It wasn't that long ago. Ronald Reagan became President during those years, but the Attorney General in Oklahoma from 1979 to 1983 was a hard-nosed, uncompromising, principled, old school progressive, Jan Eric Cartwright. Jan appointed me Assistant Attorney General in 1981. Today, Jan Cartwright doesn't even have a Wikipedia page, but I remember him like it was yesterday.
The Attorney General in Oklahoma is powerful. Any state or local officeholder may ask a question of the Attorney General who may then issue an official opinion that has the force and effect of law until overruled by a court. He can intervene in court cases on behalf of the State anywhere in the state. He can prosecute crimes. His powers give the AG great influence over the direction of public policy on a statewide basis. Jan Cartwright used his power to comfort the afflicted and afflict the comfortable. Jan lived and crusaded for his conviction that the rich and powerful have to follow the rules like anybody else.
Jan left one of his biggest marks when he declared legal war on a common tax dodge used to avoid property taxes by industrial facilities. It was corporate welfare. Publicly, Jan called them boondoggles. Privately, he spoke of the shenanigans more in barnyard terms. The law library at the Oklahoma State Capitol, named for Jan Cartwright immediately after his death in 1986, says this of his place in Oklahoma history:
Cartwright was not afraid to tackle the “big boys” during his tenure at the Corporation Commission and as Attorney General. His Attorney General Opinion ruling that large corporations owed property taxes to support the public schools was the best example of this.
That "best example" led to litigation with General Motors that ended in the US. Supreme Court. In 1982, Jan Cartwright assigned me to intervene in a suit just filed by GM to avoid tens of millions of dollars of school property taxes on its vehicle assembly plant in Midwest City, Oklahoma. For more of that story, along with another that illustrates Jan's zeal to comfort the afflicted, continue out into the tall grass.
The case, General Motors Corp. v. Oklahoma County Bd. of Equalization, shaped and reflected both the highest and lowest times of Jan Eric Cartwright's single term as Attorney General. Though the case was a legal and professional triumph, it ultimately spelled political defeat.
When Jan Cartwright took office in 1979, General Motors Corporation and hundreds of other rich and powerful interests in Oklahoma owned millions of dollars of property, all over the state, on which they didn't pay a penny of property tax. A common scam for property tax evasion had flourished for years in Oklahoma. In an official opinion in 1969, former Attorney General G.T. Blankenship, with little explanation, had approved such tax exemptions, which became used for particularly large projects under Jan Cartwright's immediate predecessor, the improbably named Larry Derryberry. Jan knew that the gimmick, known as public trust financing, was a completely fictitious and unlawful tax evasion scheme and he meant to stamp it out.
Public trusts were designed to work like this: Local voters create industrial development authorities, called public trusts. These trusts issue tax-exempt bonds, borrowing money from investors, to be paid back with lease payments made by a private company leasing the industrial facility that the public trust purchased and built with the borrowed money. The public trust, the actual owner of the land and factory, is tax exempt under the state constitution and those tax savings, along with the financing costs saved from the tax-exempt "Industrial Revenue Bonds" that finance everything, get passed on to the private company that leased the facility. Doing everything lawfully gets the company cheaper financing and a subsidized factory lease, a very good deal. That wasn't good enough for the rich and powerful, though. They wanted to have their cake and eat it, too. By the time the corporate kleptocrats were done monkeying with the system, the tax exempt public trusts held no meaningful interest whatsoever in the properties involved, save only a paper title. Everything else amounting to ownership was in the hands of the private companies, sometimes huge ones like General Motors, which used that piece of paper, that naked legal title, to avoid paying taxes on their property, mainly school taxes on property that was entirely in the private party's possession and control, like any other privately owned property. Yet, thanks to General Blankenship, the tax assessors never even put the properties on the tax rolls.
Jan Cartwright knew what a scam the public trusts had become. Still a young man, in his early 40's, Jan had a deep and thorough knowledge of public law in Oklahoma. He grew up in one of Oklahoma's most political families of the 20th Century and served as an Assistant District Attorney, Assistant United States Attorney, State Representative, Corporation Commissioner and Attorney General.
With the ink barely dry on his inauguration papers, Attorney General Cartwright issued an opinion answering a question about whether the "leasehold" interest acquired by a private company in one of these public trust deals was taxable property. Darn tootin', shot back the feisty new AG. And, by the way, he said, that P.O.S. 1969 Opinion issued by G.T. Blankenship (the only Republican who ever, until then, had served a term as Attorney General in Oklahoma) is consigned forthwith to the ash bin of history. Of course, Jan's opinion said all that in beautiful, cogent, well reasoned legal prose, authoritatively substantiated with law, rule and precedent. It was a thing of legal beauty and it set off a fire storm.
From the day the public trust tax opinion was released until his last day office, Jan marched down two roads: the legal road led toward triumph and ultimate vindication; the political road led to defeat and oblivion. I was there for much of it and had my own hands on a some of it. It was the most beautifully tragic, or, perhaps, tragically beautiful, experience of my legal career and my life.
