GARY L. BRADLEY'S TRAIL OF BROKEN PROMISES

AND MISDEEDS:

A Comprehensive Annotation

 

Summary: The following outline traces the public record of Austin developer Gary Lee Bradley in his various dealings with the City of Austin, the State of Texas, the U.S. Government, banking institutions, former business and personal partners, and the general public.  This outline is the work product of more than 300 hours of research in state and federal court files, various local, state and federal agency files, and online archives from the Austin Chronicle, the Austin-American Statesman, and other news sources.  Virtually every point is documented with the source of information so that the reader may judge for themselves the reliability of the information.  We invite persons who are familiar with other Bradley transactions to provide us with additional information so that this record may be made more complete.

 

The purpose of this document is to inform all interested persons of Mr. Bradley's track record of broken promises, misstatements, and nefarious dealings that, in our view, demonstrates a clear pattern: Bradley can always be counted on to place his own personal interests ahead of the truth or his own commitments.  Further, we ask the reader to consider what Mr. Bradley's continued business activities in our community may mean for our future and what it reflects about us as a community.  In short, why is this man still in business and how much longer will his activities be tolerated by the judicial system, the business community, and the Austin community at large?

 

More specifically, we hope that this documentation will help focus public attention on Bradley's current personal bankruptcy proceedings so that the U.S. Bankruptcy Court will aggressively pursue all assets that Mr. Bradley may have failed to disclose in his bankruptcy filing-not just those within the "Lazarus Exempt Trust"-and will show in court that Mr. Bradley's misrepresentations and failure to disclose his full range of assets bar Mr. Bradley's efforts to discharge more than $70 million in debts owed, primarily to the U.S. government.  By doing so, the Bankruptcy Court trustee can secure the right to seize Bradley assets into the future until the total sum of Bradley's personal debts are paid in full.

 

BRADLEY'S BROKEN PROMISES

  

I. Circle C Contracts with the City of Austin-Three Key Provisions of Municipal Utility District (MUD) Agreements Violated

1.  Promised to pay utility rates above those charged to in-city customers, to cover actual costs of system extension.  Shortly after completing this agreement, he challenged the agreed rate structure at the Texas Water Commission; a pro-developer City Council settled, reducing rates to below those charged to city residents. [Austin American-Statesman, hereafter AAS 11/19/89]

2.  With the accompanying Land Plan, he agreed to comply with the City's water quality ordinances "as amended from time to time." [MUD Agreements, Art. XII, "Land Use and Development," Sec. A.2]  Sought to break this commitment repeatedly:

(i) Sued to overturn the SOS ordinance in Quick vs. Austin case, citing the HB4 'grandfathering' law.

[Quick, et al v. City, No. 92-0637, 22nd Judicial Dist, Hays County, TX; see also AAS 10/28/94, 10/29/94, 11/15/94, and 10/1/99]

(ii) Created the Southwest Travis County Water District, a special interest fiefdom set up to escape Austin's water quality rules.

[AAS  5/6/95, 5/12/95, 5/25/95, 5/25/95, 10/3/96, 10/20/96, 11/14/96, 5/3/97, 8/16/97, 8/27/97, and 1/7/00]

(iii) established so-called "water quality protection zones," another attempt at self-regulation gained through Bradley's lobbying of the Texas Legislature.

[AAS  11/1/97, 12/19/97, 7/17/98]

(iv) Backed legislation that aimed to hobble Austin water quality ordinances by insisting that uniform rules apply everywhere, despite vastly different watershed types. [HB 1305; see AAS 5/18/93]

(v) lobbied for the state "grandfathering" laws-SB 1704 and the renewed HB 1704-which substantially prevent Austin from applying its water quality rules.

[AAS, 10/3/02, "Real estate has been profit-maker for Perry"]

3.  Agreed that the City of Austin could annex Circle C [MUD Agreements, Art. VIII, Art. IX].  Tried to violate this agreement in several instances, including:

(i)  Southwest Travis County Water District legislation (HB 3193) prohibited annexation. [Bradley letter to Circle C Homeowners, 6/30/95; AAS, 8/27/97]  Bradley's legal defense of this bill ultimately failed. [AAS, 8/27/97]

(ii) Water Quality Protection Zone bill [SB 1017, passed in 1995].  Also backed by Bradley and struck down in court. [AAS, 11/1/97, 6/18/98, 7/2/98, 6/16/00]

(iii)  Organized opposition of Circle C homeowners to annexation in 1997 and 1998.

[AAS  11/1/97, 5/3/98]

II.  Sought to violate other MUD agreements-by substituting a governor-appointed board for direct representation of Circle C residents on the MUD boards.

[STCWD bill; AAS  4/6/95, 5/17/97, 11/20/97, and 12/13/97]

III.  Fraud with bank loans-which federal taxpayers had to pay for

1.  Secured both business and personal loans, using Circle C land as collateral without the consent of his partner Ira Yates.

[Yates v. Bradley, No. 421,033, Travis Cnty Dist. Ct., July 1987; First Nationwide v. Gressett,  95-1041LK]

2.  Violated Gibraltar Savings loan provisions by:

(i)  using loan funds for non-Circle C expenses.

