                        37
novo review of a trial court’s decision to deny the motion for summary

judgment by the media libel defendant.113

                                SUMMARY	OF	ARGUMENT	

         On July 22, 2015, the Caller-Times filed their Second Motion for Final

Summary Judgment (the “Motion”).114 Appellants were entitled to final

summary judgment on the grounds and defenses that the Articles are not

defamatory, are true or substantially true, are non-actionable opinion, are

statutorily privileged as fair reports of judicial proceedings and public

meetings, and were published without negligence or actual malice. There

is no evidence that the Articles are defamatory of Carter or that the Caller-

Times published any false statement of fact about Carter, and no evidence

of negligence or actual malice. In addition, Appellant E.W. Scripps—a

separate entity from the Caller-Times—did not publish the Articles or any

allegedly defamatory statements concerning Carter and there is no

evidence of such publication by that Appellant. Further, Carter’s non-libel

claims fail on one or more essential elements as they are based on the same




113   Id.; Main, 348 S.W.3d at 389.
114   CR41-96.
                                                                            38
statements and actions underlying his libel claims, and there is no evidence

in support of the non-libel claims. 115

       Carter filed a response to the Motion on August 28, 2015, which

offered three reasons for denial: (1) the Caller-Times allegedly published

the statements with actual malice; (2) Carter’s affidavit details alleged false

statements; and (3) an expert deposition for the plaintiff allegedly details

damage to Carter’s reputation.116                Carter failed, however, to offer

competent or legally sufficient evidence to raise any fact issue on the

grounds and defenses in the Motion. His arguments fail as a matter of law.

                                       ARGUMENT	

       A.     The	Articles	Are	Not	Defamatory	of	Carter	

              1.     Standard	for	Determining	Defamatory	Meaning		

       An initial question for the court in a libel case is whether a statement

is reasonably capable of a defamatory meaning from the perspective of an

ordinary reader in light of the surrounding circumstances.117 If the




115 CR42-44 (setting out summary judgment grounds).
116 2CR1229. Because this case may be disposed of on grounds other than damages, that
issue is not discussed herein.
117 Hancock v. Variyam, 400 S.W.3d 59, 66 (Tex. 2013) (citing Musser v. Smith Protective

Serv., Inc., 723 S.W.2d 653, 655 (Tex. 1987)). See also New Times, Inc. v. Isaacks, 146 S.W.3d
                                                                                           39
statement is not reasonably capable of a defamatory meaning, the

statement is not defamatory as a matter of law and the claim fails.118

Likewise, the determination of whether a statement is defamatory per se is

an initial inquiry for the court.119

       Courts must give words their ordinary meaning as read by persons

of ordinary intelligence.120          The hypothetical ordinary reader is “no

dullard.”121 The focus must be on the “words used” in the publication, not

plaintiff’s characterization of them.122

              2.     The	 Articles	 are	 not	 reasonably	 capable	 of	 the	
                     defamatory	meaning	claimed	by	Carter.	

                     a.     The Articles do not charge Carter with crime or
                            fraud.

       Statements are defamatory per se if they expressly charge the plaintiff

with crime, dishonesty, or fraud.123 The Articles do not state that Carter

committed a crime or fraud, or that such conduct is suspected. There are


144, 154 (Tex. 2004) (citing Turner v. KTRK Television, Inc., 38 S.W.3d 103, 114 (Tex. 2000);
Musser, 723 S.W.2d at 655).
118 Hancock, 400 S.W.3d at 66.

119 Id.

120 See Musser, 723 S.W.2d at 655.

121 New Times, Inc., 146 S.W.3d at 157 (internal citation omitted).

122 See Musser, 723 S.W.2d at 655; see also New Times, Inc., 146 S.W.3d at 154.

123 Main, 348 S.W.3d at 390.

                                                                                          40
no references to police or prosecutors and no use of such words as “stolen,”

“theft,”     “misappropriation,”          “malfeasance,”        “fraud,”       “felony,”

“embezzlement,” “corrupt,” or the like.

                    b.     The Articles may not reasonably be read to imply
                           or impute a crime by Carter.

      The first of the Articles—published February 15, 2008—states that the

“financial    questions”     at   issue    are   “business      practice-related,     not

improprieties.”124       Similarly, other Articles, particularly those from

February 27 and March 20 as well as the editorial, extensively convey

Carter’s explanations. Such balanced reporting dispels any implication of

dishonest or criminal conduct and clarifies that the matter is a civil dispute

over accounting practices and executive compensation, not a criminal

matter. Thus, an ordinary reader may not reasonably interpret the Articles

to ascribe criminal acts to Carter.125




124 CR462 (emphasis added).
125 See, e.g., Freedom Commc’ns Corp. v. Salinas, No. 13-13-00702-CV, 2015 Tex. App. Lexis
10129 (Tex. App.—Corpus Christ, Sept. 30, 2015, no pet.) (news report not expressly
stating plaintiff was arrested would not cause ordinary person to infer that plaintiff was
involved in criminal wrongdoing).
                                                                                       41
      A more direct accusation of financial malfeasance was recently held

not to falsely impute criminal behavior.126 A Houston television station

reported that a school’s charter was revoked by the State because “millions

of dollars in State funding … was not accounted for,” that the State didn’t

know “how [the school] spent $3 million of taxpayer money,” and that the

school “did not provide proper financial records.”127 The operator of the

school sued the station, contending the statements “insinuate that she

embezzled over $3 million and thereby falsely imputed criminal behavior

to her.”128 The First Court of Appeals rejected the argument:

             There is nothing intrinsically defamatory about
             KTRK’s reports on the State’s investigation into [the
             school’s] mismanaged funds. The reports did not
             say or imply that the entire $3 million in state funds
             had been misappropriated or embezzled. Rather,
             the statements speak to the insufficiency of financial
             records to account for spent state funds.129




126  KTRK Television, Inc. v. Robinson, 409 S.W.3d 682, 690-91 (Tex. App.—Houston [1st
Dist.] 2013, pet. denied).
127 Id. at 690.

128 Id.

129 Id. at 691.

                                                                                   42
Likewise, there is nothing intrinsically defamatory in reporting concerns by

Chamber leaders over financial management and accounting practices

under Carter’s watch.

      Carter’s own reading of the Articles—that they falsely “implied

financial malfeasance” and “implied or insinuated that I committed

violations of the Penal Code”—does not supply the requisite defamatory

meaning.130 A plaintiff’s characterization that statements make accusations

of criminal conduct is not reasonable when, as here, no such language

appears in the publication.131 Likewise, Carter’s resort in his affidavit to

comments posted on-line by third-party readers also fails to show the

Articles are defamatory because the proper inquiry is objective, not




130 Carter Aff., 6CR12165.
131 See Vice v. Kasprzak, 318 S.W.3d 1, 21 (Tex. App.—Houston [1st Dist.] 2009, pet.

denied) (characterization of statement as accusing plaintiff of “embezzlement” not
reasonable when no such language appears in the publication); NW Commc’n of Tex., Inc.
v. Power, No. 05-99-01641-CV, 2000 WL 1036327, at *34 (Tex. App.—Dallas July 28, 2000,
pet. denied) (media defendant not liable for subjective impressions from statements not
actually charging intentional or criminal conduct).
                                                                                    43
subjective.132 Further, since the comments are extrinsic to the Articles, they

do not demonstrate the alleged defamatory meaning on their face.133

                     c.     The Articles do not injure Carter in his profession.

       A publication is defamatory per se if it accuses a person of lacking a

peculiar or unique skill necessary for his profession or occupation.134 Here,

viewed in context, the Articles amount only to general criticism applicable

to a person in any profession or occupation and, therefore, are not

actionable per se.135

       For example, accurately reporting that Carter allegedly “shifted

funds” is, at most, a disparagement equally discreditable to a person in any

business or occupation.136           Likewise, “seizing” a tape recording at a

meeting or “shouting” during a meeting does not disparage Carter


132 See New Times, Inc., 146 S.W.3d at 157 (“the question is not whether some actual
readers were misled, as they inevitably will be, but whether the hypothetical reasonable
reader could be”).
133 See Robinson, 409 S.W.3d at 691 (defamatory nature must be apparent on face of

publication without reference to extrinsic facts or innuendo).
134 Hancock, 400 S.W.3d at 66-67.

135 See Hancock, 400 S.W.3d at 67 (Statement charging physician with “lacking veracity”

was not defamatory per se because statement was equally discreditable to persons in
any profession.).
136 See Shipp v. Malouf, 439 S.W.3d 432, 441 (Tex. App.—Dallas June 24, 2014, no pet.),

disapproved on other grounds, In re Lipsky, 460 S.W.3d 579, 587 (Tex. 2015) (false allegation
of personal bankruptcy did not injure dentist in his profession).
                                                                                          44
regarding a particular quality or trait peculiar to his occupation. Carter’s

conclusory affidavit statements of injury to his reputation are legally

insufficient to establish that any statement in the Articles was

defamatory.137      Therefore, the trial court erred in denying summary

judgment to Appellants because the Articles are not defamatory.138

      B.     The	Articles	Are	True	or	Substantially	True	

             1.     The	 Articles	 were	 not	 more	 damaging	 than	 a	 literally	
                    truthful	account.	

      A media defendant is entitled to summary judgment upon a showing

of the substantial truth of an allegedly libelous publication.139 The Articles

are substantially true because they are not more damaging to Carter’s

reputation than a truthful statement would have been.140

      If the Caller-Times had published the complete record of the

controversy instead of the Articles, it would not have had a more favorable

impact on Carter’s reputation. For example, publishing Bentley’s letter or

PowerPoint presentation in full would not have caused the ordinary reader

137 See Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996) (conclusory affidavit
statements are not competent summary-judgment evidence).
138 If articles are not capable of a defamatory meaning, the court need not consider

whether they are false or not substantially true. See Main, 348 S.W.3d at 389.
139 Neely, 418 S.W.3d at 63; McIlvain v. Jacobs, 794 S.W.2d 14, 15-16 (Tex. 1990).

140 Neely, 418 S.W.3d at 63; McIlvain, 794 S.W.2d at 16.

                                                                                      45
to form a better impression of Carter than would the Articles. Likewise,

publishing the entire tape of the February 15 meeting, including

demeaning remarks by Carter to “Lt. Commander” Bentley, statements by

Hawley that she had “a big problem” with Carter’s leadership, and

Whitmore’s questions about “trust” of his leadership, certainly would not

have cast Carter in a more favorable light. Verbatim inclusion in the

Articles of Carter’s February 17 letter or his original petition in this suit

would have no better effect, as those accounts were fairly summarized in

the Articles and do not alter the gist of the reports.141

      Carter contends that an audit issued in November 2008 establishes

that the “2007 financial statements had been ‘fairly presented in conformity

with U.S. generally accepted accounting principles.’”142 But the complete

record of the audit report included findings that “misstatements” corrected

in the financials were “material.”143 Likewise, accounting adjustments by




141  See NW Commc’n of Tex., Inc., 2000 WL 1036327, at *25 (publishing plaintiff’s
verbatim account would not have been less damaging because the central facts
remained undisputed).
142 2CR1240.

143 CR264.

                                                                               46
the Chamber were greater even than those identified by Bentley.144

Publishing such adjustments and final audit would not have been less

damaging to Carter’s reputation than the Articles. Therefore, the Articles

were substantially true.145

             2.     The	gist	of	the	Articles	is	true.	

      The “gist” of an allegedly libelous publication is the meaning a

person of ordinary intelligence would give it when read as a whole in

context.146 A publication that correctly conveys the gist, even if it errs in

details, is substantially true.147 Here, the gist of the Articles in relation to

Carter’s libel claims is that serious questions had been raised by certain

Chamber officials concerning the financial performance and management

practices of the Chamber under Carter’s leadership. The Articles correctly

conveyed this gist and, therefore, are substantially true.



144  FY2007 adjustments, CR180 (showing positive $40,425.00 reported in January 2008
under Carter ending in negative $95,377.76 after adjustments of March 25, 2008).
145 The November 2008 audit was not available to the newspaper during the time it

published the Articles and, even if the audit is given the spin presented by Carter, it
does not dispute substantial truth. See Hearst Newspaper P’ship, LP v. Macias, 283 S.W.3d
8, 14 (Tex. App.—San Antonio 2009, no pet.) (audit report allegedly exonerating
plaintiff but not available to newspaper did not raise fact issue on substantial truth).
146 Neely, 418 S.W.3d at 63-64.

147 Id. at 64.

                                                                                      47
             3.     Items	 of	 secondary	 importance	 do	 not	 defeat	
                    substantial	truth.	

      Carter claims that he was defamed because the Articles reported he

“seized” a tape, could be heard “shouting,” or that he excluded others from

a meeting.148 But these are items of secondary importance that do not

factor into the substantial-truth analysis.149 The gist of the Articles is not

that Carter “seized” a tape recording or “shouted” during a meeting.

Reporting such details, even if incorrect, does not undermine the gist of the

matter that serious questions had been raised by certain Chamber officials

concerning the financial performance and management practices of the

Chamber under Carter’s leadership. 150

             4.     There	is	no	omission	or	juxtaposition.	

      A news report “can convey a false and defamatory meaning by

omitting or juxtaposing facts, even though all the story’s individual

statements     considered      in   isolation    were    literally   true    or   non-




148CR24-25.
149 See McIlvain, 794 S.W.2d at 16; Dolcefino, 19 S.W.3d at 919 (whether media defendant

“learned” of or “instigated” an investigation may be disregarded as of secondary
importance).
150 Although the items are of secondary importance to the gist of the Articles, they are

in fact substantially true as demonstrated in the article-by-article discussion below.
                                                                                     48
defamatory.”151          Here, there is no material omission or suggestive

juxtaposition as readers were provided a lengthy account of Carter’s

version of events, which Caller-Times personnel consistently sought to

obtain.152

         Carter’s case is easily contrasted to that of Neely v. Wilson. There, the

Supreme Court found a fact issue on whether the news report created a

more damaging impression by omitting the material fact that the plaintiff-

physician had not been disciplined by the medical board for use of

controlled substances during surgery.153 But here, the Articles did not omit

information that would place Carter in a more favorable light since the

Caller-Times included his explanations for the actions questioned by

Bentley.

                5.     The	 Articles	 are	 substantially	 true	 reports	 of	
                       allegations.	

         In Neely, the Supreme Court noted but did not resolve whether in

some cases involving allegation reporting, substantial truth may be

established by showing the defendant accurately relayed the allegations of

151   Neely, 418 S.W.3d at 64 (quoting Turner, 38 S.W.3d at 114).
152   See supra notes 93-102 and accompanying text.
153   Neely, 418 S.W.3d at 64-69.
                                                                               49
a third party.154 Such a case is presented here, at least to the extent that

Carter claims the Articles are false because third-party allegations

accurately reported by Appellants were not true.

       Where a media defendant accurately reports third-party allegations

against a plaintiff, while including the plaintiff’s denials and without

stating a conclusion of guilt, the reports are substantially true even if the

plaintiff disputes the third-party allegations.155 The defendant is not held

to proving the truth of the third-party allegations in order to be entitled to

the defense of substantial truth.156

       Here, for instance, the February 15 and 27 Articles provided an

accurate account of allegations concerning Carter that were presented by

Bentley and others to the Chamber executive committee and board.

Indeed, Carter does not dispute that the Articles accurately reported these




154  418 S.W.3d at 65 (citing Global Relief Found. v. New York Times Co., 390 F.3d 973, 985-
87 (7th Cir. 2004).
155 See Global Relief Found., 390 F.3d at 985-87.

156 Id.; accord Ackly v. Bartlesville Examiner-Enter., No. 06-CV-529-TCK-PJC, 2007 U.S.

Dist. LEXIS 87897, at *8 (N.D. Okla. Nov. 29, 2007) (“when assessing the truth of a
report concerning an investigation, a defendant is under no requirement to show that
the allegations against the plaintiff are true, but must only show that the allegations
were made and that the allegations themselves were accurately recited”).
                                                                                         50
third-party statements.157      Instead, Carter rests his case on conclusory

affidavit testimony that the allegations are false. However, because the

Caller-Times accurately reported the third-party allegations and did not

state or imply Carter’s guilt, Appellants not need additionally prove the

allegations were valid in order to obtain judgment as a matter of law on

substantial truth.158 In such instances, substantial truth is measured only

by whether the Caller-Times accurately relayed the allegations of a third

party, which is undisputed here.159

             6.     Carter	failed	to	raise	a	fact	issue	on	substantial	truth.	

      Once the Caller-Times established that the Articles were substantially

true, as shown by the foregoing discussion, Carter had the burden as non-

movant to produce evidence creating a fact issue on that element in order

to defeat summary judgment.160




157 See, e.g., Carter Dep., CR900-01 (Carter admits that the statements reported in the
2/27/08 article came from Bentley’s letter), CR904-05 (Carter admits that statements
reported in the 2/29/08 article came from Whitmore’s letter), CR908 (Carter stipulates
that Whitmore made the statement at issue in the 3/4/08 article).
158 See Global Relief Found., 390 F.3d at 985-87.

159 See Neely, 418 S.W.3d at 65.

160 See Huckabee v. Time Warner Entm’t Co. L.P., 19 S.W.3d 413, 420 (Tex. 2000).

                                                                                    51
                    a.     Alleged proof of actual malice does not prove
                           falsity.

      Carter’s response concentrated on the issue of actual malice due to

his mistaken position that it is dispositive.161 Substantial truth and actual

malice, however, are distinct aspects of a libel case.162 A finding of actual

malice does not imply that a statement was false.163                 For a summary

judgment in a private-figure libel case, “whether [the plaintiff] raised a fact

issue regarding the truth or falsity of the underlying statements is the

primary issue in [the] appeal.”164

                    b.     Carter’s affidavit        raises    no    fact   issue    on
                           substantial truth.

      The only specific evidence that Carter pointed to in his response to

show alleged falsity is his affidavit of August 28, 2015.165 The affidavit,

however, fails as summary judgment proof because it is rife with

substantive defects that make it legally insufficient.


161 2CR1240.
162 In re Lipsky, 460 S.W.3d at 593 (referencing falsity and actual malice as separate

elements); Huckabee, 19 S.W.3d at 420 (same); Hearst Corp. v. Skeen, 159 S.W.3d 633, 636-
37 (Tex. 2005) (same). See also supra note 103 (cases listing defamatory statement and
negligence as separate elements).
163 Bentley v. Bunton, 94 S.W.3d 561, 587 (Tex. 2002)

164 Neely, 418 S.W.3d at 63.

165 2CR1229.

                                                                                      52
      Carter’s affidavit declares that certain statements in the Articles

“implied or insinuated” he committed felony violations of the penal code

or “financial malfeasance” but that he “never violated the penal code” or

“engaged in any financial malfeasance.” But such conclusory statements

and opinions “cannot support a judgment.”166 Conclusory statements in

affidavits are not competent summary judgment evidence because they are

not credible and are susceptible to being readily controverted.167 Thus, the

Carter affidavit does not meet the basic requirement to “set forth such facts

as would be admissible in evidence.”168

      Appellants made substantive objections to a host of other statements

in Carter’s affidavit, including that specified statements were improper

attempts to offer expert testimony, prohibited by TRE 702, improper legal

conclusions, lacking personal knowledge, speculation, and improper




166  Wal-Mart Stores, Inc., 313 S.W.3d 837, 839 (Tex. 2010) (per curiam). See also AMS
Constr. Co. v. Warm Springs Rehab. Found., 94 S.W.3d 152, 156 (Tex. App.—Corpus
Christi 2002, no pet.) (Affidavit must set forth facts establishing witness competency,
expertise, or personal knowledge to support opinions or conclusions in order to
constitute competent summary judgment evidence.).
167 See Ryland Group, Inc., 924 S.W.2d at 122.

168 See AMS Constr. Co., 94 S.W.3d at 156.

                                                                                    53
opinion.169 Such substantive evidentiary defects are not waived by the trial

court’s failure to rule on the objections but, on appeal, are legally

insufficient to raise a fact issue.170

      Further, this Court need not concern itself with the voluminous

document dump that Carter included with his response. Carter repeatedly

makes blanket references to the prior appellate record but fails to quote,

cite, or point the Court to any evidence raising a fact issue.171 As a matter

of law, that approach cannot raise a fact issue on substantial truth or any

other essential element of Carter’s libel claim because courts are “not


169 6CR12708-15.
170 See Laidlaw Waste Systems (Dallas) v. City of Wilmer, 904 S.W.2d 656, 661 (Tex. 1995)

(substantive objection to summary judgment evidence not waivable); Stone v. Midland
Multifamily Equity REIT, 334 S.W.3d 371, 374 (Tex. App.—Dallas 2011, no pet.) (same).
See, e.g., City of San Antonio v. Pollock, 284 S.W.3d 809, 816-17 (Tex. 2009) (testimony
based on unsubstantiated speculation is legally insufficient to support summary
judgment); Coastal Transp. Co. v. Crown Cent. Pet. Corp., 136 S.W.3d 227, 233 (Tex. 2004)
(speculative or conclusory expert opinion may be challenged on appeal as legally
insufficient to raise fact issue on summary judgment); Ryland Group, Inc. v. Hood, 924
S.W.2d 120, 122 (Tex. 1996) (objection that affidavit includes opinions constitutes
substantive defect and may be raised on appeal); Danevang Farmers Coop. Soc’y v. Indeco
Prods., Inc., No. 13–04–445–CV, 2006 WL 2885058, at *3 (Tex. App.—Corpus Christi Oct.
12, 2006, no pet.) (mem. op.) (lack of personal knowledge and conclusory statements
were substantive defects to summary judgment evidence); Stewart v. Sanmina Texas L.P.,
156 S.W.3d 198, 207 (Tex. App.—Dallas 2005, no pet.) (unsubstantiated legal or factual
conclusion was substantive defect to affidavit); AMS Constr. Co., 94 S.W.3d at 156 (“An
objection that an affidavit is conclusory is an objection to the substance of the affidavit
that can be raised for the first time on appeal.”).
171 See, e.g., 2CR1228, 1233, 1241, 1267-70.

                                                                                        54
required to sift through voluminous” records to identify evidence raising a

fact issue.172

      In addition, Carter’s benign explanations in his affidavit of

accounting practices under his leadership at the Chamber173 do not render

the Articles untrue.174 A libel plaintiff’s self-serving account that his actions

were in good faith are irrelevant to whether a news organization misstated

the facts.175

      Thus, resting merely on conclusions and legal insufficiencies, the

affidavit raises no fact issue on substantial truth.

                    c.     Concealed truth does not controvert substantial
                           truth.

      Carter may not dispute substantial truth by suggesting that the

newspaper should have withheld publication since he does not have a

legally protected right to a reputation based on the concealment of the

172 Bich Ngoc Nguyen v. Allstate Ins. Co., 404 S.W.3d 770, 776–77 (Tex. App.—Dallas 2013,
pet. denied) (quoting Aguilar v. Morales, 162 S.W.3d 825, 838 (Tex. App.—El Paso 2005,
pet. denied).
173 6CR12168, 12170.

174 Again, Carter’s explanations were included in the Articles. See supra notes 93 - 102

and accompanying text.
175 See Assoc. Press v. Cook, 17 S.W.3d 447, 453-54 (Tex. App—Houston [1st Dist.] 2004,

no pet.) (Plaintiff’s explanation that court testimony was incorrect because he relied on
misinformation from a colleague was irrelevant to whether newspaper misstated the
facts of his testimony.).
                                                                                      55
facts.176 Indeed, the full record on the Chamber’s financials is worse than

reported by the Caller-Times (e.g., adjusted March 25 to negative $95,377.76,

as compared to February 27 Article reporting treasurer Bentley

presentation of negative $61,782).177 Truth—not just known truth—is a

complete defense.178

      C.   The	Articles	Are	Non‐Actionable	Opinion	

           1.    Constitutional	protection	for	statements	not	capable	of	
                 objective	proof	as	conveying	actual	facts.	

      There are “constitutional limits on the type of speech” that is subject

to a defamation action.179 The First Amendment and Texas law require that

a plaintiff prove that a media defendant published a false, defamatory

statement of fact rather than an unverifiable opinion.180 A statement that is

not capable of objective proof as true or false, or that cannot be read as




176 Global Relief Found., 390 F.3d at 989.
177   CR162-64; Bentley Dep., CR862; Bentley letter to board, CR304-07; FY2007
adjustments, CR179-183; Thompson Dep., CR1139, 1149-50.
178 Global Relief Found., 390 F.3d at 989.

179 Milkovich v. Lorain Journal Co., 497 U.S. 1, 16 (1990).

180 See id. at 19-20; Bentley, 94 S.W.3d at 580-82.

                                                                           56
conveying actual facts about an individual, is protected opinion.181

Whether a statement is one of fact or opinion is a question of law.182

             2.     Statements	of	opinion	in	the	Articles	

      Numerous expressions of non-actionable opinion appear throughout

the Articles. For instance, references in the March 2 editorial to Carter’s

“highly questionable stewardship of the financial affairs of the chamber,”

“intimidation, secrecy and duplicity,” attempts to bring “transparency and

accountability” to the Chamber and a “question mark” over Carter are

constitutionally protected opinions, not statement of facts.183

      Protected statements of opinion in the Articles also include:

                   February 15, 16, 27 and 29 Articles that Carter could be
                    heard “shouting”;184

                   February 27 and 29 Articles that Carter “seized the
                    tape”;185


181  See Milkovich, 497 U.S. at 18-21; Bentley, 94 S.W.3d at 580-81. See also Coronado v.
Freedom Commc’ns, Inc., No. 13-13-00525-CV, 2015 Tex. App. LEXIS 10128, at*7 (Tex.
App.—Corpus Christi, Sept. 30, 2015, no pet.) (Statement must constitute an assertion of
an “objectifiably verifiable” fact in order to constitute actionable defamation.) (mem.
op.).
182 Bentley, 94 S.W.3d at 579-80.

183 See Assoc. Press, 17 S.W.3d at 454 (statement that Texas Ranger captain was a “blight

on law enforcement” was constitutionally protected opinion).
184 CR462-65, 468-71.

185 CR468-71.

                                                                                      57
                   February 27 Article reference to “off the books”
                    accounting, and a “red flag”;186

                   March 2 Editorial as a whole;187

                   March 4 Article references to “lack of                    financial
                    transparency” and not “transparent”;188 and

                   May 31 Article references to a “heated exchange” and
                    “contentious exchange” and “findings of fact.”189

      D.     The	March	19,	20	and	May	29,	31	Articles	Are	Privileged	Fair	
             Reports	 of	 Judicial	 Proceedings	 Under	 Common	 Law	 and	
             Texas	Statute.	

      The March 19, 20 and May 29, 31 Articles consisted of fair, true and

impartial accounts of judicial proceedings; namely, judicial proceedings

involving a petition by Bentley and this lawsuit by Carter. Such “fair

reports” of judicial proceedings are privileged against a libel claim by

common law and Texas statute.190




186 CR468-69.
187 CR567.

188 CR474-75.

189 CR526. See also infra Part I. (article-by-article analysis regarding non-actionable

opinion).
190 Restatement (Second) of Torts § 611 (1977); Tex. Civ. Prac. & Rem. Code §§ 73.002(a),

73.002(b)(1)(A).
                                                                                      58
      E.     Article‐by‐Article	Analysis	Shows	the	Caller‐Times	Appellants	
             Are	Entitled	to	Summary	Judgment.	

      Examining each Article and allegedly defamatory statement shows

they are non-defamatory, substantially true, non-actionable opinion and

privileged as fair reports. Carter’s response failed to raise a fact issue on

these grounds and defenses.191

             1.     February	 15,	 2008	 Article:	 	 Financial,	 Management	
                    Questions	Raised	at	CC	Chamber.	

                    a.    The Article is not reasonably capable of the
                          defamatory meaning claimed by Carter.

      The February 15 Article does not impute commission of a crime by

Carter and is not reasonably capable of that defamatory meaning claimed

by Carter.     Indeed, the Article expressly disclaims that any “financial

questions” involved “improprieties.”

                    b.    The Article is substantially true.

      The gist of the February 15 article is that three high-ranking Chamber

officials raised serious financial and management issues at a meeting of the

Chamber’s executive committee. This statement is indisputably true.192


191 See supra notes 158-172 and accompanying text.
192 See supra notes 15-35 and accompanying text. See also mtg. minutes, CR118; FY2007

audit report, CR244-66; LRGlobal contract, CR279-86; Chamber bylaws, CR287-94;
FY2006 financials, CR295-98; Bentley email to Carter, CR309-12; Bentley Dep., CR859-60,
                                                                                    59
                    c.     Statement 2/15-1:

              “However, they were asked to present their information
              in a meeting that lasted most of Friday morning and
              from which Chamber President could be heard shouting.”

                           i.    Not Defamatory

      The statement is not defamatory as a matter of law. It does not state

or imply that Carter committed a crime. Shouting in a business meeting is

certainly legal. 193 It may be unflattering to Carter to report that he shouted,

but that does not make it actionable in defamation.194

                           ii.   Substantial Truth

      It is undisputed that Chamber employee Lucy Reta told reporter

Aguilar that she heard Carter shouting from the meeting room, an account

corroborated by Whitmore, Bentley, and Martinez, all of whom were

present.195




863-64; Carter Dep., CR888-90; Hawley Dep., CR1010-14, 1017, 1019-20; Martinez Dep.,
CR1049-50, 1053; Powell Dep., CR1088-90; Thompson Dep., CR1141, 1143, 1144-48, 1151-
52, 1154, 1156; Whitmore Dep., CR1201-02, 1205-08; Thompson letter, CR438-39.
193 See Means v. ABCABCO, Inc., 315 S.W.3d 209, 214 (Tex. App.—Austin 2010, no pet.)

(citing Musser, 723 S.W.2d at 655) (statement that a person has done what he has a legal
right to do is not defamatory).
194 See Farias v. Garza, 426 S.W.3d 808, 816 (Tex. App.—San Antonio 2014, pet. filed) (a

statement that is merely unflattering is not actionable).
195 See supra notes 39-45 above and accompanying text.

                                                                                     60
                         iii.   Opinion

      As Carter testified in his deposition, whether a person is shouting is a

matter of opinion.196

                  d.     Statement 2/15- 2:

            “We agreed from a statement standpoint to say we are
            continuing the process of our evaluation and that there
            are both serious financial and management issues that we
            need to address, according to Bentley.”

      Bentley and others testified to the accuracy of the statement

attributed to him.197

            2.    February	 16	 Article:	 	 Corpus	 Christi	 Chamber	 of	
                  Commerce	Pulls	Two	Off	Panel.	

      The February 16 Article as a whole is not defamatory of Carter and is

substantially true.

                         i.     Statement 2/16-1:

            “Before their grievances could be voiced, two of the three,
            Judy Hawley and Sylvia Whitmore, were told they no
            longer are eligible to serve on the committee, meaning
            they can’t participate in the committee’s recommendation
            to the full board on matters involving Carter’s contract.”