Since 1951, moneyed interests in Oklahoma had celebrated every Yuletide in the happy knowledge that soon another balance sheet would record that coveted line, "Taxes Paid -- $0.00". Since AG Blankenship had accommodated the public trust boosters with his thinly reasoned and legally inexplicable blessing in his 1969 official opinion, those exemptions became regarded as something one could take to the bank, laughing all the way, no doubt. A feature of the scam was that no one would take it to court. All of the parties with interests a court would recognize, and grant standing to, were insiders. Ordinary taxpayers or parents or school children, the real victims of the scam, had no real voice under Oklahoma's very narrow taxpayer standing rules.
Jan's opinion blew the lid off of all of that. Overnight, every tax assessor in the State was suddenly obliged to put millions and millions of dollars of, mostly, industrial land and facilities onto tax rolls previously ignorant of their existence. The school tax base, along with the tax bills of the rich and powerful, blossomed overnight.
But some county assessors folded to local pressure to leave property off the tax rolls in spite of the new AG Opinion. H. M Dunbar, Tax Assessor of Garfield County, Oklahoma, ignored the opinion, no doubt earning the gratitude of the true owners of his local public trust's titular properties, Koehring Company, and Chesterfield Cylinder Company, Inc.
With other county tax assessors equally restive, Jan took the bold step of filing an original suit in the state Supreme Court, rather than bringing a case up through the trial court in Garfield County, and elsewhere, using normal appeals channels. Among other things, an uncommon legal maneuver like original litigation in the State Supreme Court demands a very strong legal position. Jan was a great lawyer and he had that. The Oklahoma Supreme Court, no doubt astonishing many, accepted the case and, no doubt astonishing many more, turned an interpretation of law upside down that had gone unquestioned since 1951.
The largest single public trust scam in Oklahoma was the smelly deal between the Oklahoma Industries Authority (OIA) and General Motors Corporation for its Midwest City Assembly Plant. There are two stories about Jan Cartwright's struggle to end General Motors tax exemptions, the story that everyone following the story knew, and the true story.
The story everybody knew was that good ole GM was like that old bole weevil, just lookin' for a home when Oklahoma came along and lured poor GM to move its plant there with irresistible promises of tax abatement. GM and the OIA were the good guys and held up their end of the deal. They sold the bonds and built the factory and were rolling out cars and trucks to beat the band. That is, until the crazy radical Jan Cartwright made Oklahoma break its sacred and solemn word. That bastard, Cartwright, dishonored the good people of Oklahoma by making them go back on a deal. IF not for those promises, said GM, the poor, betrayed company never would have come to Oklahoma. In GM's case, things went even further, when Oklahoma Industries Authority actually gave General Motors a written promise of tax exemption.
Not many people know the true story. Parts of it appeared in a piece published years after Jan's death in the Oklahoma Observer. Knowledge of the rest remains mostly confined to the participants in the litigation over GM's property tax exemption and the participants in the events relevant to GM's exemption claims.
Four lawyers were fought GM's tax exemption claim. The case began as an appeal by GM of the placement of its properties on the tax roles by the county tax assessor. That caused the assignment of two fine attorneys by the District Attorney. Two more of us handled the intervention for Attorney General Cartwright, taking the lead for the team. The lawyers on the other side were myriad and, nearly one and all, sported the most polished credentials. Their side spent, and billed, more time for legal secretaries than ours did for lawyers. I sometimes wondered if they spent more on manicures than our side did on legal secretaries.
Most of what I know I learned during depositions of General Motors executives taken in the Winter of 1982 in Detroit, MI. I questioned people under oath for days, all of the executives at General Motors responsible for siting the plant in Midwest City, Oklahoma. What I learned completely blew up the story that GM and its allies were peddling on TV and in the papers. It turned out that tax exemption in Oklahoma, for General Motors, had nothing to do with GM choosing the location. Tax exemption was a mere afterthought for a project that had already gone far beyond its point of no return. In public, GM and the Oklahoma Industries Authority, lied about almost everything in the highly publicized litigation with Jan Eric Cartwright.
I learned that in 1972 - 1973, General Motors had conducted an internal competition for a site to assemble vehicles, winnowing down a short list of about five fully investigated locations to a final selection, Midwest City, Oklahoma, just East of Oklahoma City. Some readers may not know that special tax breaks for big companies building new plants once were not the rule in this country and, until then, unheard of for car companies. In the early 1970's, so far as GM executives knew when I deposed them in 1982, no U.S. car plant had ever been built with special tax breaks from local property taxes. What the company looked for instead was things like availability of suitable workforce, weaker unions, adequacy of rail and highway infrastructure, water supply, waste management, etc. But geography was also a factor, because the purpose of this plant was to meet a perception of regional demand. Midwest City, a centralized location with nearly unparalleled rail and highway service (I-40 at I-35 is unarguably a major national crossroads) fit the bill for GM and no place else even came close. But, up until then, GM always bragged about how great it was that their plants were good neighbors who paid taxes and helped build a better community. GM actually had official schtick about it.
