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DREW DEBERRY

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CAUSE NO. 2008-45087 (CONSOLIDATED)

ALLISON SNODDY, et al ) IN THE DISTRICT COURT


Plaintiffs, )
v. )
PETROLEUM WHOLESALE, INC. )
et al. )
Defendants, )
and )
STATE OF TEXAS ) HARRIS COUNTY, TEXAS
Plaintiff )
v. )
PETROLEUM WHOLESALE, L.P., )
d/b/a SUNMART; and PWI GP, LLC)
Defendants ) 334TH JUDICIAL DISTRICT

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ORAL VIDEOTAPED DEPOSITION

DREW DEBERRY

April 26, 2010

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ORAL VIDEOTAPED DEPOSITION of DREW


DEBERRY, produced at the instance of the DEFENDANTS, and
duly sworn, was taken in the above-styled and numbered
cause on the 26th day of April, 2010, from 9:00 a.m.
until 5:16 p.m., before Paige S. Watts, CSR/RPR, in and
for the State of Texas, reported by stenographic
machine, at the Office of the Attorney General, 300 WEST
15TH STREET, 9TH FLOOR, AUSTIN, TEXAS, pursuant to the
Texas Rules of Civil Procedure.

TAXABLE COST: __________


PAID BY: _______________
TBA NO.: _______________
JOB NO.: _______________

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1 A-P-P-E-A-R-A-N-C-E-S 1 THE VIDEOGRAPHER: We're on the record,
2
COUNSEL FOR PLAINTIFF, STATE OF TEXAS: 2 April 26th, 2010. The time is 9:15.
3 3 DREW DEBERRY,
Mr. John S. Langley
4 OFFICE OF THE ATTORNEY GENERAL 4 having been first duly sworn, testified as follows:
Environmental Protection & Administrative Law 5 EXAMINATION
5 P.O. Box 12548
Austin, Texas 78711
6 BY MR. FAIRLESS:
6 7 Q. State your name for the record, please.
7 COUNSEL FOR PLAINTIFF, STATE OF TEXAS:
8 Mr. John Owens
8 A. Drew DeBerry.
OFFICE OF THE ATTORNEY GENERAL 9 Q. Was PWI targeted in Operation Spotlight?
9 Consumer Protection & Public Health Division 10 A. Was PWI...
300 West 15th Street, 9th Floor, MC 010
10 Austin, Texas 78701 11 Q. Targeted in Operation Spotlight?
11 12 A. I wouldn't use that word. No, sir.
COUNSEL FOR DEFENDANTS, PETROLEUM WHOLESALE:
12 13 Q. Do you think it would be unfair to use that
Mr. Randy L. Fairless 14 word? Is that why you wouldn't use it?
13 JOHANSON & FAIRLESS, LLP
1456 First Colony Boulevard
15 A. Yes, sir.
14 Sugar Land, Texas 77479 16 Q. Okay. How old a man are you?
TBN: 06788500
15
17 A. Let me do the math here. I think I'm 32.
16 18 Q. Where do you presently reside?
17 19 A. Hang on a second. I live about halfway between
18 ALSO PRESENT:
19 Kelley Friedman, Johanson & Fairless 20 the Y at Oak Hill and Dripping Springs, Texas.
Stuart W. Lapp, Petroleum Wholesale 21 Q. Okay. What's the address out there where you
20
21 22 live?
22 23 A. 110 Cork Lane, Austin, Texas.
23
24 24 Q. I'm sorry?
25 25 A. Austin, Texas.
Page 3 Page 5
1 INDEX 1 Q. How long have you lived at that address?
2 2 A. Three and a half years.
3 PAGE 3 Q. Where are you from originally, Mr. DeBerry?
4 APPEARANCES .................................... 2 4 A. I grew up in Olton, Texas.
5 5 Q. And where did you graduate high school?
6 DREW DEBERRY 6 A. Olton, Texas.
7 Examination by Mr. Fairless..................... 4 7 Q. In what year?
8 EXHIBITS 8 A. 1996.
9 9 Q. And then what -- what was your first move after
10 EXHIBIT 10 high school? Was it to go to college, or did you enter
NUMBER DESCRIPTION PAGE 11 the workforce?
11
12 A. I went to college.
12 450 Business Card of Mr. DeBerry 28
13 451 Commissioner Findings of Fact 110
13 Q. And where?
14 452 Guidance Document 215
14 A. Texas Tech University.
15 453 Talking Points July 31, 2008 215 15 Q. Did you graduate?
16 454 Talking Points July 31, 2008 215 16 A. I did.
17 455 Talking Points July 31, 2008 215 17 Q. From Texas Tech?
18 456 Talking Points July 18-20, 2008 215 18 A. I did.
19 457 Talking Points July 18-20, 2008 242 19 Q. What year?
20 458 Operation Spotlight Procedures 242 20 A. 2000.
21 459 Operation Spotlight Procedures 242 21 Q. Did you work while you were going to school?
22 460 E-mail from Drew DeBerry 261 22 A. Yes, sir.
23 461 E-mail from Drew DeBerry 275 23 Q. Where at?
24 462 E-mail exchange Staples/DeBerry 275 24 A. I had a few jobs. I worked for the bulk of the
25 25 time at the Texas Tech Meat Laboratory.

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1 Q. Meat, M-e-a-t? 1 after college, did that start, for instance, in June of
2 A. Yes, sir. 2 2000; or was there any period of unemployment before you
3 Q. Okay. 3 entered the workforce?
4 A. I worked at the Texas Tech Meat Laboratory, I 4 A. I started the day I finished my last -- well,
5 worked in the summers for my dad, and I worked for a 5 the day after I finished my last class.
6 period of time towards the end of my college career for 6 Q. Was that a position you had to interview for,
7 State Senator Robert Duncan. 7 or was that a position that you get because you know
8 THE REPORTER: I'm sorry. For who? 8 somebody?
9 THE WITNESS: State Senator Robert 9 A. I had to interview for it.
10 Duncan. 10 MR. LANGLEY: Form.
11 Q. (BY MR. FAIRLESS) When you were working for the 11 Q. (BY MR. FAIRLESS) And who did you interview
12 Meat Laboratory, were you picking up paychecks from the 12 with?
13 TDA? 13 A. Susan Combs.
14 A. No, sir. 14 Q. And Susan Comb's position at the time that you
15 Q. Who -- whose name was on the paychecks that you 15 interviewed with her was what?
16 received? 16 A. She was the National Chairwoman of the
17 A. I don't even remember if it -- I assume it was 17 Presidential Agriculture effort.
18 Texas Tech University. 18 Q. And what was your role in the -- in this new
19 Q. And then did you go to work immediately upon 19 job that you were taking?
20 getting your bachelor's degree, or did you pursue -- 20 A. With the Bush campaign?
21 A. Yes. 21 Q. Yes, sir.
22 Q. -- other schooling? 22 A. I was the National Agriculture Coalition
23 A. No. I went to work as soon as I finished. 23 Director.
24 Q. Okay. What degree did you get? 24 Q. So straight out of school into the National
25 A. An agricultural in applied economics. 25 Agriculture Coalition Director position?
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1 Q. And where did you go to work upon graduation 1 A. Yes, sir.
2 in, I'm guessing, May of 2000? 2 Q. And was there some sort of agreed term or
3 A. I don't remember when it was; but somewhere in 3 agreed period of time that you were going to be working
4 there, I went to work for the Bush/Cheney 4 for the Bush/Cheney effort?
5 2000 Presidential Campaign. 5 A. Through election.
6 Q. Did that have anything to do with the Senator 6 Q. And the election was going to be when?
7 that you were working for? 7 A. November of 2000.
8 A. No, sir. 8 Q. Okay. So it was roughly a six month position?
9 Q. And the Senator that you were working for, what 9 A. Roughly.
10 political party was he? 10 Q. Any promises for future employment if
11 A. Republican. 11 Bush/Cheney get elected?
12 Q. Is he still holding an office for the State of 12 A. No, sir.
13 Texas? 13 Q. So did you take this job as -- well, you tell
14 A. Yes, sir. 14 me, why did you take the job? Was it hopefully to be
15 Q. And is he still a Senator? 15 some sort of springboard into the Texas governmental
16 A. He is. 16 system?
17 Q. And what's his name again? 17 A. No, sir.
18 A. Robert Duncan. 18 Q. So why did you take the job? Why did you
19 Q. And he's from where? 19 pursue the job, is a better question.
20 A. Lubbock. 20 A. Senator Duncan suggested it might be a good fit
21 Q. He represents the fine folks up there in 21 for my expertise at the time.
22 Lubbock? 22 Q. And what was your expertise?
23 A. He represents Lubbock. I believe he's from 23 A. I grew up in agriculture, and I developed a
24 Vernon. 24 passion for public policy while I worked for Senator
25 Q. And the Bush/Cheney work that you took right 25 Duncan.

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1 Q. Do you have political aspirations? 1 A. Yes, sir.
2 A. No, sir. 2 Q. So you wanted to see the TDA continue then,
3 Q. Have you ever ran for a political position? 3 didn't you?
4 A. No, sir. 4 MR. OWENS: Objection, form.
5 Q. Did you hold any political positions and I 5 A. Maybe I'm not understanding the question if I'm
6 guess quasi-political positions there at Texas Tech 6 having a hard time getting to the answer you've gotten
7 University? 7 me towards.
8 A. I was in student -- I held an office in the Ag. 8 Q. (BY MR. FAIRLESS) I've not gotten you towards
9 Council. I believe that may be all. 9 anything.
10 Q. Okay. What was the office you held in the Ag. 10 A. Okay.
11 Council? 11 Q. I just want honest and forthright answers to
12 A. I don't recall. It was treasurer or secretary. 12 the questions that I ask, and I know that's your
13 I don't recall. 13 intention --
14 Q. Was it important to you that the TDA do well in 14 A. Yes, sir.
15 its review by the -- when it was up for Sunset? 15 Q. -- today is to provide me those, correct?
16 A. Yes, sir. 16 A. Yes, sir.
17 Q. And were you passionate about the fact that you 17 Q. In fact, to do anything else would be a
18 wanted TDA to do as well as possible so that it didn't 18 disservice to yourself, to your own integrity, and to
19 get Sunsetted? 19 your position --
20 MR. OWENS: Form. 20 MR. LANGLEY: Objection, form.
21 MR. LANGLEY: Form. 21 Q. (BY MR. FAIRLESS) -- within the TDA, correct?
22 A. Maybe if you can state the first part of that 22 MR. OWENS: Objection, form.
23 one more time. 23 A. Yes, sir.
24 Q. (BY MR. FAIRLESS) Yeah. I'm not sure I even 24 Q. (BY MR. FAIRLESS) Is there any reason why you
25 remember what I asked. But were you passionate about 25 can't be truthful with me today?
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1 the fact that you wanted TDA to do well before the 1 A. No, sir.
2 Sunset folks? 2 MR. OWENS: Objection, form.
3 A. I don't think I had any particular feelings 3 Q. (BY MR. FAIRLESS) Do you intend to be truthful
4 about the Agency doing well, other than proving the 4 with me today?
5 professionalism that the Agency has and all of its 5 MR. OWENS: Objection, form.
6 employees. 6 A. Yes, sir.
7 Q. You wanted to see the Agency continue, didn't 7 Q. (BY MR. FAIRLESS) Have you ever given a
8 you? 8 deposition before?
9 A. Not particular strong feelings about that, but 9 A. No, sir.
10 I wanted to make sure the Agency -- if the taxpayers of 10 Q. So you understand from meetings with attorneys
11 Texas benefit from the Agency, I wanted to see it 11 how all this is going to work today. I'm going to ask
12 continue. 12 you a lot of questions, and I'm going to rely upon you
13 MR. FAIRLESS: I'll object as 13 to give me truthful and correct responses to the
14 nonresponsive. 14 questions that I ask.
15 Q. (BY MR. FAIRLESS) You wanted to see the Agency 15 MR. OWENS: Objection, form.
16 continue, didn't you, Mr. DeBerry? 16 A. Yes, sir.
17 MR. LANGLEY: Objection, form. 17 Q. (BY MR. FAIRLESS) So what did you do during the
18 A. I wanted to see the taxpayers of Texas served 18 Bush/Cheney job that you had as National Agriculture
19 to the extent they are served through the Texas 19 Coalition Director?
20 Department of Agriculture, sure. 20 A. I organized a grassroots coalition of farmers
21 Q. (BY MR. FAIRLESS) Well, did you feel like they 21 and ranchers and anyone else involved in agriculture who
22 were being served and served well through the Texas 22 supported then Governor Bush and his effort to be
23 Department of Agriculture? 23 elected in support of his policies.
24 A. I do. 24 Q. And were you doing that completely within the
25 Q. You did at the time, didn't you? 25 great state of Texas, or did you take your show on the

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1 road to other states? 1 grassroots support; but I don't know exactly what that
2 MR. OWENS: Objection, form. 2 means from the standpoint of Drew DeBerry, National
3 A. I was the National director, so -- 3 Agriculture Coalition Director, and that's what I want
4 Q. (BY MR. FAIRLESS) Right. 4 you to help me understand.
5 A. -- I worked in a lot of different states. 5 A. Okay.
6 Q. And tell me more specifically what it is you 6 Q. So what did you do?
7 were doing in other states. 7 A. I communicated with various different farmers
8 A. Coordinating grassroots efforts, grassroots 8 and ranchers and other people involved in agriculture as
9 coalitions of farmers and ranchers. 9 to what policies Governor Bush supported, what his
10 Q. I don't really understand what that means -- 10 policies are/were, and sought their support for then
11 A. Okay. 11 Governor Bush.
12 Q. -- from the standpoint of the director, which 12 Q. Did you travel by public transportation, I mean
13 is what you were himself. What does the director do? 13 commercial airlines; or did you travel by private plane?
14 Do you show up in Ohio, for instance, and some people 14 A. I didn't travel extensively. I remember flying
15 have already been assembled together -- farmers and 15 commercially, and driving my personal vehicle.
16 ranchers -- and you walk around and shake hands and talk 16 Q. Who was your supervisor? Who did you answer
17 about how Bush and Cheney are going to do a fantastic 17 to?
18 job for farmers and ranchers in Ohio? Or do you 18 A. I believe it was a woman named Kelly Craven.
19 actually get to Ohio and there's a few people there and 19 Craven, yes.
20 together with them y'all go out and solicit a meeting 20 Q. C-r-a-v-e-n?
21 with a bunch of farmers and ranchers? Those are just 21 A. Yes, sir.
22 two examples, but I want to know -- I want you to help 22 Q. And is she still working for the State? Let me
23 me understand what it is you did in these other states. 23 ask a different question. Does she work for the great
24 MR. OWENS: Form. 24 State of Texas?
25 MR. LANGLEY: Form. 25 A. No, sir.
Page 15 Page 17
1 A. Sure. I wouldn't characterize what I did as 1 Q. Do you know what Kelly Craven does now?
2 the way you described it. There were organizations of 2 A. No, sir.
3 farmers and ranchers and other people involved in 3 Q. Do you know where she's at now?
4 agriculture who felt strongly about helping then 4 A. No, sir.
5 Governor Bush become elected as President of the United 5 Q. And so after the election came, what was your
6 States. 6 next job?
7 The effort to organize those people and 7 A. Immediately following the election, we
8 bring those people together to turn out the vote on 8 continued -- I continued my job throughout the recount
9 election day and to inform their neighbors of then 9 of that election in 2000, and then...
10 Governor Bush's policies, was what I coordinated. 10 Q. And then what?
11 Q. (BY MR. FAIRLESS) I still don't understand. So 11 A. Then I went on to the Presidential transition.
12 does that mean that there were groups of people already 12 Q. This National Agriculture Coalition Director,
13 assembled in these other states and you spoke to those 13 was that an appointed position?
14 groups of people to help them understand what the 14 A. I don't know if it would be called appointed.
15 perspective policies of Bush and Cheney would be? 15 I was hired.
16 A. I don't recall ever giving formal speeches. I 16 Q. Just hired directly by the Bush/Cheney folks
17 spoke over the phone with a lot of different farmers and 17 and specifically Kelly Craven?
18 ranchers. Maybe you can help me a little more 18 A. Yes, sir.
19 understanding what you're asking. 19 Q. Okay. So what does it mean you went on to the
20 Q. I'm really not intending it to be anything 20 Presidential transition?
21 other than what it is. 21 A. There was a -- with every transition between
22 A. Sure. 22 governments, between Presidents specifically, there is a
23 Q. I just want you to give me an idea of what you 23 staff of people that help transition the previous
24 would do when you arrived in these other states. You 24 administration out of office and the new administration
25 know, I hear what you're saying about soliciting 25 into office. I went to work for that effort.

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1 Q. So what did you do? Did you have a title? A 1 the first position that you took or the last one you
2 position name? 2 held?
3 A. I -- it was such a brief period of time, I 3 A. There was a period of time where I didn't have
4 don't think there were titles. I worked with the 4 a title in the first few months of the administration;
5 nominee to be the Secretary of Agriculture. 5 and then I was hired, they gave me the title of White
6 Q. And so who were you working with? 6 House liaison.
7 A. The nominee's name was Ann Veneman. 7 Q. Did you keep that for four years, or did your
8 Q. And you answered to Ann Veneman directly, or 8 title change?
9 was there somebody in between you and Ann? 9 A. I kept that for four year.
10 A. Directly. 10 Q. And what exactly does the White House liaison
11 Q. And did Ann Veneman become the Secretary of 11 between the Secretary of Agriculture and the White House
12 Agriculture? 12 do?
13 A. She did. 13 A. It does a number of things. It's primarily
14 Q. And did you work for her while she was 14 responsible for --
15 Secretary of Agriculture? 15 Q. Wait, can I stop you for one second? When you
16 A. Yes, sir. 16 said "it does a number of things," I want to know what
17 Q. For how long? 17 you did.
18 A. Her entire time as Secretary of Agriculture. 18 A. Okay. I did the duties of the job.
19 It was, I believe, about four years. 19 Q. Okay.
20 Q. And where were you stationed? 20 A. And the job is responsible for and I conducted
21 A. In Washington, DC, at the US Department of 21 those responsibilities of primarily responsible for
22 Agriculture. 22 filling all of the -- coordinating the hiring process
23 Q. And what was your position? 23 for all of the appointed positions in a particular
24 A. I was the White House liaison. 24 government agency, this one being the US Department of
25 Q. White House liaison to what? 25 Agriculture. The position also coordinates various
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1 A. My title was White House liaison. 1 communications between the staff of the White House and
2 Q. So were you the White House liaison between the 2 the staff of the Department.
3 Department of Agriculture and the White House? 3 Q. So you selected the -- I'm sorry. Go ahead. I
4 A. Yes, sir. 4 couldn't tell if you were done.
5 Q. And this is a role you assumed six months out 5 A. That's -- those are the primary
6 of Lubbock, Texas, upon graduation from Texas Tech 6 responsibilities.
7 University? 7 Q. And what training did you have that allowed you
8 A. Thereabouts. 8 to fulfill those responsibilities in a competent manner?
9 Q. How old were you at the time when you got the 9 MR. LANGLEY: Form.
10 job? 10 MR. OWENS: Objection, form.
11 A. The White House liaison job? 11 MR. FAIRLESS: What was wrong with that
12 Q. Yeah. November of 2000. 12 question? I'm just a little curious.
13 A. That would have put me about 23, 24. 13 MR. LANGLEY: It sort of -- it sort of
14 Q. And then did you answer directly to the 14 implies that there was some specific training required
15 Agriculture Commissioner during the four years that you 15 for him to -- excuse me -- for him to fulfill those
16 were in Washington, DC? 16 obligations and duties. And I'm not sure that you've
17 A. No, sir. It was the Secretary of Agriculture; 17 established that.
18 but, yes, sir. 18 MR. FAIRLESS: That I've established?
19 Q. Okay, thanks for that correction. Did you 19 Okay.
20 answer to the Secretary of Agriculture during the four 20 MR. LANGLEY: Lack of foundation.
21 years that you were in Washington, DC? 21 Q. (BY MR. FAIRLESS) Let's take a step back. Were
22 A. Yes, sir. 22 they any -- was there any training that you believe was
23 Q. And did your position ever change? 23 necessary to perform competently as the White House
24 A. Yes, sir. 24 liaison between the White House and the Secretary of
25 Q. Okay. So this White House liaison, was that 25 Agriculture?

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1 A. Yes. 1 Q. (BY MR. FAIRLESS) So the career experience
2 Q. Okay. Well, then outline for me what your 2 consists of your six months as National Agriculture
3 training was to fulfill the responsibilities of that 3 Coalition Director during the Bush/Cheney campaign,
4 position. 4 combined with the years on the family farm?
5 A. My career training is what I would view as 5 A. And an education at a higher education
6 the -- what developed me for that position. I had an 6 institution in Texas, which is the -- one of the
7 understanding of the new President's policies on 7 nation's leading agriculture states.
8 agriculture. I had an understanding of the people who 8 Q. Okay. So we're going to throw the University
9 had -- the other people involved in agriculture who had 9 in there, too. So here goes a new question. Your
10 expertise and who would be resources, valuable 10 career training consisted of your days on the family
11 resources, to serve in his administration. 11 farm, your education at Texas Tech University, and your
12 Q. So the training that you had was your career 12 six months working for the Bush/Cheney campaign as
13 training, and your career training essentially consisted 13 National Agriculture Coalition Director, correct?
14 of your six months as National Agricultural Coalition 14 A. That's a portion of my training.
15 Director? 15 Q. Well, if there's any career training that I've
16 MR. OWENS: Form. 16 left out, I need you to help me with it. Tell me what
17 A. And several years involved in agriculture prior 17 it is because right now I'm making a mental note to
18 to that. 18 myself that's it.
19 Q. (BY MR. FAIRLESS) Yeah. You've mentioned that 19 A. My jobs in college, my upbringing with parents
20 a few times. What was your several years of involvement 20 involved in agriculture who taught me a lot about
21 in agriculture before that? Did your dad have a ranch 21 agriculture.
22 or something? 22 Q. Right. That's covered, I think, by life on the
23 A. A farm. Yes, sir. 23 family farm and --
24 Q. How many acres? 24 A. Okay.
25 A. It fluctuated. Anywhere -- 25 Q. -- your education there at Texas Tech.
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1 Q. How many did y'all own versus how many did you 1 A. Well, I want to make sure we get it all.
2 lease? 2 Q. Okay.
3 A. I really -- I don't recall. We probably -- I 3 A. The college education, the internship I did in
4 believe my great grandparents when they moved to Texas 4 college for Senator Duncan, a job with Senator Duncan, a
5 established one full section of land, and we leased -- 5 job at the Meat Lab at Texas Tech.
6 any given time, we leased several hundred acres more 6 Q. How long was the job at the Meat Lab?
7 than that. 7 A. Three or four -- I was there most of the time I
8 Q. A full section. Is a section 640 acres? 8 was in college.
9 A. Yes, sir. 9 Q. Part time?
10 Q. So you had 640 acres, plus at any given time 10 A. Yes, sir.
11 your family leased a couple of hundred additional acres. 11 Q. What did you do?
12 And what were y'all doing? Running cattle, or were you 12 A. I was a student worker there. I did everything
13 farming it? 13 from assisting with slaughter all the way through
14 A. Primarily farming. 14 fabrication and meat sales.
15 Q. And what were you growing? What was your 15 Q. Did you have a position title, or do
16 primary crop? 16 part-timers not get a position title?
17 A. Cotton, wheat, corn, sorghum. 17 A. Student worker was --
18 Q. And were y'all receiving at any point in time 18 Q. Student worker.
19 any government subsidies? 19 A. I think that's what showed up on any documents
20 A. I don't know for sure. I assume. 20 I remember seeing.
21 Q. You assume that y'all were? 21 Q. Did you have a position title, or do student
22 A. Yes, sir. 22 workers not have position titles when they work for that
23 Q. In fact, you know y'all were, don't you? 23 outfit?
24 MR. OWENS: Objection, form. 24 A. I don't recall if I had a title or not.
25 A. I don't know for sure. 25 Q. So at the end of four years in Washington, DC,

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1 what happened? 1 (Exhibit No. 450 was marked and is
2 A. I was promoted to Deputy Chief of Staff for the 2 attached hereto)
3 US Department of Agriculture. 3 Q. (BY MR. FAIRLESS) When did you accept the
4 Q. By who? 4 position as the Deputy Commissioner of Agriculture for
5 A. The new Secretary at the time was Mike Johanns. 5 the great State of Texas?
6 Q. And how long did you hold that position? 6 A. I began January -- I think January 1st was the
7 A. Two years. I think it was just shy of two 7 day that Commissioner Staples took the oath, which was
8 years. 8 when my position became effective.
9 Q. And why just two years? 9 Q. January 1st of what year?
10 A. I got the job I'm in now. 10 A. Oh, I'm sorry. 2007.
11 Q. But I mean why did you leave the job in 11 Q. So this is a position that you've held now for
12 Washington, DC? 12 a little over three years?
13 A. My wife and I had had three kids. We looked 13 A. Yes, sir.
14 forward to the opportunity to get home to Texas. An 14 Q. Explain what Sunset Review is, specifically as
15 opportunity presented itself -- 15 it pertains to the Texas Department of Agriculture. And
16 Q. Did you resign -- 16 throughout this deposition, if I refer to the TDA, will
17 A. -- that fit my -- 17 you just know that I mean the Texas Department of
18 Q. -- the position as Deputy Chief of Staff? 18 Agriculture?
19 MR. LANGLEY: Were you finished with your 19 A. Yes, sir.
20 answer? 20 Q. Okay. So now do you remember what the question
21 THE WITNESS: I -- not really, but... 21 is?
22 Q. (BY MR. FAIRLESS) Okay. Go ahead then. 22 A. Yes, sir.
23 A. The job that presented itself was an 23 Q. All right.
24 opportunity for me and it fit my background and my 24 A. The Sunset process --
25 interests. 25 Q. Yes, sir.
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1 Q. Did you resign your position as Deputy Chief of 1 A. -- is a process --
2 Staff? 2 Q. For the TDA specifically.
3 A. I did. 3 A. Okay. The Sunset process is a process that I
4 Q. And was that a written resignation? 4 believe agencies go through to evaluate programs, decide
5 A. Yes, sir. 5 the value of those programs for the taxpayers of the
6 Q. And who was it turned in to? 6 state, and any improvements that need to be made to the
7 A. Oh, it was a letter written to the Secretary 7 programs and whether or not programs need to be
8 probably. 8 continued.
9 Q. And what were the reasons stated in the letter 9 Q. Okay. So I took from that it's a process where
10 to the Secretary? The nutshell version. 10 agencies are evaluated. Fair?
11 A. I don't recall. An opportunity to move my 11 A. Yes, sir.
12 family back to Texas. 12 Q. And so who's doing the evaluation?
13 Q. And what was the opportunity? 13 A. The Sunset -- I believe it's called the Sunset
14 A. The opportunity was the position I'm in now. 14 Commission, Texas Sunset Commission in conjunction
15 Q. Do you have a business card with you? 15 with --
16 A. I do. 16 Q. And is it -- I'm sorry.
17 Q. Can I have one? 17 A. In conjunction with the staff of the agency.
18 A. Sure. 18 Q. So the Sunset Commission in conjunction with
19 Q. Okay, yeah. 19 the staff of the agency -- are you saying the staff of
20 A. (Witness complies). 20 the agency actually participates in the evaluation, or
21 MR. FAIRLESS: Ms. Court Reporter, can we 21 they participate in providing information to the Sunset
22 mark this as the next exhibit? 22 Commission so that the Sunset Commission can fully
23 THE REPORTER: Where do you want the 23 evaluate the agency?
24 sticker? 24 A. Probably a combination of both things you said
25 MR. FAIRLESS: Let's put it on the back. 25 there. I felt like the agency was involved in the

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1 evaluation. 1 MR. LANGLEY: Objection, form.
2 Q. So to some extent, you believe the Sunset 2 A. I don't think that's the case with every
3 process involves a self-evaluation where people in the 3 situation. A lot of times, the Sunset process will
4 agency itself actually participate in the evaluation and 4 yield improvements to agencies.
5 the ultimate grade to continue or not continue? 5 Q. (BY MR. FAIRLESS) So as far as the TDA was
6 A. Yes, sir. 6 concerned in your role as Deputy Commissioner of
7 Q. So tell me who at the Texas Department of -- 7 Agriculture, did you understand that the TDA could
8 well, let me take a step back. Was the TDA up -- no. 8 simply stop being if it didn't get good marks on the
9 Let me try a different one. Did the TDA go through the 9 evaluation; or did you simply understand that this was a
10 Sunset process during your time as Deputy Commissioner 10 process by which there might be certain suggestions as
11 of Agriculture? 11 to how the TDA can better and more efficiently operate?
12 A. Yes, sir. 12 MR. OWENS: Form.
13 Q. When? 13 A. We welcomed the Sunset process and actually we
14 A. During the legislative interim that began in 14 asked for it to be done ahead of schedule for the Texas
15 late '07 and ended in January of '09. 15 Department of Agriculture and we welcomed the outcome of
16 Q. I'm not sure what that means. That it went 16 that process.
17 through the process during the legislative interim. I 17 MR. FAIRLESS: I'll object as
18 mean, I get the late '07 to January '09; but what does 18 nonresponsive.
19 that mean in the legislative interim? 19 Q. (BY MR. FAIRLESS) Does the Sunset process
20 A. Sure. Sure. I apologize. The legislative 20 involve funding?
21 interim in Texas begins in June; so the interim 21 A. No, sir.
22 beginning with June of 2007, I believe the Sunset 22 Q. Does it have an impact on funding?
23 process really started later that year. 23 A. I suspect anything the legislature does could
24 Q. And how many organizations or agencies are 24 have an affect on funding.
25 typically up for Sunset review in a given year? 25 Q. What was your role with regard to the Sunset
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1 A. I don't know. 1 process from the standpoint of the TDA?
2 Q. I mean, I'm not a very political minded person. 2 A. I coordinated the Agency's efforts to inform,
3 So I'm trying to figure out is it one or two agencies a 3 to do our own internal evaluation, to work with the
4 year, or is it literally dozens of agencies a year? 4 Sunset Commission staff.
5 A. I know there were more than two. Dozens is 5 Q. What was "our own internal evaluation"?
6 probably more than I recall, but I really don't know. 6 A. Evaluating ourselves internally, evaluating the
7 Q. And is it some sort of competition that there 7 programs that the Agency administered.
8 are going to be a certain number of agencies that don't 8 Q. Okay. Well, did you after completing your own
9 make the cut, some have to be eliminated for budgetary 9 internal evaluation, generate some sort of written
10 or other reasons; or is it the ordinary course that most 10 document as to how you perceive the TDA to be doing
11 agencies do make the cut? 11 pursuant to your evaluation?
12 A. I don't know what the trend is with the Sunset 12 A. Yes, sir.
13 process. 13 Q. And that document was turned over to who?
14 Q. Yeah. And that's a good way to put it. That's 14 A. The Sunset Commission.
15 what I'm looking for to figure out what the pass/fail 15 Q. And were there any cowriters of the document,
16 rate is. I mean, do 90 percent of the agencies pass 16 or was it just you signing off on it?
17 muster or do 50 percent of the agencies pass muster? 17 A. It was a collaborative effort.
18 MR. OWENS: Form. 18 Q. And what was your ultimate conclusion?
19 A. I... 19 A. That the programs provide value. There were
20 Q. (BY MR. FAIRLESS) Do you have any idea? 20 many different observations that we had in the report.
21 A. I think it's fairly rare for an agency to -- 21 Q. Well, give me the nutshell version of what you
22 and when you say "pass muster," what do you mean? 22 consider to be the most important observations set forth
23 Because the -- 23 in the report; and I've got the overall, the programs
24 Q. Well, if you don't pass muster under the Sunset 24 provide value. So pick up on the second part of that
25 process, then the agency just stops being, doesn't it? 25 answer.