[First Nationwide v. Gressett,  95-1041LK, "Complaint objecting to dischargeability"; Yates v. Bradley, Travis Cnty Dist Ct, July 1987]

(a)  Independent study by Arthur Anderson confirmed that Bradley transferred Circle C funds for expenses not related to the project. [Third Coast June 1987; Yates v. Bradley, "Original Answer of Ira Yates to Counterclaim...," Nov. 3, 1987]

 (b) Expense padding/ self dealing allegations. Following their loan default, Bradley Development tried to raise their "management fees" from $35,000 a month to $75,000.  In a July 1989 memo, First Gibraltar official Charles Ackerman said Bradley had twice as many employees as needed, wanted too much for travel and entertainment at $34,000 a year, and proposed to pay double the market rate in "a self-serving office lease" in the Castle, Bradley's headquarters.  [AAS June 16, 1997]

(c) Loan for unauthorized purposes (Sharp buy-out)-The ownership share of one of the Circle C partners, Mitchell Sharp, was purchased by Bradley in 1985 using $7.9 million from the Gibraltar corporate loans. This violated both the partnership and loan agreements.

[Gressett discharge complaint; Yates v. Bradley, "Plaintiff's Second Amended Original Petition," Aug. 10, 1989; AAS 6/15/97]

(d) "BS&G used some of the personal loan to buy with various partners, a 20,000-acre ranch near Alpine in West Texas and a hotel in Vail, Colorado.  Later, Bradley and other partners bought a hotel in Santa Barbara, Calif." [AAS  6/15/97]

(ii) Bradley transferred 423 acres of Circle C land back to Ira Yates to settle their lawsuit without reducing or returning the loan amounts, or notifying Gibraltar.

[Yates Answer to Interrogatories; Gressett discharge complaint]

(iii)  Bradley partners failed to list other debts on their corporate loan application, or in any financial statement from Dec. 31, 1984 to 1987, allegedly overstating their net worth in order to get the Gibraltar loan. [Gressett v. First Nationwide Bank, Bankruptcy Case 94-119080-LK]

3.  Declared corporate bankruptcy rather than pay off his $100 million in business loans from Gibraltar Savings.  Taxpayers ultimately had to pay off his bad debt in the savings and loan bailouts.

[First Gibraltar, FSB v. Gary L. Bradley and James D. Gressett, Cause No. 90-052957, 151st Dist Ct of Harris Cnty, TX, filed Sept. 18, 1990; AAS 11/3/90 and 6/16/97; Craig Smith, attorney, Save Barton Creek Assn, letter to R. Baldwin, RTC, and other parties, Jul. 31, 1991]

Gibraltar posting for foreclosure represented "highest ever" default on a property loan in Travis County.  [AAS, 10/19/90]

4.  Defaulted on his personal loan from Gibraltar and impeded collection efforts.

[First Gibraltar v. Bradley, et al, No. 052957, Sept. 1990; AAS 6/20/95]

IV. Partner Problems

1.  John Wooley-first partner with Bradley in development of successful Rob Roy subdivision.  Fell out over Bradley misuse of loan funds guaranteed by Wooley's stepfather. [Third Coast  June 1987]

The rift would actually come to physical blows.  "In 1983, Bradley and Wooley had a well reported argument that all the elements of perfect cocktail party gossip: the police, Sixth Street, two rich developers and two black Ferraris (Bradley's and a bystander's ) parked outside on the street." [AAS 9/24/89]

2.  Ira Yates-Bradley violated their Circle C partnership agreement provisions, leading to Yates' lawsuit and dissolution of partnership.

[Third Coast June 1987; Yates v. Bradley, et al, Travis County District Ct, 261st Judicial District, filed July 1987]

3.  Georgia Vanguard, Inc.-potential buyers of Circle C sued Bradley over alleged misrepresentations [see section X.2, below].

4.  Houston Rockets-Sued to try to block sale of majority owner Charlie Thomas' share of the team.

 [AAS 5/23/93]

5.  Freeport McMoRan (aka FM Properties, later Stratus Properties)-Bradley tried to violate his bailout agreement with FMP by claiming MUD reimburseables-money owed by utility customers to the subdivision developers-not due him.  FMP won in court, then Bradley sued his attorney, Terry Bray, for malpractice.  (When the City of Austin later annexed Circle C, they assumed the obligation to pay FMP for these expenses.)

[AAS 2/14/91, and 2/21/98; Austin Business Journal, hereafter ABJ 2/17/97]

6.  Hatsy Heep Shaffer-landowner accuses Bradley of trying to steal her water and land rights on 1,335 acres.  In June 2002, he sued and  won judgment against her for a debt allegedly owed to one of his companies.  Bradley also sued her for slander in Oct. 2000.  Bradley blamed financial troubles associated with his Heep Ranch ventures for his Chapter 7 personal bankruptcy and inability to pay child support.

[AAS 11/6/01, 4/14/01, 5/30/02, 11/30/02;  ABJ 10/27-11/2, 2000]

V. Phony Parkland Dedications

1.  Claimed that the 412-acres that were given to the City by Polly Brooks for Slaughter Creek District Park were his, so that he could get a  "transfer of development intensity," i.e. develop more houses at Circle C.

 [FNB v. Gressett Circle C Land Corporation v. City of Austin, Cause No. 9408128, "Plaintiff's Original Petition," Jul. 1, 1994;  to verify Brooks' transfer of ownership to City see TC Property Records vol.8032/pg.85, 8882/702, and 8882/748]

2.  These phony credits were then used to justify a larger development loan from Gibraltar Savings.

[FNB v. Gressett, "First Amended Complaint Objecting to Dischargeability," Mar. 13, 1995, p. 8]

3.  Failed to give an additional 301 acres in parkland [this obligation is verified in: MUD Agreements, Art. XII, E.2 & 3; Bradley testimony to Austin City Council, Dec. 1, 1983; Third Coast, June 1987; MUD Fact Sheet, CCHA, 1995; and admitted in CCLC v. COA]. The park gifts were supposed to be in exchange for the City extending utilities and guaranteeing the MUD debt.  City officials now claim that the intended parkland was removed from the development when Ira Yates pulled some land out of the MUDs.  If so, that did not extinguish the obligation. [TC Property Records, 10592/0667]   Contradicting the City's view that the released land was the site of the intended second park, is a Yates claim that this tract was planned by the partnership to be a working ranch owned by him.

