Cleburne Times-Review, Cleburne, TX

Local News

September 8, 2010

Flores cries foul

Candidate says Edwards ad distorts the truth

Congressional District 17 Republican candidate Bill Flores on Tuesday said an ad launched by incumbent U.S. Rep. Chet Edwards, D-Waco, is false, extremely defamatory and beyond the pale.

“Given his track record of running dirty campaigns to hold onto power, this latest round of Edwards’ gutter politics is disappointing,” said Flores in demanding that Edwards remove the ad.

The Edwards campaign, communications director Megan Jacobs said, has no intention of removing the ad that claims an oil company that Flores helped run laid off more than 3,000 workers while paying millions to its top executives.

The ad is relevant to the campaign as a response to claims by Flores that he helped create more than 500 jobs in the private sector, Jacobs added.

Flores doesn’t dispute that layoffs occurred at Baker Hughes, which acquired Western Atlas in a merger in 1998. Flores served as senior vice president and chief financial officer at Western Atlas before the merger.

However, he said he played no part in them.

“I was laid off,” Flores said, “because the company didn’t need two CFOs going forward after the merger.”

Baker Hughes did not retain Flores after the merger in August 1998, he said, and in fact, Flores added, he was relieved of his management duties at Western Atlas.

Flores said he remained employed by Western Atlas through December 1998 to oversee one project, which did not include layoffs for either company.

“I did not run that company [Baker Hughes] because I did not work for them,” Flores said. “[After the merger] I helped Western Atlas sell part of an interest in a small company it owned that operated in the former Soviet Union. As far as I know, there were no layoffs from that company, either.”

A release from Edwards’ camp on Monday cited a 1999 article in the Oil & Gas Journal, which reported that Flores helped “negotiate and execute” the merger.

“It’s pretty clear the layoffs were the results of the merger,” Jacobs said Monday.

Flores camp disputed that, too.

“Prove where it says, in any SEC document, that the merger led to the layoffs,” campaign manager Matt Mackowiak said. “They cannot prove that, although they have claimed it.”

Mackowiak cited a Nov. 3, 1998, story in the Houston Chronicle attributing the Baker Hughes layoffs to low oil prices taking a toll on the industry.

In an affidavit Tuesday, James Brasher, who served as senior vice president and general counsel for Western Atlas from Jan. 1, 1998, to Aug. 10 1998, said much the same.

“Baker Hughes terminated approximately 3,400 employees in 1998,” Brasher said in his affidavit. “According to Baker Hughes’ SEC filings, these terminations were the direct result of the impact of poor industry conditions on Baker Hughes’ operations, and not due to Baker Hughes acquisition of Western Atlas.

“Mr. Flores had no management authority at Baker Hughes or Western Atlas following the acquisition, and he had no role or authority in the decision to terminate Baker Hughes or Western Atlas employees following the acquisition.”

Conditions of the merger, Brasher said, prohibited Western Atlas “from executing any material reduction in employment” in the months before the merger.

Other officials oversaw the layoffs, Flores said, which he said he believes occurred because of industry conditions at the time and redundancies caused by the merger.

Flores several times stressed he played no part in the layoffs and said he was surprised by the number of workers laid off.

“I expected layoffs because of redundancies, but nothing like 3,000,” Flores said.

Edwards’ release Tuesday pushed the issue by citing a resume submitted to Gov. Rick Perry in December 2004 by Flores, who was seeking a position on the Texas Real Estate Commission. The resume references the 1998 merger.

“After which Mr. Flores assisted Baker Hughes with special projects until Dec. 31, 1998,” the entry reads, “During his tenure, he reported to the president and CEO and maintained an open dialogue with the nonexecutive chairman of the board and members of the board of directors.”

Flores reiterated Tuesday that his role after the merger was to oversee the sale of the company partially owned by Western Atlas before the merger. After that he moved on.

Edwards’ campaign further distorted Flores’ resume, said Mackowiak.

The president, CEO and other officers Flores reported to were officials at Western Atlas, not Baker Hughes, Mackowiak said.

“[Edwards] usually goes negative in campaigns,” Flores said. “But in this campaign he’s gone negative since minute zero and ever since. We’re going to the mat on this though, it’s gone too far this time.”

Flores said he remains focused on discussing the economy, poor job market and out-of-control government spending.

The exchange came on the same day the Edwards campaign called for Flores to release his tax returns from 1998-99 to show whether he benefited financially from the merger.

Securities and Exchange Commission documents show payments of $87.7 million, which include “payments made to certain officers of Western Atlas and Baker Hughes pursuant to change in control provisions [$60.8 million] and severance benefits paid to terminated employees whose responsibilities were deemed redundant as a result of the merger [$15,4 million],” according to the SEC filing.

Voters deserve to know if Flores benefitted financially while others lost their jobs, Jacobs said.

Edwards’ request for Flores’ tax returns appears unlikely to be met.

“Bill has filed all the required financial disclosure information, that is public record,” Mackowiak said. “For decades Bill and [his wife] Gina have been dedicated to supporting their community with major charitable contributions. This absurd request does not address how he has run a very false and defamatory ad he should pull.”

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