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1 A. Our observations in our self-evaluation were 1 an agency, such as the TDA? For instance, they could
2 that we welcomed the process and were glad we were 2 just do away with the agency as a whole. That's, you
3 having the assistance of the Sunset Commission in doing 3 know, certainly the death sanction, I guess, death
4 the evaluation and there was value to Texans of the 4 penalty sanction. No. 2, is they could say we disagree
5 programs that were being administered by the Texas 5 that these programs provide value and as a result, we're
6 Department of Agriculture. 6 no longer going to give you as much money to fool around
7 Q. Okay. That kind of goes back to No. 1, 7 with over there at the TDA, so we're going to cut your
8 programs provide value. 8 funding in half. No. 3, is -- you with me?
9 A. Okay. What was the other part? 9 A. Sure.
10 Q. Well, the other part was I thought you said 10 Q. So I want you to help me and the jury who may
11 that -- and I'm not going to repeat exactly what you 11 be nonpolitical minded like me understand what are the
12 said, but something along the lines y'all made a number 12 potential ramifications should the Sunset Commission
13 of observations. 13 disagree with you that the TDA programs provide value.
14 A. Oh. I would have to go back and look at the 14 MR. OWENS: Objection, form.
15 report, but -- 15 MR. LANGLEY: Objection, form.
16 Q. Well, just the biggies. What were the biggie 16 A. Again, I won't speculate on what the
17 observations that y'all made that felt it important 17 legislature could do, might do. A dialogue begins
18 enough to report to the Sunset Commission? 18 between the legislature and the Sunset Commission and
19 A. It's been a while since I've read that report. 19 the Agency's staff.
20 I'd really prefer to defer to the report. 20 Q. (BY MR. FAIRLESS) So what was the outcome of
21 Q. What happens if the Sunset Commission 21 the Sunset Commission's review of the TDA?
22 disagrees, for instance, with the number one conclusion 22 A. They --
23 that you reached, which is that TDA programs provide 23 Q. In the words of Drew DeBerry, Deputy
24 value? 24 Commissioner of Agriculture.
25 MR. OWENS: Objection, form. 25 A. The outcome was that a piece of legislation was
Page 35 Page 37
1 Q. (BY MR. FAIRLESS) I mean, help me understand 1 passed through the legislature continuing most of the
2 the political process. You say TDA programs provide 2 programs of the Department of Agriculture and making
3 value. The Sunset Commission says we look at, 3 improvements on some.
4 Mr. DeBerry, and you're a fine young man, but we're not 4 Q. I'm not sure I followed that entirely. So most
5 so sure we agree with you here. 5 of the programs were continued, improvements were made
6 What are the potential ramifications of 6 in some. Does that mean that some of the ones that were
7 the Sunset Commission disagreeing with the conclusion 7 continued had improvements made, or does that mean
8 that you reached? 8 improvements consist of doing away with the programs
9 A. I think it could be a number of results. We 9 that they felt unnecessary or -- I mean, help me
10 found -- 10 understand that answer better.
11 Q. Help me understand the myriad of possibilities. 11 MR. OWENS: Form.
12 A. I don't remember there being disagreements 12 A. Okay. The --
13 between our observation and the Sunset Commission staff. 13 Q. (BY MR. FAIRLESS) Let me ask a better question.
14 MR. FAIRLESS: I'll object as 14 Did the Sunset Commission do away with some of the TDA
15 nonresponsive. 15 programs?
16 Q. (BY MR. FAIRLESS) I want you to help me 16 A. Yes, sir.
17 understand the myriad of possibilities of what the 17 Q. And do you know what percentage of TDA programs
18 Sunset Commission could do if they disagreed with the 18 were done away with?
19 number one finding that TDA programs provide value. 19 A. As I recall -- no, I don't recall exactly; but
20 MR. LANGLEY: Objection, form. 20 I can remember one specific program that was eliminated.
21 MR. OWENS: Form. 21 It was a component of one program.
22 A. I can't speculate as to what the legislature 22 Q. Are you saying you only remember a single
23 might do. 23 program or a component of a single program that was done
24 Q. (BY MR. FAIRLESS) No. But do you understand 24 away with?
25 that there are certain ramifications that could befall 25 MR. LANGLEY: Objection, form.

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1 A. I remember -- 1 process, Sunset review process, ended on or about
2 Q. (BY MR. FAIRLESS) No. I'm just trying to get 2 January '09. So when did the legislative session end
3 to this. Were there multiple programs done away with 3 that would have enacted whatever came about in the
4 and you can just remember a component of one, or was it 4 Sunset review?
5 just a component of one program that was done away with? 5 A. That would have been the end of May, the
6 A. We'll have to go back and look at the 6 beginning of June of that year, 2009.
7 legislation. I remember there was -- there were 7 Q. Was there any -- well, first of all, did you
8 improvements in programs, and I remember at least one 8 speak directly to any group of Sunset Commission? You
9 program that was -- hadn't been utilized and was 9 know what, I should back up.
10 eliminated. 10 This Sunset Commission, does it have a
11 Q. Were there improvements in any programs 11 subcommittees or committees?
12 pertaining to the retail motor fuel device industry? 12 A. I think they do divide their responsibilities
13 A. Yes, sir. 13 up. Whether they call them committees, work groups -- I
14 Q. Okay. And were those improvements suggested by 14 think they did divide their work up. Yes, sir.
15 the TDA, or were those improvements that were suggested 15 Q. How many folks are on the Sunset Commission?
16 by the Sunset Commission? 16 A. I don't recall.
17 A. They came from various places. TDA was 17 Q. Is it a group of five or ten guys, or is it a
18 involved in that process. The Sunset Commission staff 18 group of 50 or 100 people?
19 was involved. I think legislators and their staff were 19 A. No, sir. Somewhere between probably 10 and 20
20 involved. 20 legislators.
21 Q. When did the TDA get the news that the Sunset 21 Q. So the Sunset Commission consists of 10 to 20
22 process had ended successfully, and the Sunset 22 legislators?
23 Commission had completed its review of the TDA? 23 A. Yes, sir.
24 A. There are various stages of the Sunset process. 24 Q. And did you ever speak to the 10 or 20
25 I can't speak to any deadlines, benchmarks, any date 25 legislators in your professional capacity as Deputy
Page 39 Page 41
1 particular because there were so many along the way. I 1 Commissioner of Agriculture?
2 guess when the legislature adjourned was one of those 2 A. Did I speak to the legislators?
3 benchmarks, when the piece of legislation pass. 3 Q. Well, those. Those 10 or 20 legislators that
4 Q. Well, then why did you give me the date earlier 4 made up the Sunset Commission.
5 of January 2009? 5 A. Sure. Yes, sir.
6 A. Because there's the review process and then 6 Q. And did you have some sort of prepared remarks
7 there's the legislature's process with implementing 7 or printed speech, or were you speaking to them from the
8 anything that comes out of that review. 8 gut?
9 Q. Okay. So when did the review process end? Was 9 A. Most of the time when I talk to a legislator,
10 that January 2009? 10 I'm working off of some notes. Yes, sir.
11 A. Like I said, somewhere along in there. There 11 Q. Okay. And did you preserve any of those
12 are probably dates on reports that would answer that 12 prepared remarks or notes for any of the meetings that
13 question more specifically. 13 you had with the Sunset Commission?
14 Q. When the review process comes to an end, is 14 A. I suspect there are notes, briefings, or
15 that pretty much when you know what your final grade is, 15 something somewhere along the way.
16 or does it then take the legislative session before you 16 Q. Still on your computer, or just that can be
17 really realize the full impact of what is and is not 17 found?
18 going to happen per the Sunset Commission? 18 A. Probably -- I don't know. I suspect there is
19 MR. OWENS: Form. 19 some. I rarely keep a lot of that stuff on my computer,
20 A. I'm not sure what a -- what you're talking 20 but --
21 about with a legislative grade. Throughout the 21 Q. Which is why I asked.
22 legislative session, you -- the agency staff, the Sunset 22 A. Sure. The notes are somewhere.
23 Commission staff, and legislators and their staff have 23 Q. In other words, they're preserved in some way?
24 dialogue about the wishes of the legislature. 24 A. Some of them probably are. Yes, sir.
25 Q. (BY MR. FAIRLESS) So you said the Sunset 25 Q. Okay. You would certainly expect that they

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1 would be, correct? 1 uncommon that I would have talked about things that had
2 A. Some. Yes, sir. 2 occurred in some of our regulatory programs.
3 Q. Okay. How many times did you speak to the 3 Q. So you may or may not have used the term
4 Sunset Commission? 4 "Operation Spotlight"?
5 A. I don't have -- I wouldn't even have an idea to 5 A. May or may not.
6 guess. 6 Q. But you do recall that you discussed some of
7 Q. Well, I mean, can you put me in a ballpark? 7 the details of the blitz known as Operation Spotlight?
8 Was it just one or twice during that period of time, or 8 A. No, sir. I don't even recall that. It would
9 was it a larger number? 9 be possible.
10 A. I testified in front of legislative hearings 10 Q. Well, earlier in one of the answers that you
11 from time to time. The Sunset Commission itself, I -- a 11 gave -- in fact, two answers ago -- I thought you
12 low -- a few -- a few numbers of times. 12 clearly stated that you would have discussed some of the
13 Q. All right. And did you testify in front of 13 details. Did I misunderstand?
14 them? I mean, do you raise your right hand and take an 14 A. Possibly. I'm saying it would be possible. I
15 oath to tell the truth and then actually provide 15 could have.
16 testimony? 16 Q. Why would you discuss details of Operation
17 A. I'm not -- I don't -- I don't believe we go 17 Spotlight, if you did? Would it be because you wanted
18 through the verbal oath process, but it's testimony. 18 the Sunset Commission to realize how taxpayer money is
19 Yes, sir. 19 being spent and what's being accomplished or conceivable
20 Q. I don't understand -- 20 penalties that could come from it? I mean, help me
21 A. I think there's a -- 21 understand the framework behind which would have brought
22 Q. -- without the oath. 22 that matter up.
23 A. I think there's a sign maybe. 23 MR. OWENS: Form.
24 Q. A what now? Say it again. 24 A. Since I've been at the Department of
25 A. I think you sign an oath; but, yes, sir. 25 Agriculture, the regulatory programs, we have taken a
Page 43 Page 45
1 Q. Okay. So you sign an oath as opposed to say 1 look at those programs and looked for ways to implement
2 it, and then you proceed to testify? 2 improvements. The Sunset Commission, as I recall,
3 A. Right. 3 agreed with the fact that improvements could be made to
4 Q. All right. Did you address Operation Spotlight 4 better protect the taxpayers of Texas.
5 in any of the speaking engagements or testimony that 5 Q. (BY MR. FAIRLESS) So the Sunset Commission
6 you -- let me try with a different question. 6 agreed with the Agriculture -- no. Let me try again.
7 Did you address Operation Spotlight in 7 The Sunset Commission agreed with the TDA that
8 any of the testimony that you provided to the Sunset 8 improvements could certainly be made within the TDA to
9 Commission? 9 better protect Texas consumers?
10 A. I don't recall if I spoke specifically to 10 MR. OWENS: Form.
11 anything called Operation Spotlight. We -- I suspect I 11 A. The Sunset Commission staff and the legislature
12 probably did testify to some of the regulatory programs 12 agreed with some improvements to various programs, as
13 and things that had happened in the recent past. Some 13 they often do.
14 of these -- some of the details of Operation Spotlight 14 Q. (BY MR. FAIRLESS) When was the last time that
15 are probably part of that. 15 TDA was up for Sunset Commission, or was this the first
16 Q. Okay. That -- I didn't catch all of that. I 16 time ever?
17 didn't grasp all that. Are you telling me that, yes, 17 A. I don't recall the exact year. It was -- I --
18 there would have been details with regard to Operation 18 actually, I don't recall. Ten --
19 Spotlight that you did discuss with the Sunset 19 Q. Just put me in a ballpark. Were you even alive
20 Commission; but you simply never used the term 20 when it happened?
21 "Operation Spotlight"? 21 MR. OWENS: Form.
22 A. No, sir. 22 A. Very likely. Yes, sir.
23 Q. That's what I took from that. 23 Q. (BY MR. FAIRLESS) Well, I mean, was it -- and I
24 A. No, sir. I don't recall exactly what my 24 meant that kind of, you know, tongue and cheek. Was it
25 testimony would have been, but it wouldn't have been 25 20 years ago, or was it like five years ago?

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1 A. No, sir. 1 of Texas has its way and wants to continue with its
2 Q. How often does an agency come up for Sunset 2 efforts, then it can put my client out of business. So
3 Commission? 3 it's a serious, serious issue as far as we are
4 A. I don't know. We can check. We can check the 4 concerned.
5 records on that. 5 Now, do you mean to tell me you don't
6 Q. Well, do you have any idea? During the course 6 have any idea as you sit here today?
7 of this Sunset Commission, did it come up when y'all 7 MR. LANGLEY: Objection, form.
8 were last in front of the Sunset Commission? 8 MR. OWENS: Form.
9 A. I recall it coming up. It would have been 9 A. I've told you that it would be possible.
10 several years ago. 10 Q. (BY MR. FAIRLESS) No. I get that.
11 Q. Okay. Do you know when the next Sunset 11 A. And I agree with you that it's a serious
12 Commission will be? In other words, is there some sort 12 matter, certainly.
13 of schedule so that you know now the next one is in 13 Q. I get that it is possible that I talked to the
14 2015; or do you not know until the year it's going to 14 Sunset Commission about Operation Spotlight. I'm asking
15 come about? 15 you is that the best that you can do is to tell me it is
16 A. Every agency has its own -- or the Sunset -- 16 possible that we talked about Operation Spotlight?
17 the legislature actually establishes a cycle for every 17 MR. OWENS: Form.
18 agency. 18 A. The Texas Department of Agriculture administers
19 Q. Well, do you know when y'all come up again? 19 several programs, several hundred million dollars worth
20 Y'all being the TDA. 20 of programs; and we testified on several of those
21 A. No, sir. It's in the legislation that was 21 programs. Questions came up about several of those
22 passed. 22 programs, and we responded. It's possible that one --
23 Q. Is it many years in the future? 23 that some came up about the regulatory programs you're
24 A. I don't -- it depends on what you call many. I 24 asking about.
25 don't know. 25 MR. FAIRLESS: I'll object as
Page 47 Page 49
1 Q. More than five? 1 nonresponsive to everything before the last sentence "it
2 A. It could be more than five. 2 is possible," that begins "it is possible."
3 Q. As the Deputy Commissioner of Agriculture for 3 Q. (BY MR. FAIRLESS) So as you sit here today, you
4 the TDA, you don't have any idea whether it's more or 4 can't recall whether word one was said about Operation
5 less than five as you sit here today? 5 Spotlight in the Sunset Commission hearings that you
6 A. No, sir. 6 participated in?
7 Q. So did you talk about the results of Operation 7 MR. OWENS: Form.
8 Spotlight in the meetings that you had in front of the 8 Q. (BY MR. FAIRLESS) Is that what -- that's what
9 Sunset Commission? 9 you're telling me, right?
10 A. I could have. I don't recall any specific 10 A. I don't recall any specific conversation.
11 discussion when I did, but it's possible. 11 Q. Okay. Did anybody else within the TDA, to your
12 Q. If you would have, why would you have? 12 knowledge, testify in front of the Sunset Commission and
13 MR. OWENS: Objection, form. 13 cover the matter of Operation Spotlight? Taking you and
14 A. I don't know that I did. 14 your personal knowledge out of the mix, do you know of
15 Q. (BY MR. FAIRLESS) But I'm saying if you 15 anybody else that did speak to the Sunset Commission and
16 would -- what determines what you're going to speak 16 did specifically address Operation Spotlight?
17 about to the Sunset Commission? 17 A. I don't recall.
18 A. Largely being responsive to their inquiries and 18 Q. All right. Did -- what is your boss' name?
19 questions and their interests. 19 A. Todd Staples.
20 Q. And so since this Operation Spotlight had been 20 Q. Did Todd Staples testify in front of the Sunset
21 remarkably newsworthy, did they have questions and 21 Commission?
22 interest in Operation Spotlight? 22 A. Yes, sir.
23 A. I don't -- I don't remember if they did. 23 Q. Is he running for reelection now?
24 Q. We're talking about something that just 24 A. Yes, sir.
25 happened a year or so ago. And certainly if the State 25 Q. And what kind of term is that that the

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1 Agriculture Commissioner has? 1 A. We conducted inspections in Operation
2 A. A four-year term. 2 Spotlight. We conduct inspections daily.
3 Q. And so how does that usually work? If he goes 3 Q. My question was is that what you are describing
4 out, are you quick to follow? 4 Operation Spotlight as? Just some of the daily
5 MR. OWENS: Objection, form. 5 inspections that are ordinarily conducted by the TDA?
6 Q. (BY MR. FAIRLESS) No. I mean, is it like 6 A. No, sir.
7 regular government where when the new group takes over, 7 Q. Well, then will you call it a sting?
8 they bring all their people with them and so chances are 8 A. No, sir.
9 all the assistants and assistants to assistants of the 9 Q. Will you call it a targeted effort?
10 former guy who's on his way out, they're on their way 10 A. No, sir.
11 out, too? 11 Q. Will you call it a blitz?
12 A. I would suspect if Commissioner -- when 12 A. I might.
13 Commissioner Staples leaves the Department, I will as 13 Q. Why will you call it a blitz?
14 well. 14 A. Because that's consistent --
15 Q. Okay. And thanks for being so understanding of 15 Q. Tell me what appeals -- why does that word
16 that question. 16 appeal?
17 Did you participate in any meeting that 17 A. It's consistent with terminology we use in our
18 took place with regional directors and chief inspectors 18 programs.
19 in May of 2008, where PWI was discussed? 19 Q. Terminology you use for which program?
20 A. We had some meetings and discussed various 20 A. Programs.
21 aspects of the program and Petroleum Wholesale. Yes, 21 Q. So I don't understand that it's consistent with
22 sir. 22 terminology we use in our programs. Tell me what
23 MR. LANGLEY: Are you getting into an 23 programs you commonly use the term "blitz."
24 whole new area? Are you done with Sunset and all that? 24 A. Particularly in our plant health regulatory
25 I would like to take a break sometime in the next few if 25 programs. I believe I've heard it used in some
Page 51 Page 53
1 you don't mind, just a bathroom break. 1 components of the weights and measures programs from
2 MR. FAIRLESS: Yeah. No, that's fine. 2 time to time. We operate several programs.
3 We can do it now. 3 Q. All right. So far, you've only told me two
4 MR. LANGLEY: Okay. 4 that you believe the word blitz gets thrown around at.
5 MR. FAIRLESS: No. Because I'm going to 5 The plant health regulatory programs and the -- or some
6 bounce around. I'm going to be back to that Sunset -- 6 components of the weights and measures program.
7 MR. LANGLEY: I thought maybe you were 7 MR. OWENS: Form.
8 shifting gears. 8 Q. (BY MR. FAIRLESS) Is that right? Any place
9 THE VIDEOGRAPHER: This is the end of 9 else you're using that word blitz within the TDA?
10 Tape 1. Off the record at 10:19. 10 MR. OWENS: Form.
11 (Recess taken) 11 A. Possibly.
12 THE VIDEOGRAPHER: This is the beginning 12 Q. (BY MR. FAIRLESS) Okay. I take it there have
13 of Tape 2. We're back on the record at 10:30. 13 been -- you're going to tell me that there have been
14 Q. (BY MR. FAIRLESS) During your time as Deputy 14 blitzes before with plant health regulatory programs?
15 Commissioner of Agriculture, have there been any other 15 A. I believe so. Yes, sir.
16 stings that have been done? 16 Q. I want you to tell me the last time there was a
17 A. Stings? 17 blitz against a single business enterprise in the plant
18 Q. Yeah. Stings like Operation Spotlight? 18 health regulatory arena.
19 A. I wouldn't use that terminology. 19 A. I wouldn't know that off the top of my head.
20 Q. You wouldn't call Operation -- 20 Q. Has there ever been one?
21 A. We conduct inspections daily. 21 A. Yes, sir.
22 Q. Go ahead. 22 Q. Against a single business enterprise?
23 A. We conduct inspections daily. 23 A. I don't know.
24 Q. Is that what you think Operation Spotlight was? 24 Q. Well, see, that's part of my question.
25 That was just routine conducting of inspections? 25 A. Right.

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1 Q. So let me try again with the complete question. 1 MR. OWENS: Objection, form.
2 Has there ever been a blitz against a single business 2 A. I'm sorry I'm not helping you out more here.
3 enterprise conducted pursuant to plant health regulatory 3 I'm not aware, and I wouldn't necessarily be aware of
4 programs? 4 that information.
5 A. I don't know. I wouldn't know that 5 Q. (BY MR. FAIRLESS) Okay. So now let's step
6 information. 6 outside the plant health regulatory programs arena, and
7 Q. So it's fair to say not that you know of? 7 let me ask you has there been any blitz by the TDA in
8 MR. OWENS: Objection, form. 8 your tenure as Deputy Commissioner of Agriculture
9 MR. LANGLEY: Objection, form. 9 against a single business enterprise?
10 A. No, sir. I wouldn't know that information. 10 A. I wouldn't have that information necessarily.
11 Q. (BY MR. FAIRLESS) So you're saying there may 11 Q. Do you know of any?
12 have been one; but to the extent there was one, you 12 A. Not specifically.
13 don't know about it? 13 Q. Okay. Is there at least one that comes to
14 MR. OWENS: Form. 14 mind? Let me give you a hint. It rhymes with
15 A. I'm aware that blitz inspections are a part of 15 Moperation Moplight.
16 our plant health regulatory programs. 16 MR. OWENS: Objection, form.
17 MR. FAIRLESS: I'll object as 17 MR. LANGLEY: Objection, form.
18 nonresponsive. 18 Q. (BY MR. FAIRLESS) You've had one. It was
19 Q. (BY MR. FAIRLESS) So are you telling me today 19 against my client, Operation Spotlight. You'll at least
20 there may have been a blitz against a single business 20 give me that, right?
21 enterprise with regard to plant health regulatory 21 A. Yes, sir.
22 programs, but I just can't tell you if there was one or 22 Q. Okay. Have there been any others that you know
23 not? 23 of?
24 MR. OWENS: Form. 24 A. None come to mind.
25 A. I'm aware that blitz inspections are part of 25 Q. All right. Are there any that are -- you know,
Page 55 Page 57
1 our plant health regulatory programs. 1 without you giving me any double top secret information,
2 MR. FAIRLESS: I'll object as 2 are there any on the horizon?
3 nonresponsive. 3 A. I wouldn't have that information.
4 Q. (BY MR. FAIRLESS) I'm not talking though just 4 Q. Are you telling me that out of the Sunset
5 about blitz programs generally. In fact, you know, I'm 5 Commission, you believe did come some improvements with
6 not talking about the occasions when you have a concern 6 regard to retail motor fuel device regulations -- tell
7 about a particular plant and so you go into Walmart and 7 me about that. What improvements came about as a result
8 Home Depot and Lowe's and various nurseries in a given 8 of Operation Spotlight?
9 area. 9 A. I didn't say improvements came about as a
10 I'm talking about a specific blitz 10 result of Operation Spotlight.
11 against a single business enterprise at each and every 11 Q. Oh, that's right. Yeah. Bad question on my
12 location that that single business enterprise has in the 12 part. I kind of lumped one with the other. You
13 state of Texas. Has there ever been a blitz like that? 13 indicated that as a result of the Sunset Commission,
14 A. I wouldn't necessarily know that information. 14 there were some improvements made in the area of retail
15 Q. Well, to the extent that you do know, has there 15 motor fuel device regulatory programs?
16 been one? 16 A. Yes, sir.
17 MR. OWENS: Form. 17 Q. What improvements?
18 A. I suspect it's possible. 18 A. There were several.
19 Q. (BY MR. FAIRLESS) Anything is possible. It's 19 Q. Ms. Court Reporter is going to write them all
20 possible Ms. Court Reporter is an alien here, but 20 down, so go ahead.
21 chances are she's not. And what I want to know is can 21 A. Sure. I won't remember all of them.
22 you tell me that you know of a single instance where 22 Q. Best you can.
23 there has ever been a blitz by a plant health regulatory 23 A. I remember there was an increased authority on
24 program against a single business enterprise and its 24 the penalties.
25 multiple locations? 25 Q. Increased -- and I want to interrupt you from

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1 time, and let me apologize in advance. When you say 1 Q. -- retail motor fuel devices. This cleaning up
2 increased authority on penalties, does that mean the 2 of the statute, do you remember what it was
3 penalty structure has been increased? People pay more 3 specifically? Did it say "shall" as opposed to "shall
4 now for violations? 4 not," or was there something specific that was being
5 A. Not the structure, but the statutory limit for 5 taken care of by way of the statutory change?
6 penalties. 6 A. I think modernizing some language to current
7 Q. I'm still not -- 7 regulatory programs.
8 A. I guess it affects the structure, but I just 8 Q. Okay. Let's go back to the couple of
9 wanted to be clear. 9 improvements that you mentioned. Increased authority on
10 Q. Y'all can charge more for penalties? 10 penalties, did y'all use Operation Spotlight and the
11 A. Yes, sir. 11 purported success of Operation Spotlight as being a
12 Q. Okay. So now I get it. The next one? 12 springboard for obtaining increased authority on
13 A. The legislature expanded the risk-based 13 penalties?
14 inspection authority the Department has. 14 MR. OWENS: Objection, form.
15 Q. Okay. 15 A. No, sir.
16 A. I don't remember if it was part of the Sunset 16 Q. (BY MR. FAIRLESS) So you didn't discuss
17 process, but the legislature also gave us authority 17 Operation Spotlight at all with regard to a sound basis
18 for -- to conduct fuel quality, to implement a fuel 18 to your way of thinking for increasing the authority on
19 quality regulatory program. 19 penalties?
20 Q. Do you know if that came about as a result of 20 A. Not any more than results of other inspection.
21 the Sunset Commission, or is that just something that 21 Q. But I said any and you said any more than. I
22 has happened in the last year or two? 22 want to know at all, did y'all discuss -- did y'all
23 A. No. It was in the same legislative session, is 23 discuss Operation Spotlight with respect to using it as
24 what I'm saying. I don't recall if it was in the Sunset 24 a springboard to try and increase authority on
25 legislation. 25 penalties? For instance, oh my goodness, we've done
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1 Q. And that's my question. Do you really recall 1 Operation Spotlight, the TDA views it as a tremendous
2 whether or not fuel quality testing was in the Sunset 2 success, and this is certainly a clear example of why we
3 Commission or the Sunset legislation? 3 need greater penalties from the standpoint of violators
4 A. No, sir. 4 of retail motor fuel device statutes.
5 Q. Okay. Anything else that you can think of with 5 MR. OWENS: Form.
6 regard to improvements in the area of retail motor fuel 6 A. I don't recall having said anything along those
7 device regulatory programs that came out of the Sunset 7 lines.
8 Commission? 8 Q. (BY MR. FAIRLESS) I didn't ask whether or not
9 A. I recall various technical corrections in the 9 you specifically had said anything like that. When I
10 statute. 10 said "y'all," I meant the TDA. Did y'all use Operation
11 Q. Like what? What statute are you talking about, 11 Spotlight as a springboard to assist in obtaining
12 first of all? 12 increased authority on penalties?
13 A. The -- the statute that -- I suspect it would 13 MR. OWENS: Form.
14 be in the Ag. Code. 14 MR. LANGLEY: Objection, form.
15 Q. Okay. Well, I don't know if you know this. 15 A. It's possible. I don't recall having said
16 The Ag. Code has more than one statute. 16 those words.
17 A. Okay. 17 Q. (BY MR. FAIRLESS) But, again, I don't want to
18 Q. More than one law. So which specifically are 18 get hung up on whether or not you specifically uttered
19 you referring to? 19 the words. Do you remember if Operation Spotlight was
20 MR. LANGLEY: Objection, form. 20 used for that purpose to up the penalties?
21 A. I'm defer to the staff that's more familiar 21 A. I don't recall.
22 with those statutes. 22 Q. All right. Expanded risk-based inspection
23 Q. (BY MR. FAIRLESS) Okay. Do you remember what 23 authority, certainly y'all used Operation Spotlight as
24 it had to do with? I mean, other than just -- 24 an example for what you considered to be a successful
25 A. What it had to do with? 25 risk-based inspection, correct?