[Yates v. Bradley, "Second Amended Original Petition," Aug. 10, 1987]

4.  Sold land designated as 'greenbelt' in the original plans to the LBJ Wildflower Research Center for development of a 34,000-square foot building complex.

[AAS  9/13/89, 9/24/89, 5/5/92, and 10/15/93; see attached land plan on COA ordinance # 850530-Q, May 30, 1985-compare to Revised Circle C Land Plan, Jun. 22, 1993]

Greenbelt is defined as containing "no improvements other than those deemed necessary for utilities, drainage, recreation, and roads".

[Notes on first preliminary plan, Oct. 18, 1984] 

While parkland and greenbelt are not identical designations, "Circle C has over 700 acres that fall into this [greenbelt] category per the existing land plan.  Mr. Bradley testified he has created a development plan which converts virtually all this area into parkland..."

[Letter from S. Roberts, atty for Circle C Dev Joint Venture, to Judge L. Kelly, US Dist Ct, June 3, 1991] 

Therefore, building the Wildflower Center: violates greenbelt designations; and also represented a loss of the parkland required under the MUD Consent Agreement.

5.  The Veloway, a circular bike track at Circle C, cost more than $1 million in city and state funds.  Bradley claims he "donated" the land, but the area in question would otherwise have been either undeveloped greenbelt or dedicated parkland.  The track was controversial because it used voter-approved monies which were set aside for completion of a citywide bikeway network. At the time, the Veloway was outside the city limits, and being circular, served no transportation purpose.

[West Austin News  8/16/90]

6.   Since he proposed to build the Veloway on already dedicated parkland, the City of Austin insisted that Bradley donate 51 additional acres of new park area to compensate.  Bradley responded with a lawsuit, claiming he didn't need to dedicate the land requested, claiming "transfer credits" from the Brooks land donation and the other unused greenbelt areas at Circle C.

[CCLC v. COA, No. 9408128, Jul. 1, 1994; CCDJV Bankruptcy "Agreed Order Approving Post-Petition Loans...," Mar. 2, 1991, references the 51-acre "gift" for the Veloway]

7.  The development rights claimed from undeveloped greenbelt areas were just as bogus as the claimed parkland credits.  The law Bradley cited is clear that both greenbelt and development tracts involved must be platted at the same time to gain the 'credit.' which by his own admission did not occur. 

[CCLC v. COA,  Jul. 1, 1994; also "MUD Review," R. Holster, City of Austin, Case C8-84-164, Nov. 5, 1984]

VI. Violations of New Development Agreement-In Feb. 2000, Bradley obtained an agreement from the Austin City Council. The deal ended lawsuits over Circle C and gave him development rights on additional land in Hays County. [AAS  3/9/00]

Within a year, he attempted to void key provisions of this agreement:

1.  Reneged on his commitment not to seek special development districts from the Texas Legislature.

 [Austin Chronicle, hereafter AC 3/30/01; Memo from J. Hrncir, Govt. Relations Office, to B. Griffith, Austin City Council, 5/3/01; Bradley letter  to A. Martin, City Atty, 3/27/01;  AAS 3/22/01, 3/23/01, 4/2/01, 4/4/01, and 5/23/01]

2.  Sought to lift the ban on "major employers" locating at Circle C.

 [AAS, 8/16/00, 9/20/00, and 9/26/00]

VII.  Hides Assets in Personal Bankruptcy Case-Bradley recently filed Chapter 7 personal bankruptcy. Ronald Ingalls, the court appointed trustee, accused Bradley of trying to "hinder, delay, or defraud" all his creditors. Bradley owes dozens of creditors, including the IRS ($4 million) from the 1980s.  His largest debt is $73 million to the FDIC, stemming from his personal guarantee of the Gibraltar debt (see section II). Bradley is trying to dodge his creditors through a trust fund, Lazarus Exempt Trust, set up to shield his assets from creditors.

[AAS  5/30/02, 6/16/02, 7/23/02, 8/17/02, 9/11/02, 10/17/02]

1.  Bradley is the sole beneficiary of Lazarus Exempt Trust, an entity controlled by his sister, which owns the undeveloped residential parts of Circle C Ranch, as well as other land and assets. He has the right to give the Trust's assets to anyone but himself directly, or any of his creditors.  Lawyers for the trust argue that the trust's assets are exempt from the government's collection efforts.

[AAS 8/1/7/02]

2.  In the three months preceding his personal bankruptcy filing, Bradley paid thousands of dollars out to certain of his "creditors."  The largest such payment was $64,000 to Lazarus Investments, which Bradley says is a subsidiary of the trust.  Also included in these payments are $26,000 to his sister, $13,000 to his ex-wife, $26,000 to his mother, tens of thousands of dollars to his fiancee, and $28,000 in political campaign contributions to Gov. Rick Perry and Texas Attorney General Greg Abbott.

[AAS 8/17/02]

3.  Lazarus also owns his West Austin home, where he now pays $1,810 a month after he had previously said he pays $10,000.  [AAS 8/17/02]  While the house is valued at $1.3 million and the lease calls for payments of $8,000 a month, the Trust recently excused him from paying 4 months back rent, according to divorce court Judge Hathaway. [AAS 9/11/02]

4.  Bradley testified that he transferred $203,000 in debt owed by him to Lazarus Investments. "His bankruptcy filings indicate that he owes the trust $270,000.