      The statement is non-defamatory and substantially true.198



196 Carter Dep., CR903.
197 See Bentley Dep., CR863; Hawley Dep., CR1010-11, 1013-14, 1017; Martinez Dep.,

CR1042, 1053; Whitmore Dep., CR1201-02, 1205-08.
                                                                               61
                           ii.    Statement 2/16-2:

             “Carter could be heard shouting during portions of the
             meeting.”

      The statement is substantially true and non-defamatory as discussed

above and herein.199

                           iii.   Statement 2/16-3:

             “Bentley was outside in a hallway when Hawley and
             Whitmore were dismissed because Carter had denied him
             entrance to the meeting.”

      The statement is substantially true and non-defamatory.200

                           iv.    Statement 2/16-4

             “We agreed from a statement standpoint to say we are
             continuing the process of our evaluation and that there
             are both serious financial and management issues that we
             need to address, according to Bentley.”

      The statement is substantially true and non-defamatory.201




198 See supra notes 36-38 and accompanying text. See also Carter Dep., CR890-91, 902-03;
Whitmore Dep., CR1197; Hawley Dep., CR1021; Martinez Dep., CR1040-41; CR326-36;
CR341-53.
199 See Carter Dep., CR891; Whitmore Dep., CR1208. See also Part I.1.c.iii.c. discussing

Statement 2/15-1.
200 See Carter Dep., CR891-92; Whitmore Dep., CR1208; Hawley Dep., CR1021; Bentley

Dep., CR861.
201 See Carter Dep., CR892. See also Part I.1.c.iii.d. discussing Statement 2/15-2.

                                                                                     62
               3.      February	 20	 Article:	 	 CC	 Chamber	 Meeting	 to	 Discuss	
                       Financial	Irregularities.	

               “The Corpus Christi Chamber of Commerce executive
               committee is meeting to discuss financial irregularities
               discovered during a performance review of President
               Terry Carter after a raise and bonus for Carter had been
               proposed. The financial questions led to a decision to
               conduct a full audit.”

         The brief February 20 Article—set out in its entirety above—is non-

defamatory and substantially true.202 It is undisputed that Carter used the

term “misappropriation” in discussions of the Chamber’s financials with

executive committee members at the February 20 meeting while Bentley

referred to financial “irregularities” in the same meeting, as shown by the

minutes.203         Carter’s affidavit testimony that “there were no financial

irregularities”204 is a mere conclusion and legally insufficient to raise a fact

issue.205




202   Mtg. minutes, CR118-20; Bentley Dep., CR862-63; Carter Dep., CR892-93.
203   CR117-20.
204   6CR12166.
205   See Wal-Mart Stores, Inc., 313 S.W.3d at 840.
                                                                                63
               4.     February	 21	 Article:	 	 Chamber	 of	 Commerce:	 Financial	
                      Questions	Lead	to	Call	for	Audit.	

                             i.    Statement 2/21-1:

               “The audit decision occurred at a special called meeting
               of the executive committee.”

         The statement is non-defamatory and substantially true.206

         Carter’s affidavit assertion that the Article’s statement is false that

“Carter and Huseman informed two of three [executive committee

members] that they were no longer eligible to serve”207 raises no fact issue

because he does not dispute that he met with the two when they were

informed        of   their   alleged    ineligibility.208   Reporting   that   Carter

“participated” in informing the two of their alleged ineligibility rather than

that Carter “informed” them himself would have no lesser effect on his

reputation.




206   Carter Dep., CR893.
207   6CR12167.
208   See supra notes 36-38 and accompanying text.
                                                                                  64
            5.     February	27	Article:		Chamber	CEO	Shifted	Funds,	Letter	
                   Says.	

      The February 27 Article is non-defamatory and substantially true.209

The February 27 article presents an accurate account of dueling letters to

the Chamber board by Bentley and Carter regarding the Chamber’s

financial status, accounting practices and Carter’s role.

                         i.     Statement 2/27-1:

            “The Corpus Christi Chamber of Commerce chief
            executive, whose bonus is based on financial
            performance, shifted funds to make a loss look like a
            profit, according to a letter by the Chamber’s treasurer.”

      The statement is non-defamatory and substantially true.210 Bentley’s

letter, obtained by reporter Aguilar, states, “CEO [Carter] … shifted the

Building Fund from the Chamber’s books for the use of supplementing the

Chamber’s financials.”211     Carter admits he transferred funds from one

account to another.212 This “shift[ing]” of funds made a “loss look like a


209  Aguilar Aff., CR458; Aguilar Dep., CR822-24; Bentley letter to board, CR303-04;
Bentley PowerPoint, CR156-72; Bentley Dep., CR852-53; Thompson Dep., CR1145.
210 Carter Dep., CR894-95, 899, 939, 951-953; Martinez Dep., CR1044, 1048; Thompson

Dep., CR1145; Thompson letter, CR432-36; Bentley letter to board, CR303-04; Bentley
Dep., CR 851-52, 854-55, 862; Whitmore Dep., CR1194, 1204-05; Hawley Dep., CR1010;
Carter’s review, CR137-40, 143-45, 148-50; Carter’s contract, CR121-36; transcript,
CR717-18.
211 Aguilar Aff., CR458; Bentley letter to board, CR303-04 (emphasis added).

212 Carter Dep., CR894-95, 899.

                                                                                 65
profit” because the effect of the transactions was a swing of more than

$100,000; that is, a stated $40,000 profit versus a loss of more than

$60,000.213    Carter also admits a connection between his bonus and

Chamber finances.214

      Carter’s affidavit asserts the statement is false because his amended

employment contract did not link his bonus to the Chamber’s financial

performance.215 However, the Article does not base the statement on his

contract and the affidavit does not dispute that executive members

understood Carter’s bonus was based on financial performance.216

                          ii.    Statement 2/27-2:

              “Bentley disclosed his concern about the Chamber’s books
              at a Feb. 15 meeting of the Chamber executive committee
              that included a shouting match with Carter.”

      The statement is non-defamatory and substantially true.217

                          iii.   Statement No. 2/27-3:

              “During the meeting, which was tape-recorded, Carter
              seized the tape and left the building.”

213 Bentley Dep., CR862.
214  Carter Dep., CR951-53; Carter and Waller emails, CR152; Carter and Martinez
emails, CR268.
215 6CR12167-68.

216 See CR468-69; CR12165-172. See also supra notes 16-30 above and accompanying text.

217 See Carter Dep., CR896; see also Part. I.1.c.iii.c. discussing Statement 2/15-1.

                                                                                   66
      The statement is non-defamatory and substantially true.218 Bentley’s

letter to the Chamber board states the “CEO [Carter] took the tape and

immediately left the premises” and describes unsuccessful efforts over a

number of days by him to obtain the tape. 219 Carter’s affidavit testimony

that the statement is “blatantly false”220 is a mere conclusion and legally

insufficient to raise a fact issue.221

                          iv.    Statement No. 2/27-4:

             “The link between Carter’s bonus and the Chamber’s
             financial performance was a red flag for the Chamber’s
             accountant, Darrell Thompson, according to Bentley’s
             letter.”

      The statement is non-defamatory and substantially true.222 Although

Bentley’s letter did not use the term “red flag,” Thompson testified that he

agreed with that characterization.223        Bentley’s letter relates that the

Chamber’s CPA confirmed that the treasurer’s questions about financial

adjustments were valid concerns and that the link between the bonus and


218 See supra notes 46-49 above and accompanying text.
219 CR301.

220 6CR12168.

221 Wal-Mart Stores, Inc., 313 S.W.3d at 840.

222  Thompson letter, 434-35; Thompson Dep., CR1152-53; Bentley letter to board,
CR300-08; tape, CR325; transcript, CR791-93; Carter Dep., CR896, 922-31.
223 Thompson Dep., CR1152-53.

                                                                             67
Chamber’s financial performance could possibly forfeit the Foundation’s

501(c)(3) status.224 Stating the link was a “red flag” rather than a “concern”

has no greater impact on Carter’s reputation and thus is substantially

true.225

                          v.     Statement No. 2/27-5:

              The accountant told the Chamber executive committee
              that “use of Building Fund dollars to supplement the
              Chamber operating expenses could possibly forfeit the
              (Chamber) foundation’s (nonprofit) status because of the
              link between the CEO’s bonus to the financial
              performance of the Chamber.”

      The statement is non-defamatory, substantially true and protected

opinion.226

                          vi.    Statement No. 2/27-6:

              “Bentley also sought but never received a copy of the tape
              seized by Carter.”

      The statement is non-defamatory and substantially true.              Carter

admits that as of the date of the article, Bentley had called him to request a

copy of the tape, Carter never returned the call, and Bentley had not


224 Tape, CR325; transcript, CR791-93; Thompson letter, CR434-35.
225 See supra notes 23-28 above and accompanying text regarding the link between

Carter’s bonus and the Chamber’s financial performance.
226 Thompson letter, CR435; Thompson Dep., CR324-25; transcript, CR791-93; Bentley

Dep., CR847-48; Carter Dep., CR896-97.
                                                                               68
received a copy of the tape.227 Bentley’s letter recounts his unsuccessful

efforts over several days to obtain the tape.228

                           vii.   Statement No. 2/27-7:

             “Bentley’s letter states the Chamber showed a $40,425
             profit when it should have shown a $61,782 loss. The
             numbers provided in Bentley’s letter show that the
             Chamber showed the surplus by booking $63,903 in
             January 2008 revenue for 2007 and by deferring part of
             Carter’s salary. Carter’s February 17th letter says
             including January 2008 revenue was consistent with the
             Chamber’s accounting method, approved by the Board in
             September 2004. He also said in his letter that the failure
             to record his salary deferral as a 2007 expense was a
             bookkeeping error.”

      The statement is non-defamatory and substantially true.229

                           viii. Statement No. 2/27-8:

             “Carter also used $18,312 from the Chamber’s building
             fund to pay operating expenses, according to the letter.
             He shifted the money to the Chamber’s foundation, then
             billed the foundation for expenses in that amount.
             Carter’s February 17th letter says he discussed the move
             with Thompson and Bentley before shifting the funds.
             The foundation has operated with overhead provided by
             the Chamber and the Chamber had never been
             reimbursed for those expenses, according to Carter’s
             letter.”

227 Carter Dep., CR897-98.
228 CR112-13.

229 See supra notes 58, 64-67 and accompanying text. Bentley letter to Freddie, CR112-

13; Bentley letter to board, CR303-05; Carter’s letter, CR240-43; Carter Dep., CR898-99;
FY2007 adjustments, CR180-82; FY2007 audit report, CR260-65; Martinez Dep., CR1051.
                                                                                     69
      The statement is non-defamatory and substantially true.230 Carter’s

affidavit contends the statement that he “shifted money to the Chamber’s

foundation” implies a felony on his part,231 which again is an incompetent

conclusion or opinion. Importantly, Carter does not deny that the funds

were shifted; in fact, he admitted he transferred funds from one account to

another.232

                           ix.   Statement No. 2/27-9:

              “Among other concerns Bentley listed was the Chamber’s
              lack of accounting for special events. His letter described
              them as “off the books”, with only net income presented
              to the executive committee. Examples of special events in
              2007 were the Mayor’s State of the City address, Salute
              to the Military and the Conquer the Coast bicycle ride.
              Bentley also stated in his letter that he was concerned
              that Carter authorizes “significant contracts” without
              seeking bids or consulting the executive committee or
              board.”




230 Carter letter, CR499; Carter Dep., CR899; Bentley Dep., CR845-46, 852-53; Martinez
Dep., CR1045, 1051-52; Thompson Dep., CR1145; FY2007 audit report, CR245-66;
FY2007 adjustments, CR180-83.
231 6CR12168.

232 Carter Dep., CR895, 899.

                                                                                   70
      The statement is substantially true and non-defamatory.233 Once

again, the Article accurately recounted the content of Bentley’s letter,234

which Carter does not dispute.235 Further, Carter admits that he may not

have provided a full accounting of all special events to the board and that

he typically presented special events on a net basis to the board.236

Moreover, the Article makes clear that the phrase “off the books” is

Bentley’s characterization of the disclosed fact that only net income was

presented to the Executive Committee.

      Carter agreed that the examples of special events in 2007 cited in the

letter and Article are not false or defamatory.237 Carter also acknowledged

he authorized certain contracts, including some around $50,000, without

bids or executive committee or board approval.238




233 Bentley letter to Freddie, CR112-13; Carter Dep., CR900-02; Martinez Dep., CR1039,
1062; Hawley Dep., CR1011-12, 1017; Bentley Dep., CR860-61; LRGlobal contract CR279-
86; CR252.
234 CR112-13.

235 CR900.

236 CR900-02.

237 Id.

238 Id.

                                                                                   71
              6.    February	 29	 Article:	 	 Ex‐Chair	 Airs	 Her	 Chamber	
                    Concerns.	

      The February 29th Article is non-defamatory and substantially true as

a whole.239

                          i.     Statement No. 2/29-1:

              “On the morning of Feb. 15, Carter and Huseman took
              Whitmore and Hawley behind closed doors and told them
              they were no longer eligible to serve on the committee.
              As Bentley waited outside, according to witness
              accounts, the two women endured shouting from Carter.
              They stayed to hear Bentley’s report. Before leaving the
              room, Carter seized a tape recording of the meeting and
              left the building.”

      The statement is non-defamatory and substantially true.240 Although

Carter’s affidavit makes the conclusory assertion that it “is not true” that

the two women endured shouting from him, the affidavit does not dispute

the extensive record that Carter spoke “loudly” to Whitmore and “yelled”

and “blew up” at Bentley in the meeting.241

                          ii.    Statement No. 2/29-2:

              “Bentley had been asked to review the Chamber’s
              finances in anticipation of a raise, bonus and contract

239 Whitmore Dep., CR1208-09; Whitmore’s letter, CR313-15; Aguilar Dep., CR824-27.
240 See supra notes 190-93 and accompanying text. See also Carter Dep., CR902-03, 962;

Martinez Dep., CR1040-41; Whitmore Dep., CR1203. See also supra note 195 and
accompanying text.
241 See supra notes 39-45 and accompanying text.

                                                                                   72
             extension for Carter. Bentley found that Carter shifted
             funds among accounts and deferred $19,992 of his 2007
             salary. Without those moves, the Chamber’s cash flow
             would have been negative, according to Bentley, adding
             that Carter’s bonus is based on the Chamber’s financial
             performance.     According to Bentley, the Chamber
             accountant told him that the Chamber Foundation’s
             nonprofit status could be in jeopardy because Carter
             shifted Chamber Foundation funds to pay operating
             expenses and Carter’s bonus is linked to the Chamber’s
             financial performance.”

      The statement is non-defamatory and substantially true.242

                          iii.   Statement No. 2/29-3:

             “…denying the treasurer access to critical information
             and advice of financial professionals employed by the
             Chamber of Commerce.”

                                       *****

             “There was refusal of Chamber staff to cooperate with the
             treasurer on a task he was given by the board and the
             executive committee.”

      The statement is non-defamatory and substantially true.243 Carter

admits the February 29th Article accurately reports that Whitmore’s letter

stated that the treasurer was denied access to critical financial




242 See Carter Dep., CR903-04; Thompson Dep., CR1152; see also Part I.2.i. discussing
Statement 2/16-1.
243  Bentley letter, CR299-308; Bentley Dep., CR861-62; Whitmore’s letter CR313-15;
Carter Dep., CR904-05.
                                                                                  73
information.244 Carter admits he does not know for a fact whether Bentley

was ever denied access to information.245 Bentley’s emails of February 15th

and 18th confirm that he requested information from the Chamber, but was

refused and told he must go through Carter.246 Carter’s affidavit testimony

of alleged instructions to a staff member to fully cooperate offers no actual

proof that Bentley received the information he was seeking.247 Further,

Bentley requested information from Chamber CPA Thompson, but was

refused.248

              7.    March	 2	 Editorial:	 	 Chamber’s	 CEO’s	 Actions	 Raise	
                    Serious	Questions.249	

      For the reasons set out above and below, the editorial in its entirety is

protected under the First Amendment of the U.S. Constitution, Article 1,




244 Whitmore letter, CR313-15; Carter Dep., CR904.
245 Carter Dep., CR904-05.
246 Bentley Dep., CR861-62.

247 6CR12169.

248 Bentley Dep., CR852-54 (Chamber officials refused to sign a letter of indemnification,

effectively silencing Thompson.); Thompson’s indemnity letter to board, CR437-39.
249 Appellants’ motion inadvertently referred to the editorial as published March 3,

which is corrected herein to the March 2 publication date.
                                                                                       74
Section 8 of the Texas Constitution and the common law as non-actionable

opinion, and is non-defamatory and substantially true.250

                          i.     Statement No. 3/2 (Editorial)-1:

             “…highly questionable stewardship of the financial
             affairs of the chamber by Carter.”

      This statement is non-defamatory, substantially true, and non-

actionable opinion.251

                          ii.    Statement No. 3/2 (Editorial)-2:

             “Two executive committee members, former state Rep.
             Judy Hawley and bank executive Sylvia Whitmore, were
             removed from the committee by Carter after they
             attempted to bring transparency and accountability to
             the finances of the Chamber at a Feb. 15 meeting.”

      The statement is non-defamatory and substantially true.252

                          iii.   Statement 3/2 (Editorial)-3:

             “…intimidation, secrecy and duplicity discredit a vital
             organization”

      This statement is non-defamatory, substantially true and non-

actionable opinion.253


250 Jimenez Aff., CR563-64; Jimenez Dep., CR1029-32.
251 See supra notes 180, 184 and accompanying text. See also Jimenez Dep., CR1029; see

also Carter Dep., CR910.
252 See supra notes 36-37 and accompanying text. See also Jimenez Dep., CR1029-30.

253 See supra notes 180, 184 and accompanying text. See also Jimenez Dep., CR1031-32.

                                                                                   75
                             iv.    Statement No. 3/2(Editorial)-4:

                “The fund-shifting, including the deferring of Carter’s
                salary, allowed the Chamber to show a profit, thus
                qualifying Carter for a bonus.”

         The statement is non-defamatory and substantially true as discussed

above.

                             v.     Statement No. 3/2 (Editorial)-5:

                “The question mark remains over Carter until he fully
                explains his actions or until the Chamber chooses to move
                on without him.”

         This statement is non-defamatory, substantially true and non-

actionable opinion for the reasons set out above.

                8.    March	3	Article:		Petition	Seeks	Chamber	Changes.	

         The article is substantially true and non-defamatory.254

                             i.     Statement No. 3/3 (Article)-1:

                “Treasurer Damon Bentley reported that Carter had
                deferred a portion of his salary and shifted other funds
                among Chamber accounts in a manner that turned what
                should have been a deficit into a surplus of operating
                funds. Carter’s bonus is linked to the Chamber’s financial
                performance.”

         The statement is non-defamatory and substantially true as set out

above.255


254   Whitmore letter with petition, CR513-17; Scott Dep., CR1106, 1108-09.
                                                                              76
             9.     March	 4	 Article:	 	 About	 80	 Sign	 Petition	 on	 Chamber	
                    Operation.	

      The March 4th Article as a whole is non-defamatory, substantially

true and a fair report of a public meeting.256

                          i.         Statement No. 3/4-1:

             “Never has the lack of financial transparency been an
             issue like it is now, Whitmore said.”

                          ii.        Statement No. 3/4-2:

             “…I don’t think the current leadership is transparent in
             its financial decisions.”

      The    statements        are    non-defamatory,       non-actionable   opinion,

substantially true and a fair report of a public meeting.257

             10.    March	8	Article:		Chamber	Board,	CEO	to	Enter	Talks.	

                          i.         Statement No. 3/8-1:

             “Bentley was asked to look into the organization’s
             finances as part of a review of a proposed raise, bonus
             and contract extension for Carter, whose bonus is linked
             to the Chamber’s financial performance.”

      The March 8th Article is non-defamatory and substantially true.258


255 See also Carter Dep., CR907.
256 See Aguilar Aff., CR457; Aguilar Dep., CR828; Scott Dep., CR1106, 1108-09; see also
Tex. Civ. Prac. & Rem. Code § 73.002(b)(1)(D).
257 See Whitmore letter, CR313-15; Whitmore Dep., CR1209; Carter Dep., CR907-08;

Hawley Dep., CR1021; see also Tex. Civ. Prac. & Rem. Code § 73.002(b)(1)(D).
258 See Carter Dep., CR908; Aguilar Dep., CR829; Scott Dep., CR1114.

                                                                                    77
               11.    March	 19	 Article:	 Chamber	 Treasurer	 Granted	
                      Temporary	Restraining	Order	

         The March 19th Article is substantially true. It is also a fair, true and

impartial account of a judicial proceeding.259          As such, it is privileged

against Carter’s libel claim pursuant to Tex. Civ. Prac. & Rem. Code §

73.002(b)(1)(A) (the “fair report privilege” hereafter).

                             i.    Statement No. 3/19-1:

               “Corpus Christi Chamber of Commerce treasurer Damon
               Bentley has been granted a temporary restraining order
               against the chamber and CEO Terry Carter to prevent a
               tape recording from being destroyed.”

                             ii.   Statement No. 3/19-2:

               “Bentley’s petition for the temporary restraining order
               says he has sought a copy of the tape but it has not been
               provided, and that Carter took the tape from the
               meeting.”

         The statements are non-defamatory, protected by the fair report

privilege and substantially true.260

               12.    March	20	Article:		Chamber	Unrest	Ends	Up	In	Court.	

         The March 20th Article is a fair, true and impartial account of judicial

proceedings by Bentley and Carter. 261


259   CR326-36.
260   See CR326-36; Carter Dep., CR963-64.
                                                                               78
                             i.    Statement No. 3/20-1:

               “The restraining order, obtained Tuesday, prohibits
               Carter and the chamber from destroying a tape of a Feb.
               15 chamber executive committee meeting at which
               Bentley and two others. . .”

                             ii.   Statement No. 3/20-2:

               “One of the members’ concerns, Scott and others have
               said, is that the chamber is losing membership but they
               couldn’t verify it because the full member list was
               withheld.”

         The statements are protected by the fair report privilege, non-

defamatory and substantially true.262

               13.    March	26	Article:	Chamber	Puts	CEO	on	Paid	Leave	and	
                      March	27	Article:		Chamber	CEO	on	Paid	Leave.	

                             i.    Statement No. 3/26-1 and 3/27-1:

               “Chamber CEO on Paid Leave”

         The statement is substantially true and non-defamatory.263

               14.    March	 27	 Article:	 	 Judge	 Unifies	 Filings	 On	 Chamber	
                      Events	

         The March 27th Article is a fair report of judicial proceedings.264




261   See CR326-36; CR342-53; Scott Dep., CR1114-15.
262   See Carter Dep., CR964-65; CR504-517.
263   See Carter Dep., CR908, 965-66.
264   Order of Consolidation, CR359-62.
                                                                               79
                          i.     Statement No. 3/27(2)-1:

             “Bentley sought the consolidation, asserting that his and
             Carter’s legal actions arose from the same set of events.”

                          ii.    Statement No. 3/27(2)-2:

             “That tape was removed by Terry Carter from the
             meeting and taken from the Corpus Christi Chamber of
             Commerce immediately after the meeting ended.”

      The statements are protected by the fair report privilege, non-

defamatory and substantially true.265

             15.   April	 1	 Article:	 	 Chamber	 Had	 Deficit,	 Board	 Tells	
                   Members.	

      The Article is a privileged as a fair report of a public meeting, non-

defamatory and substantially true.266           Reporter Aguilar attended the

Chamber’s public general membership meeting on March 31, 2008 and

accurately reported on it.267

                          i.     Statement No. 4/1-1:

             “Further review of the books by the Chamber executive
             committee showed that a deferral of a part of the chief
             executive officer’s salary and shifts of more than
             $142,000 in membership dues resulted in the surplus,
             according to treasurer Damon Bentley.”

265 Carter Dep., CR966; see also CR354-58.
266  See Aguilar Aff., CR457; Carter Dep., CR966-67; FY2007 adjustments, CR180-83; see
also Tex. Civ. Prac. & Rem. Code § 73.002(b)(1)(D).
267 Aguilar Aff., CR457.

                                                                                   80
         The statement is privileged as a fair report of a public meeting,

substantially true and non-defamatory.268

                            ii.   Statement No. 4/1-2:

               “The membership meeting was a result of a petition drive
               started in late February to address concerns of members
               who said they had been denied financial information and
               membership rosters and who were concerned about the
               Chamber’s accounting methods.”

         The statement is privileged as a fair report of a public meeting,

substantially true and non-defamatory.269

               16.   April	 29	 Article:	 	 Chamber,	 In	 Need	 Of	 Audit,	 Renews	
                     Accountant	Search.	

         Carter complains about the following statement:

               “He said negotiations between Chamber attorney Van
               Huseman and Chamber President and CEO Terry Carter
               are ongoing.”

         The statement is non-defamatory and substantially true.270




268   See Carter Dep., CR967; Thompson Dep., CR1145; FY2007 adjustments, CR179-83.
269   See Carter Dep., CR967-68; Scott Dep., CR1106, 1108.
270   See also Carter Dep., CR968.
                                                                                     81
                17.    May	 2	 Article:	 	 Chamber	 Offers	 Contract	 Settlement	 to	
                       Carter,	 His	 Attorney	 Says;	 May	 3	 Article:	 Chamber	
                       Makes	 Offer,	 Carter’s	 Attorney	 Says;	 May	 23	 Article:		
                       Chamber,	 Carter’s	 Attorney	 Confirm	 Severance	
                       Agreement	 and	 May	 24	 Article:	 	 Carter’s	 salary	 to	 be	
                       paid	in	full.	

         These Articles are non-defamatory and substantially true.271

                18.    May	 28	 Article:	 	 Release	 of	 Chamber	 Audio	 Recording	
                       Sought;	and	May	30	Article:		Judge	orders	that	chamber	
                       tape	recording	be	released	today.	

         Carter complains of the following statement in each article:

                “Carter has been on paid leave since March 26.”

         The statement is substantially true and non-defamatory.272

                19.    May	 31	 Article:	 	 Chamber	 Tape	 Tells	 of	 Heated	
                       Exchange.	

         The May 31st Article as a whole is privileged as a fair report of a

judicial proceeding, non-defamatory and is substantially true.273

                              i.     Statement No. 5/31-1:

                “Chamber tape tells of heated exchange.”

                              ii.    Statement No. 5/31-2:

                “A recording of a Corpus Christi Chamber of Commerce
                meeting obtained Friday by the Caller Times contains a


271   See also Carter Dep., CR968-69.
272   See also Carter Dep., CR908; Carter’s interrog. resp., CR795-800.
273   See also CR324-25; transcript, CR707-94.
                                                                                 82
            contentious exchange between CEO Terry Carter and
            other chamber officials.”

                         iii.   Statement No. 5/31-3:

            “Early in the segment a contentious exchange between
            Carter and Bentley can be heard, as the chamber officials
            discuss whether to proceed with Bentley’s financial
            report.”

                         iv.    Statement No. 5/31-4:

            “Bentley: It’s not a question for me to answer right now.
            I’m going to give the findings of fact.”

      The statements are a privileged as a fair report, non-defamatory and

substantially true.274

            20.   June	 13,	 2008	 Article:	 	 Ex‐Chamber	 CEO’s	 Mediation	 to	
                  Continue.	

      The Article is non-defamatory and substantially true.275

      F.    The	Articles	Were	Published	Without	Negligence276	

      A private figure plaintiff must prove negligence in a libel action

against a media defendant.277 Here, the record disproves negligence as the

Caller-Times acted reasonably in checking the truth of the Articles before


274 See CR711; Bentley Dep., CR849-50; Carter Dep., CR969-70.
275 See also Carter Dep., CR970.
276 The Court need not reach the issues of negligence or exemplary damages if it

determines the Articles were non-defamatory or substantially true. See Neely, 418
S.W.3d at 61 (citing McLemore, 978 S.W.2d at 571).
277 See Foster v. Laredo Newspapers, Inc., 541 S.W.2d 809, 820 (Tex. 1976).

                                                                              83
publication.278 It is undisputed that the Articles were published with

diligence, balance and in accord with standard journalistic practices and

customs.279      The Caller-Times submitted the expert opinion of Tony

Pederson—former editor of the Houston Chronicle and journalism chair at

SMU—that the Articles were prepared in accordance with usual

journalistic standards and practices. 280

       Carter’s response offers no evidence or expert opinion to raise a fact

issue that the Caller-Times did not act reasonably in preparing and

publishing the Articles or that they contained any misstatement whose

content would warn a reasonably prudent editor of its defamatory

potential.281




278 See Scripps Tex. Newspapers, L.P. v. Belalcazar, 99 S.W.3d 829, 837 (Tex. App.—Corpus
Christi 2003, pet. denied) (“Negligent conduct is determined by asking ‘whether the
defendant acted reasonably in checking the truth or falsity or defamatory character of
the communication before publishing it.’”) (internal quotation omitted).
279 See Pederson Report, CR665; Pederson Dep., CR1068, 1070-79; Aguilar Aff., CR454-

60; Cavazos Aff., CR518-22; Chirinos Aff., CR 530-34; Jimenez Aff., CR562-65; Malan
Aff., CR608-11; Powell Aff., CR584-88; Wilson Aff., CR613-15; Whitehurst Aff., CR616-
19; Birmingham Aff., CR624-28; Contreras Aff., CR636-40; Averyt Aff., CR620-23.
280 CR664-65.

281 See Foster, 541 S.W.2d at 819. See also Holly v. Cannady, 669 S.W.2d 381, 384-385 (Tex.

App.—Dallas 1984, no pet.) (There was “simply no evidence indicating the existence of
circumstances which would have prompted a reasonable person to question the
statements made and conclusions drawn.”).
                                                                                        84
      Carter’s response mistakenly asserted alleged evidence of actual

malice was dispositive of negligence.282 However, actual malice is not the

same as negligence.283 The two concepts are different fault standards in

libel cases. A private figure plaintiff must prove negligence, not actual

malice, on his case in chief.284

      G.     Carter	 Cannot	 Recover	 Exemplary	 Damages	 Because	 the	
             Articles	Were	Published	Without	Actual	Malice	

      A private figure plaintiff must prove actual malice in order to recover

punitive or exemplary damages in a libel case arising out of reports of a

matter of public concern.285

      Here, the evidence establishes that the Caller-Times Appellants acted

without actual malice.286 Actual malice is “not ill will, spite or evil motive”;

it is the making of a statement with either knowledge it is false or reckless

282 2CR1241.
283 See Foster, 541 S.W.2d at 820 (refusing to assess negligence when only actual malice

argued).
284 See Neely, 418 S.W.3d at 61 (citing McLemore, 978 S.W.2d at 571) (public figure libel

plaintiff must prove actual malice while private figure plaintiff must prove negligence).
285 See Burbage, 447 S.W.3d at 259 (private figure plaintiff who does not prove actual

malice may recover only damages for actual injury) (citing Gertz, 418 U.S. at 350).
286  See Aguilar Aff., CR454-60; Cavazos Aff., CR518-22; Chirinos Aff., CR530-34;
Jimenez Aff., CR562-65; Powell Aff., CR584-88; Malan Aff., CR608-11; Wilson Aff.,
CR612-15; Whitehurst Aff., CR616-19; Averyt Aff., CR620-23; Birmingham Aff., CR624-
28; Contreras Aff., CR636-40; Pederson Aff., CR646-48; Pederson Dep., passim; Reta Aff.,
CR451-53.
                                                                                      85
disregard—meaning it was made while entertaining serious doubts as to

the truth of the statement.287              The Articles were published without

knowledge of any falsity and without doubts as to the truth of any

allegedly defamatory statement.288 Although Appellants negated actual

malice, Carter’s various arguments that malice is shown also fail as a

matter of law.