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1 A. Yes, sir. 1 inspection schedule when you get the criteria in place
2 Q. Okay. And so did you use Operation Spotlight 2 for the risk-based inspections?
3 to help obtain extended risk-based inspection authority? 3 A. Correct.
4 A. I don't recall it being part of any 4 Q. And is there a time set for the accomplishment
5 justification. 5 of that objective? A deadline, if you will?
6 Q. So are you saying you didn't? 6 A. Not necessarily. We're hopeful that we can get
7 MR. LANGLEY: Objection, form. 7 to that point as soon as possible.
8 A. No, sir. 8 Q. Have there been any blitzes conducted against
9 Q. (BY MR. FAIRLESS) You're just saying you don't 9 any company that owns retail motor fuel devices, besides
10 remember one way or the other? 10 PWI?
11 A. I don't remember it being part of any of those 11 A. Not that I recall in my time at the Department.
12 discussions. It's possible. 12 Q. Have any been recommended?
13 Q. Did y'all consider Operation Spotlight to be a 13 A. No, sir.
14 risk-based inspection? 14 Q. And since you are aware -- since you do have a
15 A. Yes, sir. 15 sense of history, what is your understanding of whether
16 Q. And so when you were seeking expanded 16 or not there were any blitzes of owners of retail motor
17 risk-based inspection authority, tell me what sort of 17 fuel devices prior to your time as the Deputy
18 expansion you were looking for. Obviously, somebody 18 Commissioner of Agriculture?
19 felt like you already had some authority because you did 19 A. I don't have a sense to that history.
20 Operation Spotlight before you got the expanded 20 Q. You don't know?
21 risk-based inspection authority, fair? 21 A. Not an extensive sense --
22 MR. OWENS: Form. 22 Q. You don't know one way or -- go ahead. I'm
23 MR. LANGLEY: Form. 23 sorry.
24 A. The authority to conduct risk-based inspections 24 A. I'm not aware.
25 has existed in statute previously. The expansion of 25 Q. You don't know whether or not this blitz
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1 that was removing a requirement that fuel pumps and 1 against PWI, so to speak, broke the cherry from the
2 other devices be inspected on a set frequency regardless 2 standpoint of coming after retail motor fuel device
3 of risk. 3 owners?
4 Q. (BY MR. FAIRLESS) So did y'all remove the 4 MR. OWENS: Objection, form.
5 four-year requirement that retail motor fuel devices be 5 A. I don't.
6 inspected at least every four years? 6 Q. (BY MR. FAIRLESS) You don't know whether or not
7 MR. OWENS: Form. 7 there was a foundation of this having been done in the
8 A. The legislature required TDA to implement a 8 past to set the stage for y'all conducting Operation
9 risk-based inspection criteria and removed -- in that 9 Spotlight when you did?
10 same legislation, removed the four year -- it was 10 A. This was somewhat unprecedented. It was
11 four-year requirement in one program. I don't know if 11 unprecedented.
12 it was the same number for every program. 12 Q. Yeah. We can drop the word "somewhat" out of
13 Q. (BY MR. FAIRLESS) So what is the present 13 that, can't we?
14 risk-based authority -- no. What is the current 14 MR. LANGLEY: Objection, form.
15 risk-based inspection authority criteria? Just give me 15 MR. OWENS: Form.
16 the thumbnail sketch. 16 Q. (BY MR. FAIRLESS) Well, I mean you just did.
17 A. The -- the current as in since the legislation 17 You said it's somewhat unprecedented.
18 has passed, we -- 18 MR. LANGLEY: Now you're arguing with
19 Q. Yeah. After Operation Spotlight, after the 19 him.
20 Sunset Commission, current. 20 MR. FAIRLESS: Whoa, whoa, whoa, whoa.
21 A. My understanding is that the staff are 21 MR. LANGLEY: You're just arguing with
22 developing that risk-based and we are still conducting 22 him.
23 the inspections on a four-year schedule until we 23 MR. FAIRLESS: No, I'm not.
24 implement that risk based criteria. 24 Q. (BY MR. FAIRLESS) Did you drop the word
25 Q. But the plan is to phase out the four-year 25 unprecedented out of there? You said this is somewhat

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1 unprecedented and then you said -- 1 Operation Spotlight.
2 A. No, sir. I did not drop the word unprecedented 2 MR. FAIRLESS: I'll object as
3 out of there. 3 nonresponsive, Ms. Court Reporter, to everything
4 Q. No. Somewhat, I'm sorry. Yeah. Did you drop 4 contained within the last three answers, with the
5 the word "somewhat" out of there as being a qualifier of 5 exception of the last part "I made the decision to
6 unprecedented? 6 implement Operation Spotlight."
7 A. Yes. 7 Q. (BY MR. FAIRLESS) Did you have to get somebody
8 Q. Was Operation Spotlight your idea? 8 else's approval before you made the decision to
9 A. I don't -- I participated in the data analysis 9 implement Operation Spotlight?
10 that led to it. I asked for the data to be analyzed. 10 A. No, sir.
11 Q. That would be the answer to the question did 11 Q. That was well within your authority as Deputy
12 you participate in the analysis that led to the data 12 Commissioner of Agriculture?
13 being analyzed, or did you ask for the data to be 13 A. Yes, sir.
14 analyzed; but that wasn't my question. 14 Q. Did Todd Staples know that it was going to
15 A. I asked for the data. 15 happen? That this inspection targeting PWI was about to
16 Q. My question is: Was Operation Spotlight your 16 take place?
17 idea? 17 MR. OWENS: Objection, form.
18 MR. OWENS: Form. 18 A. No, sir.
19 A. I don't recall whose idea Operation Spotlight 19 Q. (BY MR. FAIRLESS) When did Todd Staples -- when
20 was. 20 did Todd Staples get the word?
21 Q. (BY MR. FAIRLESS) If not -- 21 MR. OWENS: Objection, form.
22 A. I was part -- 22 A. What word?
23 Q. -- yours, then who is in the mix? You say I 23 Q. (BY MR. FAIRLESS) That Operation Spotlight was
24 don't recall, but I want to know who was in the mix. 24 about to take place.
25 You, Staples, Stephen Pahl, Kostroun, whose name is in 25 MR. LANGLEY: Objection, form.
Page 67 Page 69
1 the ring there -- 1 MR. FAIRLESS: Geez Louise, every
2 MR. OWENS: Objection, form. 2 question fellows?
3 Q. (BY MR. FAIRLESS) -- of persons whose idea 3 MR. LANGLEY: Well, how many times have
4 Operation Spotlight could have been? 4 you heard me say that? He just told you that Todd
5 MR. OWENS: Form. 5 Staples --
6 A. It was a collaborative effort. I requested 6 MR. FAIRLESS: Okay. Wait, wait, wait --
7 that data be analyzed. Staff brought a data analysis to 7 MR. LANGLEY: -- didn't know in advance
8 me showing data that led to Operation Spotlight. I made 8 and then you just asked a question that implied that he
9 the decision to implement it. 9 did.
10 MR. FAIRLESS: I'll object as 10 MR. FAIRLESS: No, I didn't.
11 nonresponsive. 11 MR. LANGLEY: Yes, you did.
12 Q. (BY MR. FAIRLESS) Who made the decision to 12 MR. FAIRLESS: I meant when did he find
13 implement Operation Spotlight? You? 13 out about it. When did Todd Staples find out --
14 A. I asked for data to be analyzed. Data was 14 MR. LANGLEY: But you said before it
15 presented to me that showed a compliance history that 15 started.
16 was concerning, and I made the decision to implement 16 MR. OWENS: How about when did you tell
17 Operation Spotlight. 17 him about it or when --
18 MR. FAIRLESS: I'll object as 18 MR. FAIRLESS: Oh, now I'm going to have
19 nonresponsive. 19 to turn -- now I'm going to have to turn this in for
20 Q. (BY MR. FAIRLESS) Who made the decision to 20 CLE.
21 implement Operation Spotlight? Was it you? 21 MR. OWENS: I'll give you an hour.
22 MR. OWENS: Objection, form. 22 MR. LANGLEY: All right.
23 A. I requested the data be analyzed. The data was 23 Q. (BY MR. FAIRLESS) Because I may very well need
24 analyzed and presented to me that showed an alarming 24 to subpoena you for trial, do you want to be subpoenaed
25 compliance rate and I made the decision to implement 25 at work or at the house? I want to do it at your

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1 convenience. I don't want to subpoena you at home if 1 A. Say that again.
2 you would rather be subpoenaed at work. 2 Q. Yeah. When you say the inspections being
3 MR. LANGLEY: You and I can talk about 3 conducted, are we talking about Operation Spotlight,
4 that. 4 which began on July 18, 2008?
5 MR. FAIRLESS: I can just work with you? 5 A. Somewhere around there. Yes, sir.
6 MR. LANGLEY: I will -- I will -- 6 Q. So are you telling me that Todd Staples heard
7 MR. FAIRLESS: You'll accept the subpoena 7 for the first time a couple of days before -- meaning
8 on his behalf? 8 July 16 or so of 2008 -- that there was some concerning
9 MR. LANGLEY: I didn't say I would accept 9 noncompliance rates that were going to lead to an
10 a subpoena, but I will communicate with your office or 10 inspection or some inspections?
11 you personally in arranging what the best way to do it 11 A. It was a few days before. I can't speak to the
12 is. 12 exact date.
13 MR. FAIRLESS: Okay, that's fine. That's 13 Q. And did you provide Todd Staples any documents
14 good enough. 14 to review?
15 Q. (BY MR. FAIRLESS) So when did Todd Staples know 15 A. I provide him documents all the time to review.
16 that there was going to be an Operation Spotlight, or 16 Q. No. But I mean this couple of days before,
17 that there was an Operation Spotlight going on? 17 documents that would pertain to this concerning
18 MR. OWENS: Form. 18 noncompliance rate.
19 A. I communicated with Commissioner Staples about 19 A. Not that I recall.
20 the data that was being analyzed, that some data had 20 Q. In other words, when you're talking to him
21 come back from that analysis revealing a very concerning 21 about we have this concerning noncompliance rate,
22 noncompliance rate, and that we would be conducting some 22 Commissioner Staples, and here are some documents that
23 inspections to verify that data prior to the inspections 23 support that, we would like for you to take a look at
24 being conducted. 24 this and, you know, give us your blessing, yeah or nay,
25 MR. FAIRLESS: I'm going to object as 25 was there any discussion like that that took place?
Page 71 Page 73
1 nonresponsive. 1 A. No, sir.
2 Q. (BY MR. FAIRLESS) I didn't understand that. My 2 Q. Did you provide Todd Staples any documentation
3 question was just when; so I was looking for a day or a 3 at all to review pertaining to PWI before Operation
4 time, a date, a month. 4 Spotlight took off?
5 A. I -- I don't recall ever -- I don't recall the 5 A. No, sir.
6 dates. I do know that I never had a discussion about 6 Q. And since you didn't need anybody else's
7 this more than a few days before -- maybe a couple of 7 approval, you're the guy who pulled the trigger on
8 weeks before the inspections. 8 moving forward with Operation Spotlight?
9 Q. So are you saying that you actually had a 9 A. I asked for data to be analyzed. Data came
10 conversation then with Todd Staples about Operation 10 back to me and was presented to me that showed a
11 Spotlight a couple of weeks prior to Operation 11 concerning noncompliance rate and I made the decision to
12 Spotlight? 12 implement Operation Spotlight.
13 A. No, sir. 13 MR. FAIRLESS: I'll object to everything,
14 Q. Okay. So what was it that you talked to him 14 Ms. Court Reporter, before that last sentence "I made
15 about a couple of weeks before -- 15 the decision to implement Operation Spotlight."
16 A. Nothing. 16 Q. (BY MR. FAIRLESS) Where did you get the idea of
17 Q. -- Operation Spotlight? 17 having an unprecedented blitz of PWI?
18 A. I talked to Commissioner Staples about the data 18 MR. OWENS: Objection, form.
19 that was being analyzed that showed a very concerning 19 A. I don't -- I never had an idea that we would
20 noncompliance rate a day, maybe two days, before the 20 have an unprecedented blitz.
21 inspections were conducted. 21 Q. (BY MR. FAIRLESS) Where did the idea of the
22 Q. And when you say the inspections were 22 unprecedented blitz of PWI come from?
23 conducted, are we talking about the inception of 23 MR. OWENS: Form.
24 Operation Spotlight, which would have been July 18, 24 A. The idea was based upon some concerning data
25 2008? 25 showing a noncompliance rate for a particular company of

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1 more than 30 percent, compared to that same time period 1 Q. (BY MR. FAIRLESS) So the analysis was the same
2 a statewide average of 5 percent noncompliance. 2 for everybody?
3 MR. FAIRLESS: I'll object as 3 MR. LANGLEY: Objection, form.
4 nonresponsive. 4 MR. OWENS: Form.
5 Q. (BY MR. FAIRLESS) Where did the unprecedented 5 A. The statewide average includes -- the statewide
6 blitz idea come from, if not you? 6 average of 95 percent compliance includes every company
7 MR. OWENS: Form. 7 in the state; and that compares directly to the
8 A. The idea was based upon -- the idea to conduct 8 noncompliance rate or the compliance rate for this
9 inspections in this situation was based upon data that 9 company of less than 70, somewhere around 65 percent.
10 was analyzed that showed a particular company had a 10 MR. FAIRLESS: I'll object as
11 noncompliance rate of more than 30 percent, compared to 11 nonresponsive.
12 a statewide average noncompliance rate of 5 percent. 12 Q. (BY MR. FAIRLESS) So are you telling me, Drew
13 MR. FAIRLESS: I'll object as 13 DeBerry, Deputy Commissioner of Agriculture, there was
14 nonresponsive. 14 no analysis of PWI done prior to Operation Spotlight
15 Q. (BY MR. FAIRLESS) So did y'all analyze data for 15 that wasn't done for every other retail motor fuel
16 each and every owner of retail motor fuel devices that 16 device owner in the great state of Texas?
17 operated in the great state of Texas? 17 MR. OWENS: Form.
18 A. I can't speak to all the data that was 18 A. No, sir.
19 analyzed. 19 Q. (BY MR. FAIRLESS) Earlier, I was talking to you
20 Q. Well, that's what I want to know. You said 20 about -- you know what, I want to get sidetracked for
21 data analysis a few times. I want to know did y'all do 21 just a second. How many national -- how many -- let me
22 the same data analysis for Valero and every other retail 22 try again. How many national conferences on weights and
23 motor fuel device owner that you did for PWI? 23 measures have you spoken at?
24 A. I'll defer to the staff that did the analysis 24 A. I believe only the one that was held in Texas
25 of the data to answer that question. I ask that we 25 since I've been in the job, on the job. I think they
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1 continuously be analyzing data to identify any trends 1 rotate their meetings around the country.
2 that exist, if they do exist, for noncompliance. 2 MR. FAIRLESS: I'll object as
3 MR. FAIRLESS: I'll object as -- I'm 3 nonresponsive.
4 sorry. I'll object as nonresponsive. 4 Q. (BY MR. FAIRLESS) Has there only been one
5 Q. (BY MR. FAIRLESS) So does that mean you don't 5 national conference on weights and measures that you
6 know -- 6 spoke at?
7 MR. OWENS: Objection -- 7 A. I've spoken at one meeting of national
8 Q. (BY MR. FAIRLESS) -- if y'all analyzed data for 8 conference on weights and measures.
9 the other retail motor fuel device owners as you did for 9 Q. And that was in the Summer of 2009 or
10 PWI? 10 thereabouts?
11 MR. OWENS: -- form. 11 A. I don't recall when it was.
12 A. I believe other data was analyzed that included 12 Q. Last year? Less than a year ago?
13 other companies. 13 A. Sounds about right.
14 Q. (BY MR. FAIRLESS) So you're saying we did the 14 Q. Okay. You spoke in San Antonio?
15 same analysis for everybody. PWI, any analysis we did 15 A. Yes, sir.
16 on PWI was no different than the analysis we did for 16 Q. And for how long did you speak?
17 Valero, was no different than the analysis we did for 17 A. Fifteen to 20 minutes probably.
18 any other retail motor fuel device owner? 18 Q. And were your remarks or at least an outline of
19 MR. OWENS: Form. 19 your remarks maintained by you or the TDA?
20 MR. LANGLEY: Objection, form. 20 A. I suspect they were.
21 A. It's my understanding that the analysis of data 21 Q. And tell me the general subject matter of the
22 began with a comparison of this particular company to 22 message that you delivered.
23 the statewide compliance rate, average. So to that 23 A. Welcome them to Texas for a meeting of
24 extent, yes, the analysis has been done on every company 24 representatives from 50 states across the country. I
25 in the state. 25 shared with them a little bit about Texas. I thanked

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1 them for what they do, and shared with them the 1 MR. FAIRLESS: Everything after "It's
2 importance that we feel for the jobs they do. I thanked 2 very likely I did," I'll object to as nonresponsive.
3 them for their work with establishing national 3 Q. (BY MR. FAIRLESS) Did you talk to the folks at
4 standards. 4 the national conference on weights and measures about
5 Q. So after you got through glad-handing them, 5 whether or not the TDA took minus ones and minus twos
6 then what did you do? 6 into consideration during the course of Operation
7 MR. OWENS: Form. 7 Spotlight when crunching its numbers?
8 MR. LANGLEY: Objection, form. 8 A. I'm not -- I don't understand your question.
9 Q. (BY MR. FAIRLESS) They come from the 49 lesser 9 Q. Do you know what the maintenance tolerance is
10 states. You don't have to be so nice to them. 10 for a retail motor fuel device like the ones that were
11 MR. OWENS: Form. 11 inspected, the gasoline ones that were inspected during
12 Q. (BY MR. FAIRLESS) So what did you do after 12 Operation Spotlight?
13 that? 13 A. I know there are tolerances. I don't -- I'm
14 A. I discussed how we value the programs here in 14 not familiar with what they are.
15 Texas, and how we implement these programs. 15 Q. Okay. You've never calibrated a retail motor
16 Q. Well, did you talk about Operation Spotlight 16 fuel device?
17 and the -- did you talk about Operation Spotlight and 17 A. No, sir.
18 the success that you perceived that it was? 18 Q. Never been trained on how to do that?
19 A. It's likely that I talked about the results of 19 A. No, sir.
20 our inspections. 20 Q. Never worked in the industry?
21 Q. So does -- you do inspections, or you're 21 A. What industry?
22 supposed to do inspections all the time. I'm talking 22 Q. Retail motor fuel device industry.
23 specifically about Operation Spotlight, not just any old 23 A. No, sir.
24 inspections and not just any old inspections of retail 24 Q. Well, did you speak to any experts in the
25 motor fuel devices. So let me try with the question 25 retail motor fuel device industry before you set out to
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1 again. 1 conduct Operation Spotlight?
2 Did you talk to these people at the 2 A. We communicate with representatives of all the
3 national conference on weights and measures about your 3 industries we regulate, frequently.
4 perceived success of Operation Spotlight? 4 MR. FAIRLESS: I'll object as
5 A. It's likely I spoke about the inspections and 5 nonresponsive.
6 the results of our inspections, including the fact that 6 Q. (BY MR. FAIRLESS) Did you talk to any experts
7 in Texas, we have a 95 percent compliance rate. It's 7 in the retail motor fuel device industry before setting
8 likely we talked about the -- I talked about the 8 out on Operation Spotlight?
9 inspections that were part of Operation Spotlight that 9 A. We communicate with the industries that we
10 yielded a noncompliance rate of -- that identified a 10 regulate on a frequent basis, representatives of those
11 noncompliance rate of actually more than nearly 11 industries; so, yes.
12 60 percent. 12 Q. I don't understand what your answer is. It
13 MR. FAIRLESS: I'll object as 13 ended with "so, yes." So let's start there. Who were
14 nonresponsive. 14 the experts you talked about prior to undertaking
15 Q. (BY MR. FAIRLESS) Did you talk about Operation 15 Operation Spotlight?
16 Spotlight at the national conference on weights and 16 MR. LANGLEY: Objection, form.
17 measures or not? 17 A. We communicate with representatives of all the
18 MR. OWENS: Objection, form. 18 industries we regulate frequently. Our staff
19 Q. (BY MR. FAIRLESS) You either did or you didn't, 19 communicates with experts in the -- in the protocols
20 Mr. DeBerry. 20 that we use to regulate frequently.
21 A. I don't recall. It's very likely that I talked 21 Q. (BY MR. FAIRLESS) You've got a future in
22 about the inspections that were associated with 22 politics because I understood none of that.
23 Operation Spotlight that yielded results showing a 23 Communicated with industry experts --
24 noncompliance rate of a given company of more -- of 24 MR. OWENS: Objection, form.
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1 industry experts you communicated with about Operation 1 want to call somebody within the TDA an expert on retail
2 Spotlight before that operation was conceived. 2 motor fuel devices and you consulted with them, then let
3 MR. LANGLEY: Objection, form. 3 their name be the first ones on the list.
4 MR. OWENS: Form. 4 MR. LANGLEY: Thank you for that
5 Q. (BY MR. FAIRLESS) Are you with me? I want to 5 clarification. That was the problem I was having.
6 know who you went to in the industry. Did you say, 6 Q. (BY MR. FAIRLESS) So now let me try with a
7 look, I want y'all to go out, find me the people in the 7 clean question. What experts, industry experts
8 industry who know what's going on, and I want to talk to 8 pertaining to retail motor fuel devices did you
9 one, two, or ten of them about this potential operation 9 communicate with prior to the inception of Operation
10 that we're going to have and I want to find out some 10 Spotlight?
11 answers to some questions that I have, did you do 11 A. My communications were with internal staff who
12 anything like that? 12 analyzed the data, presented the data to me. The data
13 MR. LANGLEY: Objection, form. 13 showed a concerning noncompliance rate of more than
14 A. We communicate with industry representatives 14 30 percent, compared to the statewide average of
15 all the time, and we communicate with -- our staff 15 5 percent. I made the decision to go forward with
16 communicates with the experts in the protocols we 16 Operation Spotlight based on those discussions.
17 utilize all the time. 17 MR. FAIRLESS: I'll object as
18 MR. FAIRLESS: I'll object as 18 nonresponsive.
19 nonresponsive. 19 Q. (BY MR. FAIRLESS) So does that mean you didn't
20 Q. (BY MR. FAIRLESS) So who in the way of industry 20 talk to any industry experts? I don't want to know who
21 experts did you communicate with about the protocols 21 you talked to about crunching data or the data results
22 that you were going to use during Operation Spotlight? 22 that were obtained. I want to know did you talk to any
23 MR. LANGLEY: Objection, form. 23 industry experts with regard to retail motor fuel
24 A. The protocols we used were consistent with 24 devices and the inspections that were about to take
25 national standards. I'm sure our staff communicate with 25 place.
Page 83 Page 85
1 experts frequently about those. 1 MR. OWENS: Form.
2 Q. (BY MR. FAIRLESS) Well, tell me what experts 2 A. Yes.
3 you believe your staff communicated with. 3 Q. (BY MR. FAIRLESS) Who?
4 MR. LANGLEY: Objection, form. 4 A. We communicate -- our staff communicates with
5 MR. FAIRLESS: Why? Because you're 5 experts all the time about --
6 saying he wouldn't know? 6 Q. Who?
7 MR. LANGLEY: No. Because the problem 7 A. -- our protocols.
8 I'm having with this line of questioning is I think 8 Q. I sound like an owl. Who?
9 you're assuming that those industry experts have to 9 MR. OWENS: Form.
10 exist outside of the TDA, and I'm not sure that's a fair 10 A. They communicate with counterparts around the
11 assumption. 11 country.
12 MR. FAIRLESS: No. Right now -- I'm 12 Q. (BY MR. FAIRLESS) Who?
13 going to get there; but right now I'm not even there. I 13 A. Regulatory counterparts around the country.
14 just -- 14 Q. Who?
15 MR. LANGLEY: Well -- 15 A. I'll defer to our staff to see what experts
16 MR. FAIRLESS: If he thinks it's an 16 they communicate with.
17 expert within the TDA, I want that person's name. 17 Q. So the answer is I don't know, I would have to
18 MR. LANGLEY: Okay. Well, that was the 18 defer to my staff to find out what experts, if any, we
19 problem I was having with your questions. 19 communicated with prior to the inception of Operation
20 MR. FAIRLESS: Okay. 20 Spotlight?
21 Q. (BY MR. FAIRLESS) Are you with me? It 21 MR. OWENS: Form.
22 doesn't -- 22 Q. (BY MR. FAIRLESS) Fair?
23 A. Catch me up. 23 A. No, sir.
24 Q. We're going to talk later about whether or not 24 Q. Okay.
25 it's an outside expert. Right now, I'm saying if you 25 A. The answer is --

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1 MR. LANGLEY: You're wanting him to 1 Q. Okay. Are you aware as you sit here today of
2 identify by name individuals? 2 any non-TDA employee industry experts that were
3 MR. FAIRLESS: Right, right. 3 consulted prior to Operation Spotlight?
4 MR. LANGLEY: Okay. So if you can't do 4 A. I'm not aware of any discussions about
5 that -- 5 Operation Spotlight prior to it being conducted with
6 MR. FAIRLESS: Of if he wants to give me 6 anybody externally.
7 a position title like the assistant to the assistant to 7 Q. When did the TDA submit its budget request in
8 the substitute director of the assistant of deputy 8 2008 for the 2009 year?
9 commissioner of agriculture. So make it a position, or 9 A. Budget -- the legislative appropriation
10 make it a name. Name is my preference, position is 10 requests are submitted in the fall, late summer, fall
11 second. 11 of -- of even numbered years.
12 MR. OWENS: Objection, form. 12 Q. Right, which is why I asked about 2008.
13 A. I communicated with our staff and the team we 13 A. Okay.
14 have in place that helps us implement the national 14 Q. And I don't want to just go though with late
15 standards. 15 summer, early fall. I want to know if you can tell me
16 Q. (BY MR. FAIRLESS) So who on your staff is it 16 in 2008, when the legislative appropriation request was
17 that you're recognizing as a retail motor fuel device 17 submitted.
18 expert in the industry -- 18 A. It would have been in the fall or late summer
19 A. There were various staff -- 19 of 2008, for the year -- for the --
20 Q. -- that you spoke to -- you've got to let me 20 Q. And I guess --
21 finish -- that you spoke to and listened to prior to the 21 A. Wait a minute, wait a minute. The fiscal year
22 inception of Operation Spotlight? 22 2009 --
23 A. Okay. There were various staff. I spoke with 23 Q. Right.
24 Stephen Pahl. I spoke with -- I spoke with David 24 A. -- is what you're asking about?
25 Kostroun. 25 Q. Yes.
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1 Q. Those guys are industry experts? 1 A. That -- the appropriation request for that
2 MR. LANGLEY: Now, he wasn't finished I 2 fiscal year would have been in 2006, I believe. Let me
3 don't think. 3 think about this. Yeah, it would have been in -- in the
4 MR. FAIRLESS: No, I know. And I told 4 Fall of 2006, would be when we submit our legislative
5 him earlier I was going to interrupt him from time to 5 appropriation request for the...
6 time and I apologized in advance. So here goes one of 6 Q. I'm not sure that's right.
7 my interruptions. 7 A. I might have to get a calendar here.
8 Q. (BY MR. FAIRLESS) Those guys, Stephen Pahl and 8 Q. Why don't you think about that.
9 David Kostroun, are industry experts to your way of 9 A. I'm going to have to get a calendar out here.
10 thinking? 10 The legislature meets in the beginning of the odd
11 MR. LANGLEY: Since you weren't finished 11 numbered year.
12 with your answer, don't let him tie you down to his 12 Q. Let me just ask it this way. Do you remember
13 interpretation of your partial answer. 13 if there was a legislative appropriations request made
14 THE WITNESS: Sure. 14 in the Fall of 2008?
15 MR. LANGLEY: And I'm instructing you not 15 A. There was.
16 to allow him to do that. 16 Q. And was that legislative appropriations request
17 A. Our staff communicates with the industry 17 made after Operation Spotlight?
18 experts. Those staff are Stephen Pahl, David Kostroun, 18 A. Yes.
19 Joe Benavides, and the various staff that oversee these 19 Q. And were there as part of that legislative
20 programs. 20 appropriations request, more funding requested for
21 Q. (BY MR. FAIRLESS) Okay, thank you for that 21 risk-based inspections?
22 list. Now, tell me who are the industry experts that 22 A. Yes, sir.
23 they spoke to. 23 Q. And would you view Operation Spotlight, as you
24 A. I don't know if they did, but I'll defer that 24 sit here today, as an example of a type of risk-based
25 to them. 25 inspection?

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1 MR. OWENS: Objection, form. 1 A. I don't recall.
2 A. I would consider the inspections conducted in 2 Q. Right. But if you don't recall and you don't
3 Operation Spotlight to be based upon risk. 3 have any idea, then how can you say it wasn't the
4 Q. (BY MR. FAIRLESS) Now, do you remember a 4 communications or the media people?
5 meeting occurring in May of 2008, involving you going to 5 A. Because they weren't aware of it until the
6 the Extension Center there in the Houston area and 6 inspections were already conducted.
7 speaking to a bunch of regional directors and chief 7 Q. Okay. So you can limit the field some. Was it
8 inspectors? 8 somebody within TDA that came up with name Operation
9 A. I don't recall that. 9 Spotlight then?
10 Q. Do you remember Operation Spotlight -- and, you 10 A. I don't know who it was.
11 know, perhaps it didn't have a name at the time -- but 11 Q. So the only people that we know for sure who
12 do you remember the inspections that would become 12 are outside the circle are the communications and the
13 Operation Spotlight being discussed as early as May of 13 media people.
14 2008? 14 A. Okay.
15 A. No. 15 Q. Everybody else is inside the circle?
16 Q. When is it -- 16 MR. OWENS: Form.
17 A. They weren't. 17 A. What -- what -- what are you --
18 Q. You sound pretty confident of that. 18 Q. (BY MR. FAIRLESS) The circle of people who
19 A. Say the dates again. 19 conceivably could have come up with the name Operation
20 Q. May of 2008. 20 Spotlight.
21 A. State the question again. 21 A. Okay.
22 Q. Operation Spotlight or the inspections that 22 Q. The only ones you've --
23 became Operation Spotlight, were they discussed as early 23 A. It would have been someone with TDA.
24 as May of 2008? 24 Q. Okay. And is that the best you can do for me,
25 A. No. 25 or can we narrow the circle any more?
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1 Q. When was Operation Spotlight -- I know it was 1 A. I don't believe I can help you narrow it.
2 put into motion that Friday morning, July 18; but when 2 Q. And did you have to give approval for the name,
3 was it decided by you we're going to go forward with 3 just like you gave approval for the operation itself?
4 Operation Spotlight? 4 A. No, sir.
5 A. One or two days before is when I made the 5 Q. Did anybody have to give approval of the name,
6 decision. 6 to your knowledge?
7 Q. Okay. Did you speak to the regional directors 7 A. No, sir.
8 for the TDA before Operation Spotlight's inception about 8 Q. So then I'm a little bit lost. Since nobody
9 Operation Spotlight? 9 had to give approval for the name, it would seem to me
10 A. I wasn't even aware that it was called 10 that whoever came up with the name would have to be in a
11 Operation Spotlight until it was underway, but I had 11 certain level position or higher if that person didn't
12 discussions with the people who were going to implement 12 have to have anyone's approval to name this
13 it a few days before. Yes, sir. 13 unprecedented blitz that was taking place.
14 Q. Okay. So you found out it was going to be 14 A. No, sir, not necessarily. Our regional
15 called Operation Spotlight during the operation itself? 15 directors and various staff have authority to administer
16 A. It was maybe the day before it started, maybe 16 the programs within decisions we've made.
17 the day of. I don't recall. 17 Q. Right. But I wouldn't think that they would
18 Q. Well, who came up with the name? 18 have permission to name this unprecedented blitz without
19 A. I don't recall. 19 at least some green light from a higher ranking official
20 Q. I take it it wasn't you? 20 within the TDA.
21 A. It was not me. 21 A. The name was not something we felt to be
22 Q. Was it somebody in the communications or the 22 significant with regard to the scope of the
23 media department for the TDA or the Texas government? 23 noncompliance rate of 34 percent before the inspections.
24 A. No, sir. 24 MR. FAIRLESS: Okay. I'll object as
25 Q. Who was it? 25 nonresponsive to everything after the words to the

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1 effect of the name wasn't that important. 1 Q. Well, I'll pick up on that in a minute, the
2 Q. (BY MR. FAIRLESS) So tell me about the meeting 2 trends you had noticed; but right now, I'm just talking
3 that you had with the regional directors and the chief 3 about the meeting whereupon you spoke to the regional
4 inspectors. First of all, was it a face-to-face 4 directors and the chief inspectors.
5 meeting; or was it you talking into a telephone into a 5 You said it was a week or so -- over a
6 room filled with people? 6 week before Operation Spotlight, to the best of your
7 A. What meeting? 7 recollection. It took place in Austin. And tell me
8 Q. The meeting -- 8 what you spoke to the people about.
9 A. You asked early about a meeting I don't 9 A. I went to the meeting to ask Stephen Pahl some
10 remember. 10 questions. Stephen utilized the opportunity with the
11 Q. The meeting we talked about a few minutes ago 11 regional directors there to -- I think he brought them
12 where you were speaking to regional directors and chief 12 into the discussion that we were having about some of
13 inspectors prior to Operation Spotlight getting started. 13 these trends that I wanted to get verified.
14 You said it was a couple of days before. 14 Q. So are you saying that at the time you sat off
15 MR. OWENS: Objection, form. 15 for the meeting, which was across the hall or across the
16 A. No, sir. I didn't say that. 16 town, that you did not have an Operation Spotlight in
17 Q. (BY MR. FAIRLESS) You didn't say that there was 17 mind to talk to the regional directors and chief
18 a meeting with regional directors and chief inspectors a 18 inspectors about?
19 couple of days before Operation Spotlight whereupon you 19 A. Yes, sir.
20 spoke to them? 20 Q. Okay. So the idea of these inspections only
21 A. I don't recall saying that. I recall saying I 21 came to you once you were at the meeting receiving some
22 made a decision to implement Operation Spotlight a day 22 sort of feedback and having some sort of dialogue with
23 or two before. I had discussions with the staff several 23 the regional directors and chief inspectors?
24 days before that. 24 A. No. That meeting, we didn't -- we didn't
25 Q. Okay. So when did you have discussions with 25 discuss the idea of conducting inspections. We simply
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1 the staff? 1 discussed doing trend analysis, as I recall.
2 A. With those staff you're talking about? 2 Q. Okay.
3 Q. Right. 3 A. Analyzing the data.
4 A. And who are those? 4 Q. What started all this off was I was asking you
5 Q. Regional directors and -- 5 about a meeting wherein you talked to the regional
6 A. I have meetings with a lot of staff. 6 directors and chief inspectors about what their roles
7 Q. -- chief inspectors. 7 were going to be in Operation Spotlight, this operation
8 A. Okay. That meeting would have probably been -- 8 that was coming up.
9 it was several days before. I don't know, again, the 9 A. I don't remember that being what you were
10 exact dates; but it would have been several days, 10 asking about.
11 probably more than a week before. 11 MR. LANGLEY: Objection, form.
12 Q. And where was the meeting? 12 MR. OWENS: Objection, form.
13 A. It was in -- here in Austin at the Department. 13 Q. (BY MR. FAIRLESS) Man, I'm hearing one thing
14 Q. So did the chief inspectors and regional 14 come out; and everybody else is evidently hearing
15 directors come here? 15 something else.
16 A. They were in town for another meeting. I'm not 16 Did you ever have a meeting with the
17 sure what that meeting was. 17 regional directors and the chief inspectors before
18 Q. Do you have any idea? 18 Operation Spotlight, where you talked about the
19 A. No, sir. 19 inspections that were going to be performed and later
20 Q. So while they were in town for another meeting, 20 known as Operation Spotlight?
21 you got them together and talked to them about what 21 A. I had a discussion with Stephen Pahl where I
22 would a week later become Operation Spotlight? 22 asked Stephen some questions about some enforcement
23 A. I asked -- I went to their meeting looking for 23 orders that had crossed my desk that were fairly
24 Stephen Pahl to ask him a question about some trends 24 egregious against a -- all against a given company, a
25 that I had noticed and wanted to get verified. 25 single company. Stephen engaged the other folks in the

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1 room to help me answer some questions. Those people in 1 subject.
2 the room happened to be there for another meeting. They 2 Q. But I don't get it. Are you saying there may
3 were regional directors, chief inspectors, probably some 3 have been -- there may have been such a meeting, but you
4 other folks. I'm not sure who all was there. We 4 don't remember as you sit here today; or are you saying,
5 discussed the notices of violation that the enforcement 5 yeah, listen fellow, there was a meeting, but the chief
6 orders, I guess I should say, that I had questions 6 inspectors weren't there, it was just the regional
7 about. 7 directors? I mean, I'm still -- you know, I've got a
8 MR. FAIRLESS: I'll object to all that as 8 thousand other questions; but I can't get to them until
9 nonresponsive. 9 I can figure out whether or not there was this meeting.
10 Q. (BY MR. FAIRLESS) Did y'all talk about the 10 MR. OWENS: Form.
11 inspections that were going to be done during July 18, 11 A. Sure. I recall a meeting where I went and
12 19, and 20 of only PWI locations? 12 asked Stephen Pahl some questions. There was a meeting
13 A. I don't recall that we did. 13 going on with the regional directors and chief
14 Q. Okay. So then that's not the meeting I'm 14 inspectors while I asked him the questions, and we got
15 talking about. 15 into a discussion with the group about those enforcement
16 A. Okay. 16 orders.
17 Q. I'm talking about a meeting other than this 17 Q. (BY MR. FAIRLESS) Okay. Was there ever any
18 meeting with Stephen Pahl and the people that he was 18 other meeting that you attended prior to the inception
19 meeting with, wherein you spoke to regional directors 19 of Operation Spotlight, that was attended by regional
20 and chief inspectors about inspections that were going 20 directors and chief inspectors?
21 to take place on July 18, 19, and 20. Was there ever 21 A. I don't -- I don't believe so.
22 any such meeting? 22 Q. All right. So now tell me about the trends you
23 A. I've had discussions with regional directors 23 had noticed that you referred to earlier.
24 about -- and I certainly talked to regional directors 24 A. There were several trends. I noticed
25 about the operation before it commenced. 25 originally a few enforcement orders cross my desk with a
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1 Q. There you go. That's what I want to know. 1 given -- a single company violating one of our most
2 A. But I don't recall a -- the way you're 2 egregious penalties, the predominance threshold in the
3 portraying it as a meeting that I convened or went to. 3 weights and measures program, several times. I believe
4 Q. So what -- are you saying there never was a 4 they were even far above the predominance threshold. I
5 meeting, you in isolated in conversations spoke to 5 think, as I recall, they were upwards of 80 percent
6 regional directors about what was to be Operation 6 noncompliant at a few locations with that same company.
7 Spotlight; but there never was really a formal meeting 7 That was the first that I recall.
8 where they were present along with chief inspectors and 8 Q. Okay. Well, let me make a note of that.
9 y'all talked about the inspections? 9 That's Trend No. 1. So tell me what documents you had
10 MR. OWENS: Form. 10 that supported Trend No. 1; or if you had somebody else
11 A. I know there were meetings. I don't recall if 11 do some homework for you, tell me about that.
12 I participated in the meetings talking about -- I know I 12 MR. OWENS: Objection, form.
13 wasn't involved in meetings talking about the protocols 13 A. I --
14 and how we would implement Operation Spotlight 14 MR. FAIRLESS: What's the basis of that?
15 consistent with the protocols that we had established. 15 MR. OWENS: You asked two questions
16 Q. (BY MR. FAIRLESS) Well, then maybe we can clear 16 and --
17 it up pretty quick. Can you, Drew DeBerry, say listen 17 MR. FAIRLESS: Okay, okay.
18 fellow, I was never involved in a meeting with regional 18 MR. OWENS: And homework is
19 directors and chief inspectors there together where I 19 argumentative.
20 spoke to them about what was to be the inspections that 20 Q. (BY MR. FAIRLESS) All right. I want to know
21 made up Operation Spotlight? 21 what documentation you had supporting what you just told
22 A. I can't say that. I communicated with the 22 us was the first trend.
23 regional directors and chief inspectors from time to 23 A. Enforcement orders with notices of violation,
24 time, more directly with the regional directors; and it 24 and I believe they were complete with a check from
25 wouldn't be uncommon for me to talk to them about this 25 Petroleum Wholesale paying the penalty.