 [AAS  8/17/02]

5.  Bradley's cousin, Brad Beutel, set up the trust for Bradley's sister.  Beutel owns Lazarus Investments, which in turn owns Castle Management, Inc., which employs Bradley at a salary of $12,000 a month.

[AAS  8/17/02, 9/11/02, and 6/16/02]

6.  Lazarus Investments LP sold 55 acres to an Austin partnership called Rasaca Austin. [ABJ Nov. 30, 2001]

7.  Lazarus Exempt Trust's assets include approximately 1,800 acres worth about $32 million, according to Associate Judge John Hathaway.

[AAS 9/11/02]

8.  Ted Terry, attorney for Bradley's ex-wife, told the Statesman, "He's using Lazarus as his own private bank account. Money could go in and out of Lazarus basically at his whim."

[AAS 9/11/02]

9.  In 1995, Phoenix Holdings, Ltd. bought Circle C land from FM Properties (Freeport McMoRan subsidiary).  Phoenix sold the land to Gressett on Dec. 31, 1999. On New Year's Day 2000, Gressett transferred the property to Beutel.  Beutel than transferred it to Lazarus Exempt Trust in August 2000.

[AAS 6/6/02]

10.  According to Bradley testimony, Lazarus' investments include:

            *SH 45 Partners, a group attempting to build a toll road connecting Circle C Ranch to the Heep Ranch and thence to Austin's Bergstrom Airport.

            *Overcollaterallized Investment, a group with an option to buy Buda-area property worth about $12 million.  Option was due to expire in September 2002.

 [AAS  6/16/02]

VIII. Sham Settlement (Talex)

1.  The Bradley-Gressett partnership borrowed $2.5 million in 1985, 1987, and 1988 from Interfirst Bank, Southside S&L, and Republic Bank (NCNB).  They did not disclose these facts to their major lender, Gibraltar Savings (see above sec. II.3).  They defaulted and just as in the Gibraltar case, the federal taxpayer got stuck with the bad loans.  The FDIC and the RTC sold the bad loans for collection in 1994 for $1 million.  The buyer was a Panamanian corporation, Talex Investments.   Talex then sued to collect, and Bradley settled swiftly, paying $3.58 million.

[Talex v. Slaughter 100, et al, No. 9501997, Travis County Dist Ct-Plaintiff's Original Petition, Feb. 15, 1995; Judgment dated Feb. 23, 1995; and Turnover Order dated Mar. 21, 1995]

2.  This occurred three months before a federal judge ordered Bradley to pay the FDIC for the Gibraltar loans.

[AAS  6/16/02 and 6/17/02]

3.  Talex is owned by two brothers, Vahid and Hamid Noshirvani, who are frequent business partners of Bradley's.  Talex loaned Bradley and Gressett an undisclosed sum two months before they bought the defaulted notes from the RTC and FDIC.

 [AAS 6/17/02]

4.  During the 14 months Circle C Development Corp was in bankruptcy court, three reorganization plans were vetoed by First Gibraltar.  All involved overseas companies controlled by the Noshirvanis buying out the debt at a deep discount, then returning control to Bradley and Gressett.  (Freeport McMoran eventually agreed to guarantee the debt of Circle Land Corp, a new entity headed by Steve Bartlett, a Bradley employee, which bought the land for $28 million.)

[AAS 6/16/97; on Freeport deal, see letter from S. Roberts, Atty for CCDJV, to E. Taube, atty for First Gibraltar, Jul. 25, 1991]

5.  In April 1995, Hamid Noshirvani, while acting as a trustee for Phoenix Holdings, bought the residential portions of Circle C from Freeport McMoran (FMP).  Bradley is president of Phoenix, and Gressett is vice-president.  Gressett bought Phoenix out on Dec. 31, 1999.  A day later, Gressett transferred ownership of the land to Brad Beutel, a Bradley cousin.  In Aug. 2000, Beutel transferred the Circle C holdings to Lazarus Exempt Trust. 

[AAS 6/16/02, 6/17/02]

6.  Another 60 acres located at the proposed intersection of Mopac and the Outer Loop (SH 45) was sold by Gressett to Phoenix in Oct. 2001, completing an incestuous circle of tainted transactions.

[Austin Business Journal  11/30/01]

IX.              Shady Deals and Unethical Collusions

1.  Bradley contracted to sell 2,026 acres of Circle C in 1984 for more than $60 million to a group of investors headed by Dallas developer Louis G. Reese, but the deal reportedly fell through.  This event led to a lawsuit with the investor group, Georgia Vanguard, Inc., which claimed Bradley misrepresented his ability to get the MUDs approved at the Texas Water Commission.

[Third Coast June 1987]

The reported transaction amount-$60 million-would have been more than 5 times what the Bradley partners  paid for their land only two years before. Developer Reese was later convicted of participating in fraudulent 'land flipping' schemes connected with the failures of several S&Ls. These sham transactions collusively inflated land values in order to get larger loans, which the borrowers then defaulted on. 

[Who Robbed America, M.Waldman, 1990; and Other People's Money, P. Pilzer, 1989; on recent attempts to prosecute Reese see "Getting Out of Jail Free," US News and World Report, 12/23/02]

2.  Bradley bought 25 percent of the Houston Rockets basketball team for $3 million in August 1984. Team was co-owned by three principals of Gibraltar Savings: Charlie Thomas, J. Livingston Kosberg (also owner of First Texas Savings), and Red McCombs.