              1.      Carter	failed	to	show	specific	allegedly	false	statements	
                      were	published	with	actual	malice.	

       Carter must demonstrate actual malice separately as to each allegedly

false statement he claims libeled him.289 Yet, Carter's discussion of actual

malice in his response references specific statements in only a handful of

the Articles.290 Thus, the Court may disregard Carter's abstract discussion


287 Huckabee, 19 S.W.3d at 420.
288 See Aguilar Aff., CR459; Cavazos Aff., CR521; Chirinos Aff., CR533; Jimenez Aff.,

CR564-65; Powell Aff., CR587; Malan Aff., CR610; Wilson Aff., CR614; Whitehurst Aff.,
CR619; Averyt Aff., CR622-23; Birmingham Aff., CR627; Contreras Aff., CR639;
Pederson Report, CR664-65.
289 See, e.g., Church of Scientology Int’l v. Time Warner, Inc., 903 F. Supp. 637, 641 (S.D.N.Y.

1995) (on summary judgment, “the Court considers each allegedly libelous statement
individually to determine whether a rational finder of fact could find actual malice”),
aff’d, 238 F.3d 168 (2d Cir. 2001); Henry v. Nat’l Ass’n of Air Traffic Specialists, Inc., 836 F.
Supp. 1204, 1212 (D. Md. 1993) (“The plaintiffs must produce [] evidence that the
defendants uttered [each] challenged statement [] with actual malice”), aff’d, 34 F.3d
1066 (4th Cir. 1994).
290 See Response, 2CR1244 (March 2 editorial); 2CR1252 (May 31 Article); 2CR1254

(February 27, 29, March 8 Articles); 2CR1259 (March 3 Article).
                                                                                              86
of malice regarding unspecified Articles. As to the few Articles he actually

specifies, Carter failed to establish actual malice as shown below.

                2.      There	 is	 no	 evidence	 of	 “reckless”	 preparation	 of	 the	
                        editorial.		

         Carter makes no attempt to examine whether the author of the

editorial, Nick Jimenez, actually entertained serious doubts as to its truth.

Carter’s response and affidavit do not refer to Jimenez or attempt to rebut

his uncontroverted affidavit that he believed that all facts stated in the

editorial were true based on previously published articles in the Caller-

Times.291 Reliance on previously published reports in reputable news

sources precludes a finding of actual malice.292 Carter also claims the Caller-

Times should have asked Thompson about Bentley’s letter.293 Yet it is

undisputed that Aguilar, the author of the article which quoted the Bentley

letter, attempted to do just that.294

         Carter contends actual malice may be found because the editorial

stated that Carter’s actions “would” threaten the chamber’s financial status



291   CR565.
292   Liberty Lobby, Inc. v. Dow Jones & Co., 838 F.2d 1287, 1297 (D.C. Cir. 1988).
293   2CR1247.
294   CR458.
                                                                                      87
when the accountant had only said it “could” threaten it.295 However, the

statement is substantially true296 and therefore cannot support a finding of

actual malice.297

             3.     Alleged	ill‐will	is	no	evidence	of	actual	malice.		

      Carter alleges publisher Patrick Birmingham demonstrated “dislike,”

“distain (sic),” “animosity,” “outrage,” and “personal animus” towards

him.298 But Birmingham did not write, assign, direct, edit or contribute to

any of the articles,299 and his alleged ill-will does not prove knowing or

reckless falsity.300 Statements that a defendant “didn’t like” or “had it out”

for the plaintiff are not proof of actual malice.301




295 2CR1247.
296 See Dolcefino, 19 S.W.3d at 921 (use of phrase “could not” when “would not” was

actually correct was of secondary importance and statement was substantially true).
297 See also Freedom Newspapers v. Cantu, 168 S.W.3d 847, 855 (Tex. 2005) (mistaken but

rational interpretation of statement is no evidence of actual malice).
298 2CR1248-50.

299 CR624-28.

300 Huckabee, 19 S.W.3d at 424–25.

301 Cantu, 168 S.W.3d at 857-58.

                                                                                    88
             4.     There	 is	 no	 omission	 or	 juxtaposition	 establishing	
                    actual	malice.		

      As explained above, there was no omission or juxtaposition, as

Carter’s explanations and version of events were included in the Articles.302

In any event, Carter offered no evidence of an omission or juxtaposition

made with the intent of creating a false impression, which is required for

actual malice.303

             5.     There	 was	 no	 avoidance	 of	 the	 truth	 or	 obviously	
                    unreliable	sources.		

      Where a journalist seeks the truth from multiple sources, on both

sides of an issue, there is no purposeful avoidance of truth evidencing

actual malice.304 It is undisputed that information was sought from

numerous, knowledgeable sources—including Carter and his counsel. In

addition, Carter’s claims that the Caller-Times should not have believed

Bentley and other persons with relevant knowledge is no evidence of

actual malice.305


302 See supra notes 150-51 and accompanying text.
303 Huckabee, 19 S.W.3d at 436 (“in the absence of evidence that the defendant selected
the material to portray the judge’s record falsely, the First Amendment protects the
organization’s choice of which material to include in its broadcast”).
304 Skeen, 159 S.W.3d at 637-39.

305 See Lohrenz v. Donnelly, 350 F.3d 1272, 1284 (D.C. Cir. 2003).

                                                                                    89
      H.     Tag‐Along	Tort	Claims	Also	Fail	

      Carter testified that his non-defamation claims are based on the

newsgathering for and publication of the Articles that he alleges defamed

him.306    His response—which mentions only tortious interference and

conspiracy among his non-libel actions—takes the same approach.307 But

publication-based claims fail along with defamation claims arising from the

same events.308

      Carter argued in support of his conspiracy claim (without reference

to the record) that the Caller-Times acted in concert with the people it

interviewed for the Articles.309 But Carter offered no evidence to rebut

testimony from Bentley and Caller-Times personnel negating any such

conduct.310 Therefore, the trial court erred in denying summary judgment

to Appellants on the non-libel claims.



306 CR912.
307 2CR1268-70. Carter’s response does not mention or attempt to identify any evidence

in support of his fiduciary duty or inducement claims.
308 See, e.g., Freedom Newspapers, 168 S.W.3d at 852 n.3; Rogers v. The Dallas Morning

News, Inc., 889 S.W.2d 467, 474 (Tex. App.—Dallas 1994, writ denied).
309 2CR1269-70.

310 Bentley Dep., CR857; Cavazos Aff., CR521; Malan Aff., CR610; Averyt Aff., CR623;

Birmingham Aff., CR628. See Shunta v. Westergren, No. 01-08-00715-CV, 2010 WL
2307083, at *7-8 (Tex. App.—Houston [1st Dist.] June 10, 2010, no pet.) (affirming no-
                                                                                   90
      I.    Appellant	E.W.	Scripps	Has	No	Publisher	Liability	

      The threshold element for a libel action is whether a false, defamatory

statement was published. The record is undisputed that Appellant E.W.

Scripps had no involvement in publishing (or researching, preparing,

writing, reviewing, or editing) any of the Articles or content on the website

Caller.com.311 Accordingly, it was error to deny E.W. Scripps Co. summary

judgment because it did not publish any allegedly defamatory statements

concerning Carter.

                                     PRAYER	

      Appellants pray that the Court reverse the trial court order denying

their second motion for final summary judgment and render judgment that

Appellee Terry Carter take nothing. Appellants further pray for any other

relief to which they may justly be entitled.




evidence summary judgment on conspiracy because plaintiff failed to present evidence
of requisite intent).
311 See Contreras Aff., CR636-40; Contreras Dep., CR988-98; Whitehurst Dep., CR1180-

81; Carter Dep., CR979-80.
                                                                                 91
Respectfully submitted,

/s/ Paul C. Watler
Jorge C. Rangel
State Bar No. 16543500
Jaime S. Rangel
State Bar No. 24033759
Joseph M. Marcum
State Bar No. 12973000
THE RANGEL LAW FIRM, P.C.
615 N. Upper Broadway, Suite 2020
Corpus Christi, Texas 78401
Telephone: (361) 883-8500
Facsimile: (361) 883-2611
Email: jorge.c.rangel@rangellaw.com
Email: jaime.rangel@rangellaw.com
Email: joe.marcum@rangellaw.com

- and -

Paul C. Watler
State Bar No. 20931600
Andrew D. Graham
State Bar No. 24041002
JACKSON WALKER, LLP
2323 Ross Avenue, Suite 600
Dallas, Texas 75201
Telephone: (214) 953-6000
Facsimile: (214) 953-5822
Email: pwatler@jw.com
Email: agraham@jw.com

Attorneys for Appellants Scripps NP
Operating, LLC, a Wisconsin Limited
Liability Company, Successor in Interest to
Scripps Texas Newspapers, LP d/b/a Corpus
Christi Caller-Times, and The E.W. Scripps
Company




                                        92
                         CERTIFICATE	OF	SERVICE	

      On December 17, 2015, I electronically filed Appellants’ Brief with the
Clerk of Court using the File & eFileTexas electronic filing system, which
will send notification of the filing to the following:

Rene Rodriguez
LAW OFFICE OF RENE RODRIGUEZ
433 S. Tancahua St.
Corpus Christi, Texas 78404
361-882-1919 / 361-882-2042 fax
Email: rene.rodriguez@rdrlaw.com
Attorney for Plaintiff Terry Carter

Craig Smith
Law Offices of Craig S. Smith
14493 S.P.I.D. Suite A; P.M.B. 240
Corpus Christi, Texas 78418
361-728-8037
Email: csslaw@stx.rr.com
Attorney for Plaintiff Terry Carter

Angelica E. Hernandez
AEH Law Firm
410 Peoples Street
Corpus Christi, Texas 78401
361-400-2966 / 866-759-9272 fax
Email: aehlawfirm@yahoo.com
Attorney for Plaintiff Terry Carter


                                      /s/ Paul C. Watler
                                   Paul C. Watler




                                                                          93
                     CERTIFICATE	OF	COMPLIANCE	

     Pursuant to Texas Rule of Appellate Procedure 9.4(i)(2)(B), I hereby

certify that the above styled document contains 14,431 words, excluding

the caption, identity of parties and counsel, table of contents, index of

authorities, statement of the case, issues presented, and statement of oral

argument, signature, certificate of service, certificate of compliance and

appendix. In making this certification, counsel is relying on a word-count

computer program used to prepare the document.



                                  /s/ Paul C. Watler
                                  Paul C. Watler




                                                                        94
                             APPENDIX	

TAB   DESCRIPTION

1.    Order denying Second Motion for Final Summary Judgment,
      6CR12748

2.    The Articles, CR462-78, 481-82, 485-92, 524-27, 538, 541, 567

3.    Bentley’s February 26 letter to Chamber board, CR299-08

4.    Bentley’s PowerPoint presentation to the Chamber board, CR156-
      72

5.    Carter’s February 17 letter to Chamber board, CR240-43

6.    Affidavit of reporter Elvia Aguilar, CR454-60

7.    Whitmore’s February 28 letter to Chamber board, CR313-15




                                                                      95
TABl




       96
                                                                CAUSE NO. 08-1360-F

          TERRY CARTER                                                          §               IN THE DISTRICT COURT
                Plaintiff,                                                      §
                                                                                                                                 I
          ~                                                                     §
                                                                                §                2141h JUDICIAL DISTRICT
          CORPUS CHRISTI CHAMBER OF                                             §
          COMMERCE, SCRIPPS NP                                                  §
          r'IID"Il'D , T1'~.t"   I I .t"      '"'~·                             {,


          .IJUYU I ""JJ                li I   '-'VlYIIC "' I ~ ..   >           8
         SUCCESSOR IN INTEREST TO SCRIPPS §
         TEXAS NEWSPAPERS, L.P., d/b/a     §
         CORPUS CHRISTI CALLER TIMES,      §
         and THE E.W. SCRIPPS COMPANY      6
1-- - - - - - -.._.Ditefenda.n.ts         i                                                     NI !ECES-CO.ll!SI:V:, IEXA~
                                                                                                                          ""-----;


                            ORDER DENYING CALLER-TIMES DEFENDANTS' SECOND
                                MOTION FOR FINAL SUMMARY JUDGMENT
                                                                                                                            _j'  I




                   vn the-<Jib day of September, 2U15 came on roDe heardTaller-1 1mes Defendants' SeconCI                        '

          Motion for Final Summary Judgment filed by Scripps NP Operating, LLC, A Wisconsin

          Limited Liability Company, Successor In Interest To Scripps Texas Newspapers, LP d/b/a



         Scripps")(collectivcly, "Caller-Times Defendants").                               After considering the Caller-Times

          Defendants' Second Motion for Final Summary Judgment ("Motion"), the pleadings the

          response, the reply, affidavits and other competent summary judgment evidence on file, the

          Court finds that the Motion should be and it is hereby DENIED.
                                               k
                                               1N                       \   \
                   :siDNEDlfiis );+-day of                          C> q <=:):>e.IC , 2<YI :>



                                                                                     A~AA ,_)


                                                                                                                       12748




                                                                                                                                97
TAB2




       98
       February 15, 2008
 Financial, management
        questions
  raised at CC Chamber
         Jaime Powell
         CR462- 463
Exhibit M-1 to Aguilar Affidavit
Exhibit Q-1 to Powell Affidavit




                                   99
Financial, management questic -         aised at CC Chamber : Corpus Chrisf.ler Times, C... Page 1 of 2




          call.etcom
          COR?US CHRISTl TEXA~
                                                                                 Primcr- tri~ndly   srory
                                                                             React more at caflcr.ccm




          Financial, management questions raised at CC
          Chamber
         Two members of chamber of commerce's executive
         committee, who asked for meeting to discuss the issues, told
         they are no longer eligible to serve
                                                                                                        EXHIBIT
          By Jaime Powell

         Originally published 05:00p.m ., February 15, 2008
                                                                                              I ""~-I''
         Updated 05:00 p.m., February 15 , 2008


         CORPUS CHRISTl - Three high-ranking Corpus Christi Chamber of Commerce
         officials raised what they describe as serious financial and management issues Friday.

         After demanding an emergency meeting Friday of the chamber's executive committee
         to air their concerns, two of the three officials, Judy Hawley and Sylvia Whitmore, were
         told they are no longer eligible to serve on the executive committee, Hawley said.
         However, they were asked to present their information, in a meeting that lasted most of
                                   1
         Friday morning and from which chamber President Terry Carter could be heard
         shouting.

         No chamber officials would discuss the nature of the financial issues. The concerns
         arose after chamber chairman-elect Robert Gonzalez recommended a raise, bonus
         and contract extension for Carter in January and executive committee treasurer
         Damon Bentley was asked to review the chamber's financial standing, Hawley said.

         At the meeting, chamber chairman Freddie Martinez Jr., legal counsel Van Huseman
         and Carter told Hawley she was no longer on the board because she was an appointee
         of the Port of Corpus Christi and the port did not contribute money to the chamber this
         year. They told Whitmore, a banker and a past chamber chairman, that she was no
         longer eligible because she is no longer immediate past chairman.

         Carter declined to comment. Attempts to reach Martinez and Whitmore were
         unsuccessful. Huseman said he reviewed Hawley's and Whitmore's status at
         Martinez's request. Huseman said Carter's contract runs through the end of the year,
         and described the financial questions as business practice-related, not improprieties.

         Bentley said Carter's review was continuing.

         "We agreed from a statement standpoint to say we are continuing the process of our

                                                                                                            l C.R. 462




                                                                                                                         100
       February 16, 2008
Chamber pulls two offpanel
         Jaime Powell
         CR464-465
Exhibit M-1 to Aguilar Affidavit
Exhibit Q-1 to Powell Affidavit




                                   101
 FROM THE COVER
 CHAMBERJnm< lA
The financial concern•
a.rose after chamber dJ.air-
ma.n·clect Robert Gon:r.&·
lez recommended a raise,
bonu1 a.nd contract tnen·
                                                           •
                                    'I* are gcnng to conduct our yearly
                                  audit ofthe chamber and that will give
                                  us the re.rults of2007. Frankly I am go-
                                   ing to rely on the audit to a718weT any
                                              further questions.'
                                                                                                      •
lion for Carter In J&nuary
and executive committee
trcuurtr Damon Bentley
wu &Jked to review the            bets of the executive com-        Freddie saya you can't vote
chamber's ttnancial staru:i-      mittee Based on the dwn·          on anythln& but Jet'a so
lnC. Hawley taid Friday.          ben bylaws, the executive         ahead. and hear what you
   Bentley, Gooule%. Ha.w-        oommfttet 1s made up of the       have to~..
tey and Wbitmore would            c!Wrman,chalr-dcct,lmme-            Gonzalez. wouldn't com-
not describe the ft.nanclal       c!Wepastch&lr,vlcechalntt         ment on Friday's eventl
and manacement c:ooc:erns.        any, and tbe:trt.asurer, Hule-    becauae, he l&id, they hap-
Attemptl to reach chamber         manAJd.Uodc:rthote~.              pened In clooed ....son.
ehalmw>- Martine.                 Bentley, Manlnez and Gon-            Bentley wu outlide In 1.
Jr. wueUlliUCteSStul.             zalc:z are the ol'l1y member~,    ha1lway when Hawley and
   Cb&mbtr lcca.I counsel         Hwern.a.Dsa.ld.                   Whitmore were dbmlsse:d
Van Hustman. who attend-              lb.wlcylw been the Port       because Carter had denied
ed the meetiRJ Friday, de-        of Corpua Cbrbtl'l repre·         him entrance to the meet-
acrtbed the ftna.Ddal ques-       aentative on the cb&mber          IQ&.
tiow u business prutice-re-       boanl. but thls ......the port       •1 wu oot privy to the
lated. DOt improprieties. He      didn't reocw its tund.Jn.r of     mect1n&: because I wu ukt:d
aaid Ca.rtt:r'l contra.et runs    the cbambu, which lutyear         DOt to come in,• Benne,. said.
throush the end of the ......     wu $45,000. For that ru-          •He went iMide aod closed
    The....:ut!Yeboud, with       aon, Huseman &aid Hawley,         the door. They (Hawley and
all five mtJTi)ers pruent, met    a porteommissklne:r, no lon·      Whitmore) uplalned to me
twowedts aco m~                   cer ahould be on the c:ha.m-      what happened.. It wu a
otftc:e LDd. weed to put off      berboanl.                         strance tce.D&rlo. 1 was sad·
m&klnJ a decision and to              PortCh&lrmanRuben Bo-         - a n d I'm still """"J<d
continue kMlkln& into the fi·     nilla. said the chamber bad       on wl\y two chamber exccu·
nances, Ha.v.iey said.            been apearheadioc a. eom-         tM:boardmembenlwlbeen
   Ha.d there been a vote,        munfty &dvfsory commit-           removed from the executive
it would have been 3-l to         tee to deal with the cklslnc      commtttec:atterbdncuked
refrain from a raise. bonw        of Naval Stadon ln&lesfde.        to auiJ:t In the evaluation
and contract extension,wtth       When it beeame obv\ou1            process otoor  cro.·
Bentley, Hawley and Whit-         the port didn't need such a          Hawley and Whitmore
more in the majotity, until       committee, It ellmfnat.ed the     stayed to I Iaten alter Bentley
a complete ftn.a.nclal picture    need for the port to have &       came In to report on the ft.
oould be put tosether, Ha.w-      service ag:reem.e.nt with the     nandal concerns.
Jcysald.                          chamber, which included the         "Wewantedtullandcom·
   "'We d1d DOt have enough       fundtoe.                          plete audiUofrpedalevenu,
 lnformation, so Damon con·          The asreement aho              eont:ractl, the buildlnctund,
 tlnued to 10 throu&h the         called !or the chamber and        the foundatton fund and
 books and look at all of the     the port to cross-promote         chamber fu nd1, becauae
 accounta: abe aa1d. •A week      each other aDd Included &         there were enoush lrregu-
 and a half aco he tried to        plan for chamber functions       l&rltlel and acoon!lnc to 1>)'-
 eall Freddie, he ca11ed me        a1the port's Solomon P. Ortiz    lawaweare:supposedtohave
 and called Sylvia_ He said.       International Center. The        an auc:!it every year; Hawley
 'thtreartSOmtfrtecularities       chamber bad begun UliDI          said. "l.&&tyearwehadaspot
 I am concerned about. We          the center less. 10 neither of   audit. We felt very Jtron&IY




 ---
 oeed a   tun executiVe com·       the - f o r the ori&iual         that we oocht to have a tun
 mtttee meettns as soon as         servk:e q:reemeot with the       audit..
                                   chamber lj)plie<l, and the          Reprdln& the ft.nanclal
    ~thalmeetinL Whit·             port dedded DOt to renew tt      matten, Bentley told the
 more, Bentley and Hawley          or the fundiD& BonDI& aid.       C4Un'·11mtr.
 took tuma eaJ:Unc Martine%            Allu the port'& decision        "We &Creed from a. nate-
 aDd Gonule>...,..udlyand          in January not to renew,         meat standpoint to say we
 sot no response, Hawiefa.od       Hawley Pid abe asked Mar-        are contlnulnc the process
 Bentley said.                     tine& if he wanted huto rt·       of our eva.lnatton and that
    •At that point, Damon          alp and he indicated that         there are both ICriow: ftnan-
 h a d ahared those things         she should Jtay on the eom-       dal and manqement lsaues
 and e a ch meuase we left         mittoe bccanse the chamber        that we need to address...
 wu more atrklent than the         rtillwutrylnctonqodat.ea             After Bentley ddivertd
 last,• Hawley uJd.. "Ft.naJJy     d..twithport.                     blutpOrt,lhwlcyandWbk-
 we aent hand-delivered let-         Whitmore is put ch&lr,          ""'"'lelt the m«tiQ&.
 ten to Bobby and Freddie          but not lmmed1ate put                "J am atill very commit~
 ,.questlnr tlw they uncel         ch&1r.                            ted and willinc to serve u
 other meetlnp to bold an             ""The bylaws are: clearand     Immediate put chair, u
 executive aeuion u an ex·         theywante4todoth!luthe            1 thoucht I wu aervtnc:
 eeutiYe board to discuss the      bylaws 1peclty,• Huaeman          Wb.ltmore said. "But J udy
 l=(ularltia..                     said.                             aDd l clld lea.. the c:lwnbcr
   Martinez sent a.o e-maO            Whitmore wu chainnan           omct after we told Freddie
 camnc for an emergency            twotennaqo. but remained          a.nd Bobby that we recom-
 meetin& at 8 Lm. Friday.          on the committee In place         meoded a full audit btc.ause
 When Hawley arrived 10            of reflne17 maaater Dave          I no lon~ had a vote.•
 minutes early, wlth Whit·         Allen, who resl&ntd u chair·         Gonules u.kl a tun audit
 more and Bentley tollowinl        man early af\e:r Koch IodUJ·      ofclwnberftnances Is In the
 a abort time later, Martinez      tries, wbk:h owna F1lnt HUll      work&. He would not elabo-
 wu behind closed doors in         n!tlnery In Corpua Chrlni.        ...._
 Carter's otnce with Huse·         transferred him from the            "We are COinI to ccnduct
 man.                              city. Whmuore remained on         our yearly &udk otthe cham·
    "'1ben Terry and Freddie       the committee at Mattlne%'1       ber and that wltl ctYe us the
 come ln and ta.lk to Sylvia       reqaut, abe, Hawley aod           re.sults of 2007," Gon:a:ale1
 and me,• Hawtey aa.kl. "We        Bentley &ald.                     Wd."'Fraolllylamcoins:to
 are the only ones in the room.       lb.wlcy- their abrupt          rely on the audit t o amwer
 They td1 us. Ttny says, "in
 anticipation that there mar
 be action t.Uen today, we.        ...
                                   dismissal Friday, att.u hav-
                                   in& been asl<e4 to stay, came
                                        ~
                                                                     anyfu.rthe:rque:ations.Inthe
                                                                     end the audit will td!U& the
                                                                     r<&1 f&cU bthlnd the cbam-



                                                                     Sl4/f---
 want you to know we have             J uid 'You have cot            bf!rAJ2007year.•
 been lookio& at the bylaws        to be kiddinc.' Aad Sylvia
 aDd It lj)pcan"'" aDd Syt.         Ald. 'Wb.l1 are you t&Jkinc
 ria are not YOtinc members         about1' Our lt&.tUI was dne      andFonR.v   s. CWrinol
 beea.use after oar attorney        Ulltiltoc!oy.•
                                                                     amtr(but.ld 10 " " rrport.
 JttUtiDhed the bylaws y"all           Haw)eyaJd.ltwuslcnJ~          OmlactPoto«J.ctl!J86..$714
 are DOt dicible to sit on the      cant that: abe and Whitmore      or~com
 e:xeeutiveboud.-                   were the ftrst order of busl·
    Huseman u1d Martinet            ness Friday, instead of their
 asked for lega.l advice be-        concernt about tln&oclal
 cause the question had been        practices.
 raiaed whether Whitmore               •t sa.ld, 'OK, I guesa we
 and Hawley were legal mem-         will kiss """ soodbye.' Then

                                                                                                          1 C.R 465




                                                                                                                      102
         February 20, 2008
   CC Chamber meeting to
discuss financial irregularities
           Elvia Aguilar
              CR466
  Exhibit M-1 to Aguilar Affidavit




                                     103
CC Chamber meeting to discus .ancial irregularities : Corpus Christi ~er Times, Cal... Page 1 of 1




          callet:com
          COIU'US CHRIST~ TEXA~
                                                                                  Printc r· friendly s\orr
                                                                              Read more at caller.com




         CC Chamber meeting to discuss financial
         irregularities
         By Elvia Aguilar


         Originally published 01:24p.m., February 20, 2008
         Updated 01 :24 p.m .. February 20, 2008


         CORPUS CHRISTl - The Corpus Christi Chamber of Commerce executive committee
         is meeting to discuss financial irregularities discovered during a performance review of
         president Terry Carter after a raise and bonus for Carter had been proposed. The
         financial questions led to a decision to conduct a full audit. Today's meeting is a
         special-called meeting, to be followed by a meeting of the chamber's full board.