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1 Q. And were all the enforcement orders pertaining 1 carrying around for PWI that pertained to bulk diesel,
2 to PWI? 2 or were they all retail motor fuel devices for gasoline
3 A. Yes, sir. 3 operated vehicles?
4 Q. And are these the enforcement orders, NOVs, and 4 A. I don't recall.
5 check that you carried with you to this meeting that you 5 Q. Did it matter to you?
6 talked about where you were going to ask some questions 6 A. What mattered was the 80 percent of the pumps
7 of Stephen Pahl and y'all kind of threw it out to the 7 inspected triggering being tilted in favor of the
8 room? 8 company.
9 MR. OWENS: Objection, form. 9 MR. FAIRLESS: I'll object as
10 A. There were enforcement orders. 10 nonresponsive.
11 Q. (BY MR. FAIRLESS) Right. But I'm saying are 11 Q. (BY MR. FAIRLESS) Are you saying that these
12 those the enforcement orders that you talked about at 12 five enforcement actions that you had, each supported
13 that meeting that you went to to see Stephen Pahl and it 13 80 percent predominance violations?
14 just so happens he was meeting with regional directors 14 A. They supported a predominance violation as I
15 and chief inspectors? 15 recall, a violation of the predominance threshold, which
16 A. Right. The ones I just described, yes. 16 was set at 60 percent, I believe, at the time. And as I
17 Q. Yeah. They're the same -- 17 recall, some or all of these were over 80 percent
18 A. Yes. 18 noncompliant.
19 Q. -- enforcement orders? 19 Q. Did you take any enforcement orders from
20 A. Yes. 20 entities other than -- that pertained to entities other
21 Q. And how many enforcement orders did you have, 21 than PWI?
22 Mr. DeBerry? 22 A. No, sir.
23 A. I don't -- I don't recall. 23 Q. On July 18 of 2008, you had enforcement orders
24 Q. Well, I mean, did you have two or did you have 24 that showed up on your desk for a single entity that had
25 22 or 222? 25 a check associated with a payment of the penalties for
Page 103 Page 105
1 A. It was a handful or less. 1 $10,000. Do you remember that?
2 Q. A handful or less? 2 MR. OWENS: Form.
3 A. As in five or less. Sorry. 3 A. I don't remember that particularly.
4 Q. Okay. And did all of those enforcement orders 4 Q. (BY MR. FAIRLESS) Do you remember any -- is
5 pertain to gasoline retail motor fuel devices? 5 that not -- let me try again. Is that not noteworthy
6 A. I recall they pertained to retail motor fuel 6 for the Deputy Commissioner of Agriculture to remember a
7 devices. 7 single check from an owner of retail motor fuel devices
8 Q. Right. Which underscores why I asked did it 8 in the amount of $10,000 or more for penalties?
9 pertain to gasoline retail motor fuel devices, or did it 9 A. It's a sizable amount. I'm more concerned with
10 pertain to bulk diesel as well? Do you know what bulk 10 what the violation was.
11 diesel is? 11 Q. Okay. Assume the violations were for
12 A. Yes, sir. 12 predominance rule violations, retail motor fuel device
13 MR. OWENS: Objection, form. 13 inaccuracies.
14 Q. (BY MR. FAIRLESS) What is bulk diesel? 14 MR. OWENS: Object --
15 A. What is diesel? 15 Q. (BY MR. FAIRLESS) -- so does that make it more
16 Q. What is -- yeah. Do you know what bulk diesel 16 noteworthy to you then?
17 is? 17 MR. OWENS: Object to the form.
18 A. We refer -- we refer to bulk flow meters as the 18 A. Not necessarily.
19 retail fuel dispensers that flow at a rate for bulk 19 Q. (BY MR. FAIRLESS) Well, how much --
20 sale. 20 A. I would be interested in knowing the details,
21 Q. Right. That your commercial trucks would fill 21 but I -- that's what I focus my attention on is what was
22 up at? 22 the violation.
23 A. Right. 23 Q. And if you had any questions about what the
24 Q. All right. Well, then that's what I want to 24 details were, then you could certainly talk to the
25 know. Were there any enforcement orders that you were 25 people that handle such details within the TDA and you

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1 could expect answers from them, fair? 1 Wholesale violating the predominance threshold, which I
2 A. Correct. 2 used to ask our staff to analyze data about how this
3 Q. Now, the checks that you looked at in 3 particular company compares to the statewide average for
4 conjunction with these enforcement orders, were they 4 compliance and to look at if there are any other
5 checks to pay the penalties that were set forth in the 5 companies out there that have a significantly higher
6 notices of violation associated with the enforcement 6 noncompliance rate.
7 orders? 7 The data was analyzed, and what was
8 A. Yes, sir. 8 brought back to me was a noncompliance rate for this
9 Q. And these checks of one to five or that -- I 9 particular company of more than 30 percent compared to a
10 should say the checks that went along with the 10 statewide average of 5 percent. As I recall, this
11 enforcement orders, the handful or less, five or less, 11 company had a history of violating the predominance
12 how much did those checks add up to? 12 threshold at a much higher rate than other companies in
13 A. I don't recall. 13 the state.
14 Q. Do you have any idea? 14 Q. I'm making a list of all your reasons. Is that
15 A. No, sir. 15 it?
16 Q. If those checks added up to $5,000 or less, 16 A. Those are the ones that come to mind right now.
17 would it be fair to say that certainly a check for the 17 Q. So the possible trends supported by the
18 same type of violations that was $10,000 or more, would 18 several -- the several enforcement orders, those are the
19 certainly catch your attention? 19 orders that you told me about earlier that you had up to
20 MR. OWENS: Objection, form. 20 a handful, so five or less?
21 MR. LANGLEY: Form. 21 MR. OWENS: Objection, form.
22 A. All right. Do you mind saying that again? It 22 A. Right.
23 was kind of long. 23 Q. (BY MR. FAIRLESS) Well, if there was something
24 Q. (BY MR. FAIRLESS) Yeah. If these checks that 24 else that indicated this possible trend, then I want you
25 went along with these enforcement actions that you saw 25 to tell me what it was. But as I'm understanding what
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1 for PWI was $5,000 or less and -- I'll ask it 1 you're saying, it was these enforcement orders, the
2 differently. 2 associated NOVs, and the associated check or checks that
3 Do you remember any enforcement actions, 3 triggered this trend analysis, fair?
4 notices of violations, or checks coming across your desk 4 A. That was the first -- the first thing I
5 at or about the time of Operation Spotlight that were 5 noticed, which led to an analysis of data compared to --
6 for penalties of $10,000 or more? 6 to compare this company to the statewide average. And
7 A. I don't recall the details of enforcement 7 in Texas, we have a high compliance rate for retail
8 orders I sign. I sign several every day. 8 motor fuel dispensers of 95 percent. This particular
9 Q. Was there some reason why you wanted to target 9 company had a noncompliance rate of more than 30 percent
10 PWI in the inspections that were going to take place on 10 compared directly to that statewide average.
11 July 18, 19, and 20? 11 MR. FAIRLESS: Everything after the first
12 MR. OWENS: Form. 12 sentence I'll object to as nonresponsive.
13 A. I wouldn't say -- I wouldn't use the word 13 Q. (BY MR. FAIRLESS) I'm going to serve up the
14 "target." 14 softball in a minute or the umpteenth time, and you can
15 Q. Actually, you would; but... 15 whack it out of the park about the -- what you believe
16 A. Okay. 16 the data results to be.
17 MR. OWENS: Form. 17 But right now, I'm just trying to figure
18 A. Do you want to ask it again, please, sir? 18 out what written documents did you have in your hand
19 Q. (BY MR. FAIRLESS) Yeah. Is there some reason 19 when you were considering this trend analysis.
20 you targeted PWI as opposed to other owners of retail 20 MR. LANGLEY: I object to the form as to
21 motor fuel devices for your blitz July 18, 19, and 20 of 21 the softball comment.
22 2008? 22 MR. OWENS: And form, repetitive.
23 A. There were several reasons, beginning with what 23 A. The documents that I had that led to my
24 we identified as a possible trend with several 24 requesting of an analysis of the data --
25 enforcement orders crossing my desk from Petroleum 25 Q. (BY MR. FAIRLESS) Ding, ding, ding. That's it.

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1 That's the question right there. 1 A. Well, I have a standing request for staff to be
2 A. Yes, sir. And I'm sorry I've -- I thought I 2 identifying any -- be analyzing data and seeing if there
3 had answered that, but I'm happy to say it again was the 3 are any trends to make sure that we are acting on any of
4 enforcement orders that showed several egregious 4 those trends. I've had questions on other notices of
5 violations of the State of Texas laws. 5 violations.
6 Q. Anything else? The NOVs, you evidently now 6 Q. My question --
7 didn't have them at the time; the checks that were for 7 A. Other enforcement orders.
8 payment of the penalties associated with those 8 Q. Okay. So the answer to my question is, yes, I
9 enforcement orders, you didn't have those? 9 have made a specific request for a trend analysis
10 MR. OWENS: Form. 10 pertaining to retail motor fuel device owners?
11 MR. LANGLEY: Form. 11 A. I believe, yes, sir.
12 A. Normally, when I -- when an enforcement order 12 Q. Okay. When was the last time that you did?
13 crosses my desk, it includes the notice of violation. I 13 A. I don't...
14 believe there's a stipulation to waiver of a hearing 14 Q. Give me the circumstances as you recall them.
15 that the regulated entity signs and proof that the 15 A. I don't -- I just recall that I've seen
16 enforcement order has been paid. 16 egregious violations that I wanted to have some data
17 MR. FAIRLESS: Okay. I object to all 17 analyzed, and we've looked at data in other -- on other
18 that as nonresponsive. Go ahead, Videoman. 18 companies.
19 THE VIDEOGRAPHER: This is the end of 19 Q. Give me the name of as many other companies as
20 Tape 2. Off the record at 11:54. 20 you can think of that you had someone that was in your
21 (Recess taken) 21 department do a trend analysis on for purposes of retail
22 (Exhibit No. 451 was marked and is 22 motor fuel devices.
23 attached hereto) 23 A. We've never had another company that's had the
24 THE VIDEOGRAPHER: This is the beginning 24 level of noncompliance that Petroleum Wholesale had, so
25 of Tape 3. Back on the record at 12:55. 25 I can't recall any others that -- no other company name.
Page 111 Page 113
1 Q. (BY MR. FAIRLESS) Are you able to identify for 1 MR. FAIRLESS: I'll object as
2 me the five enforcement orders with NOVs saying -- with 2 nonresponsive.
3 check or checks that you saw that pertain to PWI that 3 Q. (BY MR. FAIRLESS) I didn't ask you for any
4 you maintain led to your request for a trend analysis? 4 other company name that had the level of noncompliance
5 A. I might be able to identify them. I don't -- 5 that you perceived PWI to have had. What I asked you
6 Q. Well, that's what I'm wondering. I mean, if I 6 was simply the names of the other companies or as many
7 were to pull some out and lay them in front of you, are 7 of those names as you can remember that you specifically
8 you going to be able that say, yep, that was one of the 8 had someone on your staff do a trend analysis of
9 five I saw or, no, that was not one of the five? 9 pertaining to retail motor fuel devices.
10 A. I don't know. 10 A. I've -- I don't recall any other particular
11 Q. I don't want to go through that whole exercise 11 names --
12 like we've done some things this morning, if you're 12 Q. Okay.
13 simply going to tell me, "I'm not going to be able to 13 A. -- that rose -- that had the noncompliance rate
14 tell you, Mr. Fairless. I see a lot of those things. I 14 that would leave the company name in my head.
15 see them day after day. I wouldn't know if that's one I 15 MR. FAIRLESS: Everything and including
16 say or not." 16 the one word before "rose" I'll object -- no. The first
17 So I'm asking you would you be able if I 17 sentence or the first segment of that answer is fine.
18 showed you to tell me, yep, that's one of the 18 Everything else I'll object to as nonresponsive.
19 enforcement orders I saw that led to me requesting a 19 Q. (BY MR. FAIRLESS) Do you remember what the
20 trend analysis? 20 check or checks added up to that you had with you when
21 A. I don't know. As many as I see in a day, it's 21 you went to see Stephen Pahl and he happened to be with
22 unlikely I would be able to identify a particular one. 22 the regional directors and chief inspectors?
23 Q. Okay. Have you ever asked for a trend analysis 23 MR. OWENS: Form.
24 for any other company that was involved in the sale of 24 A. No, sir.
25 retail motor fuels? 25 Q. (BY MR. FAIRLESS) Do you -- can you put me in a

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1 ballpark as to what the check or checks added up to? 1 administrative hearings. I'm familiar that some
2 A. No, sir. 2 programs might be different than other programs.
3 Q. If somebody wants to fuss about a notice of 3 Q. Okay. What program do you call the retail
4 violation that they've been issued, where must they do 4 motor fuel device arena?
5 that? 5 A. Well, we administer programs that regulate
6 A. There's an administrative process the State 6 motor fuel devices through our weights and measures
7 has. 7 program. We also regulate fuel quality that has to do
8 Q. There's an administrative hearing that's 8 with these locations.
9 required, correct? 9 Q. Do you know what a stipulation and waiver of
10 A. It's allowed if they -- if there's a -- if the 10 hearing is?
11 respondent chooses to exercise that. 11 A. Generally, yes, sir.
12 Q. Okay. And where does the administrative 12 Q. Well, I mean, are stipulations and waivers of
13 hearing take place at? 13 hearing documents that you see?
14 A. It could be with the State Administrative -- 14 A. Yes, sir.
15 with the State Office of Administrative Hearings. The 15 Q. And so it's got the word "hearing" in the
16 Texas Department of Agriculture has hearing judges, 16 title. Where is that hearing to take place if it's not
17 hearing officers. 17 waived?
18 Q. Where? Amarillo or Dallas or Austin? 18 MR. OWENS: Objection, form.
19 A. I'll defer to the staff that are involved in 19 A. I'll defer to the staff that administer those
20 those hearings. 20 programs.
21 Q. Well, don't you look at these orders all the 21 Q. (BY MR. FAIRLESS) You don't know?
22 time? I thought you said earlier I see those orders 22 A. I'll defer to the staff. We have an able
23 every day. Did I misunderstand that? 23 workforce at the Department of Agriculture that will
24 A. No, sir. 24 make sure that anyone who seeks a hearing gets the fair
25 Q. Okay. So you see these orders every day. You 25 hearing they're entitled to.
Page 115 Page 117
1 know there's a provision in there that allows for an 1 Q. I'm sure you do have an able staff, but I'm not
2 administrative hearing, correct? 2 deposing them today. I'm deposing you. And right now,
3 A. I suspect if -- I suspect some of them do. I 3 I want to know: Do you know where the hearing is to
4 suspect maybe all of them do. 4 take place if someone protests a notice of violation?
5 Q. You don't know? As the Deputy Commissioner of 5 MR. OWENS: Form.
6 Agriculture, you don't know? 6 A. I'm -- forgive me. I thought I'd answered
7 A. I'd be happy to take a look at what you're 7 that. No. That's a detail that I defer to the staff
8 looking at there, and see if it's in there. 8 on.
9 Q. I'm going to show it to you in just a second; 9 Q. (BY MR. FAIRLESS) How many notices of violation
10 but right now as part of an evaluation of your 10 are protested? Either you can give me a number or --
11 creditability, I'm also wanting to test your 11 and you can pick the time period you want to focus on, a
12 recollection and knowledge of the documents that 12 number a day, a number a week, a number a month. You
13 evidently you relied upon when asking for a trend 13 can tell me a percentage. Oh, Mr. Fairless, I can't
14 analysis pertaining to my client. 14 tell you a specific number; but I can tell you that
15 MR. OWENS: Objection, form. 15 25 percent of all notices of violation are protested.
16 Q. (BY MR. FAIRLESS) So do you know without me 16 So are you able to give me either a
17 showing you this document -- don't worry, this document 17 number count of protests over a given period of time or
18 is coming your direction -- but do you know before it 18 a percentage of notices of violation that are protested
19 gets there? 19 over a given period of time?
20 MR. OWENS: Form. 20 A. I defer that to the staff that would be able
21 Q. (BY MR. FAIRLESS) Let me start with a clean 21 to -- that would be familiar with those requests for
22 question. Do you know where the administrative hearings 22 hearings.
23 are to take place if someone wants to protest a notice 23 Q. That staff reports to you?
24 of violation? 24 A. Yes, sir.
25 A. I don't know that there's a given place for 25 Q. Okay. And you generally have some idea of what

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1 the staff that reports to you is responsible for, 1 MR. OWENS: Form.
2 correct, and what they're doing? 2 A. I don't have the information to answer your
3 A. Yes, sir. 3 yes.
4 Q. Well, I want you to give me and 12 of Harris 4 Q. (BY MR. FAIRLESS) Okay. Let me show you what's
5 County's finest, some idea of how often notices of 5 been marked as Exhibit No. 451.
6 violation are protested. 6 MR. OWENS: Is that a new exhibit, Randy?
7 A. I'd be happy to get with the staff, and get you 7 MR. FAIRLESS: It is.
8 that; but I don't have that information. 8 MR. LANGLEY: Thank you.
9 Q. Okay. Will you get with your staff and provide 9 Q. (BY MR. FAIRLESS) The top document is an order,
10 that to your lawyer, who's here in the room today; and 10 correct?
11 then he can get it to me. 11 A. Yes, sir.
12 But in the meantime, in the meantime, can 12 Q. Is that what you were referring to earlier as
13 you put me and the jury in a ballpark? 13 an enforcement order?
14 MR. LANGLEY: Objection, form. 14 A. Yes, sir.
15 A. No, sir. 15 Q. And is this document -- the first two pages,
16 Q. (BY MR. FAIRLESS) So you wouldn't know as you 16 which is referred to as the enforcement order, is that
17 sit here today, whether it's 1 or 2 percent of notices 17 signed by you?
18 of violation that are actually protested to the point of 18 A. It is.
19 going through a formal hearing versus whether or not 19 Q. And is that dated July 17 of 2008?
20 it's a number as high as 25 or 50 percent? 20 A. It is.
21 A. I know that all of our notices of violation 21 Q. And would that have been the first day of
22 result in the process being afforded to the respondent. 22 Operation Spotlight?
23 To be more specific than that, I defer that to the 23 A. I'll --
24 appropriate staff. 24 MR. LANGLEY: Objection, form.
25 Q. See, it's that whole process being afforded to 25 A. -- defer -- I don't remember the exact date.
Page 119 Page 121
1 the respondent that I'm looking to explore now. I want 1 Q. (BY MR. FAIRLESS) If the testimony and the
2 to know how many of those respondents, to use your word, 2 evidence in this case is that Operation Spotlight
3 asked to be afforded of the process, to use your word, 3 started on July 17, 2008, which was a Friday, do you
4 with regard to contesting a notice of violation. 4 know of anything that disputes that?
5 MR. LANGLEY: Objection, form. 5 MR. OWENS: Objection, form.
6 MR. OWENS: Form. 6 MR. FAIRLESS: Geez Louise, you mean to
7 A. I've been answering your question I feel like, 7 tell me we can't even agree that Operation Spotlight
8 so maybe help me understand it a little bit more. 8 started on a Friday? That's what we've been reduced to?
9 Q. (BY MR. FAIRLESS) Yeah. I want to know how 9 MR. OWENS: Not on the 17th; and that's
10 many people take you up on this protesting of the notice 10 what your question said, the 17th. You might talk to
11 of violation. Is that something that rarely ever 11 Kelley to get your dates straight.
12 happens? Can you at least give me that? Or is it 12 MR. FAIRLESS: Oh, because the date's
13 something that happens all the time? Can you at least 13 wrong?
14 give me that? 14 MR. OWENS: Because your question is
15 MR. OWENS: Form. 15 wrong.
16 MR. LANGLEY: Objection, form. 16 MR. FAIRLESS: Oh, okay. All right.
17 A. I -- I will defer that to the staff that works 17 Yeah. Sometimes I forget what case I'm in, so let me
18 with those cases. 18 regroup.
19 Q. (BY MR. FAIRLESS) So the answer is you don't 19 Q. (BY MR. FAIRLESS) Do you know Operation
20 have any idea, as you sit here today, whether it's 20 Spotlight to have started on July 18th, 2008, which was
21 1 percent or 99 percent that take the issue of notices 21 a Friday?
22 of violation to the protest stage? 22 A. I recall that on Friday we conducted some
23 MR. OWENS: Form. 23 inspections on the case that you're talking about.
24 MR. LANGLEY: Objection, form. 24 Q. Do you not want to call those inspections
25 Q. (BY MR. FAIRLESS) Is that right? 25 Operation Spotlight for some reason?

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1 A. No, sir. There -- what we were doing on Friday 1 one?
2 was an inspection of a sampling of the company's fuel 2 A. I don't recall the details of a lot of the
3 pumps. 3 enforcement orders, so I --
4 Q. What you were doing on Friday was the first 4 Q. Do you recall --
5 phase of a targeted blitz against a single entity that 5 MR. OWENS: You can finish your answer.
6 owns retail motor fuel devices, fair? 6 Q. (BY MR. FAIRLESS) Yeah, go ahead. I can't ever
7 MR. LANGLEY: Objection, form. 7 tell when you're done, but you go ahead. I started my
8 MR. OWENS: Objection, form. 8 question too quickly.
9 A. What we did on Friday was conducted inspections 9 A. This is a sizable penalty.
10 on a sampling of the company's fuel dispensers. At the 10 Q. Okay. But I'm not asking you whether or not
11 time, we held out hope that that was going to be -- 11 it's a sizable penalty. I want to know can you recall
12 those -- that sampling was going to be all that would be 12 another penalty of $10,000 or more to an owner of retail
13 inspected. 13 motor fuel devices besides this one to Valero, which you
14 MR. FAIRLESS: I'll object as 14 signed on July 17th, 2008?
15 nonresponsive. 15 A. I seem to recall since the penalties were
16 Q. (BY MR. FAIRLESS) And remind you that you're 16 increased in 2007, I think is when we increased the
17 under oath when you say we held out hope. Really, 17 penalties, I seem to recall that the amount went up
18 Mr. DeBerry, do you want to go with that? 18 significantly on these penalties. This amount is
19 MR. OWENS: Objection, form. 19 sizable, and I can't say I recall the amounts of any of
20 MR. LANGLEY: Don't -- wait. 20 the...
21 MR. FAIRLESS: No, I'm just saying come 21 MR. FAIRLESS: I'll object to
22 on now. 22 nonresponsive everything before the sentence I can't --
23 MR. LANGLEY: Well -- 23 whatever that last sentence was -- I can't recall any of
24 MR. FAIRLESS: Held out hope? 24 them.
25 MR. LANGLEY: You may not like his answer 25 Q. (BY MR. FAIRLESS) Do you know how many retail
Page 123 Page 125
1 and -- 1 motor fuel devices Valero has in the great state of
2 MR. FAIRLESS: For Pete's sake. 2 Texas?
3 MR. LANGLEY: -- you may not like the 3 A. No, sir.
4 fact that the jury may appreciate his answer. 4 Q. Are they a big player in the retail motor fuel
5 MR. FAIRLESS: They may. 5 device industry?
6 MR. LANGLEY: But ask -- ask a clean 6 A. Yes, sir.
7 question. 7 Q. Are they one of the biggest, if not the
8 MR. FAIRLESS: Okay. 8 biggest; or do you know?
9 MR. LANGLEY: Please. 9 A. I don't know how they rate in comparison to
10 MR. FAIRLESS: Yes. 10 others.
11 Q. (BY MR. FAIRLESS) This document, this 11 Q. And do you know what the violation was that
12 enforcement order that you signed pertaining to Valero, 12 prompted this $10,250 enforcement order? If you don't
13 was signed the day before Operation Spotlight began, 13 know from your recollection, why don't you take a look
14 correct? 14 at Page 5, which is the NOV, the Notice of Violation.
15 A. It was signed on July 17th, 2008. 15 A. That's what I'm looking at. This order is
16 Q. Do you know, as you sit here today, whether or 16 connected to a violation of the predominance threshold.
17 not that's the day before Operation Spotlight began? 17 Q. So what does that mean? That the violation is
18 MR. LANGLEY: Objection, form. 18 that Valero had their pumps predominantly in favor of
19 A. I don't recall the date. I'm sorry. 19 the pump owner?
20 Q. (BY MR. FAIRLESS) How much is this enforcement 20 A. That's correct. Yes, sir.
21 order for? 21 Q. And what was the percentage that had
22 A. 10,250. 22 purportedly been found to be in favor of the pump owner?
23 Q. Are you aware of a single notice of violation 23 A. It says here 80 percent of your pumps set in
24 amounting to $10,000 or more in the history of your time 24 favor of your business.
25 as Deputy Commissioner of Agriculture, other than this 25 Q. Does it -- then yours says something different

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1 than mine, which I thought was a copy of yours. The one 1 the stipulation and waiver of hearing, fair?
2 that I have says more than 80 percent of your pumps set 2 MR. LANGLEY: Form.
3 in favor of your business. 3 A. I'm not aware of anybody asking to do that. So
4 A. Okay. It says "more than." 4 I'm not familiar with what you're asking, a situation
5 Q. And so did you ask your staff to run an 5 like what you're asking.
6 analysis on Valero in light of this? 6 Q. (BY MR. FAIRLESS) Are you aware -- and you can
7 A. I don't recall. 7 only rely upon your personal knowledge for this.
8 Q. Did you ask your -- 8 A. Right.
9 A. Possibly. 9 Q. Are you aware of anyone ever receiving
10 Q. I'm sorry? 10 permission to change the wording on a stipulation and
11 A. Possibly. 11 waiver of hearing, or not sign it at all and just pay
12 Q. Okay. So if you don't recall, who would know 12 the penalty?
13 the answer to the question of whether or not you asked 13 A. I'm not aware.
14 someone on the staff to run an analysis on Valero? 14 Q. All right. If you take a look at the next to
15 A. The staff I usually speak to about this would 15 the last page near the bottom, this again is the notice
16 be Stephen Pahl or David Kostroun or Joe Benavides. 16 of violation. Do you see it says what you must do in
17 Q. Okay. Was this $10,250 fine to Valero 17 response to this notice?
18 contested? 18 A. Yes, sir.
19 A. I assume there was no -- they stipulated to the 19 Q. And there's two choices. You can either accept
20 facts of the case. Is that -- is that what your 20 the Department's determination by paying the recommended
21 question is? 21 penalty or contest the occurrence of the violation or
22 Q. That's what will answer my question. Are you 22 the amount or both, correct?
23 on Page 4, where it says "Stipulation and Waiver of 23 A. Correct.
24 Hearing"? 24 Q. And then if you take a look at the very next
25 A. Yes, sir. 25 page, do you see in bold where it says -- and it's the
Page 127 Page 129
1 Q. Do you see that? Yes? 1 seconds paragraph from the top. We're on the last page.
2 A. Yes, sir. 2 A. Hang on.
3 Q. Okay. By reviewing the stipulation and waiver 3 Q. Do you see where it says if you choose to
4 of hearing that you see before you, does that indicate 4 contest the Department's determination?
5 that Valero is stipulating to the penalty and the 5 A. Yes, sir.
6 violation and is waiving the hearing? 6 Q. And if you choose to contest the Department's
7 A. Yes, sir. 7 determination, does it talk about where the hearing is
8 Q. And the penalty that they stipulated to was 8 going to take place? Next paragraph down.
9 $10,250? 9 A. It does.
10 A. I believe so. Yes, sir. 10 Q. And where is the hearing to take place?
11 Q. And they stipulated to all findings set forth 11 A. In Austin, Texas.
12 in the NOV? 12 Q. Okay. Now, go back to the previous page, the
13 A. Yes, sir. 13 next-to-the-last page; and let's look at that No. 1,
14 Q. Let me ask you this. If somebody wants to 14 which was you can, if you want, simply accept the
15 haggle a little bit about the language -- for instance, 15 Department's determination by paying the recommended
16 you give them a penalty and it's let's say $2,000. And 16 penalty. And what must you sign and return if you want
17 they say, well, I didn't do it and I want to fuss about 17 to pay the penalty?
18 it; but, you know, it costs me more money to fuss about 18 A. The stipulation and waiver of hearing, you must
19 it than it would to just pay it. So can I just pay it 19 sign and a personal or business check or cashier's check
20 and change some of the language on the stipulation and 20 or money order in the amount of.
21 waiver of hearing? Can they do that? 21 Q. Sure. Okay. So according to the notice of
22 MR. LANGLEY: Objection, form. 22 violation itself, if you're going to -- if you want to
23 A. I'm -- I'm not aware they can. 23 just pay the notice of violation and be done with it,
24 Q. (BY MR. FAIRLESS) It's your belief that, look, 24 pay the penalty, well, then you must sign the
25 if you're going to pay the penalty, you've got to sign 25 stipulation and waiver of hearing and return it with