[Bradley testimony in First Gibraltar v. Bradley, et al; AAS, 6/15/97; Third Coast June 1987]

Ira Yates accused Bradley and Gressett of having bought their interest in the Rockets with Circle C Investment Joint Venture (CCIJV) funds. [Yates v. Bradley]

Bradley took out his loans from Gibraltar in May of 1985.  When Gibraltar later fails in 1989, it is merged by federal regulators into First Texas and two other thrifts with a write-down of the Circle C loans.

[See section III above; also AAS 1/18/89 and 6/22/90 on Kosberg link to thrifts]

3. Bradley apparently sold a partial ownership interest in Circle C in 1988 under murky circumstances.  On June 28, BS&G allegedly sold half-interest for $31.5 million, with $1 million in cash and the rest a note, to Trafalgar Interests.  Trafalgar, in turn, was owned by Charles Knapp, his spouse Lois Knapp, and Austin-based investor William Morgan.  Morgan and Knapp then filed suit against one another, clouding the question of who owned that half-interest.

[AAS 1/6/89, 3/30/89; see also confirmation of this transaction in US Fifth Circuit Court of Appeals, First Gibraltar & FDIC v. Bradley, et al, Sep. 10, 1996]

Morgan swore in his suit that Knapp needed Circle C ownership to secure a $15 million line of credit from Western Savings and Loan and to buy a large block of stock in Southmark Corp, Western's owner. [AAS 1/16/89] Both of these institutions soon collapsed spectacularly, amidst accusations of massive fraud in loan originations.  [Inside Job, S. Pizzo, M. Fricker, and P. Muolo, 1989]  

Before Trafalgar, Knapp headed Financial Corporation of America.  When FCA collapsed in 1988, it cost taxpayers over $2 billion and spawned over 1,200 lawsuits.  Knapp then formed Trafalgar Holdings, Ltd.  In May 1990, the Wall Street Journal reported that Trafalgar was being investigated by the FBI.

[Inside Job, S. Pizzo, M. Fricker, and P. Muolo, 1989]  

4.  Bradley's agents filed new deed records on Dec. 14, 1988, transferring all ownership for 3,465 acres to Circle C Development Joint Venture, an entity which included both Trafalgar Insurance Co. and Bradley Development Inc.  These papers were pre-dated to June 28, 1988. Gibraltar reportedly gave a new $15 million line of credit to CCDJV on Nov. 22.  [AAS 1/6/89] By Dec. 28, Gibraltar had collapsed and been merged by regulators with four other thrifts. [AAS 1/6/89, 1/18/89, and 6/22/90]  On Dec. 30, a Morgan-run company filed bankruptcy, claiming half-interest in Circle C. [AAS 1/6/89 and 3/30/89] The Morgan suit alleged that Knapp and his companies committed fraud and broke securities laws.  By Mar. 1989, the Statesman reported a Bradley claim that he lost a $100 million deal to sell Circle C because of the cloud created by the Knapp and Morgan lawsuits. [AAS 3/30/89]

5. The Gressett bankruptcy lawsuit pleadings claim: "...CCDC misrepresented the actual acquisition cost of certain real property purchased by CCDC for the purpose of obtaining loan proceeds which exceeded actual and necessary acquisition costs. Additionally, upon information and belief, Plaintiff asserts that CCDC participated in a scheme to artificially inflate the value of parcels of land which were part of the Circle C Ranch project." 

[FNB v. Gressett, "First Amended Complaint," Mar. 13, 1995, p.9; and "Complaint Objecting to Dischargeability," Feb. 29, 1995]

6.  Bradley purchased a $4.5 million life insurance policy from an agent who worked for Austin Mayor Ron Mullen, whose votes were subject of investigation by the City Ethics Commission.  It was the Mullen council which approved the Circle C MUDs.

[AAS 6/15/97]

7.  Bradley hired Lee Biggart, former Texas Water Commission member, as his lobbyist after the TWC approved his MUDs. 

[Third Coast June 1987].

8.  Bradley was accused of corrupt dealings with an AISD school board president.  "After the school board agreed to buy the Bowie High School site from Bradley in 1986, the developer and school board president Ed Small were accused of having previous business and legal dealings that presented a conflict of interest in the transaction." 

[AAS 9/24/89]

9.  At least four persons serving on Austin's Planning Commission, including Bradley himself, were on his payroll between 1981 and 1987.

[Third Coast June 1987]

10.   In 1986, Bradley first sold, then bought back, an interest in Slaughter 100 Ltd, from County Commissioner and future Governor Ann Richards, a Democrat.  Later, as state Treasurer, Richards urged the Texas Highway Commission to appoint Bradley to the board of a corporation acting as the state's agent in purchasing land for the extension of South Mopac. 

[AAS 6/15/97]

11.  Bradley became suspiciously entangled in another land transaction involving Texas Agriculture Commissioner-and later Governor-Rick Perry, a Republican.

[AAS 10/3/02]

12.  Bradley gave more than $20,000 to 20 legislators and $12,000 to Lt. Gov. Bob Bullock before the 1995 session of the Texas Legislature passed several bills to undermine Austin's authority over Circle C. 

[AAS 6/17/97]

13.  Bradley gave $3,500 in political contributions to then-Governor and future US President, George W. Bush, who allowed SB 1017 and HB 3193 to become law.

[www.txpeer.org/Bush/Local_Control2.html]

14.  Bradley hired private detectives to dig up 'dirt' on the backgrounds of environmental leaders and private citizens involved in the fight to pass the SOS ordinance.