                  @ 2009 Scripps Newspaper Group- Online




                                                                                                       1 C.R. 466




                                                                                                                    104
       February 21, 2008
Financial questions lead to
      call for audit
         Elvia Aguilar
            CR467
Exhibit M-1 to Aguilar Affidavit




                                   105
                                                                    •          •
                                                                · "ae~ItiRtiftfri~''''W~*~,;
                                                                                                 THURSDAY, FEBRUARY Zl. 2008   CITY EOlTION
                                                                                50 CENTS


                                                                                                                                              CHAMBER
                                                                                                                                              OF COMMERCE
                                                                                                                                              Financial
                                                                                                                                              questions
                                                                                                                                              lead to call
                                                                                                                                              for audit
                                                                                                                                              1Y RVIA AIWilAR
                                                                                                                                              Q:I~TI'-
                                                                                                                                              The Corpus Chria:tl Cham·
                                                                                                                                              ber of Commerce decided
                                                                                                                                              Wednesday to conduct a full
                                                                                                                                              audit. after what have been
                                                                                                                                              described a.s finaociaJ ir-
                                                                                                                                              ~arlties    were unccwered
                                                                                                                                              while remwmg a proposed
                                                                                                                                              rabe and bonus for chamber
            *                  CAl l EA•TIMES     • February2l2008• n anday • 7 A
                                                                                                                                              p[c:sident.ICEOTcnyCartcr.
                                                                                                                                                 Three top ch.amber ofl!-
                                                                                                                                              .W.,chalnnanF'r<ddieMar-
 FROM THE COVER                                                                                                                               tinez Jr~ attorney Van Huse--
                                                                                                                                              man and vice president Ken
                                                                                                                                              Trevillo, said they did not
          CHAMBER-"'"" lA                      benedtsa.nd. $6,000 in expenses ln 2006,                                                       knowwhenthelastchamber
                                               the latest ftgures available through the                                                       aud1t was oonducted. Carter
no andft deadlinehas been set. An audit        organitatlon'staxform.srequiredofnon·                                                          did oat respood to a messace
committee wtn be appointed but no              ~t groups. That tax form also shows                                                            let\onhisc:dlpbooe.
deadline Ill set for those appointments,       theclwnber!n theblad<- $9<2,8861n                                                                 The ch amber 's bylaws
he ald.                                        2006 revenue against $880,838 in ex-                                                           from 2006 state tb&t an
   Wedne$da.y"s 5l)eCi.al called meeting       penses.                                                                                        audit is required annually.
resulted trom a special ealled meeting            Several board members who attend·                                                              The audit deeislon oe-
Fridorofthe=tiV<tommittee, when                ed the meeting Wednesday declined                                                              currt!d at a special called
two~tdr>eloo,_,occumd:                         to answer questiona abOut what was                                                             meeting of the execudve
l)Threeotthecommtttee'J!Wemembers              discussed. The meeting wu not tape                                                             committee, followed by a
broughtthe1\nand.alconcrrnstothefu11           recorded, a departure from the usual                                                           full board meeting. Marti·
commfttee'satt.ention,and2)Carterand            pnctice.                                                                                      nez, who also cll&irs the er-
Hu.scmaninfonnedtwoo!thethreethat                Laurie Cook, a recently appointed                                                            ecutive committee, said no
they were no longer eltgiblt to serve on     board member and former chamber                                                                  auditor has been chosen and
the committee.                               chairwoman, offered perspective on
   Those two, Jucly Hawley and Sylvia        why there may not be a set schedule
Whitmote,dJd not attend Wedne.sd.ay's        for the audlt. Cook, a cert.lfted pubUc
meetinc. The third, bo&rd treasurer accountant, pointed out that this is
Damon Bentley, declined to answer income tu: sca.son. the busiest time for
questlonsallerWednesday's~                   practking CPA& A CPA hired to audit
    People famlllar with Wcdoe.day's the chamber on a rtrlct schedule during
proceedinp: saw Bentley dei!Yer a. Pow· tu season would be likdy tp charge a
erPoint presentation on the ftDandal premium rate. she said. The ataodard
lssues, with paper copies distributed practice for &n orpnizatlon eon.duct-
to boord members. Aftetwvd, Trmlio lnl an audit would be to advertise !Of
was observed eollectinc thoae paper requests for proposals from potential
copies from boord mcmbcn. aod Bent- auditors, she said.
....... cbo<ned<lecl1n1qtollllttendtr            Butch Escobedo, a new board mem-
b!scopy.                                     ber and Owner of Butch Escobedo In-
    M&rtJnet desaibed Wednesdays .u.ra.nce, said he was pleased with the
proeeedlnc u "a very positive meet- results of the metti.QI' and loob tor-
lDC where we d lscuased Issues eon- ward to seeing the results of the audit.
CC1'1lln$ tbe chamber's 1\nandtJ pro-            •t came in herew:lthaomeeoncerns
cess and we agreed to form an audit that individuals with an agenda were
committee to move forward wtth the trying to let politics get involved in an
audit process.·                              orp.niution,·Escobedo said. 1 came
    MartineJ. said no one has been ap· away with aomething I think will be
pointed to replace Hawley and Whit· good for the chamber and those busi-
more on Ute executive committee and nesses who are members.•
he did not know when that would                  Some prominent lon~time mem-
occur. Heaaid Bentley and chairman- bcn have chosen In r ecent months
elect Robert Gonulet, who also ts a not to renew their chamber mem-
member of the executive committee, berships, including the loeal chapter
would serve on the audit committee.          of A!:soeiated General Contraetors;
    Aec:ordiag to the chamber's bylaws Bank of America; the Caller-Times;
from WO<i, •accounts of the chamber Fulton-Coutcon Construction; San
 shall be audited annually u ot the close Jacinto and Stewart title companies;
 ofbusiness De<:. 31 by a Certlti.ed. Public and Wood. Boykin & Wolter law firm.
Accountant The audit shall at a11 times That tirm Includes John D. Bell, the
beavallablcto member.! oftheorpnha- chamber's former loogtime attorney,
 ijon within the ot11ces of the chamber." who served free of charge.
 Martinez said an annual l.lldit ts still a      MarkScott, presldent and chidoper-
 r<quil<lu""-                                 at!ngof!\cerofSan1adnlo1llleServ!ces,
     No chamber otftcl:~.lD hAve d.Iscloacd h4d been aloDcttmc eho.mbcr member
 thenatw-eofthefinandallssues, which and his wife, Carol, served u the cham-
 Bentley, Hawley aod WhJtmore raised ber board's chairwoman in 2003.
 after reviewing a. recommendatloo by            •At thl$ point due to the concerns
 the chairman-elect, Gontalez, that we have with the Chamber of Com·
 Carterreceivearaise and bonus. Bent· merce, we did not renew our mem-
 ley, Hawtey and Whitmore insisted on bership; said Mark Scott, also a for-
 Frklay's meeting vl& cerUAed letter to mer City Council member.
 Gonzalez and Martinez after they did
                                                                                                                                                             1 C.R 467
 not respond to several phoae Jl'le$Sag:es Slqff'lll'l'i.kr- Denise Malon COJUribtded
 seeldng a meeting.                          W U..is n:port. Coruact Elvia Aguilar
     carter In&de $ }3'1.000 Nn!! SR ?:?0 In ,.,               ,., _ ,ll,.,...,n,,.,,.,,. ____
                                                   RRit. ~~'l'$1 -




                                                                                                                                                                              106
       February 27, 2008
  Chamber CEO shifted
    funds, letter says
         Elvia Aguilar
Exhibit M-1 to Aguilar Affidavit
Exhibit Q-1 to Powell Affidavit




                                   107
                          SO CENTS            WEDNESDAY, FEBRUARY Z7, ZOOS                 CITY EDITION




Chamber CEO shifted funds, letter says
                 Move makes loss                                                           his salatyIn2008 and 2{)(fffortax
                                                                                           purposes.AI:telnpUtoreacheart.
                                                                                                                                  Feb. 15 meetln& of the chamber
                                                                                                                                  executive committee that in-
                 appear to b e profit,                                                     er'l\lesday were unsuccessful.         cluded a shouting match with
                                                     tng to a Jetter by the chamber's          Bentley was asked to review        Carter and the d ismissal of two
                 treasurer writes                    treasurer.                            the chamber's tl.nao.c:es in antici·   committee members, Judy Haw-
                                                        Chamber CEO Terry Carter           pation of a. raise, bonu.s and eon·    ley and Sylvia Whitmore. Bentley,
                 l'f n VIA AGUILAR                   also d eterred part of h is and his   tract extension for Carter. The        Hawley and Wbitmore had de-
                 C4Uflr'>n:mu                        second-in-commaDd's 2007 sal-         Calkr-Timudid not acquire the          mandedthemeettngvfacertifted
                 The Corpus Chr isti Chamber of      ary to 2008, chamber treasurer        letter from Bentley, but h as veri-    letter after committee members
.flllaryWQ.S     Commercechtefexearttve. whose       Damon BeDtley said In a let-          fied It as what be sent &nd board      Freddie Martinez Jr., the chair-
 1137,000 plus   bonus Is based on 1\nanctal per- ter 1\lesday to board members.           members received.                      man, and Robert Gonzalez, the
 benefits and    formance. shifted tuncb to make     Carter, In a Feb. I7letter to board     Bentley disclosed his concern
cpmse.s.         a loss look like a pront. accord-   members, said he deferred part of     about the chamber's bookl at a




                                                                                                                                                  1 C.R. 468




                                                                                                                                                                      108
                                                                    •
                                                                    CAllU•TUtU   ·Febn.ary27.2(X)8· ~·· 7A

 FROM THE COVER/ NATION
                 CHAUBERJrcm< lA
c.halrman-elect, did not numben prorided in Bent·
respond to phone ea.ll.s for ley's letter show that the
more than a week.             chamber showed the aur·
    Ourtn1 the mectins:. plus by bookin1 $63.90.5 tn
which was tape-rt<Xlrded. January 2008 ~vtnue for
Carter ael.ltd the tape a.nd 2007 and by deferrinl: part
lett the bulldlnr. acconllng of Carter'l aalary. Carter'a
to Bentley'J letter and wit- Ftb.l71etUr aayt tncludlq
ness accounts. Bentley's let- Januuy 2008 revenue wu
ter details hll u~l consistent with the eha.m-
attempts to obtain a CXJPY of ber"s ICCOUntln& method,
the tape.                     approved by the board In
    The letter says chamber September 200•. He also
 executlvt: rice president said in his letter that the
KeD TreviOO also was Uc.ed fal1un: to record hi1 1alary
 to deter aalary "because defetnl as a 2007 expense
 the dwnber wu 'in a cash was a bookkeeplD& error.
 eruncll' and they needed to     Carter also osed $18,312
pay bDIJ,. acconllng"' 8ent- ·from the chamber's build·
ley'llct1c<. T!ovll\0, ruched     In& fuod to Pll Opetatinl
11>adoY.acknowtcdcedthat expenses, accordin& to the
beddcmdparto!hlssalary            ktter. He lhitted the mooey
!orth.atreuon.                    totbedwnbenfouodadoo,
   The   amou.nt Carter de·       then bOled the foundation
fernd lutyearwu$19..992.          for apen.ses Ln that amount.
accordiDI to Bentley's Itt·       Carter's Feb.l71etta'a,ys be
IU.                               dbcuned the move with
  Carter's 2006 salary,           Thompson and Bentley be-
the molt recent available         Con: shlftin& the funds. The
throqh a ftn&ndal report          foundation hu operated
required by &overnment            with ..W.ea4 provided by
rulea for nonprofit orza·         the chamber and the cham·
niutlona, wu $137,000             ber had never bet.n reim-
plua $8,000 In bend\ls and        bursed for those expenses,
$6,000 In upenses.                &ca)l"diag to Carter'llctter.
   Thellnkbetweencan.r'S              Amonr other concern•
 bonus and. the clwnber's fi.      Bentley lilted wu t he
 nancW perfonn.nce wa.s a          chamber'l Jack of aecou.o t·
 red flag for the chamber's        ln& tor special event1. Hi.l
 accountant,OarTtllThornp-         lettcrdescrlbed them as •ott
 aon, aecordins: to Bentley's      the book&; with only net ln·
 letter. The a.ccountant told      comepresentedtotheencu·
 the eh&mber executive com·        ttve eonunlttet. Examples of
 mlttee that •use of Building      special events In 2007 were
 Fund dolla.n to supp&ement        thema)'Or'I.SweottheCity
 the dwnber operatins: ex·         address, Salute to the MOI-
 penses could possibly forfeit     tary and the Cooquer the
 the (chamber) foundation~         Coo>t blcyde ride.
 (nonprofiQswus bc:causeot             Bentley also ltaUd In his
 the Unk between the CEO's         letter that hewas conc:erned
 bonus to the ftnancial per-        that carter autborizes ~ir·
 tonnance of the chamber."          nlftcant con~ w1t.bout
    Tbebulldlnatundwasset          1eddDI bld.a or con.aultins
 up to pay for the chamber's        the execut1V'e coaunlttee or
 CYentual moYe frOm lb cur·       boud.
  rentbuikiin&. DOW owned by          He also uJd a compari-
 the r~cnJ aovernment as           son oCyu.r-cnd lllelllbenhip
  pa.rtotthedealtha.tallowed       lisu •reflects a .li.(niflcaot
  the federal c:ourthouse to be    decline in member orpnl-
  builtoextdoor.Thedwnber          zations in 2()(11.·
 wlllh.avt:tomoYeby201L               Anaudltoftbedwnbeds
     The letter also said the      peodlno.Theorp.ahatioo~
 accountant •no kmsez- wiU         bylaws can for an annual
 discuss this matter and that      a.udit but Bentley and otl...-

               .....,.,t
 the eha.mber has become a
 'hl$11 risk' ..         that
 b e - DO Joo&u want ID be
                                   top cbamber oftldala have
                                   &&fd they"~ DOt sure when
                                   the last audit was done.
 o.aoc:!ated with."
    Tbompaon<Ud DOlrdUm
                                      "'n  the end." Bentley'l
                                   letter u.ys, • this come•
 phone c:albThcsday.               down t o trult and ae·
      An e·m.aD exchange be·       countablltty. Removlnl
 tween Bentley and Thomp.          exeeutlve committee
 IOilw:riAesllentley\-             members who voice sin·
 tionofThompson'tconccms           cere concerns, keeplor
 and &bows thll the descrip-       taped mee.tlnp from other
 tiooofthechamberu"high            board members,yellinrtn
 ~was ThoDlP$0n'a.1be              an attempt to intlmldate
 e-mail exchan1e obtl.lned         board volunteers, leader·
 by the eaa.,-.nma did not         ship retusln& to •il"n a let·
 come from ~er Bentleyor            teroflndemnlftcatlon that
 Thompson.                          silenced the accountant
    Tbompton had IOu&ht             and attempt1n1 to justifya
 but never received a let·          raise bued on disputable
 ter authorlztns him to Jive        numbeu do not chanre
 Bentley a written a.ccou.n t       my ftdudary responsibil-
 of bb tecolleetioiU of the         ity. Unfortunately they do
 Feb. 15 meetin&. aa:ordin1         ma_ke it much barder to
 to both the lt.tt.er and tlwo r..  {M"rlnrm my rhrt""-", hnt my
 mall•. Bentley also souzht         duties rt:DJ rem.in.•
 but DCYtt reoeiwd a copy of
 the tape aebed by Carter.         St4/J\Cif"'it.erDa"Kdlq
     Bentley\ le- sw.es the am.lriblllt«:f to tlli.J repOrt.
  dwnbcr showe:l a ~.~25 Corttact Btuia Apilor Gl
  proftt wben it sbould have IJ86.3618 or aguU.Omt
  ahown a $61,782 loss. The ccall-=.oom




                                                                                                   1 C.R. 469




                                                                                                                109
       February 29, 2008
    Ex-chair airs her
    chamber concerns
         Elvia Aguilar
         CR470-471
Exhibit M-1 to Aguilar Affidavit




                                   110
50 CENTS   FRIDAY, FEBRUARY 29, 2008   CITY EDITION




                                                      Ex-chair airs
                                                      her chamber
                                                      concerns
                                                      Leaders say they are
                                                      pushing for audit soon
                                                      ftiLVIA AAIIUAI
                                                      Co/,.,.71. . .
                                                      The Corpua Chrl•tl Chamber of Com-
                                                      merce bun't taken t utnclent mps to ad·
                                                      dress • very credible" ft.na.nclal concerns
                                                      raised by Ill treuurer, who hu been de-
                                                      nied accetl to c:ritieallnfonnatloo. a for-
                                                      merchaJrwoman aa.ld to a letterTh.unday
                                                      to boud members.
                                                          Former c!Wrwom&D Sylvia Whitmore
                                                      aloo clispulalbe ..udltyofb<r.....,.,.)Feb.
                                                      15 trom the chamber ezeeuthoe c:cmm.fttee.
                                                      Tha.t wu the day dan CDU~eDCYmectin&
                                                      ot the ftve-member committee demanded
                                                      by her, Judy Hawley auc!IJUSU= Damon
                                                      B<~nlt)'to cliacloRlbe fmaDcial a>oCUDS.
                                                          The other two eucutlve committee
                                                      members, Chairman Freddie Martinet
                                                      J r. and Chairman-elect Robert Gont.a-
                                                      IC'l, said Thursday they are mov1nc u
                                                      quickly u they ea.n to hire a.n auditor to
                                                      conduct a tun audit. They uJd they deter
                                                      to chamber attorney Van Huscm&n'• lepl
                                                      Interpretation of chamber bylaws In the
                                                      r emoval of both Whitmore and Hawley
                                                      from the executfvoe committee. Phonemes-
                                                      sqale!tonHul<man~cdlphoneaodhome
                                                      phone atterbwlness hoonThuBdaywerel
                                                      notrttu.mecl.
                                                      - - -,....
                                                             -.-...-....
                                                                    - ..-.-..-,.- ---+1 C.R. 47 0
                                                                                             •

                                                                                                    111
   fROM THE COVER
    CHAMBER.{nnn lA
    Chamber CEO Terry
  Carter, whose handling of
  chamber ft.nanclal matters
                               I                          •
                                     Martinez said the com-
                                   mtttee already had been
                                   ICheduled to mett that day.
                                                                                                                                       •        CALt.U-TIMES     •Ftbruary29.2008•Frklzy• 7A




  raised the concerns, could ,        Gonzalez said he talked
  not be reached Thursday t to Hawley tn person a.nd
  afternoon at his office or t returned a call from Whit- ~
  cell phone.                j more before the meeting.   '
  Is,°Ca~~!rm:~~i~~~!!~b~ ! n/:~=~~·~:rt~~~ ~~~~~;
  took Whitmore a.nd Haw-      !   of the upe would be de&lt :
                                                                  i
 ley behind closed doors ! with as a staff personnel 1
 and told them they were DO ' matter. Until that matter '
 longer eligible to serve on  is resolved. Martinez said. :
 the committee. As Bentley the tape should remain in
 waited outside, according Huseman's custody.
 to w1tncss accounts, the two     Bentley, in thee-maO to ·
 women endured 1hout1n g boardmemben,saidhesent


                               :
 from Ca.rter. They stayed     a.certifiedletter to Huseman
 to hear Bentley's report.
  ~=~::.~~::J~~ta~er!=~~ :~P~~7::~~~~;::~1:~ ~~m the exeeutive commit- ;~~ft5r:r~~a{;,~~t~eer:~l::! ~:~~::!:~c~~~~tiei:~:~:                                          bo&rd authorization, mov-
                                                                                                                                                                     ing funds to other accounts ,
  ing of th~ meeting and left i said Huseman refused to               "'The interpretation that     yea.r or untn their succea-     or suuesttons of any rots-       running special evenu ott
  the bulldmr;.                 surrender the tape without         1am not officially a. member     sors assume otnce.              appropriation or mi.Juse of      the books, arbitrarily fill-
     Bentley ha.d been asked Martinez's consent, and               of the executive committee          ..Since no one has as-       funds . ... The Chamber of       ing board seats. all of these
 to review the chamber's Martlnezdeclinedtorelease                 espectallylnUghtofthefact        _.umed the duties of imme-      Commerce is In exce llent        issues are about trust, con-
  finances in antit:lpatton 1 !ton Huseman's advice.               that the chairman (Freddie       dlate past chair, that person   ftnanclal condition a.nd will    fidence in the leadership,
 of a. raise, bonus and con-       Martine:z. u id Thursday        Martinez Jr.) had requested      would be me,~ Whit more         continue to be good stew-        procedures in place which
 tract extension for Carter. he sought legal a.dvice of            that 1 stay on when the 2007     sa.id.                          ards of our funds.•              ens ure tra.nsparency and
 Bentley found that Carter Husema.n.lntheseinstances               chairman (Dave Allen} leh            Whitmore also said she          Whitmore offered some        accountability of the cham-
 had shifted funds among and those were Huseman's                  the city is a concern to me;     is conce rned with cone·        wordsofadvicetothecham-          ber CEO to the board and
 accounts and de fe rred ler;al interpretations of                 Whitmoresaidlntheletter.         spondence by Carter to          berboardmembers.                 the membership."
 $19,992 of his 2007 salary. : what needed to be done ac·             Martinez said he may          the board and ch amber             "The chamber needs               Whitmore, contacted
 Without those moves, the       cordinc to the chamber's           have asked Whitmore to           members ~glossing over ft-      to strengthen and follow         Thursday, deelined t o co
 chamber's cash flow would      bylaws.                            rematn on the board with         n&nclal trre&ularities and      Its accounting procedures        into specific details about
 have been nqative, accord-        •t also want to make it         Allen's departure but has        the decllnin&membership         &nd Its accounubility to its     her concerns on arbitran1y
 lng to Bentley, a.ddlnz that   cie.ar that I have no person-      no clear recollection of a       numbers."                       members. M stated prevl-         fU1inz board kats, but aatd
 Carter's bantu is b ased on    alproblemwhatsoeverwith            eonver:u~tion with h er on           She wa.s referrinc to an    ously, the action taken by       :;he ha:;heardeoneenufrom
 the chamber's tinancial : Sylvia,• Martinez said. •tn             the matter.                      e-mail Monday by Ca.rter        the· chamber board to es-        former board members who
 pe rformance. According        fact, In rny business here at         "I think I may have had       to chamber members, In          tablish a.n audit committee      have left the ehamber about
 to Bentley, the chamber        FreddteRecordswedobusi·            a conve rsation with her         which he wrote: "'The ar·       lsagreatstep,butisnotsuf-        bow they were replaced.
 ac:countant told htm that      ness with Frost Bank."             when I was first appointed       tides which recently ran In     ftclent to reusure me and