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1 your check, correct? 1 Q. Okay. Do you know how often it is that -- that
2 A. That's the way I understand it. 2 someone is found to be under extraordinary circumstances
3 Q. And this kind of goes back to the questions I 3 such that the hearing can take place outside of Austin?
4 was asking you earlier, which I'm just curious, to say 4 A. I suspect that's a determination for the law
5 the least, as to how often somebody actually goes to 5 judge to make.
6 Austin to contest a notice of violation pertaining to a 6 Q. And I guess I'm just trying to find out do you
7 retail motor fuel device. 7 know of any such hearings ever taking place outside of
8 MR. OWENS: Objection, form. 8 Austin; and if so, how off does that happen?
9 Q. (BY MR. FAIRLESS) So now given what we've 9 A. It says here that the hearings are held by the
10 talked about with -- or I guess pertaining to this 10 State Office of Administrative Hearings, so I can't
11 exhibit that you have in front of you, has any of this 11 speak to their statistics.
12 refreshed your recollection as to how many people 12 Q. No. But you're somebody who evidently used
13 actually make the trip to Austin to fuss about the 13 some notices of violation to trigger a request for a
14 notice of violation? 14 trend analysis, correct?
15 MR. OWENS: Objection, form. 15 A. That's correct.
16 Q. (BY MR. FAIRLESS) Or would I still have to look 16 Q. And what I'm trying to figure out is did you
17 to your staff for that? 17 ask any questions or did you do any investigation
18 MR. OWENS: Form. 18 beforehand to get it straight in your own mind how many
19 A. I'm not sure that what you just said is what 19 notices of violation are actually protested, how many
20 this says. But, no, this conversation has not refreshed 20 people actually come to Austin, how often is there
21 my memory of any data I didn't have before. 21 extraordinary circumstances where we go to them such
22 Q. (BY MR. FAIRLESS) Okay. What part of what I 22 that somebody actually goes through a formal hearing
23 said did you think misinterpreted this document or this 23 process to talk about penalties and notices of violation
24 series of documents? 24 that they've received?
25 MR. LANGLEY: Objection, form. 25 A. I didn't ask for any of that data.
Page 131 Page 133
1 A. The -- 1 Q. Well, were you alarmed on July 17, 2008, when
2 Q. (BY MR. FAIRLESS) Well, I mean, if I said 2 you saw that Valero, one of the largest owners of retail
3 something wrong, I want the opportunity to correct it. 3 motor fuel devices in the state of Texas, was
4 So you help me out if I misspoke on something. 4 stipulating to penalties, stipulating to a violation
5 A. I'm not sure you have to come to Austin to 5 where more than 80 percent of their pumps were
6 express your concern or opposition. It says you should 6 purportedly shortchanging consumers and was attaching a
7 choose to do so in writing. 7 check for $10,250?
8 Q. Oh, you're reading that paragraph on the last 8 MR. OWENS: Objection, form.
9 page, the first one? 9 A. I'm alarmed by every violation of the State's
10 A. Yes, sir. 10 laws.
11 Q. That's to let them know that you're going to 11 Q. (BY MR. FAIRLESS) Well, did you follow up on
12 contest it, you have to advise them in writing. 12 this order and this notice of violation and this receipt
13 A. Right. 13 of check by requesting a trend analysis like you did
14 Q. The hearing itself takes place in Austin. 14 when you had notices of violation pertaining to PWI?
15 A. Right, okay. I'm -- 15 MR. LANGLEY: Objection, form.
16 MR. LANGLEY: Objection, form. 16 A. I may have. I don't recall if I did it on this
17 A. I thought that's what you were asking. 17 particular case.
18 MR. LANGLEY: Are you going to include 18 Q. (BY MR. FAIRLESS) Okay. Well, how would I
19 the entire sentence there? 19 know? How can I find out whether you did? Because you
20 MR. FAIRLESS: Oh, yeah. I see what you 20 can't remember whether you did or you didn't, and I want
21 want. 21 to know how can I find out?
22 Q. (BY MR. FAIRLESS) The hearing itself takes 22 MR. LANGLEY: Objection, form.
23 place in Austin, absent extraordinary circumstances, 23 A. Perhaps there are other staff that would help
24 correct? 24 remember that.
25 A. Correct. 25 Q. (BY MR. FAIRLESS) Suppose that there is and

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1 suppose I've taken depositions from some of them and 1 Q. I bounce around a lot; and so if that ever
2 nobody else remembers you requesting any additional 2 confuses you, stop me and tell me your confused. Now
3 information pertaining to Valero, then would it be safe 3 I'm fixing to bounce back to the document we were
4 to say that you didn't request any additional 4 talking about before, that Exhibit 451. And I want to
5 information? 5 ask you did you when you were requesting your trend
6 MR. OWENS: Objection, form. 6 analysis, ask to see a listing of all penalties that had
7 A. No, sir. 7 been paid in conjunction with notices of violation for
8 Q. (BY MR. FAIRLESS) Can you think of any resource 8 the owners of retail motor fuel devices?
9 that you would go to to find out whether or not you 9 A. One more time.
10 requested a trend analysis on Valero following receipt 10 Q. Yeah. Did you say to -- first of all, who did
11 of these documents in this Exhibit 451? 11 you ask for the trend analysis? A specific name or
12 A. No, sir. 12 person.
13 Q. All right. Exhibit 332 is an exhibit that -- 13 A. I asked Stephen to coordinate it.
14 A. Do you want this back, or do I keep this? 14 Q. Stephen Pahl?
15 Q. No, you can hang on to it right there. Do you 15 A. Pahl. Yes, sir.
16 see Exhibit 332 there? 16 Q. Okay. So did you -- did you tell Stephen Pahl,
17 A. Yes, sir. 17 Stephen, I also want you to look back and for the last
18 MR. FAIRLESS: And sorry, John, I don't 18 year, I want you to tell me how much each owner of
19 have another copy. 19 retail motor fuel devices has paid in fines that are
20 MR. LANGLEY: That's all right. 20 associated with notices of violation?
21 MR. OWENS: I've got mine. If it's 21 A. No, sir.
22 premarked -- if we've used it before, I think I've got 22 Q. In other words, did you want to know how much
23 it. 23 did Valero pay the previous year versus PWI versus
24 Q. (BY MR. FAIRLESS) The -- this says at the top 24 RaceTrac versus any of the other owners of retail motor
25 in the printed portion, it looks like this maybe is 25 fuel devices in Texas?
Page 135 Page 137
1 coming off of some printed notepad. Is that what this 1 A. The amount of the penalty is of less concern
2 is? 2 than the penalty and what the violation was; but, no,
3 A. It's note cards. Yes, sir. 3 sir, I didn't request that.
4 Q. Right. It says Texas Department of 4 MR. FAIRLESS: Okay. Everything before,
5 Agriculture, Drew DeBerry, Deputy Commissioner, and 5 "No, sir, I didn't request that," I'll object to as
6 that's in print; and then at the very bottom of the 6 nonresponsive.
7 card, I guess, it has the address, correct? 7 Q. (BY MR. FAIRLESS) Did you -- well, what did you
8 A. Yes, sir. 8 ask for? What was the specific trend that you wanted
9 Q. And then there's some handwriting in between 9 analyzed?
10 there, between top and bottom of the card. Is that your 10 A. The rate of noncompliance. The rate at which
11 handwriting? 11 this company's fuel pumps were tilted in favor of the
12 A. It looks like it is. Yes, sir. 12 company when presented to our inspectors for inspection.
13 Q. And the TS, does that mean Todd Staples? 13 Q. Okay. I want to talk to you about the rate of
14 A. Possibly. Yes, sir. 14 noncompliance; but, first of all, I want to move into
15 Q. Well, if not Todd Staples, then who else? 15 something you just said that I've seen in quite a bit of
16 A. I don't know. I would suspect it means Todd 16 TDA literature, "tilted in favor of."
17 Staples. 17 When y'all send a TDA inspector to a gas
18 Q. All right. And do you communicate with Todd 18 station and he does a test, I don't understand the use
19 Staples by giving him note cards like this, or would 19 of the words "tilted in favor" of versus "found in favor
20 this typically be notes you made to yourself to remind 20 of." Do tilted and found mean the same thing?
21 you when you talk to Todd Staples to tell him these 21 A. Yes, sir.
22 things? 22 Q. Right. Because really the only thing the
23 A. I suspect this was a note, but I don't remember 23 inspector can determine is assuming -- first of all, you
24 what it was used for. It was a note from myself to 24 have to assume with me for the test results to be
25 remind me what to -- what to talk to him about. 25 reliable, the test itself and the manner in which it was

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1 performed has to be reliable, correct? 1 MR. FAIRLESS: I'm going to object to all
2 A. Yes, sir. 2 that as nonresponsive.
3 Q. Okay. So if the test was reliable, then the 3 Q. (BY MR. FAIRLESS) We're not there yet. I'm not
4 only thing the tester can really tell is whether or not 4 there yet to ask you about what your opinion of the
5 the findings as found were shortchanging consumers, 5 results ultimately culminate into.
6 correct? 6 A. Okay.
7 A. All right. The first part of that... 7 Q. I'm just asking what was meant by tilted in
8 Q. Yeah. Can the inspector really determine 8 favor of. Did you mean to convey any sort of
9 anything with an accurate test, other than the findings 9 intentional connotation, or were you simply meaning to
10 are or are not found to be in favor of the station 10 say found in favor of?
11 owner? 11 A. Well, forgive me. I feel like I've answered
12 A. An inspector can find a fuel pump that would be 12 this question.
13 found in favor of the company or the customer. Is 13 Q. Try me one more time.
14 that... 14 A. Yes. Yes, the use of the word tilted and
15 Q. I'm just trying to figure out why it is that 15 found, I was comfortable with the way you described it.
16 you folks at the TDA were using tilted in favor of in 16 Q. Okay, good enough. Has anybody told you that
17 your documentation as opposed to found in favor of. 17 PWI intentionally set their pumps to shortchange Texas
18 MR. LANGLEY: Objection, form. 18 consumers?
19 Q. (BY MR. FAIRLESS) When you were referring to my 19 MR. OWENS: And if that communication
20 client, PWI. 20 came from an attorney, you're instructed not to answer
21 A. If a pump is found in favor of, that pump is 21 it.
22 tilted in favor of, I guess, is the thought process 22 MR. LANGLEY: Same instruction.
23 behind the use of that term. 23 MR. FAIRLESS: All right. I don't want
24 Q. So you didn't intend the connotation of tilted 24 to know what your lawyers told you.
25 in favor of to be that it was intended by the owner that 25 MR. LANGLEY: He's asking you -- excuse
Page 139 Page 141
1 that pump be in favor of the station? 1 me. He's asking you about communications other than
2 MR. LANGLEY: Objection, form. 2 with lawyers.
3 A. I don't -- our role with determining intent is 3 MR. FAIRLESS: Right.
4 simply to go out and conduct inspections consistent with 4 A. One more time.
5 the protocol and let the inspection results speak for 5 Q. (BY MR. FAIRLESS) Yeah. I'll break it down a
6 themselves. 6 little bit in the question. Has anyone that works
7 Q. (BY MR. FAIRLESS) And inspections that were 7 presently for PWI ever told you that they were
8 done, assuming any were, that were consistent with the 8 calibrating pumps to shortchange Texas consumers?
9 protocol would only tell you whether or not the pumps 9 A. No, sir.
10 were found in favor of the business or the consumer. 10 Q. Has anybody who has ever worked for PWI told
11 Not whether or not there was some sort of intentional 11 you that they were calibrating pumps to shortchange
12 setting of the pumps. Fair? 12 Texas consumers?
13 MR. LANGLEY: Objection, form. 13 MR. LANGLEY: Objection, form.
14 A. An inspection in and of itself might not. 14 MR. FAIRLESS: What's wrong with -- oh.
15 Q. (BY MR. FAIRLESS) And so you and the folks at 15 Anyone other than lawyers --
16 the TDA were not trying to convey intent when you used 16 MR. LANGLEY: To the extent of he knows
17 the term tilted in favor of. Fair enough? 17 -- no. And to the extent that he knows whether they
18 A. I don't -- I think maybe you're suggesting 18 used to work for PWI or not. You're assuming he has
19 there's more in that word than I'm thinking there is. 19 that knowledge.
20 I'm not understanding what you're -- what you're asking. 20 MR. FAIRLESS: Okay. All right.
21 Q. I'm asking you is there more to that word, or 21 Q. (BY MR. FAIRLESS) Has anyone that has ever
22 does tilted in favor of simply mean found in favor of? 22 worked for PWI, to your knowledge, ever told you that
23 A. Well, I think the results of the data analysis 23 PWI was calibrating pumps to the negative to shortchange
24 and the trend analysis, the inspections, all yielded 24 Texas consumers?
25 results that suggested that it could be intentional. 25 A. Not that I -- not to my knowledge.

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1 Q. Has anyone other than a lawyer that represents 1 problems with Sunmart fuel pumps, he became
2 or speaks for the AG's Office or the TDA, I want to take 2 knowledgeable of...
3 those people out of the equation. Are you with me? 3 Q. Arthur Ramirez.
4 Take all lawyers out of the equation. 4 A. Arthur Ramirez. They would have discussions
5 Now, has anybody ever told you that PWI 5 from time to time. I don't -- I don't have any idea for
6 was calibrating pumps to the negative to shortchange 6 how frequently that would happen. And -- and Stephen
7 Texas consumers? 7 said that they did have discussions about what causes
8 A. My hesitation on answering is based on the fact 8 the high rate of problems with Sunmart fuel pumps.
9 that the inspection results yielded some discussion 9 Q. So what did he tell you Arthur told him that
10 about whether there was intent, so I -- 10 shed some light on this high rate of problems?
11 Q. I'm not asking you for your interpretation of 11 A. Stephen said that Arthur indicated he was just
12 the inspection results, which is where that answer is 12 doing what he was told.
13 going. 13 Q. So did Stephen tell you that Arthur was told to
14 A. Okay. 14 set the pump -- or did Stephen -- let me try a different
15 Q. I'm asking you the words -- I'm thinking of 15 question.
16 that movie Rush Hour, "Do you understand the words 16 Did Stephen tell you that Arthur told
17 coming out of my mouth?" Did you ever see that show? 17 him, Stephen, that Arthur was told to set the pumps to
18 A. No, sir. 18 the negative by someone within the PWI family?
19 Q. I want to know has anybody ever told you that 19 MR. OWENS: Form.
20 PWI was calibrating pumps to the negative to shortchange 20 A. There was a lot of --
21 Texas consumers. And, again, we've taken lawyers out of 21 Q. (BY MR. FAIRLESS) Right.
22 the equation. I don't care or want to know what they 22 A. -- saids in there. Can you repeat it?
23 have told you. 23 Q. Yeah, but I'm not going to repeat it exactly.
24 A. I don't recall any specific conversation when 24 I just want you to tell me specifically as best you can
25 anyone told me that. 25 recall, what it is that Stephen told you that Arthur
Page 143 Page 145
1 Q. Did Stephen Pahl ever tell you that he had a 1 told him about calibrating PWI pumps.
2 conversation Arthur Ramirez, wherein they discussed PWI 2 A. I don't remember much more than Arthur said he
3 and its calibration of dispensers? 3 was doing what he was told.
4 A. Yes, sir. 4 Q. Right. But that whole context of doing what
5 Q. And did Stephen Pahl tell you that one time or 5 he's told, depending on what it is Arthur is doing at
6 many times about this conversation with Arthur? Was 6 the moment, he says, "I'm just doing what I'm told," has
7 that something he told you one time, and so you only 7 an impact on, you know, what that could really mean.
8 heard it once in your life; or is that something that 8 Are you with me?
9 you and Stephen have talked about many times over the 9 A. Uh-huh.
10 years? 10 Q. Yes?
11 A. I remember one discussion. 11 A. I'm with you.
12 Q. Okay. When was that one discussion? 12 Q. Okay. So what was Arthur doing per Stephen at
13 A. I... 13 the moment in time when Arthur says, "I'm just doing
14 Q. Let's start with was it before, during, or 14 what I'm told"?
15 after Operation Spotlight? 15 A. I don't know.
16 A. I don't believe it was before. 16 Q. Did you understand any more of the background
17 Q. Okay. So it was either during or after 17 behind what Arthur meant when he said, "I'm just doing
18 Operation Spotlight was underway? 18 what I'm told"?
19 A. Right. 19 I mean, did Stephen fill in some gaps for
20 Q. Okay. Now, tell me what it is, as best you can 20 you? What exactly does that mean, Stephen, Arthur
21 recall, that Stephen Pahl told you about a conversation 21 saying, "I'm just doing what I'm told"?
22 he had with Arthur Ramirez where they talked about PWI's 22 A. Stephen and I discussed the implication that
23 calibration of its dispensers or a dispenser? 23 possibly that meant he was being told to set the pumps a
24 A. Stephen said that when he was an inspector, 24 certain way, but --
25 he -- as I recall, because there were frequently 25 Q. And did you -- go ahead. Did you ask Stephen,

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1 well, Stephen what did you do to verify that that's 1 A. I don't know the dates that he was an
2 possibly what Arthur meant? 2 inspector.
3 A. I don't recall asking Stephen that question. 3 Q. No, I know you don't know the dates. But do
4 Q. For instance, did you say, "Stephen, look, you 4 you know if it was two years ago or five years ago or
5 were an inspector back then. Did you go ask other 5 ten years ago or longer?
6 inspectors to talk to Arthur or did you go talk to 6 A. I don't know.
7 someone else who calibrates for PWI or, Stephen, did you 7 Q. Okay. So as far as you know sitting here
8 contact PWI and somebody in their maintenance department 8 today, this conversation Stephen had with Arthur, it
9 or front office to ask them whether or not Arthur had 9 could have taken place in early 2007 or 2006 or 1996. I
10 ever been instructed to calibrate to the negative or, 10 mean, you just don't know.
11 Stephen, did you go talk to the front office people at 11 MR. OWENS: Objection, form.
12 PWI and ask them if Arthur had been told to calibrate to 12 A. All I know is it would have taken place prior
13 the negative?" 13 to when I arrived in 2007.
14 Those are all just by way of example, but 14 Q. (BY MR. FAIRLESS) Did you ever ask the
15 that's what I want to know. Did you ask Stephen whether 15 question, well, Stephen, was there ever anything that --
16 he did any follow up to try and find out what Arthur may 16 any discussions that you had with not just Arthur, but
17 have meant? 17 any PWI person or any third-party calibrator that worked
18 MR. OWENS: Form. 18 for PWI since that conversation with Arthur to help us
19 MR. LANGLEY: How can he possibly be 19 maybe understand a little more about that statement
20 responsive to what you just uttered? 20 Arthur made?
21 MR. FAIRLESS: Easy. He just focuses on 21 A. No, sir.
22 that last part. 22 Q. Did you ever ask Stephen if he or anyone at his
23 MR. LANGLEY: Okay. Objection, form. 23 direction went and interviewed third-party calibrators
24 Q. (BY MR. FAIRLESS) Did you ask -- did you ask 24 to find out what instructions they were being given by
25 Stephen if he did any follow up at all to try to help 25 PWI when it comes to calibration, if any instructions?
Page 147 Page 149
1 ascertain what it was that Arthur meant when Arthur 1 A. No, sir.
2 said, "I'm just doing what I told"? 2 Q. Did you ever ask Stephen to find out who does
3 A. I don't remember if we had that -- the 3 PWI's calibration work and let's start there and figure
4 discussion in that detail. 4 out, you know, who's doing the work and then we can
5 Q. When did Stephen tell you he had this 5 explore their motivations?
6 discussion with Arthur? 6 A. The motivation is of less concern to me than
7 A. When he was an inspector. 7 the fact that there's a violation. The violation is the
8 Q. Right. But did he give you some idea of when 8 main concern. And in this case, we had a 34 percent
9 that was? Because you were off in Washington, DC, for a 9 noncompliance rate that was verified to be actually
10 number of years. Did you just know when it was Stephen 10 nearly 60 percent noncompliance when we conducted our
11 was an inspector, or did you have to ask? 11 inspections.
12 A. I didn't ask. 12 MR. FAIRLESS: I'll object as
13 Q. Okay. Well, when was Stephen an inspector? He 13 nonresponsive.
14 works directly for you now, so are we talking about a 14 Q. (BY MR. FAIRLESS) Do you remember my question?
15 comment that was supposedly made by Arthur five years 15 A. Would you -- you can restate it.
16 ago or ten years ago or more than ten years ago? 16 Q. Did you ask Stephen whether or not he had gone
17 A. Stephen was the chief of the regulatory 17 to any third-party calibrators that did work for PWI
18 department or chief of the weights and measures 18 calibrating dispensers to find out what their feedback
19 department within our regulatory division when I started 19 was regarding instructions, if any, from PWI?
20 at the Texas Department of Agriculture, so he would have 20 A. No. I thought you used the word "motivation"
21 been an inspector prior to 2007. 21 before, so --
22 Q. But that is why I asked you the question. Do 22 Q. I did. And I can't ever remember those
23 you know when Stephen was an inspector, therefore, 23 questions exactly, remember them and repeat them exactly
24 helping you understand more about this time period when 24 the same.
25 he would have had this conversation with Arthur? 25 A. Okay. Well --

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1 Q. Do you want me to try it again? 1 Q. (BY MR. FAIRLESS) Does that include bulk
2 A. No, I don't recall asking Stephen that 2 diesel?
3 question. 3 A. I assume it includes all pumps inspected.
4 Q. Okay. To this day, to your knowledge, has 4 Q. So does that include bulk diesel?
5 anybody gone to the third-party calibrators to ask them 5 MR. LANGLEY: Objection, form.
6 what instructions, if any, they received from PWI before 6 MR. FAIRLESS: What could possibly be
7 they actually calibrated PWI's dispensers? 7 wrong with that question? If he didn't know, he can
8 A. I don't -- I don't know. 8 just say he doesn't know.
9 Q. Was that part of the analysis that was done 9 MR. LANGLEY: Well, I think he's already
10 before targeting PWI? 10 told you he would defer to the people who were actually
11 MR. OWENS: Objection, form. 11 crunching the numbers for the basis for those
12 A. Was what part of the analysis? 12 calculations, but he's --
13 Q. (BY MR. FAIRLESS) Trying to find out what 13 MR. FAIRLESS: Well, then why can't you
14 instructions, if any, PWI actually gave the third-party 14 just let him answer?
15 calibrators that did the bowl work of PWI calibrations? 15 MR. LANGLEY: -- giving you his best
16 A. The data that was analyzed before, which is 16 memory, but you're trying to tie his answer as being
17 what I think you're asking about, was a comparison -- a 17 definitive for what actually transpired in terms of the
18 simple, a very simple direct comparison of this 18 calculations and I know that's what you're doing.
19 company's noncompliance rate to the statewide average. 19 MR. FAIRLESS: I can't tie it to anything
20 That combined with us also finding out that they had a 20 other than this is what Drew DeBerry told me. That's
21 history, a very concerning history, of violating the 21 all I'm going to tie it to, Drew DeBerry.
22 predominance threshold is what -- back to your 22 MR. LANGLEY: Good deal. Then we're
23 question -- led to -- led to the inspections. 23 good.
24 MR. FAIRLESS: I'll object as 24 MR. OWENS: He said the numbers
25 nonresponsive. 25 inspected.
Page 151 Page 153
1 Q. (BY MR. FAIRLESS) So let's talk about the -- 1 Q. (BY MR. FAIRLESS) To your knowledge, does the
2 we'll come back to this document in a minute. How was 2 number of pumps noncompliant over the number of pumps
3 the PWI compliance rate calculated? 3 inspected include bulk diesel?
4 You've mentioned it -- oh, I don't 4 A. I assume so, but I don't have that information.
5 know -- two dozen times already today. So just tell us 5 Q. And so did you look at the number of pumps
6 how it was calculated. 6 noncompliant over the number of pumps inspected for
7 MR. OWENS: Objection, form. 7 every other retail motor fuel device owner in the great
8 A. I'll defer to the people that calculated it. 8 state of Texas?
9 But when it's explained to me, it's a rate of the number 9 A. We looked at the statewide average, yes, sir.
10 of pumps that are noncompliant compared to the -- as a 10 Statewide average, which includes every other pump
11 percent of the total number of pumps inspected. 11 inspected in the state of Texas was 5 percent for
12 Q. (BY MR. FAIRLESS) Okay. So it's number of 12 noncompliant.
13 pumps noncompliant over number of pumps inspected? 13 MR. FAIRLESS: I'll object as -- I'll
14 A. Yes, sir. 14 object as nonresponsive.
15 Q. And what was the percentage again? 15 Q. (BY MR. FAIRLESS) I'm not asking you did you
16 A. 34, 35. That's what it was before we conducted 16 compare the 34 percent to some statewide average. I'm
17 the inspections. It was six -- nearly 60, as I recall, 17 asking you did you run the same calculation, number of
18 when we conducted the inspections. 18 pumps noncompliant over the number of pumps inspected,
19 MR. FAIRLESS: I'll object as 19 for each and every other retail motor fuel device owner
20 nonresponsive everything after 34, 35. 20 in the great state of Texas for whatever time period it
21 Q. (BY MR. FAIRLESS) You mean 34 to 35 percent, 21 was y'all were looking at?
22 right? 22 A. Yes. We --
23 A. Yes, sir. 23 Q. Okay.
24 Q. Okay. And is that all pumps including bulk? 24 A. We did the statewide -- the statewide average
25 MR. LANGLEY: Objection, form. 25 includes all of those other companies.

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1 Q. But I'm not asking you about the statewide 1 rate?
2 average. The statewide average might be all those other 2 A. I don't -- I can't answer that without having
3 50 companies out there, Mr. Fairless, they had 5,000 3 the data in front of me.
4 pumps that were noncompliant and we looked at 100,000 4 Q. And how many pumps did they have inspected?
5 pumps total and this is the statewide average, what do 5 MR. LANGLEY: Objection, form.
6 you know, 95 percent. I'm not asking you about any of 6 Q. (BY MR. FAIRLESS) Or how many pumps do they
7 that. Okay? I don't want to know if y'all did it on a 7 own? Are you able to give me any of that information?
8 statewide average. 8 A. No, sir.
9 I want to know if piecemeal you broke it 9 Q. All right. So this is how you got the
10 and down and said for RaceTrac, their rate of compliance 10 34 percent and the -- I'm guessing the 95 percent was
11 or noncompliance, if you will, is X. For Valero, it's 11 arrived at -- first of all, were you saying 5 percent
12 Y. For this other company, it's Z. Are you with me? I 12 noncompliant or 95 percent compliant? Which was --
13 want to know if you broke it down for each company as 13 which is the way you pitch it?
14 opposed to taking everybody else as a whole and looking 14 MR. OWENS: Objection, form.
15 at it as an average. 15 Q. (BY MR. FAIRLESS) No. I mean, how have you
16 A. Right. I do think that some of that analysis 16 been saying it? 95 percent compliant is everybody else
17 was done. I don't remember the results of any other 17 in the industry, or 5 percent noncompliant is everybody
18 particular one. 18 else in the industry? Because I want to use your words.
19 Q. Who would have done that analysis? 19 A. I've used both -- both terms.
20 A. I believe it was part of what Stephen helped 20 Q. Okay. The 95 percent compliance then, would
21 coordinate, Stephen Pahl. 21 that have been reached by the number of pumps that were
22 Q. So what does that mean? It's what -- did 22 compliant over the number of pumps that were inspected?
23 Stephen Pahl do anything on his own, to your knowledge; 23 MR. LANGLEY: Objection, form.
24 or is it something we asked Wynne Hexamer to do? 24 A. I would think it would be a simple subtraction
25 A. I assume he used the help of people that can 25 from 100 on what the noncompliance rate is, but I -- the
Page 155 Page 157
1 access the database. 1 staff --
2 Q. Do you know who Wynne Hexamer is? 2 Q. (BY MR. FAIRLESS) Okay. So --
3 A. Yes, sir. 3 A. -- that conducts those would be better to
4 Q. Okay. Did he use anybody other than Wynne 4 answer that question.
5 Hexamer, to your knowledge, to crunch any of these 5 Q. So everybody else in the industry, you think
6 numbers that resulted in this analysis? 6 the number of all noncompliant pumps found over the
7 MR. OWENS: Objection, form. 7 total number of pumps inspected in the great state of
8 A. I -- I don't know who all he use. 8 Texas, that's where the 5 percent noncompliance would
9 Q. (BY MR. FAIRLESS) Right. That's why the 9 come from?
10 question started to your knowledge. 10 MR. LANGLEY: Objection, form.
11 A. Okay. 11 A. I think that's what I said, but can you say
12 Q. Okay. To your knowledge, did Stephen Pahl use 12 that one more time?
13 anyone else to crunch numbers besides Wynne Hexamer? 13 Q. (BY MR. FAIRLESS) Yeah. If you took the number
14 MR. OWENS: Objection, form. 14 of pumps noncompliant for everybody else but PWI and
15 A. Not to my knowledge. 15 then into that, you divide the number of pumps inspected
16 Q. (BY MR. FAIRLESS) Okay. And are you able to 16 for everybody but PWI, is that how you get the 5 percent
17 tell me as opposed to saying everybody else out there 17 compliance?
18 but PWI, their average is 95 percent compliant, 18 A. Oh, wait. No, no, no, no. I'm not
19 5 percent noncompliant, are you able to break down the 19 understanding it.
20 companies that constitute everybody else and tell me 20 Q. I'm just using what you told me earlier.
21 what their noncompliance percentage rates are? 21 A. I know. Can --
22 A. I believe we would be able to do that. 22 Q. Number of pumps noncompliant --
23 Q. Okay. Who was the highest company besides PWI? 23 A. Can I see what you're looking at? Maybe that
24 Evidently, if we're going to go with PWI was the 24 will help.
25 highest, who was the next highest and what was their 25 Q. Yeah. Number of pumps noncompliant over number

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1 of pumps inspected. 1 5 percent noncompliant, PWI is 34 percent noncompliant;
2 MR. OWENS: I want that pad marked as an 2 so I assume somebody reported that back to you?
3 exhibit. 3 A. Correct.
4 A. And this is to determine the number of the 4 Q. So what else did they report back to you?
5 noncompliance rate, which you've written 34 percent; so 5 A. That Petroleum Wholesale in direct comparison
6 that's the PWI noncompliance rate before the 6 to the statewide average of 5 percent noncompliant,
7 inspections? 7 Petroleum Wholesale had a 34 percent noncompliance rate.
8 Q. (BY MR. FAIRLESS) Right. 8 Q. We just talked about that.
9 A. Okay. 9 A. Petroleum Wholesale --
10 Q. And I want to know when you did the calculation 10 Q. That's why my question was what else. God, we
11 for the rest of the industry, was it the same way? 11 don't need to repeat what we've already done. I just
12 Number of pumps noncompliant over the number of pumps 12 want you to tell me what else.
13 inspected for the remainder of the industry to get to 13 A. Okay.
14 the 5 percent noncompliant? 14 MR. LANGLEY: He just doesn't like your
15 MR. LANGLEY: Don't answer that question. 15 answer.
16 MR. FAIRLESS: Why? 16 MR. FAIRLESS: I'll object to all that
17 MR. LANGLEY: Because you just asked him 17 as -- I've heard it a thousand times. I get it.
18 when he did the calculation. 18 MR. LANGLEY: Well, and I --
19 MR. FAIRLESS: No. 19 MR. FAIRLESS: I get it.
20 MR. LANGLEY: That was your question. 20 MR. LANGLEY: -- know you're not a man of
21 MR. FAIRLESS: Right. But my meaning -- 21 patience.
22 MR. LANGLEY: And you know -- okay. 22 MR. FAIRLESS: I only have a limited
23 MR. FAIRLESS: Look, he didn't do the 23 amount of time, so I can't spend -- never mind. Okay.
24 calculation. 24 I got that one. I'll object to what you answered as
25 MR. LANGLEY: Okay. And I just don't 25 nonresponsive.
Page 159 Page 161
1 want you speculating. 1 Q. (BY MR. FAIRLESS) Now, go ahead and tell me
2 THE WITNESS: Sure. 2 what else.
3 MR. LANGLEY: All right. So... 3 A. Well, if I'm not being responsive, maybe you
4 Q. (BY MR. FAIRLESS) It your understanding that 4 can rephrase the question.
5 the calculation to come up with the 5 percent for the 5 Q. I want to know what else besides the 5 percent
6 rest of the industry was done the same way as the 6 compared to the 34 percent noncompliance rate was given
7 calculation to come up with the 34 percent for PWI? 7 back to you in response to your request for a trend
8 A. Yes. 8 analysis?
9 Q. Now, when you came up with the rest of the 9 A. The fact that Petroleum Wholesale had violated
10 industry, did you factor in PWI when coming up with the 10 the predominance threshold, had a history, a concerning
11 industry numbers; or did you look at the numbers 11 history of violation of the predominance threshold; and
12 exclusive of PWI? 12 I seem to recall also being told that the 34 percent
13 MR. LANGLEY: Objection, form. 13 noncompliance rate was not only significant in direct
14 Q. (BY MR. FAIRLESS) Do you understand what I'm 14 comparison of the 5 percent statewide average, but also
15 getting at? 15 in comparison to other companies.
16 A. The statewide average would include every pump 16 Q. So somebody did look at the other companies
17 inspected in the state. 17 individually then? They didn't just measure the
18 Q. Including PWI's pumps? 18 34 percent against the statewide average. What you're
19 A. We'll have to -- you can verify that with the 19 saying is they also looked at what Valero's percentage
20 staff that conducted it, but that would be my 20 was, what RaceTrac's percentage was; and the 34 percent
21 assumption. 21 you're saying was a larger number than the others, even
22 Q. Okay. So what else did you take from this 22 on an individual versus individual basis? Yes?
23 trend analysis that you asked for? What else did you 23 A. Yes.
24 receive in response to the trend analysis you asked for? 24 Q. Okay. Who did that analysis,
25 Hey, Mr. DeBerry, everybody else in the industry is 25 company-by-company-by-company analysis? Was that Wynne

