WHAT’S THE REAL STORY ABOUT RUBEN PENA?

By Juan Montoya
As the countdown in the runoff race between former Brownsville City Commissioner Ernie Hernandez and former Harlingen attorney Ruben Peña for Cameron County Commissioner heads for the April 13 showdown, followers of both men have started to dig up past peccadilloes trying to paint their opponent as the worse of two evils.
Hernandez (who advertises on this blog) ran an ad in last Sunday’s Brownsville Herald pointing out that Peña was delinquent on nine accounts with the Cameron County Tax Assessor-Collector. Hernandez said Peña owed nearly $10,000 and then smugly declared that he (Ernie) was a good citizen and current on his tax obligations.
Peña’s followers meantime have cried foul and recounted Hernandez’s past missteps such as having his towing business on the city rotation, his vending machines on city property, and the city using his shirt embroidery service to fill an order (which he donated once the matter was revealed).
Peña sheepishly trudged over to Tony Yzaguirre’s office to pay up his tax bills and make arrangements on a Harlingen property the Monday following the publication of the ad.
The blogs, meanwhile, have gone ballistic as comments from El Rocinante’s four readers will attest. Commenters question the motives behind the Hernandez ad and other submissions to the blogs, this one included. Many outraged Peña supporters question the morality of the postings and ascribe it to some Machiavellian plotter deep in the bowels of cyberspace.
Still others wonder why there’s so much ado about the matter.
“Well, the blogs didn’t make Ruben delinquent on his taxes,” said one elected official. “They didn’t tell him not to pay. He did it himself.”
There have also been cryptic comments surrounding Peña’s role as a co-executor of the McGarr Estate in Los Indios, which some commenters point to as a question on the character of the candidate and his ability to manage finances.
We decided to look into the issue and sought the legal record for the facts.
Surprisingly, the story is still fresh in the minds of many long time county observers.
Many remember Rex McGarr as a successful farmer who owned in excess of 300 acres of prime farm land. His foreman Robert Pedraza recommended that McGarr hire Peña to draft his will in August 1982. In May 1982, about three months before Peña prepared McGarr’s will, he also prepared a report valuing the farmer’s net worth at about $1.8 million.
In the will McGarr made provisions for $5,000 in cash distributions to his sister, his four nephews, and to Pedraza. Additionally, Pedraza was to receive a 114-acre tract of land in fee simple.
The rest of the estate was to be placed in a testamentary trust. The will provided that the remainder of real and personal property would be administered by Peña and Pedraza for the benefit of his sister Ruby Duthu for 20 years, or until her death. At that time the beneficial interests would be shared by Pedraza and McGarr’s sister and nephews (Paul M. Duthu, Leory Duthu, Rex Duthu, Herman Duthu and Ruby Duthu).
On the same day that Peña drafted the will, he also drafted a power of attorney giving Pedraza control over McGarr’s estate, which the farmer signed. Then, a few months later, on March 1984, Peña drafted and filed documents in Cameron County probate court stating that McGarr was incompetent and requesting that Pedraza be made McGarr’s guardian.
Between the time that McGarr fell ill in 1982 and his death in 1986, Pedraza, in his role as McGarr’s guardian, and as assisted and adviced by Peña, borrowed more than $1 million from several state banks. He claimed the loans were secured for the purposes of continuing McGarr’s farming operations, a claim disputed by McGarr’s relatives.
To make the long story short, Pedraza defaulted on the loans in May 1988 and the banks foreclosed on the estate which was used to secure the loans. In July 1989 the bank and estate settled the state court foreclosure suit by assigning all the estate’s assets to the bank. In August 1989, the estate’s assets were conveyed to the bank pursuant to the settlement agreement.
There followed a lengthy legal battle between the heirs of McGarr and Peña and Pedraza where his nephews claimed that Peña and Pedraza had used the estate for their own benefit. Additionally, even Pedraza filed a lawsuit against Peña accusing him of “a variety of other misconduct.”
He claimed that he “was the victim of the more sophisticated machinations of a purportedly self-dealing Peña in the administration of the guardianship and the estate.”
In October 1996, the Duthus filed suit against Peña, Pedraza and the bank in federal court alleging that “Peña and Pedraza breached certain fiduciary duties…committed fraud, and engaged in a civil conspiracy which damaged (them)… and that Peña and various law firms and attorneys associated with Peña committed legal malpractice.”
On December 9, 1998, the district court entered an order granting Peña’s motion for a summary judgment in respect to the lawsuit by the Duthus. “Given that the claims were not filed until more than seven years later, on October 1996, the claims were time barred by both the potentially applicable Texas limitation periods which would be two years for those claims sounding in tort…and four years for those claims sounding in contract…,” the judgment stated.
In filing his motion for a summary judgment, Peña indicated that the heirs had received $5,000 each and had signed a release when they were informed that the estate was heavily in debt.
Likewise, Pedraza’s lawsuit against Peña was rejected by the court because the statute of limitations had run out.
That, however, was not the end of the matter. You've got to remember that we live in Cameron County, where politics always plays a role in our everyday lives.
In 1997, a brouhaha ensued when a county justice of the peace issued arrest warrants against Peña that were served on him by a county constable. Peña was placed under arrest at his office and placed in the county jail. Only the intervention of a district judge and local legal eagle Ernesto Gamez prevented him from being held on a $690,000 bond set by the justice of the peace.
In the end, the court ruled that since the heirs had not filed within the time set by the statute of limitations, they had no standing to sue Peña or Pedraza.
A special prosecutor (De Witt County Assistant District Attorney Alger Kendall) was assigned to investigate allegations against Peña after then-Cameron County District Attorney Yolanda De Leon, who was once a law partner of Peña’s, took her office out of the investigation of Peña.
Kendall, on the stand during a misconduct hearing for the justice of the peace who issued the arrest warrants against Peña, told the court “that Peña escaped indictment on misapplication of trust and other charges brought against him by the Duthus…because the statute of limitations had run out on the allegations against Peña.”
The federal case against Peña (No. 99-40041) was heard by the U.S. Court of Appeals for the Fifth Circuit and originated in Brownsville as case (B-96-CV-191).
So there you have it.
Peña’s opponents could make the case that he cannot possibly be capable of managing the county’s $118 million budget given his performance in managing the McGarr estate.
Still others think that the possibility of having three lawyers on the county commission (Peña, Eddie Treviño, and David Sanchez) goes against common sense since they would be directly involved in setting the court’s and District Attorney’s budgets.
Come April 13, we’ll see what you, the voters, decide.