                               I
 the chamber foundation's           Whitmore is employed at        as chair," he said. "but what    our local newspaper art an      others that the chamber's        Business writer PaftftJI S.
 nonprofit status could be      Frost Bank.                        wa.ssaid,l'mnotsure."            over dramath.ed account         operations are trans par-        Chirino&omtrlbut.edto
 lnjeopardybecauseCarter           Wbltmoresa ldtnthelet-             Whitmore eitesehamber         of nothing more than our        ent and open," she wrote.        thi.s t"eport. ConlaclEivia
 shifted chamberfoundation      ter she stfll Is bothered by       bylaws which state that all      board's routine and normal      "Executinr; eontracU with-       Aguilar ol 886-3678 Ot"
 ~~~~!,~:;~::::.!ib~::;            .t~~~~-g-•1-it-y_of_h_•'_'_'_
                                                               "'_ov_•_I_om_•_•_"_'_h•_u_•_•_
                                                                                            k•_o_m_•_•_on_ r_•_vi_ew_or_t_h_
                                                                                                                          e _ch_•_m_b_•r_n_-_o_"_'..
                                                                                                                                                  _ •.,_u_ve_•o_m_m_I_tte_•_o_,_ ...
                                                                                                                                                                                  _..,_..-...
                                                                                                                                                                                       __-_"""___
 ts linked to the chamber's I'
ftnanci&l perlonnance.
   In an e-m&il Tuesday,
Bentley informed board
members that he sought
a written account of what
                               I
tr&nspired at the Feb. 15
meeting from the accoun-
tant, Darren Thompson,
but Thompson decUned be·
cause Martinez didn'tgrUlt
him a letter releasing him
to do 50.
   In her letter Thursday,
Whitmore sa.id she was con-
cerned about "denying the
treuurer aceess to critical
Information and advice of
ftnandal professionals em-
ploye d by the chamber of 1
commerce."
    --rhe treaaurer's con- ~
 cems are very credible Uld
 appeared to be mostly Ig-
 nored,'" Whitmore wrote.
 "There was eonttnued re·
 tusal of the chair and cha.ir-
 elect to respond to attempts
 to schedule an executive
 meeting immediately to
 work to1ether to address
 irregulutttes. There was
 refusal of e.hamber SU.ff to
 cooperate with the trea-
 surer on a task he was given
 by the board and executive
 committee. FlnaJly. refusal
 of the chamber CEO to re·
lease the tape of the e.r.ecu-
tive committee meetlnc
which was held Feb. 15."
    Martinez sa.id Thursday
he had not been able to re-
spond to Bentley's requens
to meet becauGe of work
commitments and Ulness.
    "The 6rst 1 heard about
the concerns was during a
Jan.3lmeetlnglnmyotfi.ces
with the ftve executive com-
mittee members,'" Martine2;
said. • ouring that meeting
we decided It would be dis-
cussed agaln. I was out of
town Feb. 7 and 8 on busi·
ness and was Ill Feb. 11 and
12. When l returned to work
on Feb.131 had a letter from
                                                                                                                                                                             1 C.R 471
Damon, Sylvia and Judy re-
9U~tins the Feb. 15 meet-




                                                                                                                                                                                                     112
         March 2, 2008
Chamber CEO's actions raise
    serious questions
              CR567
 Exhibit P-1 to Jimenez Affidavit




                                    113
     OPINION                                          •                                      •
Chamber CEO's actions
raise serious questions
Funds were shifted that made a loss look
like a profit, entitling CEO to a bonus
      he Co.iler-TlMu Publi.shinc

T     Company resi.p.ed from the
      Co.-pus Christl Chamber of
Commerce last year. That wa.s a.
decision prompted by the divisive
                                      possibly rUkin&the chamber's
                                      nonprofit status. These hleh-
                                      h&nded t actic& havre done severe
                                      damq:e to a very Important civic
                                      orpnizatton.
Jelderahlp of Terry Corter, chief        The CO.-pus Christi Chamber
executive of the dwnber. AJ           ot Com.merc:e 11 supposed to
Publisher aod Prutdent Patrick        speak for the business eommunlty
Birmin&ham .Wed at the Ume,           of the dty, notjust oo bu.aine.s•
the company could no longer be        matters, but oo all l.uutt that
a part of an orpuiu.tioo "with a      a.ffect Ita: econom tc wdl-beln~o
prcstdent who enp.ges in na.me        The ch.a.mber can be, and bas
calli~ a.Dd shows fawrtUsm            been In its history, a truneodous
toward one business over a.noth-      force for the prosreu of the dty.
er." The company had been a           But when the conduct of its chief
member of the Chamber ot Com-         executive 11 under question, u It
merce for 75 years.                   is now, then that transfen t o the
   The b111inesl side of the news-    orpnlzatioo u well. That 1.1 the
paper and the oplniom expressed       damage that hu tnntcted on the
to thlJ edltortal pqe space are       dwnber by Carter's actions.
aeparate. That point mll4t be             It wa.s a cou.n.geov.s ltep taken
emphasized followlnc rt;ports         by Bentley, Hawley and Whitmore
about bt&hJy questionable stew-       lD fon::lnc tbe issue ofaocoo.nt-
ardship of the dna.ncW atfa.ln        ablllty. The removal of H&wtey and
of the chamber by Carter. The         Whltmote, by a. conventerrt. Cor
r<poru,lndudil!f alleptions by         Carter, rerudin& of the bylawo\1
the chambu'a treasurer, wert l&id.     oothln& leu than a.o attempt to
out 1n a aeries of news ltories..     1ntimkSate c:ridcs ofhts CODduct.
These news accountl des<rlbe             carun explan&tton, made In
duplicitous dealiop by Carter ln      a letm' to board member&. 1.1 thu
hit relation~ with the member-        the fl>nd·shltltl!f wu &llowo<l by
ship and the encutive committee.      tbe c:bambet's a.ccountln& meth·
   1Wo cucu.ti\"e committee           ods, that the deft:rral of lllary wu
memben. former na~ Rep. Judy          fat tu: purpo~e:~ wtth the failure
Hawley and bank executive SyMa        to show dderral property on the
Whitmore, w.:re removed from          books oplaJned u a bookkeepin&
the committee by Carter after         error. The use of capital money
they attempted bring tn.nspar·        from the chamber's fouodatSon
ency and a.«<UDtabOity to the         for operatinc upen.ses, Carter
flnaDces of the cba.mber at a         &&id,lwl been ciU<uued with the
Feb. 15 meettn&. A aubsequenf         clwnber'i accouDtt.nt. But that
Feb. l71ettu to members from          tccountant. D&rrtllTbompson.
the c:h.amben trusurer, D&mOD         Bentley  wrou.  wun<d. tiW the
Bentley,lal4 out the quertlonablc     u.e of foundatioD money ln such a
lhlftil!f of funds on the books       way _,jd thtw<n the ch&mber'l
of the chamber. The tund-&hift-       nonprofltltUUII.
tnc. tnclwlln& the deferrtn&             The chamber can be an ettec-
of CanUa Wary, allowed the            tiW: and creditable voice for the
chamber to &bow a. profit. thus       b osiness c:on:ununlty only it tts
quall!yin& Cuter for a. bonus. The    leadenhtp conducts tuelfln an
letter as wen as those involved in    ethlealand profe:sstonat ma.n-
that key Feb. 15 m.eet:II1JII.Y an    DU, acc:ountable to its membua
an&ry Carter aetud an a.udiotape      and h~dln& iUelfto the same
record of the meetln& durin& the      bustneuUke atandards that tu
eoune of the encounter. Bentley's     memben: expect ofthemldves.
attempts to obta.l o a copy of that   Intimidation, secrecy and duplle-
rtc:ord have been fruitless. The      lty diseredit a ¥1tal or&anlzatlon.
ahiftin& of tunda also involved       The questtoo mark remains over
usl111 money from the chamber's       Carter unttl he tully explains his
foundattoo meaat for ea.pltaJ         &etions, or untll the ehamber
 proj<cU for openlln&expensu,         chooses to move on without him.




                                                                                   EXHIBIT
                                                                              I'' P- \,,         ] C.R. 567




                                                                                                              114
        March 3, 2008
 Petition seeks chamber
         Changes
         Elvia Aguilar
         CR472- 473
Exhibit M-1 to Aguilar Affidavit




                                   115
50 CENTS          MONDAY, II ARCH 3, 2008            CITY EDITION




           Petition seeks chamber changes
           Members call for                     to ~erse hi!: changes io the cham·
                                                ber's accounting procedures.
                                                                                       a surplus of operating funds. Cart·
                                                                                       er's bonus is linked t o thechamber's
           increased clarity,                      The petition is a reacUon to ft.
                                                na.nclal moves cited bythe cba~r
                                                                                       ftnancial performance.
                                                                                          Attempts to reach Carter and
           accounting switch                    treasurer, who wu uk.ed to look
                                                into the Oflanlz.atlon'a ttoances u
                                                                                       chamber eha.trman Freddie Marti·
                                                                                       Del Jr. Sunday afternoon were un-
           IY U.YIA AGUILAa                     part of a review ofa proposed raise,   IUCCU$ful.
           c.u.,.,_                             bonus and contract utenston for           Organizers of the petition are
           Some Corpus Cbrl.stt Chamber of      Carter. Treasurer Damon Bentley        scheduled to meet at 11 a.m. today
           Commerce members, tnelud lng         reported that Carter had deferred      at Brewtter Street lee House to dis-
           thrt1: former chairmen. are circu·   a portion of his salary and shlfted    t ribute the petition and explaln Ita:
           latlnr a petittoP to address eon· other funds •monc chamber a.c·            purpo>e.
           cerns about recent ft.nanclal moves eounU in a manner that tu rned
           by t op executive Teny Carter, and   wbat should bavebecoadeftdtinto




                                                                                                             1C.R.472




                                                                                                                                116
                         •                                  •
                                                                         CAllU· TIMts      •Marchl2008•Mon~· S A

NATION/ FROM THE COVER
                                              CHAMBERJ;= IA                                    llrm that Includes Jobn Bell,
                                                                                               who for years was the cham~
                                The petition asks for:      froml Oper«ntofthemem·             ber'$1tt()m<y- otcbatie;
                                • A ceneral meeting of      bershlp are needed to have         andtheC4ll4J"-'nmu,a.mem·
                             the membership.                the meeting. One of the            ber for at least 75 years.
                                • A printed financial       Issues that illustrates the            The petition's drivers in·
                             report from the board of       petitioners' concerns, she         elude former chairwoman
                             directors including the au-    said. ts that they a.s mem-        Sylvia. Whitmore who on
                             dited or unaudited balance     bers don't know how many           Friday disputed the vaUdJty
                             sheet for the chamber ac-      members the chamber has.           of her removal Fcb. l5 from
                             counts or special funds of     She estimates 80 to 100 slg·       the chamberexecutive com-
                             the chamber.                   natures would be needed.           mittee. That was the day of
                                • Profit and loss state-    Late Sunday, $he had56 l ig-       an emer,ency meeting of
                             ment for th'e chamber's        naturestromcurreutcham·            the five-member comm it·
                             funds.                         ber members representing a         tee demanded by her, Judy
                                • A listing of profes-      diver&e group of businesses        Hawley and Bentley to
                             sional services contra.cu to   in Corpus Christi, she said.       disclose the ftnancl&l con·
                             which the chamber Is pi.rty       •Some of them are some          cerns. Carter and chamber
                             either as a contractor or      of the l&r~est employers In        attorney Van Huseman in·
                             customer.                      Corpus Christi, real estate        formed Hawley and Whit·
                               • Aprintedrepottofthe        agents, and b asically across      more before the meeting
                             membership In good stand-      the board r a.nk and file          started that they were no
                             ing iocludtog totaJ nu mber    members of the chamber:            lons:er e11gible'to serve on
                             of members a nd actua.l        Scott said.                        the committee, according
                             compa.ny names and point                                          to WhJtmore and Hawley.
                             of contact for all members.    MEETINC 50UCHT                         Woerner expressed con·
                                • A ddalled listing of      When Scott, who served a.s         cern about Hawley and
                             current directors Including    chairman In 2003, moved            Whitmore's removal - and
                             contact information, date      to Co rpus Chri sti In l 98<i,     he wanted more transpar·
                             of e lection or a ppointment   the: first mtJor event she at-     ency from the leadership
                             to the board, date of term     tended was sponsored by            on the financial concerns
                             expiration and classificar     the'cha.mbcr.                      raised by Bentley.
                             tion ofboard membership.           •The Corpus Christi                "In the course of time
                                The petition also uk.s      Cha mber of Commer ce              ptominent members have
                             for an amendment of the        helped me eut my business          left and I have heard con·
                             bylaws to r ead that the ft.   and polltlcal teeth: Scott         cems,"hesaki. -I don't think
                             oanca of the chamber shall     •aid. "Thit ins titution is        the membcnhlp can keep
                             berf:ported Usingtheaccru-     very near and dear t o me          conftdence in the chamber
                             al method of accounting.       and I don't want thls Insti-       tf It's not transparent. The
                             rather thaD the modified       tution's reputadon to sutler.      purpose of thb meeting
                             accrual method instituted      I think the onlywaywoecan          won't be to focus on persoo·
                             by Carter after he started     6x thla is by havtng ao open       alitics, butonwh.at'sbestfor
                             in ~004. At:eordlngto Jerry    conversation with the CD·          the chamber. I think a di&-
                             Love. a certlned public &C·    tire membership."                  logue dellnltdy Is needed.
                             eounta.nt from Abilene and         Scott said th~ questions
                             a member of the Texas So·      B~nt1~y rais~d in a letter to      UPSET WITH REMOVAL
                             ciety of CPA.s, under an ac·   the chamber's board need           Durrlll, whohasftvecompa·
                             crual method. expenses and     to be ansW'Cred not only by        nics that are chambermem·
                             revenues are booke<i as they
                             occur in order to h.a.ve the
                             most aecurat e compa.ri.son
                             oft he revenues to expenses.
                                                            an audit. but by a ineeting
                                                            that includes the ehamber's
                                                            lea.dershi p, membership
                                                            and board.
                                                                                               ..-.and
                                                                                               bcrs, also >aid he signed the
                                                                                                             got Involved In
                                                                                               the process because he wu
                                                                                               upset about Ha.wley and
                             Under the modltied system          Steve Woerner, CEO a.t         Whitmore's removal as wen
                             used by the ehamber, reve-     I>rUcoU Cluldren's Hospital        as eoocernedabout Bentley's
                             nue Is booked lmmecllately.    and chamber chairman lo            11.nandal qtaUons.
                             For e.z:ample, 2008 chamber    2004, sa.1d. he stped the pe·         •tthinkltwuquite rude
                             dues collected ln 2007 were    tition becaUJe he is worried       how two of the most re-
                             booked In 200 7 thoush         about the chamber's future.        spected women ln the com·
                             they were paid for a 2008          "Onceyouareachairman           munity were treated and 1
                             expense.                       you are part of the iofonnal       think we as members need
                                                            l~adership of the chamber          to have more transparent
                             AUDIT COMMITTE£                and because of that I have         and frequent ftnanclal re-
                             The board should appoint       a vested interest In IU suc-       port s," he said. "We also
                             a n audit committee of a.t     cess,• Woerner sa.l.d.. "'I want   need toha.veclear goals and
                             leastfwtch.ambermemben;        to see ftsucceedand frankly        a mission forthechamber."
                             including the sitting cham·    I ha.ve heard enou,b con-             Chamber member Tom
                             ber treasurer, two" past       cerns where we were going          Dobson, c:hairmaD and CEO
                             chairs and two other mem-      to see an exodus ofthe metno       ~loc.,b­
                             ben selected by a mtJority     berahip and 1 don't want to        thepetitlon~si&ners-
                             vote ofthe board, accordJng    oeethal."                              "As &l onrtime member
                             to the petition.                  Notable depa.rture.s in         a nd past director of the
                                Tbe petition also uka       the pan year included Ful--        Corput Chrlatf Chamber of
                             that the c:hamber publishfts   ton..coastcon construction,        Commerce,• Dobson 1aid,
                             aonua1aud.itanddtstrlbtrte     whole partaers lllclude for-       "'I'm very concerned about
                             ittoallmembenwlth.1Dl20        mer chamber cbainnan Jim           the accounting questions
                             daysofthe close oftbefiscal    Barnette; Bank af America;         raised recently. I strong1y
                             year.                          UtF Distrilruton , the Bud-        encour&&e t he chamber
                                 Former chai rwoman         w.lserb=distrlbuu>r,San            l<ldenhlp toeall thU meet-
                             Carol Scott, a partner ln      J&cinto Title Co., whose           ins to publicly resoiVI! these
                             KaHo Communications ,          president Marl< ScottIscarol       issues qukkly so the cham-
                             and Bill Durrill of Durrlll    Scott~ husb&nd &nd a former        ber can get back to busioess
                             properties and Brewster        city councilman; Stewart           and maintai n and crow
                             Street lee House, will have    nue. w'-prcsid<ntFoster            their membenbip.•
                             the petition available at      Edwards Is the chairman af
                             their bus inesses for cham·    the Corpus Christi Conven-         Conl4Cl EhM Aguilar
                             ber members to stcn-           tion and Visitors Bureau ;         cU IJ86.3678
                                 Scott sa id s ignatures    Wood Boykin &Wolter,&law           or aguilaTeOoczll8r.com




                                                                                                  1 C.R. 473




                                                                                                                                117
        March 4, 2008
  About 80 sign petition
  on chamber operation
         Elvia Aguilar
         CR474-475
Exhibit M-1 to Aguilar Affidavit




                                   118
   •          CORP'US CHRISTl '




•~allt~imtjili'
   50 CENTS      TUESDAY, MAICH 4, ZOOB   CITYEO!TION




                                                  About 80 sign petition
                                                  on chamber operation
                                                  Concerns heard,              Freddie Martinez Jr. at-
                                                                               tended the conference to
                                                  chairman says                uy the petitioners' coo-
                                                                                    cern• are belns
                                                  ~YJ',..!GRLAil        ~ ~=~~~r::!:d b;~~:
                                                  Some of Corpus ~ chamberboard.
                                                  Chriatl'a1arae.~t em- -                The petition orp-
                                                  ploycra have sisned                 otun are ukin& the
                                                  a petition of Corpus Chris- eht.mber'aleadership for a
                                                  t1 C:hA.mhn of Commerce lin ot the tun mamborohip
                                                  members nektng to ad- 10 they know how ma ny
                                                  dre&J concerns about top slp1atures they need to col-
                                                  uecuttve Terry Carter's !eeL Carol Scott, a petitiOn
                                                  recent fioa.nclal moves and orpnber a.nd fotmcrthair-
                                                  lhe dcparturea: ofloJlltime woma.n, uld she also needs
                                                  members.                      the Jist to eoofirm which
                                                     About 60 members, In- buslne.uu that have li~ed
                                                  dud los 11 former cha.lnne.n. actually arc members. Ten
                                                  attended a news conference percent of the membenhfp




                                                                                                      .
                                                  Monday at Brewster Street is needed to force the meet·
                                                  fceHouseto&howtheirsup· Ins, but Scott said one of
                                                                 1
                                                  po~!~~~e ~t~n ~~;ebe         the  luues thf'5lf2rates
                       1 C.R. 474                 re ach ed, but chairman          Ptsa.s••a CHAMB£171.
                                              ~




                                                                                                             119
    FROM THE COVER
                                                           CHAMBERft..,. l A
,J~WHO SIGNED ,, :.:.                                                                                                                                   LEFT: Jvdy HaWley
   ·COOipaniesthat~ · :~.·:_, ~~~t&~t~~~e~:· !~~~~~:                                                                                                    wlthAdvancedA<oUs-
~ -pttition_asof•p..m,_~y ~ ·;                        1
                                                          don't know how many                                                                           tlc:conceplsslgns




~!i!E
                                                                                                                                                        G pe"LitioK cdd.Te.U·
                                                                                                                                                        ing rmmtj&Joncial
                                                                                                                                                        mo-uu within lA.e Cor-
                                                                                                                                                        P1U Chrl.tri Cl&cmber
                                                                                                                                                        Q/ Com7Jl4f'CC Wore
                                                                                                                                                        o tUWS cxniferenu on
                                                                                                                                                        Jfonda.Jf 4boul th4 Ls-
                                                                                                                                                        ""'cslBr-ew~IM"Strut
                                                                                                                                                        lc.Houu.

                                                                                                                                                        BElOW: Chomboc ol
                                                                                                                                                        Commerce chafnnan
                                                                                                                                                        Fnddie Martin u Jr.

            :=:=~-~ ~ i::~~~~e~~t~~
                                                                                                                                                        (l([l)tcLt.svrllAKen
1
:; :                                                                                                                                                    Grfffm ofAEP Tnus
    ' il C.C.FilePro                   '    -~-           erhaddeferredaportionof                                                                       ajkr Mo-n.tiay'a news

       _:~t=':Fe <.                    f          •       ~~~;~~:~::~~~":~                                                                              cmt{ennct. Marti11a
                                                                                                                                                        uys m4tmbn-s' con-
•--~-.- ~:~~S.I~--:~t·~- - ;:;~~~- counts in a manner that                                                                                              uniJ"11Jef'eM4rd.




{:
      • Cobb,Luodqulst&Atnlp .. _,,                       turned what should have
    - ·-~~r-;              ~fi        ·                   been a deficit into a sur·
    ~-:· PaeuettersteeiRultors                            plus of operating funds.
f.: •       .~et!Street .: -1·~                           ~0a~=r~:~~r\i~~!~~ea~
            =~~
              - ~~-{:                                     performance.
r~- • Corpusarhti'Assoo,_tioo . ag~~~{!u~i~i~h:.
    • o(Rta.lton ·,.;-  - ~~-~ --:                        sponsetotheconcenu.The
~' W C«pus aristiBUidf:rs•··:..:.- -                      chamber is &upposcd to un-
    - ~- ~~aristl-~~:···. - ~                         .   dergoanauditannuaUy,ac-




_·l-~.l_-1._?.·~_;:_.~~~; ~~~~
;
       ..
            ........."                                    narrow the list or outside

r~i= ~~:=                                                 =~~~~~=~~
~~::,.~r~~                                                se~a~TI!~~~~S:di~oard
t•: ~~~;                           ;~-~~..:-~ . ~:::U~~C:n~:=
       : ~~~-~r.1i}:~;, ~:nc:=::t'!e~oC:~iso:


; ~:~;~;0, =~~~~~~~
       •- kleotitylheftSolutlonS.
       •JOeAdame&~lnc..'~
                                             ·_r-~1       ate & fmanclal committee
                                                          In charse of reporting the      an iuue like It Is now,"       Sconsaki chamber members
f ;.   ~~=~~J~-: :·                                       ~~ra~~~~~~a::~~~e:              Whitmore uid.
                                                                                             Port commissioner and
                                                                                                                      who wanted to sign the petition
                                                                                                                      could do so a.t Brewster Street
       =·~~== ,~~-,
            0
                                                          charged with upde.tin&the former st ate Rep . Judy          Ice House, FastSigns or Kailo
       ~.~rO:~~~~~-                                       ~~:~~q~:;:_hedescribed Hawley,           the other execu-
                                                                                          tive committee member
                                                                                                                      Cor:tmunlcations.

    ' =i~i~~:Jtat·~~:_ ~-~                                ph;!eh~~~~~!~~                  dismissed Feb. 15, said
                                                                                          the newa conference Mon·
                                                                                                                      Contoct Elvia Aguilar
                                                                                                                      at88<J..3tJ78
....-Mark Wtltmott:·~                :.:;!~!': · .~       who are concerned, ao 1 day accompllshed the ftrst          oroguiltJ.T~com
~~ --~uEiecbiCCo.~                                        want to let you know I am .step to what the members
·'•                  Lynch (_ • ': _' · · : ·             here to listen," Martinez were trying to do, open a
~ ~,                                                      told thoae &athered..           dialogue wtth a ch&mber
                                                              "'We hope to have t he leadersh ipthattsnotbdng
                                                          chamber'• annua1 meet· transpa.rent.
                                                          in& before the end of the          "'My concerns are that
                                                          month. I don't have all the this member hemorrha.ge
                                                          answers here today, but I needs to stop," Hawley said.
                                                          am linenln& to your eon· -we need a. chamber that
                                                          cerns and I hope everyone Is viable, that l.s a. stron&:
                                                          knows you ean come to me spokesperson for the busi-
                                                          with those concuns."            ness community and re ·
                                                              He 1atd queattons on spected both In and out
                                                          the chamber's 4nances are of this community. I don't
                                                          nothing new.                    think the current leader-
                                                              "In early 2003 and 2004 ship is transparent in its
                                                          the chamber'• ftnanceJ financial decisions."
                                                          were In question," Marti-          Former chairmen who
                                                          nez said.                       attended Monday's meeting
                                                              Sylvia Whitmore, who were Mike Bertuui, Tony
                                                          wu chalrwoma,n In 2006, Boni11a, Marshall Boykin,
                                                          disput es thatuaertton. She Mike Carrell, Joe Fulton,
                                                          is one of two dwnbtr exec- Alu:Ha.rris, AI Jones, Scott,
                                                          utive committee members Whitmore, Ivan Wil$0n and
                                                          who were told they were Steve Woerner.
                                                          diambsed from the com-             Fulton's ·construction
                                                          mittee on Feb. 15, the day company, which includes
                                                          they wert prepared. to join former chamber chairman
                                                          Bentley In disclosing his fi· Jim Barnette a.s a partner,
                                                          nandal concernsto the tl.ve- and Boyldn'slawt'um, wbicb
                                                          member committee.               includes lon~tlme former
                                                              "Never bas the lack of fl.· chamber attorney John 0 .
                                                          nancial transparency been Bell, have quit the chamber.




                                                                                                                                                                1 C.R. 475




                                                                                                                                                                                  120
        March 8, 2008
  Chamber board, CEO
     to enter talks
         Elvia Aguilar
            CR476
Exhibit M-1 to Aguilar Affidavit




                                   121
                                                        50 CENTS               SATURDAY, MARCH 8, ZOOS                  CITY EDITION




                                Chamber board, CEO to enter talks
                               Concerns about                 chamber's president a.nd
                                                              CE.OafterehambermemberS
                                                                                              Cuter did not retu rn cans
                                                                                              to his work and cell phone
                                                                                                                               future.•
                                                                                                                                 The board on ·Friday
                                                                                                                                                                  When contacted after
                                                                                                                                                               Friday's board meeting,
                               leadership lead                r&.is ed concerns this w eek
                                                              about his leadership.
                                                                                              Friday.
                                                                                                 •u wouldn't be approprf·
                                                                                                                               scheduled Its annual gen-
                                                                                                                               eral membership meetlns
                                                                                                                                                               several board members
                                                                                                                                                               deferred comment to Mar-
                               to discussion                    Chairman Freddie                     ate for me to say what
                                                              MartinezJr.wouldnot ~ w e will b e t&lki ng
                                                                                                                               in response to a request this
                                                                                                                               week by members, but Mar-
                                                                                                                                                               tinez.
                                                                                                                                                                  Martinez would not say
                               IY rLVIA AGUILAR               say what issues would ~l)n about because they                    tinez said the board may        whether the planned discus·
                               CaUe7'-1imu
                                                              ~~e~\s~~!~!:~c~g                       :~~=:~ !~:~e;;
                                                                                                                               meet $00ner if needed. The      sions with Carter were In re-
                               The Corpus Christi Cham-
                               ber of Commerce board of       Terry Carter and the
                                                                                      -              expect whatever is de-
                                                                                                                               full membership meeting is
                                                                                                                               scheduled for March 31 but
                                                                                                                                                               sponse to concerns raJ$ed by
                                                                                                                                                               chamber treasurer Damon
                               directors decided Friday to    27-member board or when         clded will lead to a decision    a location and time have not
                               enter dl..scusstoru with the   those meetings will occur.      from the board in the near       been set.                          Pf«Ue see CHAM8ER7A




                                               CAllU•fiMES    • Marth8.2008• Satunlay• 7 A

FROM THE COVIR
  CHAMBERfrom lA                petition drive.               a11y, according to chamber      bylaws, policies and pro·
                                    Scott said she was        bylaws, but chamber otn-        ceclure.s review committee
Bentley in a Feb. 26letter      pleased a date bad been       dals have said they don't       char~ with updating the
that stated Carter deferred     set for a full membership     know when the last audit        ch&mber's bylaws.
a portion of his salary and     meeting, somethi n g the      wa.sdone.                          Btntley will lead the
shifted other funds among       petition requested, and           Board members Leon          ftr,ance committee, which
chamber accounts In a           hoped the remaining re -      Loeb, a developer, and Lau-     aho Include$ board mem·
manner that turned what         quests would be addressed     rie Cook, a certified public    bers Gary Malone of Wells
should have been a dencJt       i n the annual meeting's      accountAnt and a former         Fargo Bank, Butch Esc-
into a surplus of operat-       agtDdL                        chairwoman, said Friday         obedo of Butch Escobedo
ing funds. Ca.rter stat ed          "1 would Uke to chal-     they hope to hear back          Insurance, Trent Hill of
In a Feb. 17letter to board     lenge the chamber leader-     from auditors by the end        Texas A&:M University·
me mbers that those ac-         ship to a ddress the level    of Ma.rch. Former cha ir ·      Corpus Christi and Robert
counting methods were           of detail we u ked for in     man Bud Harria, Del Mar          Blair of Bay Ltd.
a.cceptable under account·      our petition," Scott said.    College'a dean of Work-             Hll1 also was appoint ed
ing methods approved by         "'If not, we may ask for a    force &:. Economic Develop·     to the bylaws, policies and
the board.                      second f ull membership       ment, also is on the audit       procedures committee
    Bentley waa as ked to        meeting."                    committee.                      alone with board members
look into the orp.niutlon'a         At F r iday's meetlng,        "At that point we will       Jcn na Davidson of Ana-
 finances aspartofareview       the cha.mber board heard      make a r ecommendation          lylical Testing, the cham-
 of a proposed rain, bonus       from an audit committee      to the board and then ha.ve      ber's attorney Van Huse·
 and contract ext ension        formed Feb. 20 and also        them select a firm to do tbe    man and Pat Townsend
 for Cuter, whoae bonus Ls       appointed board members       audit for u a," Cook said.      of Del Mar College. John
 linked to the chamber's ft.    t o two other committees      ~vera! I, It wu a very pos-      Michael of Nabmlth En-
 nucial performance.             formed i n response to        itive meeting that I think      ctneertng will lead that
    Carter came t o Corpus       Bentley's concerns.           is putting us in the right     comml~tee.
 Christl In 20M from Pas-           The aud it committee       direction."
 cagoula, Miu ., where he        seta.Mareh 28deadUneto           The chamber 's board        SIIJ,[fvn-!Uo-IH4A Wo'Uon
 was president and CEO of        receive proposals from au-    on Friday also established     CClnlrihtted to llt.U fYPOrl.,
 the Jack!: on County Cham-      dltingftrmsforafullaud.ll     a financial committee In       C~tact Etfric. AguUor ot
 ber of Commerce. In 2006,       The chamber Is supposed       charge of r eporting t h e     886...!fJ78or
 the most recent year for        to undergo an audit a.nnu-     chamber's ftnances and a      a.pil4rriitcaller.com.
~~~ct~!~~~C:h~~~~::~:           , - -- - - - - --               - - - - - -- - - - - -- -- --'
tlon's tu forms required
of nonproftt JfOUps, Carter
made $137,000 plus $8,220
in benetl.ts and $6,000 in
expenses.
    Martinet said he called
Friday's bo ard meeting:
in response to questions
raised by Bentley and
other cb amber members,
who have been circulating
a petition seeklns detailed
financial and membership
information.
    Mora thao 60 chamber
 members had a news COD·
terence Monday a.nnounc·
 ing: the petition drive a.nd
 stating concerns about de-
 partures of several tons·
 time members. By Friday
 evening, more than 85
 signatures from some of
 Corp us Christi's larsest
 employers had be en col ·
 lected, said former cham-
 ber chairwoman and cu r-
 rent member Carol Scott,                                                                                                                                               1 C.R 476
 who helped organize the




                                                                                                                                                                                               122
        March 19, 2008
 Chamber treasurer granted
temporary restraining order
 protecting tape of meeting
         Elvia Aguilar
            CR477
Exhibit M-1 to Aguilar Affidavit




                                   123
Chamber treasurer granted ten:~ restraining order protecting tape c rting : Corpu... Page 1 of 1




         callet:com
         CORPU~   CHRJST( lEX.AS
                                                                                 Primer-friendly SlO{')'
                                                                              Read more at caller.com




         Chamber treasurer granted temporary
         restraining order protecting tape of meeting
         By Elvia Aguilar


         Originally published 11 :49. a.m., March 19, 2008
         Updated 03:00 p.m .• March 19, 2008


         CORPUS CHRISTl- Corpus Christi Chamber of Commerce treasurer Damon Bentley
         has been granted a temporary restraining order against the chamber and CEO Terry
         Carter to prevent a tape recording from being destroyed. The recording is of a meeting
         at which Bentley and two other chamber officers reported their concerns about the
         chamber's financial practices.

         In a petition filed in Judge Jose Longoria's 214th District Court, Bentley also requests
         Carter to be called in for a deposition in anticipation of a lawsuit against him and the
         chamber.

         The tape recording Bentley is seeking to preserve comes from a Feb. 15 meeting of
         the chamber's executive committee, where three of the committee's five members
         brought the financial conterns to the full committee's attention, and Carter and
         chamber legal counsel Van Huseman informed two of the three, Sylvia Whitmore and
         Judy Hawley, that they were no longer eligible to serve on the committee.

         Bentley's petition for the temporary restraining order says he has sought a copy of the
         tape but it has not been provided, and that Garter took the tape from the meeting.
         Bentley's petition includes an affidavit from Whitmore, who said she also has sought a
         copy of the tape.

         Bentley's concerns about the chamber's financial practices arose after the chamber
         board asked him to review the chamber's financial standing in anticipation of a raise ,
         bonus and contract extension for Carter.




                  © 2009 Scripps Newspaper Group- Online




                                                                                                      1 C.R. 477




                                                                                                                   124
        March 20, 2008
  Chamber unrest ends
         •
      up zn court
         Elvia Aguilar
            CR478
Exhibit M-1 to Aguilar Affidavit




                                   125
           •    _, --("         '   .. ~                 >:t\.   •
                                                                     • ....... '~;   ...."!f'l · : ~~ -~   "'"'         ,-.,.~ , _ - ~~- "'~ .,..
                                                                                                                  .......
                                                                                                                                                             •
        ~:,·:,.:-.~-~atff~imt
                                                                       50 CENTS              THURSDAY, MARCH 20, 2008                               CITY EDITION




                                                                                                                                                                    Chamber
                                                                                                                                                                    unrest
                                                                                                                                                                    ends up
                                                                                                                                                                    in court
                                                                                                                                                                    Treasurer, CEO
                                                                                                                                                                    each make filings
    6 A •Ttwnday• Man:h20,2008• CAllER·TI MU                 *                                                                                                      IY RVJA AIWJLAI