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1 Hexamer? 1 A. I don't recall specifically seeing a break down
2 A. I don't know who did it. I never saw it. 2 like what you're asking.
3 Q. Do you have -- do you have an -- you never saw 3 Q. Would you have expected to see that data so
4 it? 4 that you would know, okay, well, I see what PWI's
5 A. No, sir. 5 predominance violations have been for this given period
6 Q. Okay. Do you have an understanding, not 6 of time. Now, let's see how that ranks with everybody
7 withstanding that you never saw it, who did it? 7 else. How many did RaceTrac have for the same period of
8 A. I asked Stephen Pahl -- 8 time, and how many stations do they have. Okay, well,
9 Q. No -- go ahead. 9 how many does Valero have in the way of predominance
10 MR. LANGLEY: I think he wants to know if 10 violations and how many stations do they have.
11 you know who did the actual calculations. 11 And would you have expected to see that
12 A. I assume Stephen did some. I'm sure he 12 type of analysis if you were going to consider
13 utilized Wynne. I don't -- I don't know what all 13 predominance violations?
14 resources Stephen utilized to get -- 14 MR. OWENS: Form.
15 Q. (BY MR. FAIRLESS) Okay. 15 A. Not necessarily. No, sir. The data that we
16 A. -- to analyze that data. 16 relied on was inclusive of all of the data, including
17 Q. And then when you said PWI violated the 17 the 34 percent compared to 5 percent that everybody else
18 predominance threshold, that that was reported to you, 18 in this state meets with no problem and a significant
19 what did they show you in that regard? What support did 19 number of predominance threshold violations, all of that
20 they have for that? 20 combined.
21 A. There was a number -- there was a number -- I 21 MR. FAIRLESS: I'll object as
22 don't recall what it was. Well, this note here has a 22 nonresponsive.
23 number written on it. 23 Q. (BY MR. FAIRLESS) Who else in this state can
24 MR. LANGLEY: You're referring to 332? 24 you compare a blitz to of the size and magnitude that
25 THE WITNESS: Correct. 25 was done during Operation Spotlight of PWI?
Page 163 Page 165
1 A. I would interpret that note of ten stations 1 MR. OWENS: Form.
2 over 60 percent between the time period of January 25th, 2 A. I'm not comparing anybody else in the state to
3 2006, and June 8th, 2007. And then the note right below 3 the 68 or 58 percent that was found through the
4 it, three stations over 60 percent for a different 4 operation.
5 period of time. 5 MR. FAIRLESS: I'll object as
6 MR. FAIRLESS: I'll object to all that as 6 nonresponsive.
7 nonresponsive. 7 Q. (BY MR. FAIRLESS) Who else underwent that kind
8 Q. (BY MR. FAIRLESS) We're going to talk about 8 of inspection scrutiny in the great state of Texas
9 that. That's why I said earlier we're going to come 9 during your tenure as Deputy Commissioner of
10 back and talk about this exhibit. 10 Agriculture, besides PWI?
11 A. Okay. 11 MR. LANGLEY: Objection, form.
12 Q. But right now, I'm just wondering what 12 Q. (BY MR. FAIRLESS) Anybody?
13 documentation, if any, that you saw pertaining to the 13 A. I'm not aware that anyone has been through a
14 report that was being given to you that PWI violated the 14 particular level of data scrutiny; but I do know that
15 predominance threshold? 15 our staff has a request from me, a directive from me, to
16 A. I don't recall specific documents. 16 continuously identify or analyze data to see if there
17 Q. What ever it was that you saw, did you see the 17 are other trends out there like this 34 percent.
18 same thing for Valero and RaceTrac and all the others so 18 MR. FAIRLESS: I'll object to everything
19 you could see in your -- in living color what PWI's 19 that begins with "but I do know" as nonresponsive.
20 number of predominance violations was in comparison to 20 Q. (BY MR. FAIRLESS) So did you look at the
21 every other retail motor fuel device owner in the great 21 predominance violations of other owners of retail motor
22 state of Texas? 22 fuel devices or not?
23 A. I've seen a lot of different data associated 23 A. I seem to recall that some -- there was some
24 with our various programs. 24 data analyzed on other companies. The main thing I was
25 Q. Did you see that data? 25 concerned about was the statewide average.

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1 Q. I didn't ask you though about some data on 1 A. As I recall, that's what it means.
2 other companies. I asked you specifically about 2 Q. And then it says 35 dash Phase 1. Does that
3 predominance violations for other owners of retail motor 3 mean in this targeted blitz against PWI, there are going
4 fuel devices. And I've already talked to Wynne Hexamer 4 to be 35 stations blitzed as part of Phase 1?
5 and I've already talked to Stephen Pahl and now I'm 5 MR. OWENS: Form.
6 testing your recollection. 6 A. I believe that was referring to 35 stations to
7 I want to know did you see any of that 7 be inspected.
8 type of information on the others? 8 Q. (BY MR. FAIRLESS) And then it says ten stations
9 MR. LANGLEY: Him personally? 9 over 60 percent from 1/25/06 to 6/8/07. So that means
10 MR. FAIRLESS: Yeah, yeah. You 10 there were ten stations of 98 that were over the
11 personally because you're the one who pulled the trigger 11 60 percent mark during a one and a half year period of
12 on the decision to move forward. 12 time?
13 MR. LANGLEY: I'm just trying to make 13 MR. OWENS: Form.
14 clear the question. 14 MR. LANGLEY: Objection, form.
15 MR. OWENS: Form. 15 Q. (BY MR. FAIRLESS) What does it mean ten
16 A. Well, Mr. Fairless, I'm again sorry. I thought 16 stations over 60 percent from 1/25/06 to 6/8/07?
17 I had answered that. I didn't realize that's where -- 17 A. I assume that means ten stations violated the
18 that's the question you were asking just now. I've not 18 predominance threshold during that period of time or --
19 seen that information that I can recall. 19 no. Ten stations were over 60 percent during that
20 Q. (BY MR. FAIRLESS) Okay. What time period -- 20 period of time.
21 because we've talked about, you know, a given time 21 Q. Okay. Well, when it says predominance
22 period or I have, you haven't. But what time period was 22 threshold, what is it?
23 this 34 percent calculated over? 23 A. That's a component of the national standard
24 A. I don't recall the specifics of the time 24 requires that predominance, if there are a predominant
25 period. 25 number of devices noncompliant, then the penalty could
Page 167 Page 169
1 Q. Well, using this Exhibit 332, does that help 1 be escalated.
2 you at all or no? 2 Q. I didn't understand any of that, but I'm not so
3 A. No, sir. 3 sure I need to. 10 percent over 60 -- I mean, I'm
4 Q. See the 34.2 percent at the bottom, that's this 4 sorry. It says ten stations over 60 percent. That's
5 percentage that you've been talking about, number of 5 ten stations of the 98 stations?
6 pumps noncompliant over the number of pumps inspected? 6 A. Ten stations of what Sunmart Petroleum
7 A. Yes, sir. 7 Wholesale operate in Texas, I assume.
8 Q. And let's just -- let's just go down through 8 Q. Well, what is the 98 stations at the top mean?
9 this. First of all, where did this information come 9 A. That's -- I assume that's how many stations
10 from? Is this you making notes about something that was 10 Sunmart operates.
11 shown to you by Stephen Pahl, or is this you making 11 MR. LANGLEY: He's not asking you to
12 notes that come from what Stephen Pahl is telling you? 12 assume things.
13 A. Probably a combination. Stephen presented data 13 Q. (BY MR. FAIRLESS) So from January of '06 to
14 to me verbally; and I remember seeing reports that he 14 June of '07, roughly a year and a half, there were ten
15 had run, too. 15 stations over this 60 percent mark? That's what your
16 Q. And it -- there would be no point in me trying 16 note indicates?
17 to talk to you about what reports you saw because you 17 A. Yes, sir.
18 can't remember them, can you? 18 Q. And then for the next it looks like ten months,
19 A. No, sir. 19 there were three stations over the 60 percent mark?
20 Q. All right. It says 98 stations. Is that 20 MR. OWENS: Form.
21 information that came to you from Stephen Pahl? 21 A. Yes, sir.
22 A. Possibly. 22 Q. (BY MR. FAIRLESS) And I'm saying three stations
23 Q. It says 71 not in last six months. Does that 23 only because that's what you wrote down. There were
24 mean 71 stations were not inspected in the last six 24 actually only two stations because one was inspected
25 months? 25 twice and found to be over 60 percent both times, right?

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1 MR. OWENS: Form. 1 Q. (BY MR. FAIRLESS) If I told you that Wayne
2 A. I don't know if that was one of the three or if 2 Services is the one that went to Station 493, calibrated
3 there were only two stations, one of them twice. 3 all of those pumps there, and then by goodness the TDA
4 Q. (BY MR. FAIRLESS) Oh. So you don't know if 4 comes out again and finds the pumps still to be
5 there were three stations and one of those three was 5 60 percent or greater, is that information coming to you
6 twice versus whether or not there was only two stations 6 as news or had you heard that before?
7 and one of those two was twice. Is that what you're 7 MR. OWENS: Form.
8 telling me? 8 A. I don't recall having heard that.
9 A. I don't know if that means that there were one 9 Q. (BY MR. FAIRLESS) Would it interest you though
10 of the three or that there were only two stations and 10 today as you sit here, Deputy Commissioner of
11 one of them was found twice. 11 Agriculture, to know who calibrated the pumps if it was
12 Q. The one that was found twice, the same station, 12 found to be on back-to-back inspections above
13 did you ask anybody as part of your search for 13 60 percent?
14 information, search for data, did you ask anybody to 14 MR. OWENS: Form.
15 check into the fact that wait a second, if they were 15 Q. (BY MR. FAIRLESS) Would you want to know who
16 over 60 percent, then those pumps can't be put in 16 calibrated them after the first inspection?
17 service until they've been calibrated and then they're 17 A. I suspect --
18 subject to a reinspection, so I want you boys to tell me 18 MR. OWENS: Form.
19 who went out there and calibrated those pumps because we 19 A. -- some of our staff would be looking into
20 evidently turned right around and found them above 20 those details.
21 60 percent again? 21 Q. (BY MR. FAIRLESS) You would certainly expect
22 MR. OWENS: Form. 22 so, wouldn't you?
23 MS. FRIEDMAN: You're out of time on the 23 MR. OWENS: Form.
24 tape. 24 A. Yes, sir.
25 MR. FAIRLESS: It's what? 25 Q. Did you say yes? What did you say?
Page 171 Page 173
1 MS. FRIEDMAN: You're out of time on the 1 A. I said yes, sir.
2 tape. 2 Q. Oh, okay.
3 MR. LANGLEY: It's a good time for a 3 THE VIDEOGRAPHER: This is the end of
4 bathroom break. 4 Tape 3. Off the record at 2:19.
5 Q. (BY MR. FAIRLESS) Are you with me? 5 (Recess taken)
6 A. No, I'm not. I didn't follow that question. 6 THE VIDEOGRAPHER: This is the beginning
7 MR. LANGLEY: You can finish this up. 7 of Tape 4. We are on the record at 2:30.
8 Yeah. 8 MR. FAIRLESS: Let's stop. Go off the
9 MR. FAIRLESS: Huh? 9 record for just a second.
10 MR. LANGLEY: Finish this up, and then at 10 THE VIDEOGRAPHER: Off the record at
11 some point I would like to take a bathroom break is all 11 2:30.
12 I'm trying to tell you. 12 (Discussion off the record)
13 MR. FAIRLESS: No, I hear you. But are 13 THE VIDEOGRAPHER: Back on the record at
14 out of the tape? 14 2:31.
15 THE VIDEOGRAPHER: One minute. 15 Q. (BY MR. FAIRLESS) You've probably never worked
16 MR. LANGLEY: Yeah, that's what I'm 16 for the Wildlife Commission, have you?
17 saying. 17 A. No, sir.
18 Q. (BY MR. FAIRLESS) Okay. This is what I want to 18 Q. Have you ever seen or heard how they'll tag a
19 know: Did you have anybody go to the station records 19 duck or tag some sort of animal and then come back and
20 where the station was found above 60 percent twice and 20 check in with that same duck or that same animal later
21 say, well, who calibrated the pumps after they were 21 on, just to see how things have progressed since it was
22 found to be above 60 percent the first time and let's 22 tagged?
23 start there with our analysis? 23 A. I'm not familiar with how they do that.
24 MR. OWENS: Objection, form. 24 Q. Have y'all ever had a program similar to that
25 A. No, sir. 25 with the TDA where you take a gasoline pump that is

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1 calibrated, you're there when it's calibrated, you watch 1 the documents and say, "Stephen, look here, look what we
2 it being calibrated, and then you tag it, seal it, and 2 have here"? Take me from there. Tell me about the
3 then come back one month, two months, six months later 3 conversation with Stephen.
4 to find out how or if that calibration has changed, if 4 MR. OWENS: Form.
5 it's moved towards the positive, if it's moved towards 5 A. I asked him if he was -- if he had seen things
6 the negative, and do that to a series of pumps so that 6 like this in the past, if he had any thoughts on how we
7 you can analyze the conclusions? 7 could verify whether or not there's a trend.
8 MR. OWENS: Form. 8 Q. (BY MR. FAIRLESS) All right. Did every
9 A. I'm not aware that we've done anything like 9 document that you had with you that day pertain to PWI?
10 what the Parks Department does on that program. 10 A. Yes, sir.
11 Q. (BY MR. FAIRLESS) Okay. Have you solicited any 11 Q. And when you said that you asked him had he
12 information like that from experts in the industry as to 12 seen things like this in the past, did you mean notices
13 what can, does, or could happen if you calibrate a pump 13 of violation for the predominance rule generally or did
14 and then come back six months later or a year later 14 you mean notices pertaining to PWI or did you mean
15 after the pump has been experiencing regular use? 15 multiple notices for any single retail motor fuel device
16 A. I can't speak for what our staff has sought 16 owner?
17 feedback from them on, but -- 17 MR. OWENS: Form.
18 Q. To your knowledge. 18 A. I think it was simpler than that. I was
19 A. Not to my knowledge. 19 curious as to whether he had ever seen anything like
20 Q. The -- the discussions that took place at that 20 that as far as the egregiousness.
21 meeting where Stephen Pahl was there with the regional 21 Q. (BY MR. FAIRLESS) The egregiousness being the
22 directors and the chief inspectors, you had some 22 more than 60 percent or the egregiousness being a
23 documents in hand, a handful or less, five or less 23 preponderance issue? I mean, what do you mean
24 enforcement orders, NOVs, and checks and you went over 24 egregiousness?
25 to where Stephen Pahl was, correct? 25 A. The violation of the predominance threshold
Page 175 Page 177
1 A. Yes, sir. 1 with multiple occurrences by the same company within a
2 Q. And where was he? 2 close period of time.
3 A. In our building in a conference room. 3 Q. What we see there in front of you on Exhibit
4 Q. Okay. And so how many people were in that 4 No. 451, that shows the $10,250 fine for a single
5 meeting with him? 5 location, that is -- has more than 80 percent of their
6 A. I couldn't speculate; but there were more than 6 pumps noncompliant, is that egregious?
7 five, less than 50. 7 A. Yes, sir.
8 Q. And did you call Stephen Pahl out of the room 8 Q. And do you know where that station was?
9 to talk to him about the issues that you had in mind to 9 A. No, sir.
10 discuss with him, or did you have your discussion with 10 Q. Which is the biggest media market from -- well,
11 Stephen Pahl in front of the more than five, less than 11 you just tell me which is the bigger media market. Is
12 50 people? 12 Temple, Texas; or is it Houston, Texas?
13 A. As I recall, Stephen was sitting on the back 13 MR. OWENS: Objection, form.
14 row, not at the conference table; and I sat down beside 14 A. I would imagine Houston is a larger media
15 him and asked him some questions. 15 market.
16 Q. Oh. Somebody else was doing the speaking, and 16 Q. (BY MR. FAIRLESS) Well, come on now. I mean,
17 Stephen was just somebody who was in attendance; is that 17 you were involved in the campaigns such as Bush and
18 it? 18 Cheney. You know which one is the larger media market,
19 A. I imagine he was participating, but I don't 19 don't you; or do you really have to imagine?
20 know what his role was. 20 MR. OWENS: Objection.
21 Q. When you came upon him, he wasn't talking. He 21 MR. LANGLEY: Objection, form.
22 was on the back row? 22 A. I've not done press for any of my former
23 A. As I recall, yes, sir. 23 employers.
24 Q. And there was a vacant chair next to him, so 24 Q. (BY MR. FAIRLESS) As you sit here today, you
25 you sat down and then what did you do? Did you pull out 25 can't tell this jury which is the larger media market,

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1 Temple, Texas, or Houston, Texas? 1 of the predominance threshold getting better or worse
2 MR. OWENS: Objection, form. 2 from '06 to '08?
3 A. I would imagine Houston is. 3 A. I can't -- I can't speculate based on that
4 Q. (BY MR. FAIRLESS) Do you really have to 4 data.
5 imagine, or do you know? 5 Q. By looking at this data that you have noted
6 MR. LANGLEY: Objection, form. 6 here on your note, you can't tell that however bad it
7 MR. OWENS: Objection, form. 7 is, it's at least getting better?
8 A. I have no data on the size of media markets. I 8 MR. OWENS: Form.
9 would imagine Houston is. 9 A. Well, no, sir. One of them -- one of them is a
10 Q. (BY MR. FAIRLESS) Were y'all looking for a 10 time period that is a year and a half, and one of them
11 company that had a large media market presence when you 11 is less than a year. Am I right on that?
12 were making a decision about targeting an entity for 12 Q. (BY MR. FAIRLESS) You are right about that.
13 retail motor fuel device violations? 13 It's -- one of them is roughly 17 months, and the other
14 MR. OWENS: Objection, form. 14 one is ten months.
15 A. We weren't looking for a company to, in your 15 A. Okay.
16 words, target; so I can't speculate on the rest of that. 16 Q. Let's take the one that's ten months; and let's
17 Q. (BY MR. FAIRLESS) So Stephen Pahl and Wynne 17 just double it, make it 20 months. So it will even be
18 Hexamer would not have been given any directive to find 18 more than the 17 months in front of it. So if you take
19 a company to target by the data that they were 19 the one that's ten months and you double it to account
20 analyzing? 20 for the time factor -- what's three times two?
21 A. No, sir. 21 MR. OWENS: Form.
22 Q. They were just being told to collect the data 22 A. Six.
23 for you to look at, and they were not aware -- they had 23 Q. (BY MR. FAIRLESS) Okay. So you have ten
24 not been told that there was going to be some operation 24 stations over a year and a half, and then you have the
25 undertaken? 25 equivalent on a pro rata basis of six stations over more
Page 179 Page 181
1 A. Initially, we just wanted to analyze some data, 1 than a year and a half. So is it getting better, or is
2 see if there were trends. We later verified that there 2 it getting worse?
3 were concerning trends. 3 MR. OWENS: Form.
4 Q. The trend with the -- do you still have this 4 MR. LANGLEY: Objection, form.
5 332 in front of you? 5 MR. FAIRLESS: I don't know if you know
6 A. Yes, sir. 6 this guys. The jury can do the same math me and this
7 Q. It says ten stations over 60 percent for that 7 young man are doing.
8 year and a half from '06 -- the first of '06 to the 8 MR. LANGLEY: Probably better.
9 middle of '07. And then the next year, from the middle 9 MR. FAIRLESS: Certainly better and
10 of '07 to the middle of '08, there's three stations over 10 quicker.
11 60 percent. So what's the trend there? 11 Q. (BY MR. FAIRLESS) Do you see the trend --
12 A. It represents violations of the predominance 12 A. I think -- I don't think we've got --
13 threshold. 13 Q. I'm just trying to point out the obvious.
14 Q. Really? That's the best you can do? You don't 14 A. I don't think we've got enough data here to
15 see any other trend? That there were ten stations over 15 figure out if that trend is improving or worsening. You
16 60 percent for a year and a half period of time and then 16 look at the 34 percent noncompliance, you combine that
17 the following year, they're down to three stations over 17 with a history of violation of the predominance
18 60 percent and you don't see a trend other than they 18 threshold. No other company that I'm aware of in the
19 both show stations that have predominance violations? 19 state has a problem like that of meeting our standards.
20 MR. OWENS: Form. 20 MR. FAIRLESS: I'll object as
21 A. It's different lengths of time; but the trend 21 nonresponsive.
22 that we saw was the whole picture of 34 percent 22 Q. (BY MR. FAIRLESS) You don't even know whether
23 noncompliance, a history of violation of the 23 or not the other entities in the state were looked at
24 predominance threshold. 24 the same way because when I asked you questions about
25 Q. (BY MR. FAIRLESS) Is this history of violations 25 whether or not predominance violations of the other

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1 stations were even looked at or considered, you said you 1 don't recall what that means.
2 had no idea. 2 Q. (BY MR. FAIRLESS) Oh. You don't know if that
3 A. I know the statewide average is 5 percent 3 means one station was over 60 percent twice?
4 noncompliance. 4 MR. OWENS: Form.
5 Q. For predominance violations? 5 Q. (BY MR. FAIRLESS) I'm not talking about the
6 A. For noncompliance. 6 three right now. Whether or not that's included in the
7 Q. Do you know? Right. But we're talking about 7 three or not included in the three.
8 predominance violations. Okay? 8 A. Sure. There was some significance to what I
9 A. Okay. 9 wrote down.
10 Q. Let's assume one is apples and one is oranges. 10 Q. Well, was it significant enough that you told
11 I want to get away from the apples, and focus on the 11 your staff to go find who calibrated the pumps in
12 oranges. Did you look at predominance violations for 12 between the two notices of violation so that you could
13 individual outfits like RaceTrac, Valero, and the 13 explore how they could calibrate the pumps and then
14 various other entities? 14 weeks, a month later, the pumps are still 60 percent in
15 A. I don't recall having seen that. 15 number noncompliant?
16 Q. Okay. Because you tell me we were considering 16 MR. OWENS: Form.
17 the percent noncompliance as well as the predominance 17 A. I did not ask that question of the staff.
18 violations, that's why I'm asking you, well, let's focus 18 Q. (BY MR. FAIRLESS) So what else did you and
19 on the second half of that. 19 Stephen Pahl talk about at that meeting where he was
20 Just based on what you have here on your 20 sitting on the back row and you sat down next to him? I
21 note, are you able to see that the predominance 21 want to make sure we've covered everything y'all talked
22 violations are better in more recent times than they 22 about before I move on.
23 were in more distant times? 23 A. I asked Stephen if he had seen violations like
24 MR. OWENS: Form. 24 this, if it looked like a trend, and if he had ideas on
25 A. Again, they're -- I can't make a determination 25 how to analyze data to determine if there is a trend.
Page 183 Page 185
1 like what you're asking based on this note. 1 Q. Had you recognized at that point in time PWI to
2 Q. (BY MR. FAIRLESS) This note is all I have to go 2 be some sort of problem child based upon notices of
3 on because these are the only things that evidently you 3 violation that you've seen?
4 saw fit to be important enough to write down. If you 4 A. Other than what I had in my hand at the time,
5 had written down more information, then I would have 5 no, sir.
6 more information to talk about. So I'm confined to what 6 Q. Had Stephen Pahl told you at that moment in
7 you wrote down. This is what you wrote down, right? 7 time that PWI was a problem child based on everything he
8 MR. LANGLEY: Objection, form. 8 knew about them?
9 A. That appears to be my handwriting. 9 A. Throughout the course of the discussion, he
10 Q. (BY MR. FAIRLESS) Obviously, you deemed it 10 asked what the company name was. I showed him and he
11 important enough to write down the time period from 11 said, yeah, they're -- that company -- he said something
12 January '06 to June of '07, because you wrote it down. 12 to the effect of that company has had a violation
13 Fair enough? 13 history, but he wanted to analyze the data to verify
14 MR. LANGLEY: Objection, form. 14 what it was.
15 A. Yes, sir. 15 Q. Did he -- did you ask any questions or did he
16 Q. (BY MR. FAIRLESS) Obviously, you considered it 16 volunteer any information about what that company's,
17 important enough to write down what happened in the time 17 quote, violation history, end quote, was?
18 period from July of '07 to May of '08, because you wrote 18 A. No, sir.
19 it down. Fair enough? 19 Q. And clearly he didn't tell you at that point
20 A. Yes, sir. 20 that funny you should mention the name of that company,
21 Q. And then obviously you considered it important 21 I talked to one of their service technicians, Arthur
22 that one of the stations was over 60 percent twice 22 Ramirez, years ago and he told me that he was doing what
23 because you wrote that down, correct? 23 he was told when we -- when I was asking him about
24 MR. OWENS: Form. 24 calibrations?
25 A. We've already discussed that. I'm not -- I 25 A. I don't recall it being then.

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1 Q. Don't you think that's kind of an important 1 MR. LANGLEY: Objection, form.
2 historical fact not to bring up? 2 MR. OWENS: Form.
3 MR. LANGLEY: Form. 3 A. All I was asking Stephen about was whether he
4 A. I can't speculate as to what Stephen thought 4 saw a trend or a potential trend and if he had ideas on
5 was important. 5 how to analyze data to --
6 Q. (BY MR. FAIRLESS) I'm not asking you to 6 Q. (BY MR. FAIRLESS) And so the -- what? Go
7 speculate about what he thought was important. I'm 7 ahead. I'm sorry.
8 asking you as the Deputy Commissioner of Agriculture, 8 A. To verify whether or not there was a trend.
9 don't you think that was an important fact to leave out 9 Q. So did he give you the answer to the -- this is
10 when discussing with your boss whether or not there is a 10 how we analyze data or did he say, "I'll get back to you
11 noncompliance history of a particular entity? 11 on that"?
12 MR. LANGLEY: Form. 12 A. He said he could run some numbers and do some
13 A. It wouldn't be out of the ordinary for certain 13 data analysis and work with the staff to do that.
14 details like that to be left out of conversations with 14 Q. And did you just leave it up to him as to what
15 me because of my role in executing these enforcement 15 data to analyze?
16 agreements. 16 A. We had a discussion about analyzing the
17 MR. FAIRLESS: I'll object as 17 compliance history.
18 nonresponsive. 18 Q. Well, see, that takes me back to what I asked
19 Q. (BY MR. FAIRLESS) So why did he tell you later? 19 earlier when I said I want to know everything y'all
20 It was important later, but it wasn't important at the 20 talked about. So if you had a discussion about how to
21 time when you were trying to figure out whether or not 21 analyze the compliance history, I want you to tell me
22 more data was necessary to do an analysis? 22 about it because clearly you remember something about
23 MR. OWENS: Form. 23 it, so tell me about it.
24 A. I'm -- I'm pretty sure I said I couldn't recall 24 A. Other than what I just said, we discussed
25 exactly when he said it. 25 analyzing data regarding compliance history and
Page 187 Page 189
1 Q. (BY MR. FAIRLESS) Yeah. You said during or 1 comparing it to the statewide average.
2 after Operation Spotlight. 2 Q. Okay. So what y'all specifically talked about
3 A. Okay. 3 is, Stephen, let's pull PWI's compliance history and
4 Q. So why was it important then and not at this 4 let's measure it against the industry average for the
5 point when he evidently asked you specifically who are 5 state?
6 we talking about and you told him the name of the 6 MR. OWENS: Form.
7 company? 7 Q. (BY MR. FAIRLESS) Is that what you're telling
8 MR. LANGLEY: Objection, form. 8 me?
9 A. I -- he could have told me at any time during 9 A. I don't recall every detail of the
10 that process. 10 conversation.
11 Q. (BY MR. FAIRLESS) But he didn't. 11 Q. I don't need every detail. I mean, I'd like
12 A. As the -- as we developed a better 12 it; but evidently I'm not going to get it. I want to
13 understanding of the data, more information was able to 13 know with regard to the compliance history, did you say
14 be shared. 14 let's look at it, every single company, let's look at
15 Q. I don't even understand that; and to the extent 15 the same information like on an Excel spreadsheet or did
16 I do, it doesn't make any sense. So let me ask you: 16 you say let's look at PWI versus everybody else as an
17 Does that make any sense to you why he would not share 17 average?
18 that information with you at that time after he has 18 MR. OWENS: Form.
19 already specifically asked you who are we talking about 19 A. Like I said, I don't recall the details, the
20 and you say this company right here, PWI? 20 exact details of the conversation. I recall that we
21 MR. LANGLEY: Objection, form. 21 discussed analyzing the data to see if there was a
22 MR. OWENS: Form. 22 trend.
23 Q. (BY MR. FAIRLESS) Does it make any sense to you 23 Q. (BY MR. FAIRLESS) Did you invite anybody else
24 that he wouldn't follow with the comment funny you 24 in the room to participate in this back-row discussion
25 should mention them? 25 that you and Stephen were having?

