Moody National Bank this week filed a lawsuit against the Galveston County Republican Party Executive Committee asking a district court judge to decide who is in control of the party’s finances.

The lawsuit was filed Tuesday in Galveston’s 56th District Court. It stems from a monthslong conflict between Galveston County Republican Party Chairman Carl Gustafson and a group of county precinct chairs who, citing dissatisfaction with Gustafson’s leadership, said they have seized control of the party.

The group that claims control calls itself the party’s Steering Committee, and uses a resolution voted on by precinct chairs in November as proof of its power.

But while the committee members argue they should have control of the party’s finance, attorneys for Moody Bank say they’re not so sure.

On Dec. 26, the bank received a letter signed by two precinct chairs, Alicia Youngblood and Kathy Rogers, asking that Youngblood and another precinct chair, Janis Lowe, be added as signatories to one of four party bank accounts, according to the lawsuit.

Two days later, the bank responded, saying that the party’s secretary needed to submit an adopted resolution to the bank, and that existing signatories — including Gustafson — would be needed to sign documents acknowledging the changes, according to the lawsuit.

Lowe subsequently sent more emails to the bank on Jan. 8, Jan. 18, Jan. 19, Jan. 25 and Feb. 7 requesting information and changes to the bank account, according to the lawsuit.

In one letter, Lowe claimed to be the party’s new treasurer.

The bank took no action, and on Feb. 9, received a message from Gustafson saying he was not agreeable to the changes proposed by the steering committee, according to the lawsuit.

The bank’s attorneys are seeking a judgment from the court because the state election code doesn’t address the management of bank accounts held in the name of the county executive committee.

The executive committee is the name for the collective group of elected party precinct chairs, and is separate from the party’s executive board, which consists of Gustafson and people he appoints to lead the party.

The bank also is seeking unspecified attorneys fees, court costs and other relief, according to the lawsuit.

Vic Pierson, the president and CEO of Moody National Bank, said the bank has no opinion on who should be in charge of the party and its finances, but wanted a judge to decide who the company should be listening to.

“We’re really not suing anybody,” Pierson said. “We’re just asking the court to give us direction on what we should do.”

Pierson said he couldn’t think of another time when the bank had gone to court in an attempt to decide who was in charge of an account.

Julia Hatcher, the legal counsel for the Galveston County Republican Party, said she believed the steering committee had no standing to request access to the bank accounts.

“The state law is very clear, and I’ve said many times that state law trumps bylaws,” she said. “They can’t create bylaws, they can’t write a resolution, that trumps a state law.”

Hatcher had previously said the steering committee had no standing to challenge Gustafson’s control of the party.

Lowe declined to comment about the lawsuit Thursday, but said a group of members of the steering committee was set to meet and talk about the lawsuit.

Gustafson declined to comment on the lawsuit.

No hearing date on the lawsuit had been set as of Thursday, according to court records.

John Wayne Ferguson: 409-683-5226; or on Twitter @johnwferguson.


(8) comments

JD Arnold

Good grief! Stop this nonsense.

Ron Shelby

Again. More spillover from the split within the GOP. Not only with individual candidates and their allegiances with different elected officials, but now the inner management of the party itself. What a mess.

Shawn Byars

There has been a general concern for quite some time that Carl Gustafson may not satisfy his statutory duties as the duly elected county chair. The duly elected precinct chairs have and are taking action to mitigate this. It has been an odd alliance of R's working together... just seeing Alicia's and Kathy's name on the same line doing something together is mind boggling for this casual observer. Folks have put aside faction differences to band together to push Carl out. The only real support Carl Gustafson has left is Tax Collector Cheryl Johnson and her political advisor/husband Don. Given Judge Cox's political association with the Johnsons (they are campaigning very hard for him) and the county party it seems odd tha he should preside over this case. Should the judge recuse himself on this one? Probably so.

Don Johnson

Shawn Byars, like typical Mark Henry surrogates, appears to live in a universe completely disconnected from the truth. There is no basis for his claim that Cheryl Johnson or I have taken a position in the race for GOP County Chair. The race we’ve focused on is the County Judge election. I know Byars has not been in contact with us, so maybe he heard this fabrication from Mark Henry – he is notorious for factually inaccurate statements.

Carol Dean

Janis Lowe, self appointed spokesperson for the newly formed Galveston County Republican Steering Committee, has in fact been hiding the details of this "dilemma" from members of the Executive Committee. The documents for this situation are easily accesable by going on line to The District Clerk's records. She claims that she will reveal this info to committee members at a "closed" Executive Committee meeting scheduled for February 26. What's up with that? The GCDN has already exposed the info.

Talk about a lack of transparency!

Shawn Byars

Thanks for the response Don, always great to hear from you. Numerous conversations with precinct chairs, elected officials and party insiders suggest otherwise in regards to your support for Gustafson. While you may have not taken a public position your support behind the scenes is obviously alarming. Your and the Tax Collector's obsession with the County Judge race is further evidence of your political meddling. I have been in contact with Cheryl... a simple ORR would show that. Claiming that I am a surrogate for Judge Henry is laughable at best... just another example of your slanderous attempts to silence your critics. I do agree wholeheartedly with Judge Henry on one thing... I wish you two would "just stop it".

Walter Manuel

This election cycle has certainly brought out the worst in a lot of people especially when it comes to trying to convince voters of unfounded or baseless lies in order to promote their own agenda or political candidate.

The biggest farce for example is that a lawyer reports that he filed a "criminal" complaint with the Attorney General's office against Judge Lonnie Cox when in fact EVERYONE should know that the OAG will never say whether or not they have actually received such a complaint and/or whether they are even investigating such a complaint.

How do I know you ask? Because I filed a complaint with OAG against the former ousted LMISD BOT and even I couldn't get any information from their office whether or not they received, accepted the charges or even took the time to investigate my complaint.

This was obviously the best strategy that the Henry camp could come up with in order to do whatever it takes to hold onto his seat when in fact everyone knows that there is NO way for voters including the lawyer who filed the complaint to actually validate such a claim.

Unfortunately voters won't know the validity of such a complaint made against Judge Lonnie Cox until long after the election is over or in fact maybe never.

Voters need to be aware of just how low dirty politics has really become.

Educate yourself on ALL candidates qualifications and accomplishments when considering voting for or against someone while being extremely cognizant of the usual smear tactics that some people have to resort to in order to confuse or distract voters from the REAL truth.[sneaky]

Carol Dean

Education is always the best resource! Too many people just will not take the time to access the truth. My new motto: "Show Me!" Show me documentation where it says that!

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