 FROM THE COVER                                                                                                                                                    """-"-
                                                                                                                                                                   Dboa!1sfaction  within the CorJ>us
                                                                                                                                                                    Christ!CiwnberofCommen:olw
                                                                                                                                                                    moved to the court S)'StmL
    CHAMBER/,..... lA                condition or mtus.lo addition,                                                                                                     Chamber treasurer Damon
                                     since the bonus was not linked                                                                                                  Bentley has obtained a tempo-
the aecwed. "pla.intJfrs em-         to the 1'\nanclal performance                                                                                                   rary restrainiog order against the
ployment wtth the chamber is         ofthe chamber, use ofBuilding                                                                                                  chamber and its chief executive.
in jeopardy and any ch&.nee of       Fnnd dollars t o supplement the                                                                                                Terry Carter. Carter bas filed a
continued employment with the chamber operatina: expenses                                                                                                           separate lawsuit seddn.g damag·
chamber through Dec. 31, 2010, would not have forfeited the                                                                                                         es against Bentley, the chamber,
is essentially oonerlstent."         foundation's 50l(c)3 status as                                                                                                 the C'4.Un--Timu and others.
    Chamber attorney Van stated by defebda nt Damon                                                                                                                     The restralnlng order, ob~
Hustmt.n destribtd Bentley':J Bentley and reported by defen·                                                                                                        tained. 1\.tesday, prohibits Carter
petition a.s frivolous. He said da.nt C<Uln-'Pi:me.s:                                                                                                               a.nd the chamber from destroyina:
Bentley knows that the tape .is          Bentley could not be                                                                                                       a ta.pe of a Feb. 15 ch1rnberexecu-
under lock and key in my care.• reached late Wednesday for                                                                                                          tive committee meeting at which
Chamber chairman Freddie reaction to Carter's lawsuit.                                                                                                              Bentley and two other officers
Martinez Jr. "took the tape from         The lawsuit says Bentley,                                                                                                  raised concerns about how the
Mr. Carter and s:ave it to me. executive committee mem-                                                                                                             chamber has conducted lts6nan·
Then aren't any dangen to the bers Judy Hawley aad Sylv!.a                                                                                                          dal matters under Carter's direc-
tape.• Huseman added that he Whitmore, and the: newspaper                                                                                                           tion. Bentley says he has soua:ht
would seek a hearing to address •made it appear that the plain·                                                                                                     unsuccessfullyto obtain a copy of
 Bentley's action.                    tiff was Illegally 'cooki ng the                                                                                              that tapulnce the meeting.
     Asked late Wednesday books' to justify a raise, bonus                                                                                                             Carter, In a lawsuit rtled
about Carter's lawsuit, Huse- and employment ertension                                                                                                             Wednesdayafternoonbyattorney
man said, •t heard at 5:15 that contract.• The suit, whieh In-                                                                                                      Rene Rodriguez, accuses Bentley,
there might be a lawsuit, but I cludes Hawley a.nd Whitmore                                                                                                        the chamber, the newspaper aod
don't know what It u.ys."             among defendants, says the                                                                                                   others of•talse and defamatory"
     Asked about Carter's cur- chamber's accountin1 method                                                                                                         statements •wtthout regard to
 rent employment sta.tus, •Ln fact had been a proper, le~                                                                                                          the truth." carter claims he and
 Huseman said, •nothtnz: has a:itima.te a.nd legal method of                                                                                                       chamber members were in dls-
 chan&ed. He iJ the chambers a<:coWlting, bookkeeping we<!                                                                                                         eu&sions  -w    erteod h1l employ-
 president and CEO."                  and specifically approved by                                                                                                 ment cootract to Dec. 31. 2mo, at
     Both petitions were faled in Ute chamber for several )'Urs:                                                                                                   an annuaJ salary,
 .fud&eJoooLoo..,na's214thllt.s-          Ca.rter's lawsuit also Wes
 UictCourt.AftcrRodrigu<zlllcd tasue with CoUe,....Timu ac~
 Cartor's !&wsuit, &tamped by the c:ounts, based on descrlptlons
                                                                                                                                                                   ~~~~.~ ~ ~
 court at -4.:28 p.m. Wednesday, bywltnesses10theFeb.15mcet·
                                                                                                                                                                   and that because      ~
 he provided a copy to theecu.r.. lng.thatheoeized thetapeofthe                                                                                                    of the actions of     -
 l'imoo "the r<queatof&r<part· meedna: and left the buUdinc,
 er. ec.u,..TUnu attorney Jorp! -deceitful ond dbhon-
 Ran¢ ulcl the newspaper lw cstbch&vlorbythepl&lntllt"""'
 not been served omdally with oordinatothesuit, ~twasinfact
 the!&wsu.IL                          Freddie Martinez Jr., c:bamber
     BenUey'a petition aho uks boanl c:halnnan, who oeludthe
 that Carter be called to answer tape recording and left.the meet~
 questions in a deposition in an- lng10 give k 10 the plalntil!."
 t idpat! on of a. lawsuit against        Chamber memben, includ-
 Carter and the chamber. A ing several former chairmen and
 hearlna: is scheduled 1:30 p.m. Jed byfonnttclWrwomao Carol
 March26.                             Scott, have circulated a pet:itlon
     Carter'J lawsuit disputu reQUeStina:atundisdosureofthe
 Bentley's assertions that Cart~ chamber's tmandal situation, a
 er deferred a portion of hil complet< llst of its m<mbclslllp,
 aalary and transferred funds directors and officers, a meet.-
 amona: accounts in a manner lng of the clwnbcr's
 that showed a surplus when, membership and •change In its
                                                             full""""
  according to Bentley, the accounting method
  chamber ahould h ave shown               One of the members' con-
  a def!,clL Carter also disputes cerns, Scott and others ha.ve
  Bentley's statements that said, Is that the chamber i.s
  Carter's bonus wa.s linked to losing membership but they
  the chamber's financial per- couldn't verify it because the
  fonn&nce, and that Carter's full member list wu withheld.
  shittlngoffundsamongcham- In response to that concern,
  ber aceounts jeopardized the the chamber has disclo$ed a list
  chamber foundation's non- showina: 871 voting members
  profit status. Carter's laW5uit and 167 non-voting honorary
  aJso of'Cers justiflcatlon for the memben. That tou.is 1,039.
  chamber accounting method                In December, Carter told
  questioned by Bentley.               the Caller-Timu the chamber
     Accordina: t o Carter's law- had 1,400 members.
                                                                                                                                                                                  1 C.R. 478
  suit, his bonus "would not have
 ~~~~ !~J_:t:.~~~~~~r ~~~~~~r




                                                                                                                                                                                                          126
        March 26, 2008
    Chamber puts CEO
      on paid leave
         Elvia Aguilar
            CR481
Exhibit M-1 to Aguilar Affidavit




                                   127
Chamber puts CEO on paid lea- Corpus Christi Caller Times, Caller.<-                                               Page 1 ofl




            callet:com
            COR?U.S OiRISTI. lEXAS
                                                                                       Prlnwr.frion,j lj" s loty
                                                                                Read more at callcr.oom




           Chamber puts CEO on paid leave
           By Elvia Aguilar


           Originally published 05:25p.m., March 26, 2008
           Updated 05:"25 p.m., March 26, 2008


           CORPUS CHRISTl- Terry Carter, president and CEO of the Corpus Christi Chamber
           of Commerce, has been put on administrative leave with pay effective immediately and
           the chamber is "working on a process of disengagement," the chamber's attorney said
           Wednesday.

           The chamber board members decided Wednesday in a special meeting to put Carter
           on administrative leave with pay and make Ken Trevino, the chamber's executive vice
           president, the acting president and CEO, said chamber attorney Van Huseman.

           "The board did this to get all this discord and dissension behind us," Huseman said."
           We are trying to put an end to all of this."

           Carter's attorney Rene Rodriguez said he had informed his client of the decision late
           Wednesday afternoon and his client did not have any comment on the matter.
           Rodriguez said he did not know the reason tor Carter's suspension and had no further
           details.

           Carter has been with the chamber since 2004.

           The chamber board last month agreed to a full audit of the chamber's finances in
           response to concerns raised by chamber treasurer Damon Bentley, who looked into
           the chamber's financial matters in conjunction with a proposed raise and contract
           extension for Carter.

           Carter filed a lawsuit March 19 against Bentley, the chamber, executive committee
           members Judy Hawley and Sylvia Whitmore, the Caller-Times and others, alleging
           actions that he said jeopardized his continued employment w ith the chamber.

           ''We're still working on tt)e process of disengagement," Huseman said Wednesday
           afternoon. ''We want something that's fair with everyone involved in it."




                    e 2009 Scripps Newspaper Group- Online


                                                                                                                   1 C.R. 481




                                                                                                                                128
        March 27, 2008
    Chamber puts CEO
      on paid leave
         Elvia Aguilar
            CR482
Exhibit M-1 to Aguilar Affidavit




                                   129
                         •                                                                           •
                         50 CENTS               THURSDAY, MARCH 27, 2008                CITY EDITION




Chamber CEO on paid leave
                                                    INSIDE:Judgtcon.solidAtnfil~gsonCorpusChristiChambl!foftammme..6A
                 Moves aim to end                                                                                                  Chamber chairman Freddie
                                                                                                                                Martinez Jr. said that because
                 dissension, group's                torney said Wednesday.
                                                       The chamber board decided
                                                                                        hind us," Huseman said. -we are
                                                                                        trying to put an end to all of this."
                                                                                                                                of pendinr lltta:atlon he didn't
                                                                                                                                wanttocommt.nt anyturtheron
                 attorney explains                  Wednesday in a special               Carter's attorney, Rene                Carter's employmentstatus with
                                                    meeting to pat Carter on ~ Jtodriguel:, said h e in ·                       the chamber.
                 BY RVIA AGUlLAI                    admlninrati..e leave with =rtedon formed b ts elient of t he                   •1 don't know what can and
                Calk7-T'i:mu
                Terry Carter, president and CEO     ~a:e ~~~~~::: ~:~c~~~~~     -              ~~~!~i~~~~te4;:'~d~:~~:~
                                                                                                                                can'tbesaidrightoowsoiwould
                                                                                                                                rather not elaborate," Martinez

      ""'
bun with lhe
                oftheCorpusChrlsttChambcrof
                Commerce, i.s on admitlistrative
cAGmbeT f i nct leave with pay and th~ chamber
                                                    lfio the aeting president
                                                    and CEO, chamber attorney Van
                                                    Husema.n saiC..
                                                                                              w ould decline to com-
                                                                                        ment. Rodriguez said he d id not
                                                                                        know the rea..son for the board's
                                                                                                                                said.
                                                                                                                                   Carter has been with the
                                                                                                                                chamber .sinc:e 20<K.
~-.             Is •working on a process of di.s-
                engar;ement; the chamber's at -
                                                       "The board did this to get all
                                                    this discord t.nd dissension be·
                                                                                        decision and he had no further
                                                                                        details.




                                                                                                                         CARTERfrom lA
                                                                                                     Carter filed a lawsuit        The chamber has sched-
                                                                                                  March 19 &&ainst chamber uled an anooal membership
                                                                                                  treasu rer Damon Bentley, meeting at 4 p.m. Monday at
                                                                                                  the ch.a.mbet, executive com- the Del Mar CoUea:e Center
                                                                                                  mittee members Judy Haw- for l!.eonomk Development
                                                                                                  ley and Sylvia. Whitmore, at Staples Street and Kos-
                                                                                                  the Co.JUr..Timu and ot.bers, tomRoad.
                                                                                                  seeking daJna&es for ution.s     At the meetln( chamber
                                                                                                  he claims jeapardiu:d his omclals will discuss lu:ues
                                                                                                  emp)oyment with the cliam- raised tn a petition sisned
                                                                                                  ber.                          by about 95 chamber mem·
                                                                                                     Asked about Carter's ben, who soucht the meet ·
                                                                                                  employment status, Huse- lngto discuss the chamber's
                                                                                                  man responded: "We're still Ao.anees and other matte11.
                                                                                                  work ing on t he process of
                                                                                                  disena:arement. We want Conklet Elvie~ A guiJ11r ell
                                                                                                  some tbln1 that's fair w ith 886-3678 or aguuaree
                                                                                                  everyone Involved i n it.•
                                                                                                                                     """"""""




                                                                                                                                      1 C.R. 482




                                                                                                                                                                   130
        March 27, 2008
 Judge unifies filings on
    chamber events
      Mary Ann Cavazos
             CR524
Exhibit N-1 to Cavazos Affidavit




                                   131
6A • Tbursday·Man:h 27. 2008· C.t.llfR •1'1Mf S

_FR_O_M_TH_E_CO_VE_R_______tt•~----------------~~.--------------
                                                                  Judge unifies filings
                                                                  on chamber events
                                                                  Court's action                  l.ng and. taken from the Cor·
                                                                                                  pusCiu1atiC'b&mberofCom·
                                                                  also preserves                  mercebnmedLately after the
                                                                                                  meetin,ended."'
                                                                  tape of meeting                    Carter disputes this In
                                                                                                  his lawso.lt ftled March 19
                                                                  aY MARY AJCN CAVAZOS            asainst Bentley, the cham-
                                                                  Ca.!Jero.7liMI                  ber, the Calt.r-Timn and
                                                                  A judte Wednesday &ll'eed othen. Carter saya chamber
                                                                  to consolidate lepl action& chairman Freddie Martinez
                                                                  filed by CorpUI Christl Jr. took the tape "and left
                                                                  Chamber of Com- ·                      the meeting to give it
                                                                  merce treasurer ~ to" Carter, who wa.s
                                                                  Damon Bentley and Arstrtedon In anolherofttcewith
                                                                  chief executive Terry ~ two other people, a.c-
                                                                  Cart er, and to pre- - - cord.ingto t he lawsuit,
                                                                  serve a tape recordin&"                which seeks damages
                                                                  sought by Bentley.              tor action~ Cuter says jeop-
                                                                      Bentley sought the co n· ardtze d his employment
                                                                  solldatlon, asserting that wlth the chamber.
                                                                  his a.nd carter's legal actions     Bentley's March 18 peti·
                                                                  a ro.se from the same set of tionseekstoquestionCartu
                                                                  events. Judge Jose Longoria in adeposft!on Bentley could
                                                                  ot the 21~th District Court use tnalawsuitagafnstCart-
                                                                  a:igned. the order eoruolida.t- er, if Bentley chooses to ft.le
                                                                  ingtbecases.                    one. "'A s a result of the til·
                                                                      In moUons ft.led on Bent· iDJS of the claims of Terry
                                                                  ley's behalf, attorney Robert Carter, Damon Bentley will
                                                                  Anderson says Bentley wm be allowed to take the depo-
                                                                  be able to take a depo$itlon sition of Terry Carter and,
                                                                  ftom carter bec:a.Me Carter therefore, there is no neces-
                                                                  ha.s sued him and others in sttyfor a.n order authort:rtng
                                                                  a separate utton. and that a the deposition without suit,•
                                                                  t.a.pc reconilna: of a chamber a.ccordlms:to themoUonAled
                                                                  meeting sought by Bentley Thesday.
                                                                  will be protectm.. Bentley on      Anderson a1Jo sent a let-
                                                                  Mareh 18 obtained a. tempo· ter'I\lesd.ay to the chamber's
                                                                  rary restraining order pro· attorney, Van Huseman, to
                                                                  tecttnrthetape.                 conftrm that Huseman bad
                                                                      The tape is a reeordlns the tape and that •tt would
                                                                  of a Feb. 15 chamber exeeu- not be altered or erased.·
                                                                  tive committee meetina: at Huaeman acknowledged
                                                                  whk:h Bentley rave a report posseu{on of the tape and
                                                                  •concerningthe financial ac- &&reed to safquard it.
                                                                  tivtties of Terry Carter a.nd      Thejudge'sorderconsolt-
                                                                  the Corpus Christi Chamber datingthetwoac:tionsstates
                                                                  of Commerce; aeeording to that •each of the pa.rttu In
                                                                  Bentley'~ Marth 18 petition.    this eau.se: of action shall be
                                                                      -rhere wu a tape of an of pTovided wJth a copy af the
                                                                  the activities while Damon tape.•
                                                                   Bentley wu In the room."' - - - - - - - -
                                                                  accordtn, to that petition. ComCicl Mary Ann Cavo..us
                                                                  "lhat tape wu removed by al 886-36!3
                                                                  Terry Carter from the meet- or c:G11CUDSmCitcall.lr.com




                                                      EXHIBIT

                                                  l ,, N-- l '~
                                                                                                            1 C.R. 524




                                                                                                                                    132
         April 1, 2008
   Chamber had deficit,
   hoard tells members
         Elvia Aguilar
        Fanny Chirinos
          CR485-487
Exhibit M-1 to Aguilar Affidavit




                                   133
Chamber had deficit, board tel'.embers: Corpus Christi Caller Timef .ller.com                              Page 1 of3




          callet:com
          COR~\JS   CHRISTl. TEXA~
                                                                                  ?rii:tcr-fricn<Jiy
                                                                              Read more at callcr.com
                                                                                                       stcr~'




         Chamber had deficit, board tells members
         $95,377 deficit cited at meeting contrasts with earlier surplus
         report

         By Elvia Aguilar. Fanny S. Chirinos


         Originally published 03:25 a.m .• April 1, 2008
         Updated 03:25 a.m., April 1, 2008


         The Corpus Christi Chamber of Commerce finished last year with a $95,377 deficit, not
         a $40,425 surplus, the board told members Monday in a meeting that had been sought
         by petition.

         An end-of-the-year report given to the board earlier this year by chamber staff showed
         a profit. Further review of the books by the chamber executive committee showed that
         a deferral of part of the chief executive officer's salary and shifts of more than $142,000
         in membership dues resulted in the surplus, according to treasurer Damon Bentley.
         Bentley in February reported that the deficit was $61 ,782 but adjustments by chamber
         staff raised the number.

         Despite the deficit, Bentley said, the chamber is doing fine.

         "We are financially sound, and we're ready to move on," he said.

         About 120 people attended the meeting, held at Del Mar College's Center for
         Economic Development, including 96 voting chamber members, said C. Michelle
         Peters, a chamber spokeswoman. Fifteen of those 96 also represented 15 members
         by proxy.

         The membership meeting was a result of a petition drive started in late February to
         address concerns of members who said they had been denied financial information
         and membership rosters, and who were concerned about the chamber's accounting
         methods.

         The chamber's recently appointed audit committee reported that on March 26, the
         board voted to return to the accrual method of accounting instead of the modified
         method of accounting instituted in 2004. The modified accrual method is one under
         which revenues are recognized in the period they become available and measurable
         and expenditures are recognized in the period the associated liabilities a re incurred.
         The accrual method is one under which revenue is recognized or recorded when
         earned and expenses are recognized when incurred.

                                                                                                                1 C.R. 485




                                                                                                                             134
Chamber had deficit, board tel4Jembers : Corpus Christi Caller Time~.aller.com                    Page 2   of3


         The last annual audit the chamber had conducted was in 2003, according to audit
         committee member Laurie Cook, a certified public accountant and former chamber
         chairwoman.

         The audit committee set a March 28 deadline to receive proposals from auditing firms
         for a full audit. Other audit committee members are Leon Loeb, a developer, and
         former chairman Bud Harris, Del Mar College's dean of Workforce & Economic
         Development.

         Cook said the committee has heard from three auditors. Two said they were not
         interested and one said it could perform the audit at a later time. The request for
         proposals had been sent to 10 local firms, Cook said, but because of the tax season
         she suggested sending additional requests after April 15, which could push back the
         process.

         ·we may have to go to another market,' she said, •but we were trying to be
         conservative with our money because we estimate an audit will cost anywhere from
         $10,000 to $15,000.•

         The chamber members voted to approve the proposed amendments to the bylaws
         asked for in the petition.

         The approved amendments include:

         n The finances of the chamber shall be reported utilizing the accrual method of
         accounting. The accounts of the chamber shall be audited annually as of the close of
         business on Dec. 31 by a certified public accountant. The board shall appoint an audit
         committee of at least five chamber members, three current board members, two past
         chairs and two other members selected by a majority vote of the chamber.

         n A printed annual report will be published and distributed to all members of the
         chamber within 120 days of the close of the fiscal year. The annual report will include a
         balance sheet, profit and loss statement and a reporting of the number of members in
         good standing.

         San Jacinto Title Company recently rejoined the chamber, said company president
         Mark Scott, a former city councilman. He asked the board to reinstate Sylvia
         Whitmoreto the executive committee. Scott's wife, Carol, is a former chamber
         chairwoman who helped organize the petition.

         On Feb. 15, Whitmore and Judy Hawley, members of the executive committee, were
         told they no longer were eligible to serve on the executive committee.

         Chamber attorney Van Huseman said Monday that the board would consider
         reappointing Whitmore, but the matter could not be brought to a vote Monday because
         it was not on the agenda.


                                                                                                - -1 C.R. 486




                                                                                                                 135
Chamber had deficit, board tell~embers : Corpus Christi Caller Timer j l ler.com                Page 3 of3


         Carol Scott said Monday's meeting was a positive step by the board, but she hoped
         another membership meeting would be called soon for updates without the
         membership having to sign a petition to request it.

         Acting chamber president and CEO Ken Trevino and board member Harris welcomed
         the idea and said a dialogue must continue.

         Contact Elvia Aguilar at 886-3678 or aguilare @caller.com. Contact Fanny S. Chirinos
         at 886-3759 or chirinosf@caller.com.




                C 2009 Scripps Newspaper Grqup- Online




                                                                                                1 C.R. 487




                                                                                                             136
         April 29, 2008
Chamber, in need of audit,
renews accountant search
         Elvia Aguilar
            CR488
Exhibit M-1 to Aguilar Affidavit




                                   137
Chamber, in need ofaudit, - r
renews accountant search F""
......,_
.... ll_VJA AOfQI.M




"""""""'"-
Wlaltolno:mtt: tuflli.flcdw!.1lr.e fU'ed.
hel~t.fCIIJII!Qii:lrUI~
-~·M~
    The: ~' prn1olls as~
w )1ft ao ucl1lor .. ~ r&fltd ud
...                     ..._..I;W:
c:burt!eJallldtls......,. .I P ' _
      ~_.._
-     M M~. thin ..olb., 1'-ltou'll
---~-~.,..
.rut"~ . . . -~.
- . . . , . ha nu...ra Dtata
                                     ....
..._..,oe-.....
 Oa,..,...trla..~
                   --..n..
                      ........
duulkl     t..n.
           ~      CIO         , ..
&eii~Ald the.,.~
""'""~~ ,~                 .. ..            ...
fr:rc-a&ll-.ht. t~ aJd • Md:t:n. ~lhM.t~- ......- .
b-tllb pii:IOI'$Sbe DCtbecflat.  .,.,..~
                                                      1 C.R . 488
                            •
                                                                138
          May 2, 2008
 Chamber offers contract
  settlement to Carter,
    his attorney says
         Elvia Aguilar
          Dan Kelley
            CR489
Exhibit M-1 to Aguilar Affidavit




                                   139
Chamber offers contract settle-          to Carter, his attorney says : Corpus ~sti Caller Ti...         Page 1 of 1




           call.erecom
           CORP'U'S CHRISTl, TEXAS.
                                                                                    Printer, friendly story
                                                                                Read ITI1)(C at caner.com




          Chamber offers contract settlement to Carter,
          his attorney says
          By Elvia Aguilar, Dan Kelley


          Originally published 05:09p.m.. May 2, 2008
          Updated 05:09p.m .. May 2. 2008


          CORPUS CHRISTl -The Corpus Christi Chamber of Commerce has made an offer to
          president and CEO Terry Carter to settle a contract dispute, accdrding to his attorney.

          Carter has been on paid leave since late March, and he had bee in talks with the
          chamber over what insiders termed the process of disengageme t.

          Carter's attorney, Rene Rodriguez, said the chamber has offered a sum of money and
          he is waiting to speak with his client, who is traveling in Tenness e. Rodriguez would
          not disclose the offer.

          Chamber attorney Van Huseman would neither confirm nor deny existence of a
          settlement offer.

          "A deal is not done,' Huseman said. "This is a work in progress
          over till it's over."
                                                                             J  this point and it ain't



          Ken Trevino, acting chamber president and CEO, said Carter's c ntract extended
          through Dec. 31 and Carter was seeking severance that amount d to what he would
          have been paid under the contract, or some middle ground.



          its executive committee, the Caller-Times and others, seeking da ages for actions he
          claims jeopardized his employment with the chamber. The Caller Times and the other
          defendants deny Carter's claims.




                     © 2009 Scripps Newspaper Group - Online




                                                                                                     1 C.R. 489




                                                                                                                       140
          May 3, 2008
  Chamber makes offer,
  Carter's attorney says
         Elvia Aguilar
          Dan Kelley
            CR490
Exhibit M-1 to Aguilar Affidavit




                                   141
                                                 •
              BUSINESS&OPINION
              ~              I   Saturday, May 3, 2008



Chamber makes offer, Carter's attorney says
              Chamber won't                   Commerce has made an offerto
                                              president and CEO Terry carter
                                                                                  is waiting: to speak with hJs eli-
                                                                                  ent, whoLstravelinglnTennes·
                                                                                                                          Ken Trevino, acting cham·
                                                                                                                       b er president and CEO, said
                                                                                                                                                         executive committee, the C4ll·
                                                                                                                                                         tr-Ti'mt .s a nd others, seeking
              confirm, deny                   to settle a eontratt dispute, ac-
                                              cording to his attorney.
                                                                                  see. Rodriguez would not
                                                                                  disclose the offer.
                                                                                                                             Carter's contract extend-
                                                                                                               ~ ed through Dec. 31 and
                                                                                                                                                         damages fot a.ctions he claims
                                                                                                                                                         jeopardized his employ ment
              proposed deal                      Carter has been on paid leaW:
                                              since late March, and he had
                                                                                     Chamber attorney Van Flrst tad on Carter wu seeking sev-
                                                                                  Huseman would neither ~ erancethat amountedto
                                                                                                                                                         w lth the chamber. The CllUtr·
                                                                                                                                                         Tinu'.s and the other defendants
              t o end dispute                 been In talks with the chamber
                                              over what Insiders termed '"the
                                                                                  conftrmoordeny theexis-- - - whathewouldhave been
                                                                                  tenceofasettlementoffer.              paid under the contract,
                                                                                                                                                         deny Carter's clainu.
              IY lLVlA AGUJLAA                process of disengagement."             "A deal is not done,'" Huse- or some middle ground.                 Co1t~t Don KdJ4y o.t telleydr.t
cart£r U      AND DAN K E.LUY                    Carter's attorney, Rene Ro-      man said. "This is a work in       On March 19, Carter ftled a         calUr.com. tn"886~115. Conl4ct
trawling in   Co1Ur-1'1tnu                    drilUc:z. saJd the chamber has      progress at t his point and it lawsuitagainstthe c.hamber,its          EhriG Apilar Ol aguilGrt@
TQ nU.SU..    The Corpus Christi Chamber of   of!ered a sum ot money and he       ain't over till it's over.'"    treasurer, two members of Its          caller.rom or 886-3B78.




                                                                                                                                                                     l C.R. 490




                                                                                                                                                                                            142
          May 23,2008
  Chamber, Carter attorney
confirm severance agreement
         Fanny Cbirinos
          CR491-492
 Exhibit M-1 to Aguilar Affidavit




                                    143
Chamber, Carter's attorney con~ severance agreement : Corpus Chrif .aller Times, C... Page 1 of2




          caller.coni
          COitPUS CHIIISTI, "Tl:XA~
                                                                                Printer-friendly story
                                                                             Read more at caller.com




         Chamber, Carter's attorney confirm severance
         agreement
         By Fanny S. Chirinos


         Originally published 07:1 0 p.m .• May 23, 2008
         Updated 07:10p.m .• May 23.2008


         CORPUS CHRISTl -The Corpus Christi Chamber of Commerce and CEO Terry
         Carter's attorney gave conflicting reports Friday about a severance agreement, but
         confirmed that it included paying his full 2008 salary and benefits and accepting his
         resignation. The proposal does not Include an agreement by Carter to end his lawsuit
         against the chamber and others, including the Caller-Times.

         Chamber attorney Van Huseman and Carter's attorney, Rene Rodriguez, also
         confirmed that the resignation would be effective April 30. Carter has been on paid
         leave since March 26 after disagreements over chamber financial practices.

         Huseman and Rodriguez differed Friday on whether the agreement to settle Carter's
         2008 contract was concluded. Huseman said it was and Rodriguez said some details
         remained to be resolved. Those details involved the final compensation amount,
         federal payroll taxes and Social Security.

         Huseman said the chamber has issued a check and it has been cashed. Rodriguez
         said the check is deposited in an escrow account. Neither would identify the amount,
         but interim CEO Ken Trevino said It was in the $132,000 range. A copy of the contract,
         provided by Huseman, calls for a $136,500 salary and various benefits. Trevino said
         the $132,000 represented salary and benefits not already paid this year.

         Attempts to reach Carter were unsuccessful Friday.

         Huseman said Carter's contract was so favorable to him that the chamber was not in a
         position to obtain an agreement not to sue in exchange for the severance.

         According to a copy of the employment contract Carter signed in 2004 when he was
         hired, he could be terminated without cause only after a 90-day written notice and a
         vote of at least 75 percent of the voting members of the board of directors. In such an
         event, Carter would be compensated for 100 percent of the remaining salary and
         benefits.

         If there was cause for termination, Carter would be released from his contract only if a


                                                                                                1 C.R. 49 1




                                                                                                              144
Chamber, Carter's attorney   co11P4J severance agreement: Corpus Christ-aiJer Times, C...             Page 2 of2


          90-day written notice was given along with vote of at least 75 percent of the board and
          only if Carter flagrantly violated policy adopted by the chamber. In such a case, Carter
          still would receive full compensation for salary and benefits.

          Huseman said the chamber had no choice but to pay the remainder of Carter's
          contract.

          ' He had an employee contract that was entirely one-sided in his favor,' Huseman said.
          'It did not help our bargaining position any.'

          Huseman declined to name who drew up the contract on behalf of the chamber. Steve
          Woerner, the chamber's board chairman at the time Carter was hired, said he didn't
          remember the details of the contract or who wrote the contract.

          John Bell, a former, longtime chamber attorney, said he was the chamber's attorney in
          2004 but wasn't involved in the contract.

          ' I asked for a copy of that contract several times and never got one,' said Bell, who is
          representing two defendants in Carter's lawsuit, chamber executive committee
          members Judy Hawley and Sylvia Whitmore.

          Carter filed a lawsuit March 19 against the chamber, its treasurer Damon Bentley,
          Hawley, Whitmore, the Caller-Times and others, seeking damages for actions he
          claims jeopardized his employment with the chamber. All defendants deny Carter's
          allegations.

          Huseman said the chamber tried to persuade Carter to drop the lawsuit as part of the
          contract settlement, but he wouldn't agree to it.

          'Had the chamber not settled the remainder of the contract, it would have had to wait
          until the laWsuit ran its course,' the attorney added.

          ' The chamber got rid of what it could and what he was willing to settle,' Huseman said.


          - - - - · - ·-     ---------



                 C 2009 Scripps Newspaper Group- Online




                                                                                                 1 C.R. 492

http://www.caller.com/news/2008/may/23/chamber-carters-attorney-confirm-severance-ag... 9/ 14/2009




                                                                                                                   145