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1 A. I did not invite anyone else into the room. 1 was it?
2 Q. No. Did you invite anyone else who was already 2 A. It was -- it evolved into more than just me and
3 in the room to participate in the discussion that you 3 Stephen talking.
4 and Stephen were having as he sat in the back row? 4 Q. And I realize that because you just told me it
5 A. I think at some point we had a discussion with 5 evolved into you and Stephen --
6 one of the regional directors, but I don't recall. 6 A. Right.
7 Q. Who? 7 Q. -- and the regional director. But now I'm
8 A. I don't -- I really don't recall. It could 8 trying figure out did it evolve into more than that?
9 have been any of them. 9 A. Sure. I think there were probably several
10 Q. Okay. So at some point, you and Stephen and 10 people in the room that heard the conversation we were
11 one of the regional directors had a discussion; and what 11 having.
12 was the scope of that discussion? 12 Q. And so did anybody provide any feedback?
13 A. Just whether or not there was a trend that 13 A. Like I said, I remember a regional director
14 anybody at the regional level had identified and any 14 contributing to the conversation.
15 information they had that might be helpful in figuring 15 Q. And the regional director was the only one that
16 out how to do the data analysis we were discussing. 16 contributed? Do you remember anybody else contributing?
17 Q. Pertaining to PWI? 17 A. David Kostroun was in the room, I think.
18 A. We discussed both in general and with regard to 18 Q. Did he contribute?
19 PWI. 19 A. I don't recall him saying anything actually.
20 Q. Okay. But I'm trying to figure out did y'all 20 Q. Did David Kostroun, at that point in time, know
21 discuss PWI with the regional director? 21 Sunmart from Adam?
22 A. I believe -- yes, sir, I think it came up. 22 MR. OWENS: Objection, form.
23 Q. Okay. 23 A. I didn't ask.
24 A. Actually, as I recall, it wasn't PWI. It was 24 Q. (BY MR. FAIRLESS) To your knowledge.
25 Sunmart. I wasn't aware that PWI was the name other 25 A. I can't speculate. I didn't ask.
Page 191 Page 193
1 than Sunmart at the time. 1 Q. Okay. Well, had you and David Kostroun ever
2 Q. So y'all discussed Sunmart with the regional 2 had any discussions about Sunmart before then?
3 director, inviting his or her input into the trend 3 A. No, sir.
4 analysis? 4 Q. Well, what I'm trying to figure out is did
5 A. Correct. 5 anybody -- David Kostroun or this regional director, who
6 Q. And do you remember if it was -- if we're 6 you believe contributed -- did they contribute anything
7 talking about Dudley Allen or are we talking about 7 in the way of I'm familiar with Sunmart and this is what
8 Jennifer? Who are we talking about regional director 8 I will tell you about them, following which they spoke
9 wise? 9 about Sunmart?
10 A. I really can't recall. 10 A. That's -- the regional director I recall
11 Q. Did you have any of the chief inspectors 11 contributing, indicated that was a familiar name for a
12 participate in the discussion? 12 violation history.
13 A. Possibly. Sure, we weren't -- it's possible 13 Q. Okay. Anything else other than that's a
14 that some of them were part of it, but I don't recall. 14 familiar name for violation history?
15 I recall my conversation with Stephen, and there was 15 A. I can't recall exactly what was said.
16 some discussion with a regional director. 16 Q. I don't want you to recall exactly. I just
17 Q. Well, see, as a lawyer, I try to get past 17 want you to tell me if generally there was anything
18 anything is possible answer because I realize anything 18 else, or was it just that?
19 is possible. What I want to know is did y'all put it 19 A. I can't recall anything in specific detail. I
20 out there on the floor for open discussion with the 20 recall that there was a discussion about a potential
21 room; or was it just like me and Ms. Court Reporter 21 violation history.
22 here, sitting beside each other, somebody else in the 22 Q. You weren't asking David Kostroun to do
23 room is talking and I'm engaging Ms. Court Reporter in a 23 anything, were you?
24 little discussion of our own here on the back row? 24 A. No. No, sir.
25 That's what I'm trying to get a flavor of. Which way 25 Q. Okay. Were you asking the regional director to

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1 do anything? 1 me. I do recall that he had some documents, and we
2 A. No, sir. 2 discussed -- he discussed those with me.
3 Q. So the only one you were really asking to do 3 Q. But I'm talking about result-oriented
4 anything was Stephen Pahl? 4 documents, opinion documents, final calculation
5 A. Correct. 5 documents. I mean were there documents that reached an
6 Q. To the extent anybody else contributed, they 6 opinion, that reached a conclusion that Stephen Pahl
7 were just providing their two cents worth? 7 prepared for you?
8 A. Yes, sir. 8 A. I can't -- I can't speculate on what was in his
9 Q. Now, have we talked about all the discussions 9 hands.
10 that may have involved PWI at that meeting with Stephen 10 Q. Have you ever had a discussion, other than what
11 Pahl, the regional director, and David Kostroun that you 11 you've told me that you could recall just a few moments
12 can recall? 12 ago, have you ever had a discussion with a regional
13 A. Yes, sir. 13 director about PWI?
14 Q. All right. Now, when the information came back 14 A. Prior to that, no, sir.
15 to you, this trend analysis, and we've talked about what 15 Q. Okay. How about after that? You've told me
16 that information was; but when it came back to you, who 16 everything you can remember about that -- what may have
17 brought it back to you? 17 been a conversation with a regional director when you
18 A. I believe Stephen did. 18 went to talk to Stephen Pahl. So take me from that
19 Q. And did he bring anybody with him to help share 19 point to now. Have you had any discussions with
20 the information? 20 regional directors about PWI?
21 A. I can't recall. 21 MR. LANGLEY: Obviously, he's not asking
22 Q. Was there some sort of computer show or 22 you about conversations where lawyers were present, if
23 computer demonstration of documents, Power Point, 23 that occurred. So other than lawyers.
24 anything like that? 24 A. I recall a discussion with regional -- with the
25 A. I don't recall there being. 25 staff that was presenting the results of the
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1 Q. Was there any documentation that was generated 1 inspections. I think there were -- I know there was --
2 specifically with results? And I'm not talking about 2 Jennifer Bailey was on the phone.
3 just a spreadsheet for you to look at in your leisure. 3 Q. (BY MR. FAIRLESS) Who was the staff that was
4 But was there a document that had results on it? 4 presenting the results of the investigation?
5 A. I don't -- I recall a verbal presentation, and 5 A. Stephen Pahl was involved. I believe David
6 that Stephen had some documents; but I don't recall if 6 Kostroun was also involved.
7 he showed them to me, or... 7 Q. Do both of them answer to you directly, or did
8 Q. And is it fair to say the verbal presentation 8 they at the time?
9 is what yielded the information that is contained here 9 A. Yes, sir.
10 on Exhibit 332? 10 Q. Was one above the other, or do they hold equal
11 MR. OWENS: Form. 11 positions?
12 A. I don't -- I don't know the timing of this, but 12 A. David Kostroun is an Assistant Commissioner,
13 I -- I don't know the timing of this. I don't know. I 13 and Stephen Pahl is our Director of Regional Operations.
14 can't speculate on what yielded that information. 14 Q. Yeah, that doesn't mean anything to me. Is one
15 Q. (BY MR. FAIRLESS) When you say "this," 15 higher than the other?
16 Ms. Court Reporter don't know what you're talking. It's 16 A. An assistant commissioner -- it probably
17 not going to be reflected in the record. By "this," you 17 depends on who you ask, but I think assistant
18 mean Exhibit 332? 18 commissioner is a senior level position.
19 A. Yes, sir. 19 Q. So I'm trying to figure out would they have
20 Q. Well, are there notes somewhere or is there a 20 observed a chain of command. Are you telling me that
21 document that Stephen Pahl created for you that 21 Stephen Pahl would have reported to David Kostroun and
22 contained results of the meeting with Stephen Pahl where 22 David Kostroun would have been reporting the results to
23 he brought back to you the analysis information you 23 you?
24 requested? 24 A. No, sir. They both report to me.
25 A. I don't recall if there were documents shown to 25 Q. Okay. Well, we're talking about an environment

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1 where somebody is reporting the results of the operation 1 by Stephen and David and Jennifer, was that -- well, you
2 to you. And I want to know who is it coming to you 2 tell me, what was it?
3 from, Stephen or David; or did they divide it up and 3 A. The inspection results yielded, as I recall, a
4 present it to you? 4 noncompliance rate of close to 60 percent for all of the
5 A. It was a collaborative presentation. They 5 fuel pumps that were tested. There were several, close
6 had -- they were familiar with the data, and were both 6 to -- close to half of the stations, the locations that
7 present. 7 were inspected, that had violations in excess of the
8 Q. And who else was either on -- was this a 8 predominance threshold. Several of the stations, more
9 meeting where y'all were all face to face, or was this a 9 than ten, had -- were cheating customers on 100 percent
10 meeting where some people were participating by 10 of the fuel pumps tested.
11 telephone? 11 Q. Okay. Are you at the end or if you're waiting
12 A. I -- there was -- someone was on the phone. I 12 for me to look startled because you used the word
13 remember Jennifer was on the phone. 13 "cheating," I've heard it and read it before, so --
14 Q. Okay. The three of y'all -- you, David, and 14 MR. LANGLEY: Don't respond to that.
15 Stephen -- are all in Austin. So y'all were all in the 15 Q. (BY MR. FAIRLESS) Are you at the end?
16 same room? 16 MR. OWENS: Form.
17 A. I don't remember if David was there. I 17 A. There was -- that's what I recall.
18 remember seeing -- yeah. Stephen was there. 18 Q. (BY MR. FAIRLESS) Why did you use the word
19 Q. Okay. You and Stephen were in the same room. 19 cheating instead of saying the pumps were found in favor
20 David may have been elsewhere. Jennifer was elsewhere. 20 of or the predominance rule was violated, just now when
21 And then who else was participating? 21 you were telling me?
22 A. I don't recall everyone that was there. 22 A. The consumers of Texas deserve to get what they
23 Q. Everyone that was there in the room, or 23 pay for.
24 everybody that was there one way or the other? 24 Q. Absolutely they do.
25 A. One way or the other, I don't recall who all 25 A. When a consumer in Texas --
Page 199 Page 201
1 was participating. 1 Q. Go ahead.
2 Q. Was there anybody else in the room with you and 2 A. When a consumer in Texas buys a gallon of gas,
3 Stephen? 3 they deserve to get a gallon of gas. When they buy a
4 A. I don't recall. 4 gallon of gas and don't get a full gallon of gas, I
5 Q. Was Dudley Allen on the phone along with 5 don't know what else to call it.
6 Jennifer? 6 Q. What about tolerances? Are there tolerances
7 A. I don't know. 7 that are in play with regard to the measure of fuel?
8 Q. Was Todd Staples either on the phone or in the 8 A. Yes, sir.
9 room? 9 Q. And do you know what the allowable tolerance
10 A. He was later in the process, but not when we 10 is? Is tolerance another way of saying allowable error?
11 were having this initial discussion. 11 MR. OWENS: Form.
12 Q. What does that mean "later in the process"? 12 MR. LANGLEY: Objection, form.
13 Later that day, later on a different call, or just at 13 Q. (BY MR. FAIRLESS) Is tolerance another way of
14 the tail end of that call? 14 saying allowable error?
15 A. As I recall, we had a discussion where the data 15 A. I've never heard it say that way. No, sir.
16 was presented to me; and then later on, we briefed the 16 Q. You would disagree if somebody did define it
17 Commissioner. 17 that way?
18 Q. So did he participate in the telephone call 18 A. I might. Yes, sir.
19 slash meeting or no? 19 Q. Okay. How much is a cubic inch? Do you know?
20 A. No. Not -- 20 A. It's a cubic inch.
21 Q. He got a later briefing from you or you and 21 Q. Well, I mean, will a cubic inch fill that cup
22 Stephen? 22 there beside you, that coffee cup?
23 A. Me and Stephen. I don't recall who all was on 23 A. No, sir.
24 the phone when I briefed the Commissioner. 24 Q. Will a cubic inch fill a tablespoon?
25 Q. And the information that you got briefed to you 25 A. I don't know.

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1 Q. And what is the allowable tolerance, the 1 Q. None of that is your personal knowledge. So
2 maintenance tolerance for a gallon of gas? 2 I'm taking it that is your expectation as the Deputy
3 MR. OWENS: Form. 3 Commissioner of Agriculture, correct? What you just
4 MR. LANGLEY: Objection, form. 4 said is your expectation of what your inspectors will
5 A. I don't -- I defer to our able staff for those 5 live up to?
6 details. 6 A. That's my expectation.
7 Q. (BY MR. FAIRLESS) The able staff which the TDA 7 Q. And if they don't live up to that, then you
8 takes responsibility for training? 8 would be sorely disappointed. Fair?
9 A. Yes, sir. 9 MR. LANGLEY: Objection, form.
10 Q. Nobody else takes responsibility for training 10 A. It's my expectation that the staff of the Texas
11 them, do they? 11 Department of Agriculture conduct themselves with the
12 A. We take responsibility for our staff. 12 professionalism that the taxpayers of Texas deserve.
13 Q. And would you agree with me that the staff that 13 Q. (BY MR. FAIRLESS) And if they don't, you would
14 conducts inspections, the TDA inspectors, if you will, 14 be sorely disappointed, correct?
15 need to be properly trained? 15 MR. LANGLEY: Objection, form.
16 A. Absolutely. 16 MR. OWENS: Form.
17 Q. And will you agree with me that they need to do 17 A. It is my expectation that the staff of the
18 their job in a competent fashion? 18 Department of Agriculture conduct themselves with the
19 A. Yes, sir. 19 professionalism that the taxpayers of Texas pay for
20 Q. And will you agree with me that they need to do 20 and deserve.
21 their job consistently and their testing methods and 21 Q. (BY MR. FAIRLESS) Do you think if you say that
22 means? 22 multiple times that that somehow becomes responsive? I
23 A. Yes, sir. 23 just want to know an answer to my question. If they
24 Q. And will you agree with me that they need to 24 don't, if the TDA inspectors -- let me start with a new
25 use quality equipment to perform accurate testing? 25 question. All that other stuff I said is objectionable.
Page 203 Page 205
1 A. Yes, sir. 1 If the TDA inspectors don't perform their
2 Q. And will you agree with me that if their 2 job to the expectations that you just set out in your
3 testing is not accurate, then their results are 3 previous answer, would you be disappointed?
4 unreliable? 4 A. I would expect that that would be corrected.
5 MR. OWENS: Form. 5 Q. So it's, yes, and I would expect that that
6 MR. LANGLEY: Objection, form. 6 would be corrected?
7 MR. FAIRLESS: I think the jury can 7 MR. LANGLEY: No. Objection, form. Quit
8 connect the dots on that one, boys. 8 putting words in his mouth.
9 MR. LANGLEY: Thank you. 9 A. No, sir. I would expect that --
10 Q. (BY MR. FAIRLESS) Will you agree with me that 10 MR. FAIRLESS: I'm trying to put words in
11 if the testing that is done is not accurate, then the 11 his mouth because I want a fair response to that
12 results are therefore unreliable? 12 question.
13 MR. OWENS: Form. 13 MR. LANGLEY: What you perceive as fair.
14 MR. LANGLEY: Objection, form. 14 MR. FAIRLESS: Right. Perception is
15 A. Our inspections are conducted in an accurate 15 realty.
16 manner. 16 MR. OWENS: Form.
17 MR. FAIRLESS: I'll object as 17 Q. (BY MR. FAIRLESS) So will you agree with me
18 nonresponsive. 18 that if they don't do their job in accordance with your
19 Q. (BY MR. FAIRLESS) Have you ever been to one? 19 expectations as Deputy Commissioner of Agriculture, that
20 A. No, sir. 20 you would be disappointed in their testing methods?
21 Q. Well, then why would you say that? 21 MR. OWENS: Form.
22 A. Because we have a training system. Our 22 A. I would expect that it be corrected if that
23 inspectors are trained, our inspectors are professional, 23 ever happens.
24 and they conduct their responsibilities with all of that 24 Q. (BY MR. FAIRLESS) And y'all went through some
25 professionalism. 25 corrections in December of 2009, didn't you?

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1 MR. OWENS: Form. 1 generally. I'm talking about specific changes from the
2 MR. LANGLEY: Objection, form. 2 standpoint of testing retail motor fuel devices and
3 A. We went -- say it again, please, sir. 3 changes that were made after Operation Spotlight. And
4 Q. (BY MR. FAIRLESS) Did y'all make some 4 those are the changes I want to know did you have a hand
5 corrections to your testing protocol or testing criteria 5 in seeing come to fruition?
6 in December of 2009? 6 A. I would -- I would imagine I did if there were
7 A. We -- we're continuously making improvements to 7 changes to our -- to certain policies, I would have been
8 our protocols and... 8 involved.
9 Q. That would be the answer to the question are 9 Q. And did you make those changes in light of what
10 you continuously making corrections to your protocol; 10 was deemed to be a lack of consistency in testing that
11 but, see, that's not my question. My question is 11 was done by the various TDA inspectors?
12 specific as to December of 2009. So let me try again. 12 A. I'm not sure what changes you're talking about.
13 In December of 2009, were there changes 13 MR. OWENS: Form.
14 made to the TDA inspection procedures and protocol for 14 MS. FRIEDMAN: It's already an exhibit.
15 retail motor fuel devices? 15 MR. FAIRLESS: Do you know what number it
16 MR. LANGLEY: Objection, form. 16 is?
17 A. I recall that we've made changes in our 17 MS. FRIEDMAN: 334.
18 programs in the last year. 18 Q. (BY MR. FAIRLESS) Let me hand you what's been
19 MR. FAIRLESS: I'll object as 19 marked as Exhibit 334.
20 nonresponsive. 20 MR. FAIRLESS: Langley, do you want this?
21 Q. (BY MR. FAIRLESS) So is the answer you don't 21 MR. LANGLEY: Thanks.
22 know if changes were made in 2009. You just know at 22 MR. FAIRLESS: Do you have it?
23 some point in the past year, changes have been made? 23 MR. OWENS: Yeah, I have it.
24 A. I recall that our programs go through a 24 Q. (BY MR. FAIRLESS) Do you see that there on the
25 continuous review process to make sure that they are 25 first two pages are 16 mandatory procedures, practices
Page 207 Page 209
1 providing the services the taxpayers expect from us. 1 for immediate implementation by all inspectors?
2 MR. FAIRLESS: I'll object as 2 MR. OWENS: Objection, form.
3 nonresponsive. 3 MR. FAIRLESS: What's wrong with that?
4 Q. (BY MR. FAIRLESS) Did you play a role in 4 I'm just reading it.
5 changing the policies and procedures in December of 5 MR. OWENS: Oh, I thought you were -- I
6 2009? 6 didn't realize that, and I didn't track it while you
7 A. Can you clarify what policies and procedures 7 were reading it.
8 we're talking about? 8 A. I see there's a list of 16.
9 Q. Do you know what policies and procedures I'm 9 Q. (BY MR. FAIRLESS) Okay. Well, I'll point out
10 talking about? 10 to you I'm just reading at the top where it says
11 A. I know we have policies and procedures in our 11 mandatory and that's underlined, right?
12 program. Yes, sir. 12 A. Yes, sir.
13 Q. Okay. Well, I'm talking about policies and 13 Q. Procedures slash practices for immediate
14 procedures with regard to the inspection of retail motor 14 implementation by all inspectors, colon. Did I read
15 fuel devices. And do you know why the changes -- I 15 that correctly?
16 guess my question -- my first question is: Did you play 16 A. Yes, sir.
17 a role in initiating those changes, making those changes 17 Q. And why was it important that these procedures
18 come about? 18 and practices by mandate be implemented immediately by
19 MR. OWENS: Form. 19 all inspectors?
20 A. Maybe I'm not being clear enough, Mr. Fairless; 20 MR. OWENS: Objection, form.
21 but I'm not understanding your question. Since I've 21 A. Any changes or any changes to the protocol
22 been at the Department of Agriculture in January of 2007 22 should be implemented immediately.
23 to now, from that time period, we've made changes to the 23 Q. (BY MR. FAIRLESS) And so were these changes
24 program. 24 made because of what was perceived to be a lack of
25 Q. (BY MR. FAIRLESS) I'm not asking about changes 25 consistency with regard to testing by the TDA

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1 inspectors? 1 utilizes the changes, understands and utilizes the
2 A. Well, I'm not sure which of these are changes 2 changes, correct?
3 and which are procedures that existed previously to this 3 A. Correct.
4 document. 4 Q. Even the best policies and procedures in the
5 Q. Either way, does it matter? Is the ultimate 5 world serve no purpose if they can't be understood and
6 hope here that somebody is wanting consistency, whether 6 implemented by the people who are expected to implement
7 it's a change or whether it's enforcement of what 7 them, would you agree with me?
8 already exists, they want consistency, right? 8 A. Say it one more time, please, sir.
9 A. Yes, sir. 9 Q. Yeah. Even policies -- even the best policies
10 Q. Okay. So was the purpose of this being printed 10 and procedures in the world don't do any good if they're
11 out and circulated to make sure that the inspectors were 11 not understood by the people expected to understand and
12 utilizing consistent means and methods with regard to 12 implement them, fair?
13 testing retail motor fuel devices? 13 A. Yes, sir.
14 MR. OWENS: Form. 14 Q. And there shouldn't be -- should not be any
15 A. There are many purposes for having procedures 15 reason why TDA inspectors go about their inspections of
16 and practices. Consistency is one of them, 16 retail motor fuel devices in different manners, fair?
17 professionalism, accuracy -- 17 MR. LANGLEY: Objection, form.
18 Q. Education? 18 A. I won't speculate on what the procedures are.
19 MR. OWENS: Let him finish answering. 19 There may be different circumstances.
20 Q. (BY MR. FAIRLESS) Okay, go ahead. 20 Q. (BY MR. FAIRLESS) You would expect that absent
21 A. There are many forms. There are many -- there 21 different circumstances, there should be consistency
22 are many reasons for having procedures in practice. 22 from inspector to inspector so that the device owners
23 Q. But I cut you off at accuracy. What were you 23 will understand what the nature and course of inspection
24 going to say after accuracy? 24 will be, fair?
25 A. I don't know. 25 A. Yes, sir.
Page 211 Page 213
1 Q. How about education? Good reason to have 1 Q. And is there any point in me talking to you
2 policies and procedures? 2 about the details of these changes or the -- well, is
3 A. Is it -- say that again. 3 there any point in me talking to you about the details
4 Q. Education, is that a good reason to have 4 of this document I've just handed you or will -- do you
5 policies and procedures? 5 know enough about the details to specifically address
6 A. Sure. 6 them?
7 Q. Training, is that a good reason to have 7 A. I don't -- I know some of the details. I don't
8 policies and procedures? 8 know all of the details.
9 A. Policies and procedures are a part of training. 9 Q. Well, then tell me which ones you had a hand in
10 Q. Right. 10 seeing implemented. And I'll -- guess I'll talk to you
11 A. Employees are trained. 11 about those. Out of 1 through 16, just...
12 Q. Using, guess what, policies and procedures? 12 A. So you're asking which ones have been
13 A. Yes, sir. 13 implemented since I've been here?
14 Q. So education, training, consistency, accuracy, 14 MR. OWENS: He's asking --
15 those are all good reasons to have policies and 15 MR. LANGLEY: He want's to know which
16 procedures and to make sure that -- first of all, 16 ones you had a hand in implementing.
17 they're all good reasons to have policies and 17 MR. OWENS: A hand in. So read them and
18 procedures, right? 18 tell them which ones you had a hand in.
19 A. Yes, sir. 19 THE WITNESS: Okay.
20 Q. And they're all good reasons to make sure that 20 MR. LANGLEY: Which ones that you had --
21 your policies and procedures are immediately 21 which ones that you had involvement in.
22 implemented, correct? 22 Q. (BY MR. FAIRLESS) And I've got a red pen. When
23 A. Yes, sir. 23 you get to one, I want you to tell me and I'm going to
24 Q. Particularly if you're going to implement 24 give it to you so you can circle it and then we're going
25 changes because you want to make sure that everybody 25 to mark that as an exhibit. Do you need the red pen

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1 yet? 1 MR. FAIRLESS: Yeah. Exhibit 452 is
2 A. I've come across one that I recall being 2 marked. It's what has been marked as a previous
3 involved in. 3 exhibit.
4 Q. Here. Okay. Just keep it until you're done, 4 Q. (BY MR. FAIRLESS) I don't remember what number
5 until you get through 16. 5 it is, but I had her mark it again because you circled
6 MR. OWENS: For the record, can you 6 Items 6 and 7, correct?
7 reproduce these in red? We've had exhibits before that 7 A. Yes, sir.
8 were highlighted in different colors and I didn't get 8 Q. All right. And then what role did you play in
9 the different colors. 9 the change to No. 6?
10 THE REPORTER: Yes. 10 A. I met with staff about the changes, approved
11 MR. OWENS: I don't care what it costs. 11 them.
12 If he does it in red, pink, or blue or yellow, I would 12 Q. Well, did somebody put forth the changes to you
13 like my copy to be in the same color. 13 with a recommendation?
14 MR. FAIRLESS: Can we go off the record 14 A. Yes, sir.
15 for this? 15 Q. And who did the recommendation come from?
16 MR. OWENS: If you want to. This is the 16 A. I believe it was from the regulatory division,
17 kinder and gentler... 17 staff in the regulatory division. David Kostroun being
18 MR. FAIRLESS: I appreciate that. Are 18 the Assistant Commissioner.
19 you almost done or if it's going to take much longer, 19 Q. Okay. So it came to you by way of David
20 maybe we need to. 20 Kostroun; and as far as how it came to him, you don't
21 THE WITNESS: I just want to make sure -- 21 know or do you know the genesis of this change?
22 I just want to make sure I'm getting it. 22 MR. OWENS: Form.
23 MR. LANGLEY: You want perfection out of 23 A. Yes, sir.
24 him and then when he tries to be perfect, you fuss at 24 Q. (BY MR. FAIRLESS) What's the genesis of it?
25 him. 25 Where did it begin?
Page 215 Page 217
1 MR. OWENS: Start counting the minutes. 1 A. Throughout the last three years, since I've
2 THE VIDEOGRAPHER: Off the record at 2 been at the Department of Agriculture, the program as
3 3:27. 3 undergone other changes. One of those being a
4 (Discussion off the record) 4 significant increase in the penalty structure that
5 (Exhibit Nos. 452-456 were marked and are 5 resulted in industry representatives communicating with
6 attached hereto) 6 us a need to look at the -- how the predominance
7 THE VIDEOGRAPHER: This is the beginning 7 threshold is implemented to build in a little small
8 of Tape 5. Back on the record at 3:41. 8 amount of relaxation there.
9 Q. (BY MR. FAIRLESS) Did you mark them? 9 Q. So the industry representative has been
10 MR. FAIRLESS: Oh, sorry, Videoman. I 10 communicating this to you for the past three years?
11 was talking over you. 11 A. No, sir.
12 A. I did. 12 Q. Okay. Well, when did it get communicated to
13 MS. FRIEDMAN: I marked them. 13 you?
14 MR. FAIRLESS: No. I'm talking to the 14 A. As the penalties have gone up, we've heard from
15 witness, not you. But thanks, Kelley, for your 15 industry representatives about it.
16 attention. 16 Q. And the penalties went up in 2007?
17 MS. FRIEDMAN: You're welcome. 17 A. Yes, sir.
18 MR. OWENS: Are you remarking that? 18 Q. So you're familiar with the fact that the
19 MR. FAIRLESS: No. I mean it's marked. 19 industry wanted a certain amount of leeway, be it minus
20 MR. OWENS: Okay. I -- 20 one and a half and below or something else even prior to
21 MR. FAIRLESS: I put a -- I put a -- 21 Operation Spotlight?
22 because when you were out of the room, I told Ms. Court 22 A. I don't -- I don't recall when industry
23 Reporter to go ahead and put a sticker on this. 23 representatives brought it to us, but sometime after the
24 MR. OWENS: Okay. I just haven't heard 24 penalty matrix was -- or the penalty structure was
25 anything on the record. I'm sorry. 25 increased.

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1 Q. Well, the penalty structure -- we just went 1 that the staff felt the need to bring to your attention
2 over this -- was increased in 2007. So it was sometime 2 for approval purposes?
3 after 2007 and prior to Operation Spotlight that this 3 A. After I read through it --
4 discussion set forth as No. 6 on this Exhibit 452 was 4 MR. OWENS: Objection, form.
5 addressed with you, fair? 5 MR. LANGLEY: Objection, form.
6 MR. OWENS: Objection, form. 6 A. -- there were only those two that I recall
7 MR. LANGLEY: Form. 7 having --
8 A. No. 6 -- no. I think No. 6 is mainly having to 8 Q. (BY MR. FAIRLESS) After you read --
9 do with the technology of the equipment. The newer -- 9 A. -- specifically discussed.
10 the newer provers have readings in half cubic inch -- I 10 Q. After you read through Exhibit 452, the only
11 believe those are cubic inch increments. 11 ones that you recall being brought to your attention for
12 Q. (BY MR. FAIRLESS) Okay. You're right. So why 12 purposes of approval were No. 6 and No. 7?
13 did we start off talking about No. 6 anyway with regard 13 A. Correct.
14 to -- never mind. 14 Q. Okay. No. 6, you're just -- the new policy is
15 MR. OWENS: Form. 15 what? Everything is to be read to the .5?
16 Q. (BY MR. FAIRLESS) So what -- what role did you 16 A. On No. 6?
17 have in No. 6? 17 Q. Yeah. As opposed to going to whole numbers,
18 A. Staff presented it to me, and I approved 18 now y'all can go to .5s?
19 implementing it. 19 A. Yes, sir, that's essentially...
20 Q. You didn't have to approve the other 14? The 20 Q. All right. And No. 7, what's the change there?
21 only two you had to approve were No. 6 and No. 7? 21 A. No. 7 is a small allowance in the 60 percent
22 A. As I read through, I think most of the other 22 predominance threshold.
23 ones were in place before. 23 Q. Meaning for purposes of ascertaining whether or
24 Q. So you're saying the only changes as of 24 not there was a predominance violation, minus ones and
25 December '09, are No. 6 and No. 7? 25 minus 1.5s will not be counted?
Page 219 Page 221
1 A. I don't know that with certainty. I was 1 A. Yes, sir. That's correct.
2 involved -- the staff ran the -- No. 6 and No. 7 past me 2 Q. And you say that was a suggestion made by
3 as a change that they needed my approval on. 3 industry representatives?
4 Q. Well, wouldn't they have needed your approval 4 A. Not that specific recommendation.
5 on any changes? 5 Q. I thought that's what you said a few minutes
6 A. They know I have their confidence to make some 6 ago.
7 changes within -- 7 A. They -- they requested that the predominance
8 Q. So is the answer no? 8 threshold be relaxed. We -- our staff came up with
9 A. -- their authorities. 9 those numbers.
10 Q. Is the answer no, they don't need your approval 10 Q. So did the industry come to you and say that
11 on any changes? They just need your approval on some 11 they didn't want the low negative numbers to be included
12 changes? 12 in predominant -- in determining whether or not there
13 MR. OWENS: Objection, form. 13 was a predominance violation. And you're saying the
14 A. They know I have confidence in their ability to 14 negative one and a half, negative one, and negative .5
15 administer the programs. 15 were not their numbers; but the idea was what they were
16 Q. (BY MR. FAIRLESS) Then why didn't they just 16 pushing?
17 utilize their knowledge that you have confidence in them 17 A. The industry asked us for a relaxation in the
18 and not even run No. 6 and No. 7 past you? 18 predominance threshold.
19 MR. LANGLEY: Objection, form. 19 Q. And what did they want it relaxed to? .2s,
20 A. Well, because like I told you, industry 20 .3s --
21 representatives had communicated to me about that issue 21 A. I don't --
22 in No. 7. No. 6 is related to No. 7 in that No. 7 22 Q. -- did they want those counted?
23 involves the use of half cubic inch increments. 23 A. I don't recall that I even heard a proposal.
24 Q. (BY MR. FAIRLESS) Okay. So No. 6 and No. 7 24 Q. Well, did you ever talk to anybody? Did you
25 were the only ones, the only policies and procedures 25 speak directly to one of these industry representatives?

