S.A. Democratic stalwart eyed
By Guillermo Contreras, STAFF WRITER / Express News
Seven months after hosting a private $35,800-a-plate fundraiser for President Barack Obama at his home in The Dominion, nationally recognized plaintiff’s lawyer and Democratic Party stalwart Mikal C. Watts finds himself under federal investigation over the legitimacy of his client list in a case stemming from the 2010 BP oil spill.
Earlier this month, Secret Service agents, who not only protect the president but investigate cases of fraud, counterfeiting and identity theft, served search warrants at Watts’ two law offices on the Northwest Side, the San Antonio Express-News has confirmed with federal officials and Watts’ attorney.
Federal officials confirmed the raids, but won’t discuss the scope or the timetable of the probe, including when it began.
“It’s an ongoing investigation,” said Brian Leary, a Secret Service spokesman in Washington, D.C.
Records reviewed by the Express-News indicate the probe is centered in Jackson, Miss., and is related to claims against BP and a compensation fund stemming from the oil company’s Macondo well and Deepwater Horizon disaster in the Gulf of Mexico.
“We can’t comment because it’s an ongoing criminal investigation,” said John Dowdy, chief of the criminal division for the U.S. attorney’s office for the Southern District of Mississippi. “No charges have been filed at this time.”
Through his lawyer, Watts denied any wrongdoing.
“Mikal Watts is an honorable man,” said his lawyer, Mike McCrum. “He has been serving and helping victims of tragedies for many years. Everything he has done in the BP litigation has been in good faith and with good intentions. I’m honored to represent him and his family.”
Watts is a plaintiff’s lawyer with a brass-knuckle reputation in the courtroom.
He’s also a Democratic kingmaker, having contributed and raised thousands for candidates for the bench, mayor, City Council, the Legislature, governor, Congress and the White House.
In July 2012, he hosted a fundraiser for Democrats at the Convention Center that drew more than 1,200 people who paid $250 each for a chance to see Obama.
That gala occurred before Watts and 75 guests — including Mayor Julián Castro, U.S. Rep. Charlie Gonzalez, former Mayor and HUD Secretary Henry Cisneros and actress Eva Longoria — gathered at Watts’ home in the Dominion for a private fundraiser held in his gymnasium.
It wasn’t clear Tuesday whether the president knew of the investigation during his visit, but a previous newspaper story indicates complaints had been levied with authorities since 2011, at least a year before Obama’s visit, when the president presented Watts with a birthday cake.
A message was left with the White House press secretary Tuesday followed by an email requesting comment. The request has gone unanswered.
As first reported by the New York Times in 2011, Watts previously has been accused of discrepancies in the litigation against BP as he made his way onto the plaintiffs steering committee, an exclusive group of lawyers appointed to manage their side of the litigation.
Lawyers on such committees typically reap a financial bonanza for their efforts.
A large list of clients can help secure a seat on the committee, but his client list came under question, with discrepancies about Vietnamese people in the Gulf region who say they never hired his firm, according to the Times report.
Some maintained they never signed up with any lawyer, but found claims had been filed on their behalf, the Times reported.
Others along the coast said they had handed over financial records to people who promised them quick and free financial assistance, only to discover later that they actually had hired a lawyer. Still others told the Times they were misled into signing up for a lawyer by being told they were applying for medical assistance.
Former Louisiana law student Felix Cao told the Express-News he didn’t have any a claim, yet was targeted by mass mailings from the Watts firm, which claims it obtained a retainer from him.
He also said the house he lived in was bombarded with mailings for people who have not lived there for 20 or 30 years. Letters arrived saying, “Dear Client” — in apparent violation of rules barring lawyers from referring to people that way if they haven’t obtained signed retainers. Investigators are trying to make sense of things.
“I was shown a retainer I supposedly signed, but I never signed it,” said Cao, who now works for a law firm in Louisiana. “I looked at it, and it definitely wasn’t me.”
Supporting affidavits for the San Antonio searches, which were executed Feb. 8 at 4 Dominion Drive and 5250 Prue Road, are filed in federal court here, but are sealed, a check by the Express-News found.
However, sources said agents sought records related to people who Watts’ firm purportedly represented in litigation against BP.
Watts “had no knowledge of the existence of a criminal investigation until he was surprised to find out that his offices were searched,” McCrum said.
“Mikal and his firm have not made any money as a result of this litigation,” McCrum said. “People were injured out there, and he’s been doing his best to see that these injured people are compensated. … Mikal and the law firm have been cooperative. Mikal has no knowledge of anybody committing any crimes with respect to this.”
Speaking on condition of anonymity, an official familiar with the claims process involving the fund set up to compensate victims of the BP oil spill told the Express-News that many of Watts’ claims had discrepancies on whether the purported clients had actually signed a retainer.
Watts first came to the attention of many San Antonio Democrats in 2006 when he largely bankrolled Navy pilot and attorney Juan Garcia’s winning campaign against longtime Republican state Rep. Gene Seaman in Corpus Christi.
Watts had relocated his family from Corpus to San Antonio, where he took up residence in The Dominion and began pouring more money into races here.
He held at least one major fundraiser for Castro in 2009 as the former councilman battled to become mayor.
During that campaign, Castro’s opponents tried to make political hay of his referral of a drunken-driving lawsuit to Watts’ law firm.
Castro and Watts’ law firm successfully settled the case in 2007, and although the terms of the settlement are confidential, it purportedly netted Castro a sizable fee.
Castro did not return a request for comment Tuesday, but at the time, he denied any impropriety.