         May 24,2008
    Carter's salary to be
        paid in full
       Fanny S. Chirinos
             CR538
Exhibit 0-1 to Chirinos Affidavit




                                    146
                                                        •                                                                             •
                                                       SO CENTS                   SATURDAY, IIAY 24, 2008             CITY ED!TlON




                         Carter's salary to be paid in full
                         Ch amber will                            that it included paying his full
                                                                  2008 salary a nd benefits and
                                                                                                     on pald Jeayesince March
                                                                                                     a6 after dlsacreements
                                                                                                                                  ~
                                                                                                                                  f;~don
                                                                                                                                               payroll taxes and Social
                                                                                                                                               Security.
                         accept resignation                       accepting his relignation. The
                                                                  proposal docs not inclu de an      ~;:~ti~~:.mber financial     -            ch!!::~=~~~s s1~!~e~h!
                         effectiveApril 30                        agreement by Carter to end his        Huseman and Ro-
                                                                  lawsuit against the chamber driguez differed Frida.y on
                                                                                                                                               check and tt has been
                                                                                                                                         cubed. Rodrigu e% said the
                         I Y FANNY S. CIIIIINOS                   and others, Including the Calt-    whether the agreement to Jet·       check ts deposited in an escrow
                         Ozl/.n>.7'ima
                                                                  n--Timts.                          tie Carter's 2008 contract was      account. Neither would identify
                         The Corpus Christi Chamber of                Chamber attorney Van Huse-     concluded. Hu.seman said it         the amount, but interim CEO
                         Commerce and CRO Terry Cart-             man and Carter's attorney, Rene    was and Rodriguez said some         Ken Treviri.o said It was in the    c.ter is
                         er's attorney gave confUcting            Rodrig uez, also confirmed that    details rema.ined to be resolved.   $132,000 range. A copy of the      former CEO q{
                         reports Friday abou.t a sever-           t he resignation would be eff~­    Those deuils Involved the 1\nal                                        tMChmnbft"
                         ance agreement, but confirmed            iive April 30. Carter has been     compensation amount, federal            Pfeo.se Uti CKAMIWt UA         q{Commnu.




                                                                                                                                               CAlLER· TIMES •May24, 2008•5atvd.y•lJA


 FROM THE COVER
                  CHAMBERfrom lA
contract, provided by Huse·      name who drew up the
man, calls for a $136,500        contract on behalf of the
salary and various benefi.ts.    chamber. Steve Woerner,
Treviti.o said the $132,000      the chamber's board chair-
repre.sented. salary and ben--   man at the time Carter was
efits not already paid this      hired, sa.ld he didn't re-
year.                            member the deu.tb of the
    Attempta to reach Cuter      contract or who wrote the
were unsucct!sful Friday.        contract.
    Huseman said Carter's            John Bell, a former long-
contract was so favorable to     time chamber attorney,
him that the chamber was         said he was the chamber's
not In a position to obtain      a,ttorney in 2004 but wasn't
a n agreement not to sue         involved in the contract.
In exchange for the s ever·          "I asked for a copy of
ance.                            that contract several times
    According to a copy ofthe    and never cot one," said
employment contract Carter       Bell, who is representtnc
 signed in 2001. when he was      two deferidant& In Carter's
 hired. he could be terminat-     lawsuit, chamber executive
 ed without cause only after      committee members Judy
 a 90-day written notice and      Hawley and Sylvia Whit-
 a vote of at least 75 percent    more.
 otthevotin&membertofthe             Carter filed a l awsuit
 board of directors. In such     Much 19&&1!nst the cham-
 an event, Carter would be        ber, its treasurer Damon
 compensated for 100 per·         Bentley, Hawley, Whitmore,
 cent ofthe remalnlng salary      the Coll~r--Ttm•s and pth-
 andbeneftts.                     ers,seeking damages for ac-
     If there was cause for       tions be claims jeopardized
 termination, Caner would         his employment with the
 be releued from his con·         chamber. AU defendants
 trtct only if a 90·day wrlt·     deny Carter's alleptions.
 ten noUee wu liven along             Huseman said the cham-
 with vote of at least 75         bertrled to persuade Ca.rter
 per cent of the board a.nd       to drop the lawsuit as part
 only if Carter •n agra.ntly      of the cont ract settlement,
 violated" policy a dopted        but he wouldn't agree to lt.
 by the chamber. In such a            Had t h e ch amber not
 ease, Carter rtill would re-     settled the remainder of the
 ceive full C<Jmpensation for      contract, It would have had
 salary and beneftts.             to walt unttl the lawsuit
     Huseman said the eham-        ran its course, the attorney
 ber had no choice but to pay      added.
 the remainder of Carter's            "The chamber got rid
  contract.                        of what it could and what
     •nehada.n employee eon·       he was wlllinc to settle:
  tract that wu entirely one·      Huseman said.
  sided in his favor," Huseman
  said. "ltdidnothelpourb&r·      Con.to.c' Fonn11 S. Chirln.o&
  gaining position any."          o1. 886-3759 tw chirinotl't
     Huseman declined to          coller.com.




                                                                                                                                                                    1 C.R. 538




                                                                                                                                                                                            147
         May 28,2008
   Release of chamber
  audio recording sought
        Fanny Cbirinos
             CR541
Exhibit 0-1 to Chirinos Affidavit




                                    148
LOCAL
        .--··            •
                Release ofchamber
                audio recording sought
                .,..,.,.._
                IY fAIINY L CHWMOI                the pendi.Jle bWiult.
                                                      At the tape-recorded
                The Co:Ucr-f'im• has ulc.ed       mutln &Feb. 15, ehamber
                a judce to compel uleue           treasurer Damon Bentley
                of an audio recordlns of a        aired COI\cerns about the
                Corpw: Christi Chamber of         chamber's tlnauelal prac·
                Commerce mee\J.ns"at which        tices. Abo at that meetin&.
                the chambertreuurer alred         two membefl of the eu-c.u·
                concerns about the cham·          Uve committee_ Judy Haw·
                bu'8 ftnanclal practices.         ley and Sylvia Wbitmore,
                   The tape, Ia tbe custody       were told. they were beJn&
                of chamber attorney Van           r emoved from t he t JCCCU·
                Huseman, b evidence in a          tlve committee. AU ttuee
                lawsuit by chamber presi-         are defendants in C&.rte r's
                dent and CEO Terry C&rttr         lawsuit .
                q:alnst the chamber, some             Rancel, who tiled the 1110--
                ch amber officlalt and the        t\on to compel releue of the
                C4lUr-1'imu.                      tape Thcsd~. said a n other
                   A hearing on the C4J.l.e-r..   a.ttorneys Involved In the
                ri""'s' modon is R t for 8:30     case ha.ve reoeivoed notke of
                a.m. Friday In Judse Jose         the bearing. HllStman said
                 Longorla's·2Hth Dis trict        Tuesday afternoon t hat he
                Court. LonJorla on March          had not rece l~d notice of
                U ordered release of theu.pe      thehearlns.
                t o all parties to the lawsuit.       Huseman said Bentley'•
                Since then, Call•r-TiM••          a.Ltorney, Robert Anderson.
                attorney Jorge Rancel hu          lnformeci h im that lawyers
                requested.aeopyfromHu.se-         involved.in the lawsuit would
                m.an ln'eral titnel by man.       bear the tape toa:ether.
                   Carter's lawsui t, filed           "I tbourht he had (Ran·
                Maub 19, alleces aetlona          cel'l) b leuin& on It, but
                that jeopardlu:d hb em-           m aybe 1 mlsundeutood,"
                ployment with the ch a m-         Huseman said. "I told Ran·
                bu. The defendant• deny           eel thata.t~600n u wecotthis
                the allesaUons.                   Ca.tter(settlemenl) wrapped
                    Carter hu been on paid        up, we would make It ava.O·
                l eave since Marth 215 and        able. We cUdn\ want tojeop·
                last week hls and the cham-       ardlz.e tile oegotta.tlotu.•
                ber'l a.ttorney~p.veconllict·         Hutemao s aid he didn't
                lng ~porta as to whether a        kDOW If he woukl appear at .
                settlement lnvolvfn& hi1 res·     Friday's hearing as he had
                lcn&don was eooclud!d. The        Juat beta tnfonnedoftt.
                settlement l.l.epuate from
                the lawsuit and dou not In·       CtmlActFarm~S.     Clliri"AM
                elude an a&reement not to         Cll 886-3"l.S9
                sue the chamber, or to drop       or c;h(riM.tl'iJoalUT




                                                                     1 C.R. 541




                                                                                     149
         May 30,2008
Judge orders that chamber
tape recording be released
          today
      Mary Ann Cavazos
             CR525
Exhibit N-1 to Cavazos Affidavit




                                   150
                                                                           •
Judge orders that chamber tape riording be released today : Corpus Cb· · ·ti Caller Times,... Page 1 of 1
                                    •




           calleracom
           CORP!JS CHRISTl. TEXAS
                                                                                 Primer-friendly swr1
                                                                              Read more at callcr.com




          Judge orders that chamber tape recording be
          released today
          By Mary Ann Cavazos


          Originally published 10:51 a.m., May 30, 2008
          Updated 10:51 a.m.. May 30, 2008


          CORPUS CHRISTl -District Judge Jose Longoria signed an order this morning
          ordering release Friday of a tape recording of a Corpus Christi Chamber of Commerce
          meeting at which the chamber treasurer voiced concerns about the chamber's financial
          practices.

          The tape is to be released today to all parties in a lawsuit by chamber president and
          CEO Terry Carter against the chamber, some chamber officials and the Caller-Times.
          Longoria first ordered release of the tape to all parties on March 26. Today's order
          precluded the need for a hearing scheduled at 10:30 a.m. today to consider a motion
          by Caller-Times attorney Jorge Rangel to compel release of the tape.

          Since March 26, Rangel ~as made several requests for the tape, which has been in the
          custody of chamber attorney Van Huseman since shortly after the Feb. 15 chamber
          meeting. It is evidence in the lawsuit by Carter, who accuses the defendants of actions
          jeopardizing his employment with the chamber. All parties deny the allegations.

          Carter has been on paid leave since March 26. Last week, his and the chamber's
          attorneys gave conflicting reports as to whether a settlement involving his resignation
          had been finalized. That settlement is separate from the lawsuit and does not include
          an agreement to drop the pending lawsuit.

          At the tape-recorded meeting on Feb. 15, chamber treasurer Damon Bentley
          discussed his concerns about the chamber's financial practices. Also during the
          meeting, Judy Hawley and Sylvia Whitmore, were told they were being removed from
          the chamber executive committee. All three are defendants in Carter's lawsuit.




                    © 2009 Scripps Newspaper Group- Online




                                                                                                1 C.R. 525




                                                                                                             151
         May 31,2008
    Chamber tape tells
    of heated exchange
      Mary Ann Cavazos
             CR526
Exhibit N-1 to Cavazos Affidavit




                                   152
                                                                                                                                              •
                                                                                  50 CENTS                  SATURDAY, MAY 31, 2008   CITY EDITION




                                                                                                                                                    ·chamber
                                                                                                                                                     tape tells
                                                                                                                                                     of heated
                                                                                                                                                     exchange
                                                                                                                                                    Recording released
                                                                                                                                                    after a legal battle
                                                                                                                                                    IY MAllY AJflf CAVAZOS
                                                                                                                                                    Call~n:-
                                                                                                                                                    A recording of a Corpus Christi
                                                                                                                                                    ChamberofCommercemeetlngob·
                                                                                                                                                    talned Friday by the CGU.r-Timu
                                                                                                                                                    contains a eontentlous exchange
                                                                                                                                                    bet ween CEO Terry Carter and
                                                                                                                                                    other chamber otllcla.le.
                                                                                                                                                       The Ca..Ckr-Tim•s obtained the
                                                                                                                                                    recording &15:20 p.m. Friday after
                                                                                                                                                    legal wrlJl!llng. A Judse on March
                                                                                                                                                    26 ftrst ordered that the recording
                                                                                                                                                    be made available to all partie.t
                                                                                                                                                    in a lawsuit by caner ap.inst the
                                                                                                                                                    chamber, some ch am·
                                                                                                                                                    ~,.:~~~t~~ ~
                                                                                                                                                    Carter, who has been    ~
                                                                                                                                                    on paid leave sinee     ~
                                                                                                                                                    that date, filed suit
                                                                                                                                                    March 19 alleging actions jeopar-
                                                                                                                                                    d izing his employment. The defen-
                                                                                                                                                    dants deny all claim$.
                                                                                                                                                      The recording contains numer-
                                                                                                                                                    ous chamber meetings, including a
                                                                                                                                                    Feb. 15 meeUng referenced In thll":
                                                                                                                                                    tawsutL
                                                                                                                                                        The total recording indicates a
                                                                                                                                                    lenJth of five houn:, 29 m inutes.
                                                                                                                                                    The aegmentconta.lnl~the Feb. 15
                                                                                                                                                    meeting Is one hour, nine minutu.
                                                                                                                                                    It ghu no lndieator u to when the
                                                                                                                                                    meeting bep.n or ended.
                                                                                                                                                        The Feb. 15 segment wu lden~
                                                                                                                                                    tJti.ed baled on tntervlewJ, corre•
                                                                                                                                                    s:pond ence amana chamber offi~
                                                                                                                                                    clala, and allcgationa cont&ined in
                                                                                                                                                    theautt.
                                                                                                                                                        The voices ofchamber treuurer
                       FROM THE COVER                                                                                                               Damon Bentley, Carter, chamber



  CHAUBER./h>m lA                          for personal use?'"               tion. That's the p roblem.•
                                               Bentley: •No."'                   Carter later left the room
chairman-elect Robert Gon-                     Carter: "'Are you making and Bentley could be heard
zalez, chamber attorney Van                any accusations t hat I have giving his financial report.
Huaeman,chalrmanFredcUe                    intentionally, intentionally         The recordini's release Frt~
M&liiDC2; Jr. and ell:eeutive              misled an executive comllllt · da,y resulted from a motion by
commltt« members Judy                      tee or members of this board the CaUer-Tim.c.s to compel
Hawley and Sylvia Whit-                    of directors? Intentionally?"'    its relea.se In accordance with
mor e w ere recognizable                       Bentley: "'I'm not solng to 214th Di.strlctJud.ge:J~ Long-
on t he recording. Bentley,                a.nswer that."'                   oria's March 26 order that it be
Hawley and Whitmore are                        Carter: •Why not?"'           made available to all parties.
named defendants In Cart·                      Bentley: •tt'S nota Question      CaU •r~Timu attorney
er's lawsuit.                              for me to answer rizht ·now. Jorge Rangel61ed the motion
   Ea~.rt y ln t he aecment a              I'm cotng to CIYe the !Uuliu~ ·l \u~¥1.Jw.y w.Cttr he mtule sever-
content ious exchange be·                  of facts. There's no opinions al requests for the recording
tween Cart er and Bentley                  that I have. There's jll!t facts, after March 26.
can be heard, u the cham~                  Terry. ·- I have a 1\dudary re·       Since Feb. 15, the record-
ber ofl\dals discuss whether               aponsibility -· Don't call me Ins had been In Huseman's
to proceed with Bentley's n-               lieut enant commander and custody.
n&.Dcial report.                           don't stare me down.•                 On Fr iday morning, t he
   Bentley: "'I really don't                   Carter also c.an be heard In parties reached a.n agreement
want Terry sitting here star-              a n ell:change with Hawley, in on the releaseof the recording,
ing me down .•                             which he uks why she won't beading off a. scheduled 10:30
    Carter: "'Why? If you've               look him in the face.        ·    a.m. hearing on the issue in
got a problem with me, get                     "Oh, I have a probl~m," Longoria's oourt.
In my face and say 'Terry,
here it is.' ... Ueutena.nt com·
                                            Hawley replied. "I have a biz
                                            problem, Terry. ... I have a ConlclCt Mary Ann CatJClWS
                                                                                                                                                              1 C.R. 526
mander ... Art: you making                  problem with tr u.stlns your at 886·36!3 orca~@
any accusations that I have                 leadership with this organita· aJller.cam
mi••nnf"t'lnri • t,..... ,..,v f~•"tl ""




                                                                                                                                                                                          153
         June 13, 2008
   Ex-Chamber CEO
  mediation to continue
      Mary Ann Cavazos
             CR527
Exhibit N-1 to Cavazos Affidavit




                                   154
                    Soc:tVm O
                                                                               •                                                                              •
                                 BUSINESS&OPINION

                                                                                            CORRECTION: Please see 11.2, 611412008

                   Ex-Chamber CEO's me ation to continue
                  .,...,..,_
                  aTMArf.U.CA.VAZOS                          lawsuit.                               lty•                                    <Mmdlnl<uac:lwnberanplo)u             I
                                                             lecl.. IU:tioosJ<cpanllzl. .hltem- man did not returu ealls for com- =~~~~beenon                                     i
                                                                Carter filed suit March 19, al·   Cbamber attorney Van Hose-
                  AttoroeyllnV'Oived in the lawsuit
                  by former Corpus Christi Cham·             ploym<nL Tbe defendanU deny all        ment lateTbnnday.                         hIs Wldeu wbat the terms of \
                  berofCommerce CEOTuryCa.rt-                claims.                                   eou.r-nmc• attorney Jorze the ~ent were. but former !
                  er spent tcVer&1 houn Thursday
                  in l mediation session tbat two
                  participants described u a fall·
                                                                ROOricuez aaid Thurs<loy'lme-Ran&d oald the newspaper chose
                                                             diatloo.acssloncouJdrt:~U~nelnan·
                                                                                             not to partldpa!eln the medla!ioo
                                                             other two weeki. &lthoulh no d ate
                                                                                             ..because It did not~ thJ.t it
                                                                                                                                            =:=:,>~=-.bu~
                                                                                                                                            ~=~fttsrematned tobepa.ld
                                                                                                                                                                                  !j
                  ure. One defendant, the CaU.r-                                             would be productiYe to do10 at thls

                                                                                                                                                                                  [
                                                             has been set.
                  nm.u, did not participate.
                                                                                                                                            an=e::~=.~~
                                                                Attomey.lobnBell,_.onc       poiot In the litlptloo.The C.U...
                    A severance agreement that                                               nmu intends to agrusiYely de-
                                                             chamber oftlclaJs Sylvia Wblunon:
                  canen anomey, Rene Rodriguez,
                  prevlously described u nearly eon-
                  dudedlsnow!lnal,~ald
                                                             and Judy Hawley, said the medla.-

                                                             -      procoss will proceed.
                                                                                             feud q&lnst tbe claima that Mr.
                                                             tion was unsuccessful and t.ht.liti·
                                                                                             Carter hu filed a.M anticipates
                                                                                             tbat the facti and the law will show
                                                                                                                                            under way, with former chamber
                                                                                                                                            chairmen Bud Harris and Debbie
                                                                                                                                            U ndsey-Opel leadln& the &earth.
                                                                                                                                                                                  I
                                                                                                                                                                                  .


                  Thunday.                                      "Thel&wauhllveryddeod&ble,"  that tbe CclUf'-7\met i.a:ln DO way            They hope to hire an Interim for 60
                        '!bat-otluepanlefrom                 BeD saki.                       Uable to Mr. Carter."                          to 90 days wbUe • natloaal oeatth
                  Catter'llawsu.Jt apinst the eham-             Attorney Robert Anderaon,        RodriJUez aaJ.d Thurtday that              for a. permanent CEO proeeeda,
                  ber, aome chamber officials, the           representing chamber treuurer hll cli~nt's stveranu: ~ent                      Martinez saki.
                  Col£tr..1'i.'I'I'&U and others. The ~e¥­   Damon Bentley, utd there l.a no wtth \he c:b.amberwasco'mpletedlo
                  erance agreement did not lnclude           plan atthi$point forfuturemed:l.l·     lateMoy.CbarnberclWrmanFr<d·
                  .. - t o drop the pmdl. .                  1lon but that It Is a1wm a poalbil·    die Martinez; Jr. said Carters effec-

                   &l
                                                                                       •



.   ~ ·~• June l4, 2008 • CALLER-TIMES




                  PAGE2
    CORRECTIONS
    CLARIFICATIONS
  A headline on Page 10 Friday
  Incorrectly reported the sta-
  tus of mediation In a lawsuit
  filed by former Corpus Christi
  Chamber of Commerce CEO
(       'Carter. The headline
\      .•d have said thatThurs·
  day's mediation session ended
  without an agreement and
  those Involved aren't in agree-                                                                                                                                                      1 C.R. 527
  ment about how the matter
    ... ue .....:............,




                                                                                                                                                                                                    155
TAB3




       156
Exhibit A-23




               299




                     157
larger clients have called me with serious concerns that I don't have answers for.
 I am very uncomfortable with the Chamber's method of accounting and lack of
information getting to the board.
Does anyone have any suggestions on how to proceed with this?
Kent Cooper


                                    ·- - - ·-----------·---·
From: Damon Bentley [mailto:dbentley@utoplaworldcuisine.com]
Sent: Tuesday, February 26, 2008 2:05PM
To: 'Freddie Martinez Jr.'; 'Judy Hawley'; 'Robert Gonzalez'; 'Sylvia Whitmore';
'Bud Harris': 'Butch Escobedo': 'Chuck Cazalas'; 'Dan Garza'; 'Debbie Lindsey-
Opel'; 'Dick Drilling'; 'Gary Eifler'; 'Gary Eifler x2 copy'; 'Gary Malone'; 'Howard
Ainsley'; 'Howard Ainsley x2 copy'; 'Joanna Davidson'; 'Joe Guzman'; 'John
Michael'; 'Kent Cooper'; 'Laurie Cook'; 'Leon Loeb'; 'Manuel Ugues': 'Pat
Townsend'; 'Ralph Coker'; 'Ralph Diaz'; 'Robert Blair'; 'Sandra Alvarez'; 'Sean
Murphy'; 'Trent Hill'; 'Trent Hill X2 copy'
Subject: Attention Chamber Board of Directors

February 26, 2008

Corpus Christi Chamber of Commerce Board of Directors,

I sincerely appreciate all of the Board members that have contacted and
thanked me for the review I provided at the Board meeting last Wednesday.
Many of you also have given me sound advice on how to proceed forward
with my fiduciary duties to the Chamber Board and its members .

It was unfortunate that the CEO's letter sent to the members of the Board
prior to my presentation at the called meeting on 20 Feb, misrepresented
both the intent and the facts to be presented in the Treasurer's report. The
CEO's letter, which quickly became public, may have compromised our
membership's clear understanding of the severity of issues with which the
Board of Directors must deal with In the coming weeks.

Two additional pieces of correspondence, purportedly sent from us, the
Board of Directors, to our members misrepresent a number of findings to
our members and may pose potential issues of liability. In order to
articulate my concerns to those of you who were not present at the 20 Feb
Board meeting, and to address the misrepresentations included in the two
subsequent letters from the Chamber leadership, I provide the following
fa cts for your consideration.
                                                                                  Page 3 of 11
                                                           CCOOS49



                                                                                           300




                                                                                                 158
     I was asked by the Board and our Chairman to review our financials in
connection with our CEO's request for a raise, performance bonus increase
and contract extension. The timeline was set by the Board and our
Chairman. I had no malicious intent or political agenda as the CEO has
inferred in both private and public venues. I simply was conducting my
fiduciary duty as your Treasurer. As soon as I felt there were issues with the
financials, I contacted the Chairman. After I later discovered what I thought
was a crucial problem with the use of Building Fund dollars to supplement
the Chamber's operating expense account, I once again immediately
contacted the Chairman. Due to the persistent avoidance of calling an
Executive Committee meeting to address the issue by the Chairman, I
contacted two other Executive Committee members and shared the
Information with them. After still not receiving a response from our
Chairman or Chai r~Eiect, the three of us requested, via certified letter. that
the Chairman use the scheduled 15 Feb meeting to address these issues.
The letter is included as an attachment to this email.

     In the Executive Committee meeting on 15 Feb, our accountant
confirmed that, based on his review of the information presented, all of the
"financial adjustments" about which I had questions were valid concerns.
He went on to further say that the use of Building Fund dollars to
supplement the Chamber operating expenses could possibly forfeit the
Foundation's 501 c3 status because of the link between the CEO's bonus to
the financial performance of the Chamber. In closing, I asked the
accountant if he felt the Chamber of Commerce has "financial problems", to
which he replied, "Yes". As your Treasurer, it was my duty at that point to
report this to you.

     The Executive Committee meeting on 15 Feb was taped. I requested
after the meeting that I receive a copy of the tape to accurately and
completely disseminate the information discussed for my presentation to
the Board. Unfortunately, the CEO took the tape and immediately left the
premises. Attempts to immediately contact him were unsuccessful. I
received a call from the Chairman later that day confirming that the CEO
was bringing the tape back and that I would receive a copy. I made several
attempts to obtain the tape over the weekend without success. On Monday,
I was told by the Chamber's attorney, that the recording was too divisive
and that unless the Chairman directed him, he was not going to release it to
me. I called the Chairman who stated he was not going to authorize the
release of the tape due to counsel by our attorney. I sent a registered letter
to the Chairman on 23 Feb asserting my right to this tape and demanding a
                                                                          P;~ge   4 of 11
                                                     C<.:OOSSO



                                                                                     301




                                                                                            159
copy within 24 hours of the receipt of the letter. More than 24 hours have
lapsed after the letter was received by the Chairman and the copy has still
not been made available. I have included this demand letter for your review.
It is my assumption that if the accountant had stated in the Executive
Committee meeting that the Chamber financials were fine, the tape would
have been readily available for your review at the full Board meeting last
Wednesday.

     After learning that I wouldn't receive a copy of the tape for my
presentation on Wednesday, I contacted the accountant and requested a
letter with his recollection of the main points of the meeting. He stated that
he would provide such letter, but that he required a letter of Indemnification
prior to doing this. I requested the Chairman sign this letter and facilitate
this process, but the accountant never received the letter of indemnification.
Since that time, the accountant has sent me an email stating that he no
longer will discuss this matter and that the Chamber has become a "high
risk" engagement that he may no longer want to be associated with. This is
very troubling considering this is coming from a person who the CEO
considered the Chamber's CPA at the time of the 15 Feb meeting.

     To respond to the CEO's letter to the Board that has now been made
public, I offer the following responses to his "three immediate concerns." 1)
The timeline for the CEO's evaluation was set by the Chamber Board of
Directors and the Chairman called the evaluation meeting as a direct
response from the CEO's request for a raise, performance bonus and
contract extension. As unfortunate as it was that the CEO had surgery, the
tlmellne was set without any knowledge that the CEO was scheduled for
surgery. 2) The statement I made to the paper was the statement that the
Chairman, Chair-Elect and I agreed would be made to any press inquiries
and that anything above and beyond that would be directed to the
Chairman. If the tape were available from the meeting, this could be
confirmed; unfortunately it is not. I have stated, "No comment" to all and
any other inquiries about this issue to all media sources and have
continued that practice up to this date. The CEO is the one who made this
information public by sending a letter to the Chamber Board of Directors in
an attempt to discredit the findings prior to the presentation. 3) I never hid
anything from the CEO and at the Executive Committee meeting, I invited
the CEO to respond to the points I had raised. It was our attorney who
recommended to the CEO to take pause and respond in writing at a later
date.

It is undeniable the financials for 2007 as presented to the Executive
                                                                          Page 5 of 11
                                                    C:C00551



                                                                                  302




                                                                                         160
Committee and Board are inaccurate. inconsistent with the process used in
previous years and a misrepresentation of the Chamber's bottom line. My
main concerns after our 31 Jan evaluation meeting were that 1) the CEO's
performance bonus is directly linked to the financial performance of the
Chamber, 2) suspected irregularities in booking expenses and revenues
that created the "Net Operating Income" for 2007, and 3) these irregularities
had the effect of justifying a performance bonus under his Contract. At the
core of this matter are three very obvious findings:

o The CEO deferred his pay for Nov and Dec 2007 without booking it
as an expense in 2007: $19,992

 In the CEO's preemptive letter to the Board, he states that his deferred pay
should have been booked in 2007 and that he brought this to my attention
at the Executive Committee meeting on 18 Jan. This is not true. Judy
Hawley, an Executive Committee member before she was expelled on 15
Feb, was at this meeting and can attest to this statement. The CEO did
state that he had deferred a portion of his pay for personal tax purposes. I
found this odd, but made the assumption that the booking of this entry was
done correctly. He further states in his letter to the Board, "I immediately
went to the bookkeeper to see what had happened and Instructed him to
contact our CPA and get the correct entries and make them to the books,
which he did. This was simply a bookkeeping error that was immediately
corrected." This also is not true. The financials on 28 Jan, 10 days after the
Executive Committee meeting, still did not reflect the deferred pay as a
2007 expense. The adjustment wasn't made until after I questioned whether
the deferred pay was recorded as an expense in 2007 at our evaluation
meeting on 31 Jan. Our book keeper stated that it wasn't. I wasn't brought
an adjusted financial until 4 Feb, a full17 days after the CEO claims he
"immediately corrected" this error on 18 Jan. Regardless of when it was
corrected, the undeniable fact is that the financlals presented to the
Executive Committee and the Board of Directors were inaccurate and the
request for a raise, performance bonus and contract extension were done
so on the basis of an inaccurate financial report.

o The CEO used Building Fund dollars to supplement the Chamber
financials: $18,312

After the Building Fund was moved from the Chamber to the Chamber
Foundation in Oct 2007, a check was written to the Foundation from the
Building Fund account for $18,312 on 14 Nov. A check was then drafted for
$18,312 from the Foundation to pay the Chamber for *overhead" based on

                                                     CCODSS2             Page 6 of 11




                                                                                  303




                                                                                        161
an Oct invoice from the Chamber for telephone expense ($9,800), services/
utilities expense ($7, 732) and office printing expense ($780). At a meeting I
had with the accountant in his office, he stated to me that the CEO should
have never shifted the Building Fund from the Chamber books to the
Foundation books for the use of supplementing the Chamber's finan cials.
This contradicts the CEO's claim in his letter to the Board that the CPA's
firm was consulted about the transfer of the Building Fund for the use of
operating expenses. In a statement provided by the Chamber staff to me on
4 Feb, it reports that our accounta'n t felt that our Building Fund "should be
used for the original intentions of building maintenance, property upkeep
and capitalized equipment."

Needless to say, whether this is an accounting problem or not, the use of
Building Fund dollars in its most liberal interpretation could not possibly be
thought to be used for Chamber operating expenses. If this were the case,
the CEO could simply unilaterally charge the Foundation whenever he
wants and dwindle down that account to zero and post a profit each and
every year. Transfer of the Building Fund to the Foundation was
represented by the CEO for the intent of providing a tax deduction for those
who gave to the Building Fund in our upcoming building campaign. One
would have to believe that if someone donated money to this account they
would expect that money to be used for the new building, not to pay for
current operating expenses of the Chamber.

I want to be clear that the movement of the Building Fund from the
Chamber of Commerce to the Foundation does not automatically give the
CEO unilateral authority to use these funds for whatever he wishes. The
Building Fund is still held In a separate account and was not lumped into
the operating account of the Foundation. Even though the Board was
informed of the movement of the Building Fund to the Foundation, the
Executive Committee or the Board never approved the funds to be
available for unilateral use by the CEO for operating expenses.

o The CEO booked January 2008 membership renewals in 2007:
$63,903

This is a matter of fact. I am not questioning whether modified accrual,
accrual or cash basis should be used. I am simply pointing out the fact that
by using this "modified accrual" system, and doing so when it benefits the
bottom line, you open up the possibility for manipulation of the numbers.
Any and all adjustments that are made should be disclosed when it directly
affects the financial performance and subsequently the CEO's bonus. In

                                                                          Page 7 of 11
                                                      CCOOSS3



                                                                                         304




                                                                                               162
fact, 2007 received the benefit of most of Jan 2007 renewed dues ($58,336
booked on 3 Jan 2007) and most of Jan 2008 renewed dues ($63,903).
This creates a distorted view of our financial performance for the past year.

If you make the above adjustments to the 2007 P&L, you receive a much
different picture of our 2007 performance, which is undeniably more
accurate when comparing year-to-year performance from 2006 to 2007
based on consistent methods of accounting.

Original Net Operating Income:                                                  +
$40,425



Pay Adjustment:
$19,992

Building Fund Adjustment:
$18,312

2008 Renewed Dues Adjustment:
$63.903



Adj usted Net Operating Income:
$61,782



                                    (Total Swing of $102,207)

In addition, there are several miscellaneous findings that I neither have the
resources or expertise to investigate further but that I feel need to be
scrutinized. They are as follows:

    Foundation financials have never been presented to the Executive
Committee :;ince I have been on the Exet.;utive Cornmittee i:l::i required in
the by-laws.

     Special events (Salute to the Military, Conquer the Coast, State of the
City, etc.) are kept "off the books" and only net income is presented to the
Executive Committee even though full accounting has been requested by at

