“Goliad’s $1 Million Mess” Caty Hirst, Melissa Crowe; Robert Zavala, Kimiko Fieg Victoria Advocate September 08, 2013

Caty Hirst, Melissa Crowe; Robert Zavala, Kimiko Fieg
Victoria Advocate  
September 08, 2013 


Just about every town in the United States has some sort of program designed to promote economic development. They are so ubiquitous most newspapers tend to overlook these programs’ operations, or report on them only superficially. Victoria Advocate reporter Caty Hirst, however, began to question what was happening in the small town of Goliad in the name of economic development. After receiving a tip from a resident that businesses had started to line up for “free money,” she and the newspaper began a six-month investigation that revealed a program riddled with poor record-keeping, questionable loan practices, missing documents and virtually no accountability.

The newspaper’s investigation prompted the state’s top law enforcement agency, the Texas Rangers, to investigate the town. Here are a few highlights of the Advocate’s investigation:

  • Since 2008, the Goliad development board collected $525,624 in sales tax. It spent more than $1 million during those same five years, but the city did not accurately record the money.

  • Few on the board received economic development training. No one kept accurate records. No one accepted responsibility.

  • Three City Council members had loans while on the council. All three defaulted.

In one example, a Goliad businessman received a $31,128 loan for a self-serve laundromat, which created only one job — his. Moreover, the businessman stopped making payments after he was elected to the City Council and then defaulted on his loan. He continued to serve and vote on the economic development board during this time. All of this was possible only through repeated open records requests to obtain the supporting documents.

We detailed the scandal in a special report in print and an accompanying multimedia presentation online at www.VictoriaAdvocate.com/Goliad. We continue to report on the scandal during the criminal investigation, but already state lawmakers have promised to look into the little-known law that allows small Texas towns to operate economic development programs with virtually no oversight. Our investigation revealed 30 towns had taken advantage of this 2005 law to collect more than $75 million in sales tax. The towns are free to spend the money with no reporting required to the Texas Comptroller’s Office, as is mandated under the older, more well-known law governing the state’s economic development programs.

“It’s obviously a scandal, and it’s obviously horrible policy and sloppy lending practices,” Goliad District Attorney Michael Sheppard said after the Advocate’s special report published. Within a week of the initial publication, the DA asked the Texas Rangers to investigate.

Regardless of whether criminal intent can be proven, the newspaper’s work revealed a problem that should be examined by voters and lawmakers in every state. We appreciate your consideration of this investigation in the category of Public Service. I can’t recall a project in my time as editor here that prompted such a reader outpouring of gratitude toward the newspaper. You may see many of these comments below the main story online.
“I’m so proud of The Victoria Advocate,’ reader Patrick Nelson wrote. “In an age where true investigative journalism is almost dead, The Advocate is there to show it isn’t yet… The Media was intended to be an unofficial (4th branch of government) by our nation’s founding fathers & framers of The Constitution – exposing the truth and shining a light on political corruption, keeping our elected public servants in check… Thank you, Advocate staff, for doing that… Not only with this story, but also a good number of other investigative stories done over years exposing political injustices locally… I could not be any more prouder of The Advocate & staff.”

To make this in-depth project possible, all of our other reporters filled in on Caty’s beat. We also pulled in city of Victoria reporter Melissa Crowe to handle additional reporting and relied heavily on the expertise of special projects editor Robert Zavala in the detailed graphics we produced. Copy editor Jillian Kremer did line-by-line editing of the entire package, checking every number back it its original documentation. Of course, our editorial board also wrote strong editorials calling for reform.

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Submitted by Chris Cobler.

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