[AAS  2/28/92, 5/24/92]

15.  Bradley hired the same attorney who represented First Gibraltar in the Circle C bankruptcy case, Eric Taube, to defend his Lazarus trust assets from collection.  During the corporate bankruptcy, Taube charged that Bradley and Gressett were "playing a lot of shell games," hiding assets from their creditors.  Also during the Gressett bankruptcy case, Taube laid out specific charges of fraud which Bradley allegedly participated in along with his partner.  Now Taube says, "There was never an allegation of fraudulent representation against Gary."  Splitting legal hairs, Taube says of Bradley, "He was not a party to the suit."

[AC 10/11/02]

X.                 Shell Game: What Does Bradley "Own"?

1.  "Bradley formed a new entity, Circle C Land Corp, to take over ownership of the property.  Developer Gary Bradley-with help from Freeport McMoRan, another major developer in Southwest Travis County-paid approximately $28 million to First Gibraltar Bank on Thursday to retain control of Circle C Ranch." 

[AAS 2/7/92]

2.  "In an interview Thursday, Bradley said he signed a confidentiality agreement prohibiting him from disclosing the source of the funds.  But he said the money came from a US bank, and the financing arrangement involved several investors, both foreign and domestic."

[AAS 2/7/92]

3. "Jay Handelman, PR director of FM Properties said the company helped Bradley obtain funding but [FMP] is not an owner or manager. 'We're helping to arrange financing in order to maintain Austin ownership." 

[AAS 2/7/92]

4.  [Then FM Properties president Wyn] "Howard said the company is required under accounting rules  to list the property among its assets, although it doesn't own Circle C...Freeport guaranteed the notes of Circle C Corp, but neither FM Properties nor any of its affiliates owns Circle C Ranch." 

[AAS 10/10/93]

4.  "In its 1994 Annual Report, FM Properties disclosed that Circle C is counted among its real estate holdings and debts, something it didn't disclose in its earlier reports."  FMP began describing Circle C Land Corp as a 'consolidated affiliate'.

[AAS 4/27/95]

5. Between Feb. 1992 and Nov. 1995, both FMP and Bradley made on-record statements disclaiming ownership.  "According to Steve Bartlett, the president of Circle C Land Corp, Bradley has not been an owner of Circle C since 1992, when the development was purchased out of bankruptcy court by Circle C Land.  He said Bradley is paid a fee as its developer." 

[AAS  6/20/95]

6.  "On April 26, [1995] Freeport announced it would sell residential sections of the development to a group headed by Bradley for $18 million."

[AAS  6/17/97, see also 6/15/97]

7. "Bradley...heads a syndicate of investors that paid a $1.4 million nonrefundable deposit to buy Circle C's residential portions for $18 million, said Richard Adkerson, chairman of FM Properties."  [AAS 4/26/95] "Richard Adkerson, chairman of FM Properties, said Tuesday that the new ownership group is headed by Bradley."  [AAS  4/27/95]

8.  "The next day, Bartlett said it was unclear whether Bradley would lead the investor group.  When the Houston judgment was announced [saying Bradley owed $53 million to the federal taxpayers], Bartlett said, "I seriously doubt he'll have any ownership, since he has a $50 million judgment against him." (emphasis added) 

[AAS 6/17/97]

9.  "The deal to buy Circle C was reworked several times, according to court records."  Finally, by November 1995, FMP announced that Phoenix Holdings, Ltd had bought the residential lots, golf course, and swimming pool.

[AAS 6/17/97]

10.  Roy Minton: Bradley and Gressett have "complete day-to-day management and control of the property." [AAS  6/16/97]

"He no longer owned his signature development, but he still managed it, and through Freeport, had the money to go forward." [AAS  6/16/97]

"Circle C is currently being developed primarily by Phoenix Holdings, Ltd. And Circle C Land Corp, an affiliate of Freeport-McMoRan, Inc...The Freeport affiliate owns the commercial parts of Circle C, about 1,100 acres.  Phoenix owns most of the residential property. Bradley, who is not an owner of Circle C, is president of Phoenix Holdings GP Inc, which is general partner of Phoenix Holdings Ltd."  [AAS 8/27/97]

"Weinstock noted in court that First Madison is concerned that Bradley will sell or transfer assets that would be used to pay the judgment." [AAS 6/20/95]

12.  In 2000, the Austin City Council negotiated a new development deal with Gary Bradley under the presumption that he was the "owner" of the land in question. [see section VI]  Only two years later, in bankruptcy court, he now claims he owns no land, and no assets exceeding $500,000.  [see section VII]

 XII.            Feeling 'Entitled"-What Can Bradley Build?

1.  When the Austin City Council approved the four MUDs, Bradley spoke of the utility service levels permitted under the agreements.  He testified "five units to the acre is not a minimum or even the actual density but rather, a maximum, and it is also not guaranteed."

[Bradley testimony, Aus City Cncl, Dec. 1, 1983, emphasis not in original]

2.  The MUD Consent Agreements state: "It is acknowledged and agreed that the densities and land use intensities reflected on the land plan are not guaranteed levels of development, but represent the maximum levels of development which can be achieved subject to...reduction."  [Art. XII, Sec. B]  Also, the owner shall "comply with density requirements of any applicable ordinance in existence at the time such subdivision is platted." [Art. XII, C.7]

3.  In the Circle C bankruptcy, First Gibraltar and Bradley quarreled over the proper appraised value of the property.  However, Bradley's attorneys testified, Gibraltar agreed, and the court did not dispute, that the land fell under the interim Comprehensive Watershed Ordinance.  This was a set of strict water quality rules very similar to the later SOS ordinance.