So, in early 1974 GM came to Oklahoma, purchased a bunch of land in Midwest City and told the locals they were coming with a new assembly plant. A good neighbor. With a big payroll. Who paid taxes like anybody else. They even broke out a gold plated shovel and broke some ground.
But in October of 1973 the Yom Kippur War broke out in the Middle East. Pretty soon, the nation was in the grip of what became known as The Oil Crisis Recession: (November 1973 - March 1975), a long, deep economic rollback that GM soon realized made building a new vehicle assembly plant right away a very bad idea. So, with a bit less ceremony than before, later in 1974, GM declared eternal love and dedication to Oklahoma, but said it needed some time to itself and was going away for awhile.
Awhile lasted until children not yet conceived when GM first decided to build a plant in Oklahoma were beginning to enter Kindergarten. By then, things had changed. Volkswagen had come to America, put a plant in Pennsylvania and got a $70,000,000 tax break in the process. One day at lunch during a GM Board Meeting, perhaps a result of dyspepsia from a poorly digested bit of Chateaubriand, the chairman was heard to exclaim something like "Why the hell don't we get stuff like that VW deal in Pennsylvania?" By this time, the company was ready to move ahead with the long promised Midwest City project and it took remarkably little time for the Chairman's indigestion to transform itself into policy.
That's when GM sent a guy to Oklahoma who is enshrined in my memory as Phil the Tax Bandit. Phil was sent to extract tax concessions from Oklahoma, by brandishing a threat to build GM's new plant elsewhere. But GM had no Plan B location and had already designed the plant for the Midwest City location. Phil knew he was making an empty threat, but he knew it didn't matter, because he was "threatening" Eddie Gaylord, one of the most powerful rich men in the state and the Godfather of the Oklahoma Industries Authority, a public trust. Eddie, the OIA, a murder of lawyers and Phil huddled around G.T. Blankenship's accommodating 1969 Attorney General Opinion and before you know it, Presto Chango, GM's property in Midwest City suddenly, on paper anyway, became OIA's property in Midwest City, bonds went to market, investors put up money and GM built a Midwest City assembly plant. To gild the lily, OIA gave GM a written promise that GM's factory would not be taxed. The assembly plant never went on the tax rolls. Until, that is, Jan Eric Cartwright rode into town, a metaphorical noonday Sun glinting from one of the points on his metaphorical tin star.
Eddie Gaylord took the arrival of the "new sheriff" personally. Gaylord wasn't just a ring to kiss to get corporate welfare from the OIA, he was also publisher of the only daily newspaper in Oklahoma City, the State Capitol, and a ruthless conservative enemy of all of the most progressive voices in Oklahoma politics. His paper, the Daily Oklahoman, once earned the distinction of Worst Newspaper in America from the Columbia Journalism Review. He declared war on Jan Eric Cartwright. I thought his front page editorials with the black borders were particularly charming. But they couldn't beat Jan Cartwright in court. That is why the true story never really came out.
We showed the trial judge that the law taxing General Motors' property was so clear that the claims GM was making in its protest didn't even deserve a hearing. When the Judge ruled against GM without a hearing, we had no use for all the evidence we had gathered in Detroit to destroy their credibility if they tried to fly their cockamamie claims in a trial. On appeal, the Supreme Court affirmed the trial judge, two times. The U.S. Supreme Court refused to review the case. The tax cheats lost at every turn.
But they won their war to destroy Jan Eric Cartwright politically. With Gaylord's help, a younger, firebrand District Attorney from Muskogee, Mike Turpen, ran against Jan in the Democratic primary and beat him, ending Jan's political career. Jan Eric Cartwright died in 1986 after a short illness with aggressive brain cancer.
Jan wasn't just about afflicting the comfortable. I'll never forget the time he sent me to "straighten out", I think he called it, a local school district over 100 miles away from the State Capitol. In those days corporal punishment of children in public schools was fairly common, if not universal. But a movement to reform child protection laws had just managed to get the state's child protection laws revised, and one of the new provisions prohibited corporal punishment of any child in the state's custody. Near Prior, Oklahoma, the State ran a residential facility for children, many of whom attended the local public school, where Jan had learned they were being paddled like any other kid in the school. He wanted it stopped immediately. I remembered he seemed very intent about it after he called the local officials to try to talk sense to them and they pretty much told him to butt out.
When I got to work that morning, I found out I was heading up there that very day to get a temporary restraining order and injunction to stop the paddling, from the local, known to be hostile, District Judge. In Biblical terms, it was something of a Daniel in the Lions Den kind of assignment, but that is what a civil division chief is for. I had about an hour to jumble together some pleadings and was driven to the closest airstrip where the Governor's twin engine propeller plane was waiting to fly me up to the action. Despite enormous political backlash and stout local push-back, we stopped the indefensibly illegal paddling of the State Home kids that very day.
In the battles of the strong against the weak that so fill the World, Jan had an unerring eye for the justice of the thing and did what was called for without fear or hesitation. I admire and miss his courage and can only hope I see it again in another American political figure, some day, somewhere, in the life that remains to me.
This post reflects the author's gratitude for the recent invitation to contribute from the Oklahoma Roundup Group.