                                                                            Page 8 of 11
                                                        CCOOS54

                                                                                    305




                                                                                           163
least one Executive Committee member.

     A comparison of the year-end membership lists provided by staff
reflects a significant decline in member organizations during 2007.

    The by-taws require an audit each year. A review was conducted last
year without approval from the Executive Committee to deviate from the by-
taws. Not one member of the Chamber leadership can say when the fast
audit was conducted.

    The CEO's explanation for not conducting an audit was that of cost and
availability. It is hard to believe that we do not have enough money to
conduct an audit, but during this same time period, we have requests by the
CEO for a raise and bonus.

    Our accountant conducted the 2006 "review" and stated in that review
(and stilt thought this was the case as of the meeting on 15 Feb) that the
Chamber was on an accrual basis of accounting.

    I have been told several times when I have questioned the use of
modified accrual basis that the accountant knew we were on this form of
accounting and approved it. This contradicts the previous point that the
accountant thought we were using accrual basis.

    The Executive Vice President reported to the Executive Committee on
31 Jan that he was "asked" to defer his pay in Oct 2007 because the
Chamber was in a "cash crunch" and they needed to pay bills. Our fragile
cash position and need to ask staff to withhold pay was never reported to
the Executive Committee or the Board at any time by the CEO.

     $77,630 of the Building Fund was used from 1 Jan to 31 Oct. 2007 for
the purpose of moving to the CVB side of the Chamber building. The
original budget for this move was estimated by the CEO to be $36,000
according to the Board minutes of 24 Sep. $55,847 of these funds were
capitalized. Some of the capitalized expenses are suspect such as a $255
"lunch" expense.

   Significant contracts are signed and authorized by the CEO without
RFPs or knowledge by the Executive Committee or the Board.

In the end, this comes down to trust and accountability. Removing
Executive Committee members who voice sincere concerns, keeping taped
meetings from other Board members, yelling in an attempt to intimidate
                                                                        Page 9 of 11
                                                    ccoosss

                                                                                       306




                                                                                             164
       Board volunteers, leadership refusing to sign a letter of indemnification that
       silenced the accountant and attempting to justify a raise based on
       disputable numbers do not change my fiduciary responsibility.
       Unfortunately, they do make It much harder to perform my duties, but my
       duties still remain.

      An audit has now been called for. I have not been appointed to the audit
      committee as was reported to the Caller Times. My overarching concern is
      that while an audit is demanded in this situation, an overhaul of our financial
      policies and procedures is also of utmost importance. An audit will address
      how we may or may not have complied with generally accepted accounting
      principles, but it will not address the policy questions regarding early
      booking of revenue, deferment of expenses, transfer of funds between the
      various Chamber entities and other procedural matters. I urge all Board
      members to immediately and diligently secure all records relating to the
      business of the Corpus Christi Chamber of Commerce so that critical
      information is safeguarded.

      In closing, I would like to thank all of you for your courage and friendship.
      The truth is sometimes difficult to interpret and I hope that the facts above
      assist you in finding that truth. I leave you with the following quote from
      Winston Churchill, "The truth is Incontrovertible, malice may attack it,
      ignorance may deride it, but in the end, there it is."

       With Respect and Devotion to Duty,



      Damon L. Bentley

      Treasurer, Corpus Christi Chamber of Commerce




Terry H. Carter
President & Chief Executive Officer
Corpus Christi Chamber of Commerce
361-881-180 0

                                                              CC00556           Page 10 of 11


                                                                                         307




                                                                                                165
tcarter@theccchambcr.org

==============================================~=============================
=~====:=== =====~============
      Disclaimer: This e-mail message and all information enclosed, Including any
      attachments, is for the sole use of the intended reclplent(s) and may contain confidential
      and privileged information. Any unauthorized review, use, disclosure, or distribution of
      the information enclosed, in its entirety or in part, Is strictly prohibited. If you are not the
      intended recipient, please contact the sender by reply e-mail and immediately destroy all
      copies of the message. For further assistance or questions please contact the email
      administrator at Corpus Christi Chamber of Commerce. 361-881 -1800.
=~~================,=====:====~===:======~====~===== ===;=====================




                                                                                            CCOOSS7



                                                                                               Page 11 of 11



                                                                                                         308




                                                                                                               166
TAB4




       167
Exhibit A-1 0




                156




                      168
Treasurer's Due Diligence at Request
      of Executive Committee
• After the meeting, I reviewed the following documents from
  the Chamber

   - 2006/2007 Financials
   - 2006 Audit Review
   - Salaries of all Staff for 2007
   - Building Fund P&L
   - Chamber and Foundation By-laws
   -Accounting policies and procedures
   - Personnel policies and procedures
   - Stand alone budgets for the last 3 special events
   - 2006/2007 membership reports
   - December 2007 dues report (early pay)
   - Statement of 8tJilding Fund (purposes and intentions)
                                                             CCOOS80


                                                                  157   ..




                                                                        169
         Findings: Payroll Reporting

• CEO withheld his pay for Nov & Dec 2007. He had stated
  that this was for tax reasons in his presentation to the Exec
  Committee.

• The withheld pay was not shown on the 2007 books as a
  payable.


• After the CEO evaluation meeting (not after our exec
  committee meeting), Waller (Finance Director) stated he
  contacted our CPA (Thompson) via phone and was told that
  the salary should have been booked in Nov & Dec. Waller
  made an adjustment to the books for a minus $19,992.

                                                           CC0058l


                                                                     158




                                                                           170
        Findings: Payroll Continued

• Executive Director (Trevino) stated prior to our evaluation
  meeting that the CEO told him that they were in a "cash
  crunch" in October and that he needed to withhold his pay to
  pay bills. He did so.



• This led me to look at October's financials closer (where we
  supposedly showed a net ordinary income of -8,307.62).




                                                          CCOOS82


                                                                 159




                                                                       171
        Findings: Foundation Books

• On 31 October, the Chamber invoiced the Chamber
  Foundation for $18,312.87 to pay Jan- Oct expenses for
  the following percentages, categories and amounts:

• 60% of Chamber's Telephone Exp of: $16,334.43


• 60% of Chamber's Services/Utilities of: $12,886.10

• 10% of Chamber's Office Printing of:   $7,805.41

• Total Billing: $18,312.87

                                                       CC0053l


                                                             160




                                                                   172
        Findings: Foundation Books

• At no time did the Executive Committee or the Board vote to
  bill the Foundation for these expenses.

• Billing the Foundation for these expenses did not occur in
  2006 according to Trevino (Pres of Foundation) .

• This is what led me to the Foundation financials ...




                                                           CC00584


                                                                     161




                                                                           173
                 Foundation Findings:
                 Use of Building Fund

• On 14 November, $18,312.87 in funds were disbursed from
  the Building Fund to the Foundation in order to pay the
  Chamber of Commerce the utilities expense invoice. This
  was previously booked as an expense reimbursement in
  October on the Chamber financials.

• The Building Fund was established with proceeds from the
  sale of the Chamber's property to the GSA to be used for
  building improvements or a new location for the Chamber.

• Using Building Funds for utilities expenses is inconsistent
  with this objective.



                                                          CC0058S


                                                                    162




                                                                          174
            Building Fund Findings
• At no time did the Executive Committee or the Board of
  Directors vote for the Building Fund's movement to the
  Foundation.

• At no time did the Executive Committee or the Board of
  Directors vote for the Building Fund to be used for operating
  expenses of the Chamber.

• From Jan 1 to Oct 31, 2007, the Building Fund was depleted
  by $77,630.

• $51,847 of this was capitalized for various move-in
  expenses to the old CVB space.

                                                            CC00586



                                                                  163




                                                                        175
            Findings: Building Fund


• At no time did the Executive Committee or Chamber Board
  vote to expend $77,630 to move from one side of the
  building to the other or authorize use of the Building Fund
  for this purpose.


• Use of Building Fund dollars from a 501c could be a
  "serious problem" if used to increase the NOI that is linked
  to a performance bonus according to the CPA (Thompson).
  The CPA will no longer speak on this subject and the tape
  from the meeting has not been made available to review his
  comments.
                                                          CCOOS87



                                                                    164




                                                                          176
                   2008 Renewals
• $63,903 of renewed 2008 dues were booked in December
  2007 vs 2008.

• This was $53,000 over budget. When asked if this was
  normal, the Finance Director stated that it was and that this
  happened in 2006 as well. After reviewing the Dec 2006
  P&L, this is not the case. Only $10,589 were
  received ... $5,811 under budget for that month.

• In Dec 2006, $2,076 of Jan 2007 renewed dues were
  booked for 2006 and $58,336 were booked on Jan 3.
  Therefore, 2007 received the benefit of both Jan 2007 and
  Jan 2008 renewed dues.

                                                            CCOOSS8


                                                                      165




                                                                            177
     Summary of 2007 Adj ustments
• Original NOI:                  +$40,425

• Pay-Adjustment                 - $19,992
• Building Fund Adjustment:      -$18,312
• 2008 Renewed Dues Adj:         - $63,903

• Adjusted NOI:                  -$61 ,782

            This is a $102,207 swing ...



                                             CC00589


                                                       166




                                                             178
 Accrual -Cash - Modified Accrual
Withholding of pay & not booked during time period
            Cash basis for expense

Foundation charged for expenses (actually building
  fund) ... books it in Oct, but receives in November
            Accrual basis for an expense
 reimbursement .. . even if acceptable, entire time
  period (Jan - Oct) should have been accrued.
  We also didn't continue to bill the foundation
                       (inconsistent)

  $63,903 renewed dues received and booked in
                   December
             Cash basis for income
                                                 CC00590


                                                           167




                                                                 179
            Miscellaneous Findings


• Foundation Financials have never been presented to the
  Executive Committee as required in the By-Laws

• Special Events are kept "off the books" and only net income
  is presented to the Executive Committee even though full
  accounting has been requested

• A comparison of the end of year membership lists provided
  by staff reflects a significant decline in member
  organizations during 2007.




                                                         CC0059J


                                                                   168




                                                                         180
            Miscellaneous Findings
• The by-laws require an audit each year. A review was
  conducted last year without approval from Exec. Com.

• Dove -Thompson conducted the review and stated ·in their
  review (and still thought this was the case as of the meeting
  last Friday) that we were on accrual basis at that time.

• I have been told several times when I have brought up the
  modified accrual basis that the CPA knew we were on this
  form of accounting and approved it.

• Checks for the Chamber of Commerce have never been
  signed by the Treasurer (Accounting policies and
  procedures contradict by-laws)


                                                           ccoo;n

                                                                    169




                                                                          181
              CEO's 2006 Evaluation:
          Performance Objectives for 2007
The Executive Committee was unable to reach consensus on
the CEO's achievement of these Performance Objectives from
his 2006 Evaluation:
   • Maintain the level of the Chamber's media coverage at 2006 levels or
     better.

   • Continue to foster a working relationship with the area's other
     business organizations (CCREDC, CCHCC, PICC, etc.)

   • Set an aggressive goal for membership retention, and lead effort to
     attain it.

   • Develop and foster a professional, working relationship with the City,
     County, and Port leadership.

   • Coordinate at least (2) joint information-sharing meetings with the
     Hispanic Chamber of Commerce.

                                                                       CC00593


                                                                                 170




                                                                                       182
     Analysis and Recommendations
• The Chamber of Commerce and Chamber Foundation need
  a complete and thorough audit from an outside accounting
  agency (full audit vs. a review).

• The audit should include the building fund, special events,
  and contracts.

• Best accounting practices need to be implemented to
  ensure transparent financial transactions.

• Policies and procedures for all aspects of operating the
  Chamber of Commerce need to be developed and followed.



                                                           CCOOS94


                                                                     171




                                                                           183
                  .,
                  .,
                  <>-
                  0
                  0
                  u
                  u




C'·
tn
  c
  0
·-....,tn
  Q)
  ::J
a




            172




                        184
TABS




       185
Exhibit A-15




               240




                     186
MEMORNDUM
FOR: Doard of Directors, Corpus Christi Chamber of Commerce

FROM: Terry Carter, CEO

DATI<:: February 17,2008

SUBJECT: Allegations concerning inappropriate busincs.~ pr~ctices

Ladies and Gentlemen:

The specially culled meeting for Wednesday, february 20th was culh:d at Board
Direction for the singular purpose of receiving a recommendation from the Executive
Co!Tunittce regarding my employment contract. The Executive Committee will report that
they have been unable to make a recommendati on.

I would appreciltle your consideration at that meeting to eon.~idcr the following facts in
response to allegations that have been made both privately and publicly regarding my job
pcrfonnance. Up until this time I have not been afforded on opportunity to address the
allegations and may not be given that opportunity during Wednesday's Board meeting.

As I understand, there are four allegations:

    J. Th11t J with malice favorably affected the net nperating profit on the yeur-end
       P&L statement by deferring my November und December income and not
       showing it as an expense.

          R.liSPONSE: l differed compensation in 2006 (documentation is Available to
support this defcnal) and elected to do so again in 2007 for ta~t reasons. My wife made
approximately SOk more this year than last year. None of her additional income had
taxes withheld during 2007. Jam happy to provide the documentation to suppo11 this
fuel.
          The Chairman was notified in October 2007 of my intention In defer my income.
The correct bookkeeping entries are to expense on the P&L the defc1rcd compensation
und show it ns a liability on the balance sheet at the time thnt the compcnsulion should
have been paid. Our bookkeeper failed to make these entries and I failed to check the
en try before they were presented. I am the one tlutl found the error during the January
!'lltccutivc Committee meeting and brought it to the attention of our Treasurer, Damon
Ucntley. J:ollowing the meeting, I immediately went to the bookkeeper to sec what had
happened and instructed him to contact our CPA, Dnrryl Thompson, ond gel the correct
entries and make t11cm to the books, which he did. This was simply n bookkeeping error
that was immediately corrected.

   2. That I am using a modified accrual accounting method that according to Damon
      Bentley should not be used.


                                                                                         CCOOS59


                                                                                               241




                                                                                                     187
        RESPONSE: We arc using a modified accrual basis of accounting that has been
!lppr(wcd by the Board of Directors. When I was employed in August 2004, I inherited an
organization that had vc:ry inconsistent accounting and financial controls and practices.
My instructions from the Boord was to fix it and do .~o fast. In consultation with our then
Treasurer, narron nergstrom, and our then CPA, Kendra Kennison, we put into place a
modified accrual basis of accounting. This treats revenue on a c~sh basis so that you
record the revenue when you receive it and accrue certain expenses. This basis of
accounting was approved by the Board of Directors in September 2004 and has been in
place since that time. One of our current Board members was present at tbe meeting and
will validate this tiJCI.

    3. Transfer of the building fund from the Chamber of Commerce (a 50l(c)(6))
       corporation) to the Chmnbcr Founda tion (a 501 (c)(3)) without Roard approval.

        RESPONSE: The transfer of these funds was done in consultation with our CPA.
We had u discu~~ion with our CPA about both the propriety of making the transfer, the
reason for doing so, and the exact entries to affect the transfer. During the course of the
conversation, we discussed ifthcrc were any restrictions that wou ld preclude making the
trnnsfer. Ken Trevino researched archived documents relating to the building and
buildi ng fund and could not find ony restrictions of any nature on the building fund. We
concluded that not being able to lind restrictions was insufficient. Therefore, our Cl> A
talked with his senior partner, Mr. Joe Dove, who set up the building fund. Mr. Dove
confirmed that there never were any restrictions placed on the "building" fund . During
the December Board meeting, Leon Loeb asked about the funds. I fully explained to the
Board what we bad done.

    4. That I used a portion of the building fimd after it was transferred to the:
       Foundation to pay certain operating expenses.

        RESPONSE: That is correct. The Chamber of Commerce hns for many ycnrs
housed the Foundation and its operations, which include among other things Leadership
Corpus Christi. The Chamber has never sought any reimbursement from the .F oundation
for the cost of providing space, administrative, overhead and managerial support. I
caused to be invoiced the roundation for about $18,000 for telephone and utility support
During "FY 07, that represented about60% of the total cost oftclcpl10ne and electricity.
The Foundation has never been charged for space allocation, bookkeeping services,
managerial oversight or administrative support. This was discussed with our Treasurer,
Damon Bentley, during a two-hour FY'08 operating budget meeting. My lield notes
developed in preparing the budget, reflect that T had some question as to whether 60%
was a reasonable number. At no time, did Damo11 Ot:nlley ever question or contribute any
dialogue to that convcr!Xtlion. If he h11d rniscd any exceptions during the budget meeting,
the percentage would have been adjusted.




                                                                                        CCIJOSGO



                                                                                               242




                                                                                                     188
    5 There seems to be some concerns raised as to whether the by-laws of the Chamber
       arc tx:ing followed to the letter of the Jaw. Spedfically, were there 5 members on
       the 2008 Nominating Committee as opposed to the required
    (, 7'!

        RESPONSE: Ladies and gentlemen, we as management und you as our Directors
make every effort to comply with our Bylaws as closely as possible. There is no way that
I can attest that in every single case aud illStancc that the bylaws arc complied with 100%
of the time. What I can say is that we make a very good effort to comply with the bylaws
and its intentions. If we arc to comply with 100% of the bylaws, you as directors must
approve every prospective member before they join the Chamber. You must also approve
every member that is dropped for non-payment of dues. This distracts from your ability
to work nt a strategic level. My recommendation is that the bylaws shou ld be reviewed,
edited and in some cases rcwtiuen to reflect the modem operations of a chamber of
comrn~rce that represents a mid-size American city.


CLOSfNG COMMENTS: I am not calling into quest ion the motives of any individual
that questions the operations of our Chamber. Ow· records have always been open to any
director or officer of the corporation. 1 have insisted on complete transparency with
respect to all aspects of the management ofthe Chamber of Commerce.

However, never in my professional career has my integrity been called to question as
right now. There is NO Allegation that any illegal activity or misappropriation of money
has taken place. That leaves this essentially as a matter of bookkeeping practices. I have
three immediate concerns:

       l. What was of such critical and grave w·gency that these discussions had to take
          place while I was in Cardiac Intensive Ca re at Shoreline Hospital I 8 hol\J's
          after having undergone a 5-hour open-hc11rl surgery?

       2. Who provided unauthorized information to the local newspaper that was
          clearly one-sided and seemed very much designed to embnrrass the Chamber,
          the Chamber s taff: Chamber Di rectors and our lilmilies.

       3.    I have not been allowed to respond or otherwise defend any of these
            allegations ul uny meeting to date. The chairman has advised me that I may
            not be ullowcd tube present at the entire Board meeting in Wednc~dfty and so
            I present these facts to you in advance.




                                                                                    CC00561




                                                                                              243




                                                                                                    189
TAB6




       190
EXHIBIT "M"




              454




                    191
    (                                       CAUSE NO. 08-1360-F

        TERRY CARTER                                    §            IN THE DISTRICT COURT
                                                        §
        vs.                                             §            2141h JUDICIAL COURT
                                                        §
        CORPUS CHRISTI CHA11J3ER OF                     §
        COMMERCE, SCRIPPS TEXAS                         §
        NEWSPAPERS, LP d/b/a CORPUS                     §
        CHRlSTI CALLER TIMES, DAMON                     §
        BENTLEY, JUDY HAWLEY, SYLVIA                    §
        WHITMORE, et al.                                §           NUECES COUNTY, TEXAS

        STAT E OFTEXAS                 §
                                       §
        COUNTY OF NUECE S              §

                                    AFFIDAVIT OF ELVIA AGUILAR

        BEFORE ME, the undersigned authority, personally appeared Elvia Aguilar, who, after
        being duly sworn by me, upon her oath, testified as follows:

    (         I. "My name is Elvia Aguilar. I am over the age of 18 years and competent to make
                 this Affidavit. All statements contained in this Affidavit are within my own
                 personal knowledge and are true and correct.

              2. I graduated from Baylor University with a Bachelor of Arts degree in 2005, with a
                 major in journalism. After graduating from Baylor, I worked as a reporter for the
                 San Antonio Express-News' bilingual publication, Conexion, from June, 2005
                 until June, 2006. At that time, I started working for the Caller-Times as a busj.ness
                 reporter. As such, 1 was in charge of covering banking, tourism, real estate,
                 business and finance issues in the Coastal Bend area. This included the Co1pus
                 Christi Convention and Visitors Bureau, the Co1pus Christi Chamber of
                 Commerce, and Corpus Christi Regional Economic Development Co1poration's
                 4A board, among other groups and organizations. In July or August, 2008, I
                 began my current position with the Caller-Times as an education reporter.

           3. Since I was the business reporter for the Caller-Times, sometime during the
              rooming of February 15, 2008, my direct editor, Tom Whitehurst, assigned me to
              assist with a story j:egarding the Corpus Christi Chamber of Commerce. As a
              result of my news-gathering activities regarding the matter, .I authored or
              contribute.d to the following articles regarding Terry Carter and the Co1pus Christi
              Chamber of Commerce between February 15, 2008 and June 13, 2008~ which is
              the time p~riod during which the articles about which Terry Carter is complaining
.
/

\
              in the above referenced lawsuit, were published by the Corpus Christi Caller-
              Times:
                                                     EXHIBIT

                                             .I                                                          455




                                                                                                               192
    (
                 a. "Financial, Management Questions Raised at Corpus Christi Chamber",
                     published ori February 15, 2008;
                 b. "Corpus Christi Chamber Pulls Two Off Panel", published on February
                     16, 2008;
                 c. "Corpus Christi Chamber Meeting to Discuss Financial Irregularities",
                     published on February 20, 2008;
                d. "Chamber of Commerce: Financial Questions Lead to Call .for Audit",
                     published on February 21, 2008;
                e. "Chamber GEO Shifted Funds, Letter Says", published on February 27,
                     2008;
                f. "Ex-Chair' Airs Her Chamber Concerns", published on February 29, 2008;
                g. "Petition Seeks Chamber Changes", published on March 3, 2008;
                h. "About 80 Sign Petition on Chamber Operation", published on March 4,
                    2008;
                1. "Chamber Board, CEO to Enter Talks", published on March 8, 2008;
               j. "Chamber Treasurer Granted Temporary Restraining Order Protecting
                    Tape of Meeting", published on March 19, 2008;
               k. "Chamber Unrest Ends up in Court", published on March 20, 2008;
               1. "Chamber to Discuss Petitioners' Concerns, published on March 21, 2008;
               m. "Chamber Puts CEO on Paid Leave", published on March 26, 2008;
               n. "Chamber CEO on Paid Leave", published on March 27, 2008;
               o. "Chamber Finances Move to Forefront", published on March 31, 2008;
               p. '!Chamber Had Deficit, Board Tells Members", published on April 1,
                    2008;
               q. "Chamber, in Need of Audit, Renews Accountant Search", published on
                    April 29, 2008;
               r. "Chamber <;>ffers Contract Settlement to Carter, his Attorney Says",
                    published on May 2, 2008;
              •s. "Chamber Makes Offer, Carter's Attorney Says", published on May 3,
                    2008;
             • t. "Chamber, Carter's Attorney Confinn Severance Agreement", published
                    on May 23, 2008;
             • u. "Chamber's 'Acting CEO Resigns"; published on May 27, 2008; and
               v. "Chamber Acting CEO Resigns", published on May 28, 2008.

        True and correct copies of the foregoing articles are attached hereto and incorporated
        herein by reference as Exhibit "M-1 ".
                           .   I
        4. As part of my research and news-gathering activities in connection with my
           preparation of the f~regoing articles, I interviewed the following individuals:
                               i
               a. Lucy Reta, Van Huseman and 'Judy Hawley as sources for the February
                  15th article;
(              b. Sylvia Whitmore and Van Huseman as sources for the February 16, 2008
                  article;



                                                2                                                456




                                                                                                       193
    (            c. Butch Escobedo, Lawie Cook, Freddie Martinez and Mark Scott as
                     sources for the February 21, 2008 article;
                 d. Lucy Reta and Kendra Kinnison as sources for the February 27, 2008
                     article;
                 e. Freddie Martinez, Robert Gonzalez and Sylvia Whitmore as sources for
                     the February 29, 2008 article;
                 f. Steve Woerner, Tom Dobson, Dusty Durrill and Carol Scott as sources for
                     the March 3; 2008 article;
                 g. Freddie Martinez, Sylvia Whitmore, Carol Scott and Judy Hawley as
                     sources for the March 4, 2008 article;
                h. Freddie Martinez, Carol Scott, Leon Loeb, and Laurie Cook as sources for
                    the March 8, 2008 article;
                i. Van Huseman and Carol Scott as sources for the March'20, 2008. article;
                j. Freddie Martinez and Carol Scott as sources for the March 21, 2008
                    article;
                k. Van Huseman and Rene Rodriguez as sources for the March 26, 2008
                    article;
                l. Freddie Martinez, Van Husem~ and Rene Rodriguez as sources for the
                    March 27, 2008 article;
                m. Ken Trevino, Carol Scott and Freddie Martinez as sources for the March
                    31 , 2008 article;
               n. Michelle Peters, Damon Bentley, Laurie Cook, Carol Scott, Bud Harris,
                    Ken Trevino and Van Huseman as sources for the April I, 2008 article;
(                   and my att~ndance at the Chamber of Commerce general membership
                    meeting on March 31, 2008;
               o. Ken Trevino. as source for the April29, 2008 article;
               p. Van Huseman, and Rene Rodriguez as sources for the May 2, 2008 article;
               q. Van Huseman, Rene Rodriguez and Ken Trevino as sources for the May 3,
                    2008 article;
               r. Van Huseman as source for the May 23, 2008 article;
               s. Freddie Martinez as source for the May 27, 2008 article; and
               t. Freddie Marpnez as source for the May 28, 2008 article

        5. Additionally, as part of my research and news-gathering activities in connection
           with my preparation of the foregoing articles:

               a. I attempted .to reach Plaintiff, Terry Carter, for his comments for the
                  stories published on February 16th, February 20th, February 21'1, February
                  27lll, February 29111, March 3rd, March 4th, March &lb. I was unsuccessful in
                  my attempts' as Plaintiff did not respond to my messages. Further, per
                  Plaintiffs attorney, Rene Rodriguez, Plaintiff had no comment for the
                  March 26th article and declined to comment for the March 27th article. .

              b. I attempted¥> reach Sylvia Whitmore for comments for the February 15lll
                 article. I was not successful in contacting her.
(


                                                3                                                 457




                                                                                                        194
    (          c. I attempted to reach Freddie Martinez, the chairman of the Corpus Christi
                  Chamber of Commerce, for his comments for the stories published on
                  February 16th and March 3rd. MJ:. Martinez did not respond to my
                  messages.

               d. I, together with my co-worker, Denise Malan, attempted to reach all of the
                  Chamber of Commerce Board members on or abou~ February 18th.

               e. I attempted to reach Darrell Thompson, the Chamber of Commerce's CPA
                  during the time period in question, did not return my telephone calls for
                  the February 27tii article.

               f. I attempted to reach Van Huseman, the attorney for the Chamber of
                   Commerce. He did not return my telephone messages for his comments
                  .for the February 15th and 29th articles.

               g. I attempted to reach Damon Bentley for his reaction to the Plaintiffs
                  lawsuit for the March 20th article. He did not return my calls.

        6. Additionally, as part of my research and news-gathering activities in connection
           with my preparation of the foregoing artiqles, I reviewed and relied upon the
           following written ~ources, all of which are attached hereto· and incorporated
c·         herein by reference as Exhibit "M-2":

              a. Plaintiff Terry Carter's memorandum to the Chamber of Commerce Board
                  .of Directors dated February 1i\                           .
               b. Darrell Thompson's e-mail to Damon Bentley dated February 20th;
              c. The Chamber of Commerce Board of Directors' letter to its members
                   dated February 22nd;
              d. Damon Bentley's e-mail to the Chamber of Commerce Board of Directors
                   dated February 26th;
              e. Sylvia Whitmore's letter to the Chamber of Commerce Board of Directors
                   dated February 28th;            .
              f Damon Bentley's lawsuit filed on March 18th, styled: Damon ·Bentley v
                   The Corpus 'Christi Caller-Times cmd Terry Carter; responsive pleadings
                   and Orders;
              g. Terry Carter,'s lawsuit filed on March 19th, styled: Terry Carter v Corpus
                  Christi Chamber ofCommerce, eta/., responsive pleadings and Orders;
              h. The Chamber of Co~erce Petition; and
              1. Chamber of Commerce invitation to the March 31 , 2008 Annual
                  Membership Meeting. ·

          Additionally, on M~y 30, 2008, I listened to a portion of an audiotape containing
          the February 15, 2008 Corpus Christi Ch~ber of Commerce meeting which the
          Caller-Times had obtained on May 30, 2008 pursuant to a Motion to Compel that
(         had been filed by th~ Corpus Christi Caller-Times' attorney.



                                              4                                               458




                                                                                                    195
    (
         7. In addition to my own newsgathering in connection with the aforementioned
            articles that I authored, Dan Kelley, Beth Wilson, Denise Malan md Fanny
            Chi.rinos, reporters at the Caller-Times, contributed to the articles based on
            information they had gathered during their own news gathering activities.

         8. In interviewing the above-named persons, I asked them to elaborate on the
             matters raised in Mr. Bentley's e-mail of February 26, 2008 to the Chamber
             Board of Directors, Ms. Whitmore's letter of February 28, 2008 to the Chamber
             Board of Directors, and Mr. Carter's memorandum to the Chamber. Board of
             Directors on February 17, 2008. They were unwilling to do so. In researching and
             writing .the aforementioned articles, I relied in good faith on the sources and
             infonnation listed in paragraphs 4 . and 6 because they, particularly, Damon
            Bentley, Sylvia Whitmore and Judy Hawley, were high-ranking Chamber officials
            who, by virtue of their then and former positions with the Chamber of Commerce,
            were in a position to be knowledgeable about the matters and issues involved,
            regarding the Corpus Christi Chamber of Commerce and Terry Carter. At all
            times I believed that the matters about which I was writing were newsworthy
            because they involved a controversy between high-ranking officials of a
            significant local organization, the Corpus Christi Chamber of Commerce, and its
            high-profile CEO and President, Terry Carter. I also relied on information I
            obtained from a long-time Chamber employee, Lucy Reta, who was known by me
(           to be reliable.      ·

        9. At no time did Terry Carter contact me, or to my knowledge, anybody else at the
           Caller-Times, to point out that any statement contained in the articles listed above
           in paragraph 3 :vas ~accurate or incorrect.

        10. Prior to and at the time of the publication of the articl~s listed above in paragraph
            3: (a) I had no knowledge that any of the statements in said articles, including,
            but not limited to, the ·statements about which Terry Carter is complaining in the
            above referenced lawsuit, was false; (b) I never entertained any doubts as to the
            truth of any of the statements contained in said articles, including, but not limited
            to, the statements about which Terry Carter is complaining in the above
            referenced lawsuit;' (c) I had no knowledge nor suspected that any of the
            statements in said articles, including, but not limited to, the statements about
            which Terry Carte~ is complaining in the above referenced lawsuit, nor each
            article as a whole; nor the totality of said articles, could create a false or
            substantially false i.inpression regarding Terry Carter in the minds of the ordinary
           reader of said articles.

        11. Prior to and at the tin1e of the publication of the articles listed abov~ in paragraph
            3, I believed that all of the statements contained in said articles, including but not
            limited to, the statements about which Terry Carter is complaining in the above
            referenced lawsuit, were true and correct.
(

                                                  5                                                  459




                                                                                                           196
(      12. Prior to and at the time of the publication of the articles listed above in paragraph
           3, I did not and do not now, bear any personal ill will toward Terry Carter."


       "FURTHER AFFIANT SAYETI! NAUGHT."




                                                                  CL.:~
                                                                Elvia Aguil·



    SWORN TO AND SUBSCRIBED BEFORE ME, the undersigned authority, on the 24th
    day of September, 2009.


         ~:~~t~J!~~;\ ROXANE MARIE IGLESIAS
        ~~.'..
        It       ..:.._,e No18ry ~lie. State of Texas
                    .~      My Commission El<pircs
         ~:~.!.i!$"          AugVll24, 2010




(




(

                                                        6
                                                                                               460




                                                                                                     197
TAB7




       198
Exhibit A-25




               313




                     199
.                         •                                       •
    February 28, 2008

    Corpus Christi Chamber of Commerce Board of Directors

    ladies and Gentlemen:

    The action taken by the Chamber of Commerce Board to establish an audit
    committee is a great step. At this time, I am still very concerned about three
    issues:

    •   The interpretation that I am not officially a member of the Executive
        Committee, especially in light of the fact that the Chairman had requested
        that I stay on when the 2007 Chairman left the city. Furthermore, Article V,
        Section 1: of the Corpus Christi Chamber of Commerce Bylaws states ... "AII
        officers shall take office on the first day of the new year and serve for a term
        of one (1) year or until their s uccessors assume the duties of office".
        Since no one has assumed the duties of Immediate Past Chair, that person
        would be me.

    •   The correspondence which has been sent by the Chamber CEO to the Board
        and Chamber Members glossing over the fi nancial irregularities and the
        declining membership numbers.

    •   The obstruction of duties by denying the lreasurer access to critical
        information and advise of financial professionals employed by the Chamber
        of Commerce. The Treasurer's concerns are very credible, and appeared to
        be mostly ignored. There was continued refusal of the Chair and Chair Elect
        to respond to attempts to schedule an executive meeting immediately to wor1<
        together to address irregularities. There was refusal of Chamber staff to
        cooperate w ith the Treasurer on a task he was given by the Board and
        Executive Committee. Finally, refusal of the Chamber CEO to release the
        tape of the Executive Committee meeting which was held on February 15.


    The Chamber needs to strengthen, and follow, its accounting procedures and its
    accountability to its members. As stated previously, the action taken by the
    Chamber Board to establish an audit committee is"a great step, but is not
    sufficient to reassure me and others that the Chamber's operations are
    transparent and open. Executing contracts without Executive Committee or
    Board authorization, moving funds to other accounts. running special events off
    the books, arbitrarily filling board seats . . . all of these issues are about trust.
    confidence in the leadership, procedures in place which ensure transparency
    and accoun tability of the Chamber CEO to the Board and the Membership

    I love the Corpus Christi Chamber of Commerce. I have devoted many of my
    years of volunteerism to this organization beginning in the 1970s. It is, and


                                                                                     CCOOS76


                                                                                               314




                                                                                                     200
           ....                        •                                      •
                  should continue to be, a member-driven organization. Those of us who have
                  worked for years to strengthen the Chamber want to insure it is financially
                  secure.

                  I know I speak for myself, Damon Bentley and Judy Hawley in that we did
                  everything we could to have the Executive Committee function as It should; to
                  move forward with the performance evaluation and recommendation back to the
                  full Board as we requested. By "kicking" Judy Hawley and I off the Executive
                  Committee, we all now know what chaos that has created.

                  When the Treasurer identified areas of financial concern, his first call was to the
                  Chamber Chairman, requesting that we convene to move forward Immediately
                  with a full audit. His position was that it would take that level of scrutiny to
                  provide the Board and Chamber Members with an accurate assessment of the
                  Chamber's financial status, membership levels, etc.

                  It is incumbent on the Board of Directors to insure that this 85+ year organization
                  continues to speak for the entire business community of our city; that the voice is
                  an advocate for a pro-business elected leadership, a pro-business environment,
                  and that it is an information resource for Issues that are important to businesses,
                  both large and small. Somehow, we seem to have forgotten our mission, and we
                  need to speak it loud and clear. Prosperity. Together.

                  Respectfully,

                  Sylvia A Whitmore




                                                                                               CCOOS77




                                                                                                         315


15062286 135934/00001


                                                                                                               201