"It is undisputed that the interim watershed ordinance reduced the allowable density for Circle C Ranch from over 3.5 units per acre to 2.2 units per acre, a 37.2 percent drop."

[Bradley attorney Stephen Roberts' letter to Judge L.E. Kelly, dated Jun.3, 1991, emphasis added]

"During the court proceedings, Bradley successfully argued that Circle C's market value had been reduced by Austin water quality ordinances that limited its development."

[AAS 4/27/95]

4.  It was on this basis that the property was devalued, then sold to unknown buyers backed by FM Properties-forcing the US taxpayers to eat $92 million in bad debt. In then-Gibraltar attorney Taube's direct examination of Circle C Land Corp representative Steve Bartlett, Bradley's front man stated that the old Lower Watersheds ordinance was what the initial land plan was based upon, and that the interim ordinance reduced the possible building at Circle C.  First Gibraltar claimed, "Your honor, the debtor has not, is not, and cannot maintain the value and exemptions from this regulation."

[In Re CCDJV, "Emergency Motion of First Gibraltar Bank, " Mar. 25, 1991; also S. Roberts' letter to Judge L.E. Kelly, Jun.3, 1991]

5.  Within a year, contradicting his own sworn testimony in federal bankruptcy court, Bradley was suing to have a court recognize his "rights" under the much weaker Lower Watersheds Ordinance.  He testified in the Quick case seeking to overturn SOS that the citizen-initiated ordinance was "incredibly restrictive."

[AAS 10/28/94]

6.  This case went all the way to the Texas Supreme Court, where the Bradley-led plaintiffs won on a 5-4 vote.  " Justice Greg Abbott, writing for the majority, said this meant that four subdivision applications filed by Circle C Land in 1985 fall under the rules in effect at the time." [AAS 10/1/99]  Bradley later gave Abbott donations to his successful campaign for Attorney General. [AAS 8/17/02]

7.  The MUD Consent Agreements state that development will be built under the City of Austin's water quality ordinances "as amended from time to time."  [Art. XII, Sec. A.2]  For current developments, this is the SOS ordinance, being the most up-to-date amended version of the CWO.

8.  Much of this dispute is moot, because many sections of Circle C are now complete.  However, there are significant remaining undeveloped areas in and around Circle C.  These include 1,253 acres owned by Stratus (formerly FM Properties), and a reported 1,800 acres "owned" by Bradley.  Both 'ownership' groups moved to settle their disputes by concluding far-ranging agreements with the City of Austin-Bradley Interests in March 2000 and Stratus in August 2002.  Their major leverage to gain these agreements were threats to assert disputed "entitlements" in the Legislature and the courts.

QUOTES BY AND ABOUT GARY BRADLEY

"My feeling was that Gary Bradley was very hard to deal with and sort of secretive, and I honestly think the lenders had lost confidence in his credibility."

 "What drove me nuts was I never felt like what everybody was fighting over in court was what the real issue was.  You always felt like there's something going on they're not telling you."

 Judge Larry Kelly, US Bankruptcy Court

[Austin American-Statesman  June 16, 1997]

"We serve as an excellent example of the abuses of the system."

Gary Bradley, speaking of First Gibraltar, not himself.

[AAS 11/30/90]

"I can tell you there's more going on here than meets the eye."

Craig Weinstock, First Gibraltar attorney, to Judge Kelly

"There was this little odor.  It's one of those things I'd like to know more about, but it seems to me it ultimately didn't matter.  It would have become more important had Gary Bradley individually been the founder of the new plan and gained control of the entity personally but it wasn't his bankruptcy."

Judge Larry Kelly, US Bankruptcy Court

[AAS  11/30/90]

"At the same time, you might say it increased my personal resolve.  If anyone thought I was intent before you should see the new Gary Bradley with $40 million.  Even if they get to me, they can't get to Circle C."

Bradley on the Circle C bankruptcy bailout by FM Properties  

[AAS 2/7/92]

"They're playing a lot of shell games.  These loans may be a facade, all interwoven with Noshirvani's money."

 "The bank is concerned that all or part of the money ostensibly to be lent by Alistair [a corporation chartered in the British Virgin Islands, controlled by Hamid Noshirvani] is actually money which has been funneled to Alistair by either Gressett or Bradley in an attempt to circumvent the priorities normally afforded creditors."

 Eric Taube, First Gibraltar attorney

[AAS 6/17/97]

"There was never an allegation of fraudulent representation against Gary."

Taube, now attorney for Bradley's trust

[Austin Chronicle,  Oct. 11, 2002]

"People think it's somehow inappropriate to create a trust for someone without something sinister going on.  No one has been able to identify any assets that Gary ever had-no one has ever come close to it."

Eric Taube, speaking for Lazarus Exempt Trust

[AC10/11/02]

"Contrary to what some of my detractors have said, I have never been accused of committing fraud or anything else by any governmental agency."

Gary Bradley

[AC  10/11/02]

"Gary's very tenacious; Gary's very shrewd and smart, but it can hardly be said he's ever repaid his lawful and moral obligations...at least as determined by the courts at this time."

Craig Weinstock, First Gibraltar attorney

[AAS 6/17/97]

"I don't intend to satisfy Gibraltar.  They're wrong, I think they're corrupt and I know they've lied to me numerous times."

Gary Bradley

[AAS 6/17/97]

"I would say the fight has just begun.  They may have thrown the first punch, but if Gary were in a street fight, I'd bet on him.  Gary will come out swinging.  Gary is not only financially but emotionally tied to that project.  He's not about to quit now."

