TEXAS: The Founder

Even during the Great Depression, none of Houston's banks failed. Last month, however, the queues began forming each day before dawn outside the defunct Sharpstown State Bank as depositors applied for payouts from the Federal Deposit Insurance Corp. The agency was making good on accounts —but only up to $20,000 each. About $16 million seemed, for the time being, lost to depositors.

Nor was that the only loss in what was shaping up as a Texas financial-political scandal large enough to eclipse Billie Sol Estes' capers of a decade ago. According to the...

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