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June 26, 2003, 4:19PM Judge orders former attorney general to remain in jailAssociated PressAUSTIN - Former Texas Attorney General Dan Morales was ordered to remain in jail while awaiting trial on federal fraud charges after a judge determined today that he may have lied on two recent car loan applications and was a risk to commit financial crimes. "This is beyond stupidity," U.S. District Judge Sam Sparks said from the bench. "It appears he has committed a federal crime." Morales spent Wednesday night in the Travis County Jail after prosecutors said he gave conflicting information on the car applications and sworn financial statements when he asked the court to appoint a public defender. He had previously been free on a personal recognizance bond. Morales, 47, entered Sparks' courtroom in handcuffs and escorted by federal marshals. He did not speak during the hearing. Assistant U.S. Attorney Jim Blankinship said that because of massive credit, mortgage and car loan debt, Morales was a risk to either flee from prosecution or commit financial fraud to cover his debts. "You just have to wonder what is he going to do to live?" Blankinship said. "He can't do anything but commit a crime and carry on the way he's carrying on." Morales' court-appointed attorney, William Ibbotson, said Morales had legal options to pursue, such a declaring bankruptcy. He said Morales should remain free on bond to help prepare his defense in his Oct. 7 trial. Sparks, however, agreed with prosecutors. "He stays in jail," the judge said. Morales has pleaded innocent to charges that he and Marc Murr, a friend, tried to obtain hundreds of millions of dollars in legal fees for Murr resulting from the state's $17.3 billion settlement with the tobacco industry in 1998. He also is charged with diverting political contributions for personal use, including the purchase of a $1 million home. Morales faces prison terms of five to 30 years on each count of the original 12-count indictment if convicted. U.S. Attorney's Office spokeswoman Shana Jones refused to comment on whether prosecutors would file additional charges. Sparks appointed the public defender to Morales' case after Morales submitted a financial statement to the court that showed he had almost $1 million in assets and about $925,000 in debts. Prosecutors moved to have him jailed after he submitted the two loan applications for a Lexus and a Mercedes; one claimed income of $20,000, the other $20,800 a month. He listed his occupation as a lawyer, although he had allowed his law license to lapse. Robert Hightower, the FBI agent leading the investigation into the federal charges against Morales, said investigators have found no evidence that the Harvard educated-Morales has had any income since October 2001. Credit reports through May 1 showed Morales had $163,715 in credit card debt. Morales' minimum monthly payments to satisfy house, car and credit card debts are about $10,615, Hightower said. Morales' payments were up to date through the May 1 report. Morales' attorneys gave no indication how Morales was able to make the payments while not holding a job. The judge said he was particularly troubled that Morales would ask for a court-appointed attorney, paid for by taxpayers, and then buy the two cars, taking on an additional $1,600 a month in debt. "I don't find Mr. Morales credible," Sparks said. The financial statement Morales filed in April listed Morales as self-employed with $10,000 in a bank account. He listed his home value at $950,000. A 1999 automobile was valued at $15,000 and a 1996 boat was valued at $10,000. Morales was elected attorney general in 1990 and was re-elected to a second term in 1994. He chose not to run for re-election in 1998. He ran last year for the Democratic nomination for Texas governor, but lost the primary to multimillionaire Tony Sanchez.
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