Clark Wilson, president Doyle Wilson Homebuilders, on Gibraltar's foreclosure of Circle C

[AAS 10/19/90]

"Bradley and Gressett allege economic duress because they were forced to sign these letters [waiving claims against Gibraltar] to obtain additional funding.  Borrowing short and investing long has its hazards, but the natural consequences of a borrower's own acts cannot be used as duress...asking a borrower to live up to his promise or asking for consideration for the delivery of funds cannot be duress."

Federal Judge Lynn Hughes, on Bradley's defenses against paying the Circle C debts

[US District Court "Opinion on Summary Judgment," in First Gibraltar v. Bradley, et al, May 18, 1995]

"To my knowledge, the Circle C MUDs (and the residents and developers they represent) have met every financial obligation they have to the city.  More importantly, there has never been an attempt by any Circle C entity to change these financial obligations by using the state Legislature or the courts.  Anyone who says anything different is either misinformed or lying."

"I won't sit idly by and have him [Austin City Council member Daryl Slusher] accuse Circle C on not keeping its word.'

Gary Bradley

[AAS 2/22/98]

"In short, the bill [creating the Southwest Travis County Water District] achieved one basic objective: to remove Circle C from the City of Austin's jurisdiction.  We will not have to comply with their regulations nor will we ever be annexed and taxed by the City of Austin...City officials have lied repeatedly regarding financial impacts that the bill may have on the City of Austin.  I know the use of the term 'lied' is very harsh, but I also know that most of these city officials know the truth and simply chose not to tell it."

Bradley letter to Circle C Homeowners, June 30,1995

"All you ever hear about developers is that they never keep their word."

Gary Bradley [AAS 9/24/89]

On Talex Settlement:  "He also warned against any 'innuendo that I may be moving assets illegally or I'm a crook,' and said he would take legal action 'if you even hint of something like that."

Bradley threat to the Austin American-Statesman, reported AAS 6/17/97.

"Gary is an unscrupulous person and will go to the wall when he thinks he is right."

Jim Ray, developer [Third Coast June 1987]

"The idea of me using one of my employees who is on the planning commission to interfere with somebody else's business-that's a lie.  That is an absolute lie."

Gary Bradley [Third Coast June 1987]

"Gary Bradley is a big crybaby."

Ed Wendler, Sr., developer lobbyist formerly aligned with Bradley

[Third Coast June 1987]

"I see a guy who wants more than anybody can ever have.  When will enough be enough? Will he ever be satisfied?  I think he won't."

John Wooley, Schlotzky's CEO and former Bradley development partner

[Third Coast June 1987]

"He is a vindictive player.  He really is mean."

Jay Frank Powell, former Austin Planning Commission member

[Third Coast June 1987]

"Why am I such a lightning rod for this crap?  If you're just an average citizen who lives in Austin, Texas, you think I'm the biggest polluting jerk asshole, bankrupt, corrupt, immoral, illegal, da da da guy walking the streets.  And it's all because of my media image."

Gary Bradley [AAS 6/15/97]

"The only thing I have ever really wanted to do is to make movies."

Gary Bradley, in the Austin Chronicle Oct. 11, 2002."

"Whatever I have is for sale at the right time and the right price."

Gary Bradley, on his partners' land, not his ethics

[AAS 9/24/89]

"Probably nothing motivates me more than injustice or hypocrisy.  I also really don't like bullies, whether it's individuals, bureaucracies, organizations, or the media.

Gary Bradley, on others, not himself

[AC 10/11/02]

"Under examination by the FDIC's counsel, the Debtor testified regarding a number of convoluted business transactions and asset conveyances, but was unable to recall many of the details of same."

Federal Deposit Insurance Corporation, "Motion to Extend Time for Filing Complaint Objecting to Discharge," in re: Gary L. Bradley, debtor, No. 02-12741-FRM (Chapter 7), filed Oct. 11, 2002.

"As far as I am concerned, the Gary Bradley story ends with this bankruptcy."

Gary Bradley, on his media epitaph

[AC 10/11/02]

"I think a funeral will probably be the end of my relationship with Circle C."

Gary Bradley

[AAS 3/30/89]

WHAT BRADLEY HAS COST TAXPAYERS

 

EXPENSE

WHO PAID

AMOUNT

Defaulted corporate bank loans

federal taxpayers

$92 million[1]

 

 

 

Defaulted "personal loans"

for Circle C

federal taxpayers

$15 million[2]

 

 

 

Utility bond expenses not

covered by Circle C residents

Austin utility ratepayers

$35 million[3]

 

 

 

Bowie High School site

AISD taxpayers

$30 million[4]

 

 

 

Kiker Elementary School

AISD taxpayers

$  .7 million[5]

 

 

 

South MoPac extension

Texas taxpayers

$22 million[6]

 

 

 

Veloway

local & state taxpayers

~$1 million[7]

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

$195.7 MILLION

 

 

 

WHAT BS&G PARTNERSHIP PAID FOR THE LAND IN 1982:   $  11.2 MILLION[8]

Above figures do not include: interest on the defaulted loans; taxpayer expenses for roads such as the Outer Loop (SH 45), extensions of MoPac north of Davis Lane, and arterials like Slaughter Lane; nor expenses attendant upon annexing Circle C.


[1] AAS  11/3/90

[2] AAS  11/3/90

[3] AC  11/9/94

[4] AC  11/9/94

[5] Bradley letter to Jerry Ford, CEO of First Gibraltar, 10/3/89.

[6] AC  11/9/94

[7] AAS  9/24/89

[8] Third Coast June 1987; AAS 6/15/97