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1 A. Yes, sir. 1 MR. OWENS: Objection, form.
2 Q. One or many times? 2 A. It's my understanding those would have been
3 A. Maybe one or two, maybe three. 3 utilized.
4 Q. And were they all in conjunction with this 4 Q. (BY MR. FAIRLESS) Okay. And --
5 issue right here, identified by No. 7 on Exhibit 452? 5 A. The -- the .5, I don't know because we didn't
6 A. No. We have an ongoing, very positive working 6 have that reading previously. So I guess I can't
7 relationship with industry representatives who we 7 respond to that.
8 regulate, and we discuss a number of things about our 8 Q. Well, that would go back to that consistency
9 programs. 9 issue with regard to what the inspectors were doing. If
10 MR. FAIRLESS: I'll object as 10 the bottom of the meniscus, assuming that's what they
11 nonresponsive. 11 were reading, was beneath one; but not all the way down
12 Q. (BY MR. FAIRLESS) Did you talk about this Item 12 to zero, we would have to know how they were reading
13 No. 7, each of the two or three times that you met with 13 that to determine whether they put zero or minus one,
14 industry representatives? 14 wouldn't we?
15 A. However many times it was, that was what I 15 MR. OWENS: Objection, form.
16 was -- that's where that number came from, one or two or 16 Q. (BY MR. FAIRLESS) Do you know what the --
17 three times. Yes, sir. 17 A. If the --
18 Q. Okay. Then who were the industry 18 Q. Do you know what the --
19 representatives? 19 MR. OWENS: You can answer his question.
20 A. Most often, I communicate with the government 20 A. If the reading was below zero.
21 affairs representatives of the Texas Petroleum Marketers 21 Q. (BY MR. FAIRLESS) No. Okay, go ahead.
22 and Convenience Store Association. 22 A. My understanding is if the reading was below
23 Q. Well, who was that? 23 zero, that represented that the pump was not dispensing
24 A. Chris Newton is the person I normally 24 the fuel the consumer was paying for. That's what the
25 communicate with. 25 predominance threshold is designed to find.
Page 223 Page 225
1 Q. And so was Chris Newton the only one you 1 Q. So if it was below zero, it should have been
2 communicated with as regards this Item No. 7, or did you 2 read as a negative one?
3 communicate with others as well that fall under this 3 MR. OWENS: Objection, form.
4 category of industry representative? 4 MR. LANGLEY: Form.
5 A. I don't recall if Chris was the only one, or if 5 A. I assume that's what we're talking about here.
6 I even discussed it with him. I don't recall who I 6 Q. (BY MR. FAIRLESS) Okay. Well, do you really
7 discussed it with. 7 have to assume. You're the Deputy Commissioner of
8 Q. Well, you just got through saying you discussed 8 Agriculture.
9 it with industry representatives. So are you saying now 9 A. Well, I rely on the capable staff of the
10 that you cannot even be sure that you discussed it with 10 Department who are involved in these details at the
11 Chris? 11 level you're asking me.
12 A. That's correct. 12 Q. Well, you keep saying you rely on other people;
13 Q. Can you be sure -- can you give me any name and 13 but you know what, in five hours, almost five hours
14 say but I am sure I discussed it with that person who's 14 worth of deposition, I'm not sure you've said, "I don't
15 an industry representative? 15 know" one time.
16 A. No, sir. 16 MR. OWENS: Objection, form.
17 Q. This Item No. 7, let me ask you the negative 17 Q. (BY MR. FAIRLESS) So do you know?
18 1.5, negative one, and negative .5, were those included 18 A. Do I know what?
19 in determining predominance violations during Operation 19 Q. Do you know whether or not they were marking
20 Spotlight? 20 negative one if the bottom of the meniscus, assuming
21 A. Which ones? 21 that's what they were reading, was less than zero?
22 Q. Negative 1.5, negative one, and negative .5. 22 MR. OWENS: Objection, form.
23 A. It's my -- it's my understanding they would 23 A. No.
24 have been. 24 Q. (BY MR. FAIRLESS) Okay. Has anybody gone back
25 Q. Is that the same as, yes, they were? 25 to analyze what the Operation Spotlight figures for the

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1 PWI stations would be if negative .5, negative ones, and 1 A. Shannon Rusing.
2 negative 1.5s were not included? 2 Q. Spell it.
3 A. I don't know. 3 A. R-u-s-i-n-g.
4 Q. You don't know if anybody has or hasn't? I 4 Q. Okay. Did Shannon Rusing have any involvement
5 should have said you hadn't said, "I don't know" earlier 5 in any of the issues that are involved with Operation
6 because then, boom, I don't know. 6 Spotlight, this litigation?
7 MR. OWENS: Objection, form. 7 A. Not that I'm aware of. No, sir.
8 Q. (BY MR. FAIRLESS) I'm clowning around. Okay. 8 Q. Okay. Who else has a direct report to you and
9 Do you understand the question though? You don't know 9 did in July of 2008?
10 if they have or they haven't gone back and determined 10 A. Stephen Pahl.
11 how this new change would have made a difference or if 11 Q. Okay. Stephen Pahl the individual, or Stephen
12 it would have made a difference? 12 Pahl in his position as whatever his position title is?
13 A. No, sir. 13 MR. LANGLEY: Objection, form.
14 Q. Okay. So the other 14 items, you didn't play a 14 A. I don't understand.
15 role in? 15 Q. (BY MR. FAIRLESS) Does Stephen Pahl answer to
16 A. Not that I recall. 16 you no matter what his position is or does his position
17 Q. Who actually reports to you? 17 answer to you and he just happens to be the person in
18 A. The assistant commissioners. 18 that position?
19 Q. Well, how many are there? 19 A. Stephen Pahl reports to me through the position
20 A. There are nine assistant commissioners. 20 he occupies.
21 Q. Okay. David Kostroun, is he the one that's an 21 Q. Yeah, that's good. What's his position?
22 assistant commissioner that would have a role with 22 A. Director of Regional Operations.
23 regulatory programs pertaining to retail motor fuel 23 Q. What's his region?
24 devices? 24 A. All regions.
25 A. Yes, sir. 25 Q. Are there any other director of regional
Page 227 Page 229
1 Q. Are there other assistant commissioners that 1 operations?
2 would fulfill that role as well, or is it just Kostroun? 2 A. No, sir.
3 A. David is the assistant commissioner overseeing 3 Q. Okay. Who else has the direct report to you?
4 that program. 4 This doesn't have to be like pulling teeth. I mean, you
5 Q. Okay. So as far as the issues that are on the 5 can just give me a list if you want.
6 table here today, David Kostroun is really the assistant 6 A. Chris Drews.
7 commissioner that would deal with such issues? 7 Q. Chris Drews. What position?
8 A. Yes, sir. 8 A. He's a -- I don't recall his exact title. He's
9 Q. Now, who else reports to you then besides 9 a Quality Assurance Specialist, I believe.
10 assistant commissioners? Anybody else have a direct 10 Q. Who else?
11 report line to you? 11 A. I believe that's -- I believe that's all.
12 A. The chief of staff. 12 Q. Okay. What is -- what does a quality assurance
13 Q. What chief of staff? Is that it? That's the 13 specialist -- you know, let me back up. Is Chris Drews
14 full title, chief of staff? 14 the only quality assurance specialist or are there
15 A. Yes, sir. The Chief of Staff for the Texas 15 others?
16 Department of Agriculture. 16 A. He's the only one.
17 Q. Okay. So the TDA Chief of Staff. And who was 17 Q. Okay. And what is he quality assurance
18 that in July of 2008? 18 specialist of? What does that position do?
19 A. Shannon Rusing. 19 A. He works with the director of regional
20 Q. Shannon? 20 operations.
21 A. Shannon Rusing. 21 Q. So is he like the assistant to Stephen Pahl?
22 Q. I'm not understanding. Are you saying Shannon 22 A. No. He's the -- coordinates our quality
23 or Channon? 23 assurance efforts in our regional operations.
24 A. Shannon. 24 Q. What kind of quality assurance? Like retail
25 Q. Shannon Rusing? 25 motor fuel devices or some other quality assurance?

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1 A. For multiple programs. 1 MR. FAIRLESS: I'll object to everything
2 Q. Does it include retail motor fuel devices? 2 beginning with the word "specifically" as nonresponsive.
3 A. Yes, sir. 3 Q. (BY MR. FAIRLESS) PWI, I mean per their Web
4 Q. Did you contact other states -- when I say you, 4 site which you guys looked at, only did business in ten
5 I mean you or at your direction -- contact other states 5 other states; so why did you send it to all 50?
6 to inquire as to PWI and their compliance slash 6 A. I don't know that we did.
7 noncompliance history with regard to retail motor fuel 7 Q. You don't know if you sent it to all 50, or you
8 devices? 8 don't know if you checked the Web site?
9 A. Did I contact -- one more time, please. 9 A. I don't know if we sent it to all 50.
10 Q. You or someone at your direction, did y'all 10 Q. Oh, I thought you said a few -- not I thought.
11 contact any of the 49 lesser states to inquire about PWI 11 A few minutes ago you said you did.
12 and retail motor fuel devices? 12 A. Well, we sent it to other states. I thought
13 A. We made contact with the other states. 13 that's what we were talking about. I don't recall if we
14 Q. In writing or by telephone? 14 sent it to each and every of the other 49.
15 A. In writing. 15 Q. Did you get any feedback from any of these
16 Q. Okay. Did you send the same letter to 16 other states with respect to PWI?
17 everybody and just change the addressee on the letter, 17 A. I don't recall.
18 or did everybody get their own little individually 18 Q. Isn't that the kind of thing that you would
19 crafted letter? 19 recall, particularly before you come to give a
20 A. I believe we wrote a letter that went to -- in 20 deposition is, hey, we heard this back from New Mexico,
21 its same form -- to all 50 states informing them of the 21 hey, we heard this back from Oklahoma, and I need to be
22 results of our inspection. 22 mindful of it when that PWI lawyer asks me questions
23 Q. And what feedback did you get? Well, first of 23 today?
24 all, that form letter you're talking about, did you 24 MR. LANGLEY: Objection, form.
25 invite feedback from the other states; or did you just 25 MR. OWENS: Form.
Page 231 Page 233
1 say, hey guys, FYI, and then provide the results? 1 Q. (BY MR. FAIRLESS) I mean, isn't that the type
2 A. I don't recall. 2 of thing that you would make yourself aware of before
3 Q. Don't you recall that you invited feedback? 3 you came to give a deposition?
4 A. I don't recall. 4 MR. OWENS: Form.
5 Q. You don't have any idea as you sit here today? 5 MR. LANGLEY: Form.
6 A. No, sir. 6 A. Not necessarily.
7 Q. Was part of the reason of sending the letter to 7 Q. (BY MR. FAIRLESS) Have you done any checking to
8 invite feedback? 8 find out if you've heard back from any of the other
9 MR. LANGLEY: Objection, form. 9 states?
10 A. I don't recall if we invited feedback. 10 A. I don't recall if we invited feedback.
11 Q. (BY MR. FAIRLESS) Why did you send the letter 11 Q. I didn't ask you did you invite feedback. I
12 then? I mean were you just wanting to make sure -- why? 12 asked you did you check around to find out if you had
13 You tell me why. 13 heard back from any of the other states who got the form
14 A. As I recall, we wrote a letter for all of the 14 letter?
15 other states that might have an interest in our 15 A. No, sir.
16 inspection results to be aware that this particular 16 Q. What was PWI's consumer complaint history like
17 company had a very concerning compliance, noncompliance 17 prior to Operation Spotlight?
18 rate in Texas. 18 A. I don't -- I don't recall.
19 Q. Had y'all ever -- were you done? 19 Q. Certainly you asked for that to be analyzed by
20 A. No, sir. 20 Stephen Pahl and the results to be provided back to you
21 Q. Go ahead. 21 before implementing Operation Spotlight, didn't you?
22 A. Specifically, we had consumers in Texas who 22 A. I don't recall if I requested that.
23 were buying fuel from this particular company who nearly 23 Q. To this day, have you ever seen what PWI's
24 60 percent of their pumps were tilted in favor of the 24 consumer complaint history was like?
25 company. 25 A. Not that I recall.

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1 Q. Have you ever done anything to -- if not look 1 talked to David Kostroun or Chris Drews or Joe Benavides
2 at PWI's complaint history individually, evaluate what 2 or Stephen Pahl about the deposition?
3 PWI's complaint history looks like as compared to 3 A. No, sir.
4 everyone else in the industry? 4 Q. And did you make the decision and -- never
5 A. I don't recall if that data has ever been 5 mind. I don't want to know what you talked to lawyers
6 presented to me. 6 about, but did you specifically seek out Stephen Pahl's
7 Q. You certainly don't recall as you sit here 7 deposition from Stephen?
8 today ever seeing it, do you? 8 A. No, sir.
9 A. I don't recall if that information has ever 9 Q. Were the reinspection procedures changed after
10 been presented to me. 10 Operation Spotlight was concluded? Meaning after
11 Q. Which would mean I don't recall having ever 11 July 20th, but during the time period when reinspections
12 seen that information, right? 12 were being done following the Operation Spotlight blitz?
13 MR. OWENS: Objection, form. 13 MR. OWENS: Form.
14 A. I don't recall having ever seen that 14 MR. FAIRLESS: What's wrong with that?
15 information. 15 MR. OWENS: I didn't understand it.
16 Q. (BY MR. FAIRLESS) Okay. Have you directed 16 THE WITNESS: I don't understand.
17 anybody to make contact -- I mean, specifically go out 17 MR. FAIRLESS: Yeah, that was a bad
18 and make contact with the other states, not just send 18 question.
19 them a letter; but contact somebody with the Department 19 Q. (BY MR. FAIRLESS) Do you know anything about
20 of Agriculture for Utah or the Department of Agriculture 20 reinspection procedures?
21 for New Mexico or Colorado or Oklahoma or any of the 21 A. Very limited.
22 other states where PWI does business to speak TDA to TDA 22 Q. And if I were to tell you that the reinspection
23 and get insider information, if you will? 23 procedures changed after Operation Spotlight started, do
24 A. What was the first part? Have I what? 24 you know how they changed?
25 Q. Have you established such contact yourself or 25 A. No, sir.
Page 235 Page 237
1 directed anybody to establish such contact so that the 1 Q. Do you know why they changed?
2 state agencies can interact with one another and share 2 A. I can't speculate without knowing what
3 information pertaining to PWI? 3 procedures you're talking about.
4 A. Beyond the letter, I don't -- I'm not aware of 4 Q. Reinspection procedures.
5 any other contact. 5 A. Right.
6 Q. And as you sit here today, you don't have an 6 Q. Yeah. Do you know how they changed, or why
7 independent recollection of any other state coming back 7 they changed?
8 to the Texas Department of Agriculture to tattletale on 8 A. I can't -- I don't recall being aware of any
9 PWI? 9 reinspection procedure changes.
10 MR. OWENS: Form. 10 Q. Okay. The one to five enforcement orders with
11 Q. (BY MR. FAIRLESS) If you do, share it with me. 11 NOVs with one or more checks that you saw for PWI and
12 A. I don't recall. 12 brought to Stephen Pahl's attention, did any of those
13 Q. Did you ever speak to Russell Langston or Roy 13 fail the preponderance rule?
14 Lee Langston? 14 MR. LANGLEY: Predominance rule?
15 A. I don't recall. 15 MR. FAIRLESS: Yeah, preponderance rule.
16 Q. Do you know those names? 16 Q. (BY MR. FAIRLESS) Did any of those fail the
17 A. No, sir. 17 predominance rule because the devices that were looked
18 Q. What documents did you review to get ready for 18 at -- you know, I should have ask you first: Do you
19 your deposition today? 19 know if somebody goes out to do a bulk diesel inspection
20 A. I read through the transcript, not in its 20 whether or not for predominance purposes at the time of
21 entirety, but the transcript of Stephen Pahl's 21 Operation Spotlight, they were looking at just bulk
22 deposition. 22 diesel dispensers or would they be calculating the
23 Q. Okay. Did you read anybody else's? 23 predominance rule based on bulk diesel, automotive
24 A. No, sir. 24 diesel, and automotive gas?
25 Q. Have you talked to anybody? Like have you 25 MR. OWENS: Form.

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1 Q. (BY MR. FAIRLESS) Do you understand what I'm 1 then there would have been no predominance violation.
2 asking? 2 Are you with me?
3 A. I could use a little bit better explanation. 3 MR. OWENS: Form.
4 Q. I want to know -- remember earlier you gave me 4 MR. LANGLEY: Objection, form.
5 what's on top and what's on bottom in the -- you know, 5 A. No, I'm not with you.
6 in the analysis of the -- I'm trying to think what it 6 Q. (BY MR. FAIRLESS) The example that I just gave
7 was now -- the number of pumps compliant versus number 7 you about the 56 gas pumps and --
8 of pumps inspected. 8 A. Yes.
9 Okay. Now, I want to know for purposes 9 Q. -- the eight bulk diesel --
10 of the predominance rule in calculating the 60 percent, 10 A. Yes.
11 what's on top, what's the numerator, and what's on 11 Q. -- do you know if any of the five that you had
12 bottom, what's the denominator. 12 in hand of the one to five that you had in hand when you
13 A. Number of -- number of pumps versus number of 13 went to see Stephen Pahl, were predominance -- they were
14 pumps tilted in favor of the company. 14 ruled as predominance violations and notice of
15 Q. Okay. So when you say number of pumps, are you 15 violations were issued, NOVs were issued as predominance
16 talking about total number of pumps at the station? Is 16 violations even though the only predominance had to do
17 that what is to go in that area, or is it just the total 17 with the bulk diesel as opposed to all of the dispensers
18 number of whatever you're looking at, for instance, bulk 18 at the station? Do you know if any of the one to five
19 diesel? 19 fell in that category?
20 MR. OWENS: Form. 20 MR. OWENS: Form.
21 A. Well, I know different equipment is used for 21 A. I'm sorry. I'm really not following your
22 different pumps; so -- but I can't speculate on how that 22 question here.
23 works exactly. 23 Q. (BY MR. FAIRLESS) Do you know -- well, you
24 Q. (BY MR. FAIRLESS) Let's do this. If you're 24 don't know. Do you know how it's -- no, I think you
25 going to a station and there are let's say 56 gasoline 25 answered that. So you don't know what you're supposed
Page 239 Page 241
1 dispensers. You know, grades, fuel blends some of your 1 to look at. That's what you would defer to the people
2 TDA inspectors call it. And then there are eight bulk 2 underneath you to tell you?
3 diesel. And let's say six of the eight bulk diesel, 3 MR. OWENS: Form.
4 which would be 75 percent if you were just looking at 4 Q. (BY MR. FAIRLESS) Is whether or not you look at
5 bulk diesel, were noncompliant according to the 5 the total number of dispensers or just the bulk diesel
6 inspector's results. 6 if you're testing bulk diesel?
7 A. Of what percent? 7 MR. OWENS: Form.
8 Q. Six of eight of the bulk diesel were 8 A. There are procedures for determining the
9 noncompliant. So in determining the application of the 9 predominance threshold violations and when it comes to
10 60 percent rule, would you just look at the six of eight 10 me, if it says it violated the predominance threshold
11 or would you look at the six of 64, which would be the 11 that's the extent of my understanding on those that I
12 56 gas plus the eight? 12 was looking at.
13 A. I'll defer to the staff on that. 13 Q. (BY MR. FAIRLESS) But that's the thing. Would
14 Q. You don't know? 14 you know whether or not those predominance violations
15 A. I'll defer to the staff that do know. 15 were predominance for the entire station or were they
16 Q. Right. And I'm not making fun of you because 16 predominance just because, for instance, six of the
17 you don't know. I'm just saying are you deferring to 17 eight bulk diesel were supposedly outside tolerances?
18 the staff because you don't know? 18 A. Okay. I understand your question now.
19 A. Yes, sir. 19 Q. Okay.
20 Q. All right. Do you know whether or not any of 20 A. I wouldn't know that.
21 those few that you -- any of the few notices of 21 Q. All right. And would anybody have to come to
22 violation, the one to five that you had in your hand 22 you as Deputy Commissioner to get any approval from you
23 when you went to see Stephen Pahl, if any of those 23 before they changed reinspection procedures following
24 showed noncompliance violations even though had the 24 Operation Spotlight?
25 total number of devices, gas and diesel been considered, 25 A. Some inspection procedures would come to me for

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1 approval. 1 that's Pages 2 and 3.
2 Q. All right. 2 MR. OWENS: That's fine. Let me just
3 MR. FAIRLESS: Let me -- have they been 3 get...
4 marked? 4 MR. FAIRLESS: I'm not going to go over
5 Q. (BY MR. FAIRLESS) Let me show you what's been 5 the details with him.
6 marked as -- 6 MR. OWENS: That's fine.
7 MR. FAIRLESS: Do we have an extra copy? 7 MR. FAIRLESS: I just want to know if
8 MS. FRIEDMAN: Yes. 8 he's ever seen them.
9 MR. FAIRLESS: Where's 454? 9 MR. OWENS: I'm familiar with the
10 THE WITNESS: Do we have any water over 10 documents.
11 there? 11 Q. (BY MR. FAIRLESS) Have you ever seen those?
12 MR. FAIRLESS: Oh, these are the talking 12 A. No, sir.
13 points. I want to know about the inspection procedures. 13 Q. They're reinspection procedures. One group of
14 MS. FRIEDMAN: The reinspection 14 them, the July group, were in effect during Operation
15 procedures? We didn't mark those. 15 Spotlight; and then the August group reflect changes
16 MR. FAIRLESS: Okay. Have they ever been 16 made after Operation Spotlight.
17 marked? 17 Do you know that, or does that give you
18 MS. FRIEDMAN: The reinspection -- I 18 any more familiarity with them?
19 don't know where they are. 19 MR. LANGLEY: Objection, form.
20 MR. FAIRLESS: Ms. Court Reporter, can I 20 A. I don't recall having seen these, so...
21 get you to put your sticker on that? 21 Q. Okay. Fine. So obviously, I would assume that
22 (Exhibit Nos. 457-459 were marked and are 22 since you don't recall having seen them, then they
23 attached hereto) 23 didn't need your approval to put into operation. Fair?
24 Q. (BY MR. FAIRLESS) I'm going to hand you what's 24 A. That doesn't mean I didn't see them. I don't
25 been marked Exhibits 458 and 459. 25 recall having seen them.
Page 243 Page 245
1 MR. FAIRLESS: And, John, I don't know. 1 Q. What's Exhibit 453?
2 These may have been marked before. These are the 2 MS. FRIEDMAN: This is a set for you.
3 reinspection procedures. 3 MR. FAIRLESS: Huh?
4 MR. OWENS: That's fine. You've double 4 MS. FRIEDMAN: This is a set for you.
5 marked stuff before. 5 A. It says it's talking points.
6 MR. FAIRLESS: Right. 6 MR. LANGLEY: Thank you.
7 MS. FRIEDMAN: Those are copies of the 7 MR. OWENS: Has this been marked?
8 first one. 8 MS. FRIEDMAN: Huh?
9 MR. FAIRLESS: Heres copies of... 9 MR. OWENS: Has this been mark?
10 MR. LANGLEY: Thank you. 10 MR. FAIRLESS: Yeah, they're right here.
11 MR. FAIRLESS: What about the other one? 11 That first one is 453.
12 MS. FRIEDMAN: For some bizarre reason, 12 MR. OWENS: The entirety?
13 the first page got missed; so I'm missing the first 13 MR. FAIRLESS: No.
14 page. But those are copies of the second one. 14 MR. LANGLEY: No, just the first page.
15 MR. FAIRLESS: Okay. Well, here's all 15 MR. FAIRLESS: Just the first page.
16 but the first page of the second one. 16 MS. FRIEDMAN: I gave you all of the ones
17 MR. OWENS: Are you saying you only have 17 that we've marked. The first page is 453.
18 one copy of these? 18 MR. FAIRLESS: T1 and --
19 MR. FAIRLESS: One -- no. There's a 19 MR. LANGLEY: So you've marked all of
20 complete copy of the first one. 20 these, but you've just handed the witness this first
21 MS. FRIEDMAN: The second exhibit, I'm 21 one?
22 missing the first page of your copy. The witness has 22 MR. FAIRLESS: Right.
23 the first page. 23 MR. LANGLEY: Okay.
24 MR. FAIRLESS: And then on the next 24 MR. OWENS: Which is?
25 exhibit, we don't have a copy of the first page; but 25 MR. FAIRLESS: T1.

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1 MR. LANGLEY: This one, T1. 1 performed after Operation Spotlight, which was nearly,
2 MS. FRIEDMAN: On top. 2 what, two years ago?
3 MR. OWENS: I know. I just want to know 3 A. I don't -- not that I'm aware of.
4 the number. 4 Q. Yes, it was nearly two years ago, not that
5 MR. FAIRLESS: 453. 5 you're aware of. No, there haven't been any risk-based
6 MR. OWENS: Okay. Sorry. 6 inspections done. Fair?
7 Q. (BY MR. FAIRLESS) So what did you say? You saw 7 A. Yes, sir.
8 it, or you didn't? 8 Q. Okay. So this light that you're going to shine
9 A. You asked me what it was. I said it was 9 on all violators, just doesn't have the batteries in it
10 talking points. 10 yet?
11 Q. Okay. So now my next question: Have you seen 11 MR. OWENS: Objection, form.
12 it? 12 MR. LANGLEY: Form.
13 A. Yes, sir. 13 A. I'm not sure what you mean.
14 Q. Did you draft it? 14 Q. (BY MR. FAIRLESS) Well, you know what I'm mean.
15 A. I was involved in drafting it. Yes, sir. 15 Just commonsensical wise, is that what you're -- I mean,
16 Q. What does that mean you were involved in 16 is that fair to look at it this way? I know it's your
17 drafting? Did y'all have some sort of round table where 17 talking point, but you say you're going to shine a light
18 you brainstormed about talking points? 18 on all violators; but you haven't done anything in the
19 A. I was involved with other staff in developing 19 way of a risk-based inspection to accomplish that, have
20 the talking points. 20 you?
21 Q. I assure you we were going to shine a light on 21 MR. OWENS: Form.
22 all violators who are looking to shortchange Texans. 22 A. We have not come across any trends as --
23 What light have you shined on all violators? 23 Q. (BY MR. FAIRLESS) You haven't looked for any?
24 A. I guess that's referring to the light of our 24 MR. OWENS: Let him finish his answer.
25 regulatory programs. 25 Q. (BY MR. FAIRLESS) Go ahead. I thought you
Page 247 Page 249
1 Q. So what specifically have you done to shine 1 were.
2 light on all violators? 2 A. We've not come across any trends that would
3 A. We've made multiple improvements to our 3 suggest someone is looking to shortchange Texans. What
4 regulatory programs since I came into my job in January 4 led to Operation Spotlight, as a reminder, was a trend
5 of 2007, including increase -- increasing the penalty 5 of more than 30 percent noncompliance compared to the
6 matrix significantly, we've worked with the legislature 6 statewide average of 5 percent.
7 to increase the statutory authority for penalties, 7 MR. FAIRLESS: I'll object as
8 we've -- 8 nonresponsive.
9 Q. That's not the context I'm asking for. 9 Q. (BY MR. FAIRLESS) What trends have you looked
10 MR. OWENS: Let him finish his answer. 10 for specifically with regard to retail motor fuel device
11 Q. (BY MR. FAIRLESS) Go ahead. 11 and regulatory enactment of your programs?
12 A. We've obtained increased authority on the 12 A. We're developing a risk-based inspection
13 ability to conduct risk-based inspections. We've 13 criteria that will include trend analysis and we have a
14 enacted a number of changes that will help identify 14 directive to all staff involved with these programs to
15 anyone shortchanging Texans. 15 continuously look for anything that suggests there might
16 Q. What risk-based inspections have you conducted 16 be a trend that needs to be researched.
17 of a single entity, other than PWI? 17 Q. I'm talking specifically. What have you
18 A. We're in the process of developing our 18 specifically done to look for trends to shine the light
19 risk-based criteria at the legislature's direction. 19 on violators?
20 Q. So is the answer none today? 20 A. We've directed all staff who interact with
21 A. We conduct risk-based inspections in other 21 these programs to monitor the programs from their
22 programs. 22 perspective and identify anything that they feel needs
23 Q. I'm not talking about other programs. I'm 23 to be researched as a possible trend and we're in the
24 talking about this program pertaining to retail motor 24 process of developing a risk-based inspection criteria.
25 fuel devices. Have any risk-based inspections been 25 Q. Wait a second. Having everybody and their

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1 brother look for a trend that could be developing, 1 here's a company that we need to look into?
2 that's -- that was going on long before Operation 2 MR. OWENS: Form.
3 Spotlight, wasn't it? 3 Q. (BY MR. FAIRLESS) Did they?
4 A. We had directed it long before then. Yes, sir. 4 MR. OWENS: Form.
5 Q. So it's not like that instruction changed at 5 MR. LANGLEY: Form.
6 all after Operation Spotlight, right? 6 A. I identified what I believed could be a trend
7 A. Correct. 7 based upon the enforcement orders that crossed my desk
8 Q. And nobody brought it to your attention, hey, 8 and --
9 here's a trend we all need to be mindful of, that later 9 Q. (BY MR. FAIRLESS) That's not my question.
10 gave birth to Operation Spotlight, fair? 10 MR. LANGLEY: He's already answered your
11 A. Say it one more time please, sir. 11 question.
12 Q. Nobody came to you and said here's a trend that 12 MR. FAIRLESS: No, he hasn't.
13 I have been seeing that we need to be mindful of and it 13 MR. LANGLEY: Yes he has. He answered
14 subsequently gave birth to Operation Spotlight. That's 14 that very question.
15 not the way it came about, is it? 15 Q. (BY MR. FAIRLESS) Nobody brought a PWI trend to
16 A. That's correct. 16 your attention in your entire period of time as Deputy
17 Q. The way it came about is you yourself looking 17 Commissioner of Agriculture, correct?
18 at NOVs that evidently came across your desk, noticing 18 A. That's not correct at all.
19 enforcement orders and attached checks and then noticing 19 MR. OWENS: Form.
20 that some of them had the name of the same company, that 20 Q. (BY MR. FAIRLESS) Okay. Who brought a PWI
21 being PWI and/or Sunmart, that is what triggered an 21 trend to your attention?
22 analysis, correct? 22 A. After I asked for the data to be analyzed, the
23 A. That is what caused me to ask for an analysis 23 trends that were brought to my attention were alarming,
24 of the data. 24 34 percent I believe noncompliant compared to a
25 Q. So when you say that we're relying upon, you 25 statewide average of 5 percent noncompliant. Then after
Page 251 Page 253
1 know, people to constantly analyze data to shine a light 1 we conducted the inspections, the data that people
2 on possible violators, that's what you had been doing 2 brought to my attention, which I believe is what you're
3 for years before and that's not how PWI came to the 3 asking --
4 forefront, is it? 4 Q. It's not.
5 A. PWI and Operation Spotlight came about due to 5 A. -- showed that 58 percent of the fuel pumps
6 an increased awareness of potential trends, some 6 inspected in Texas by -- that this company operates,
7 enforcement orders that crossed my desk that showed what 7 were tilted in favor of the company.
8 appeared could be a trend to me, which resulted in me 8 Q. We should keep talking about that it though.
9 requesting that data be analyzed. That resulted in data 9 It's gone down from 60 percent to 58 percent the more we
10 yielding -- data showing that this company has a 10 talk about it.
11 noncompliance rate of more than 30 percent compared to 11 MR. OWENS: Objection, form.
12 the statewide average of 5 percent, comparing this 12 Q. (BY MR. FAIRLESS) The -- I'm talking about
13 company to all other companies in the state and we 13 before you sent everybody out or sent Stephen Pahl out
14 identified that this company had a history of violating 14 to have trend analysis done. Nobody before that moment
15 the predominance threshold. 15 in time brought to you any sort of trend analysis that
16 MR. FAIRLESS: I'll object as 16 questioned PWI or its business ethics, correct?
17 nonresponsive. 17 MR. OWENS: Form.
18 Q. (BY MR. FAIRLESS) Nobody brought to you a PWI 18 MR. LANGLEY: Form.
19 trend. That was something you decided to look into 19 MR. FAIRLESS: He'll be at trial, boys.
20 yourself. 20 MR. LANGLEY: We know.
21 MR. OWENS: Form. 21 A. Nobody brought to my attention anything prior
22 MR. LANGLEY: Asked and answered. 22 to the trend that I suspected could exist. I asked for
23 Q. (BY MR. FAIRLESS) Correct? 23 data to be analyzed and the trend that came back to me,
24 A. What's -- forgive me. What's the question? 24 that staff brought to me, showed a 34 percent
25 Q. Nobody brought to you a PWI trend, and said 25 noncompliance rate compared to a statewide average of 5

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1 percent noncompliance. 1 press conference.
2 Q. (BY MR. FAIRLESS) You should get paid by how 2 Q. (BY MR. FAIRLESS) I didn't ask you was he
3 many times you've mentioned that 34 percent today. You 3 involved before the press conference. I said did y'all
4 would be a wealthy man. 4 come up with these talking points, Exhibits 453 and 454,
5 MR. LANGLEY: It won't be as much as how 5 without the involvement of Todd Staples?
6 many times you've looked at his business card today. 6 A. We drafted them without Commissioner Staples'
7 MR. FAIRLESS: Exhibit -- it won't be 7 involvement.
8 because I can't ever remember what the hell his position 8 Q. Okay, thank you. Exhibit 455, did you
9 is. If I got paid a nickel for every time I looked at 9 participate in the drafting of that?
10 this, I would have a pocket full nickels. 10 A. I think all of these documents, these three are
11 MR. LANGLEY: I tell you what, you've got 11 different versions of the same one. They all say
12 it at the ready. 12 talking points.
13 MR. FAIRLESS: I know I do, don't I? I 13 Q. Right. But I didn't generate them, see. All
14 need one of my very own to frame. 14 I'm doing is looking at them. So are you saying that
15 Q. (BY MR. FAIRLESS) What's Exhibit 454? 15 this is yet another document that was part of the
16 A. Talking points. 16 initial talking points that were being drafted for later
17 Q. And what -- who came up with these? 17 submission to Todd Staples?
18 MR. OWENS: Just for the record -- 18 MR. LANGLEY: Page 2.
19 MR. LANGLEY: Which one? 19 A. This is a version of those talking points.
20 THE WITNESS: I think this one. 20 Q. (BY MR. FAIRLESS) These are three different
21 MR. OWENS: He's looking at talking 21 versions of what was going to be the talking points that
22 points with T1 on them and you -- 22 would be shared with the media?
23 MR. LANGLEY: I think they're both -- are 23 A. This was one of the versions.
24 they different? 24 Q. You're saying this --
25 MR. FAIRLESS: They both have T1 on them. 25 A. One of the drafts.
Page 255 Page 257
1 MR. OWENS: So there's two different -- 1 Q. -- but you're pointing to Exhibits 453, 454,
2 THE WITNESS: Looks like they're 2 and 455. You're saying that they all culminated in a
3 formatted differently. 3 set of talking points that Todd Staples used with the
4 MR. OWENS: So there's two different T1s? 4 media? Yes?
5 MS. FRIEDMAN: Yeah. 5 A. Yes, sir.
6 MR. OWENS: Okay, sorry. I didn't know. 6 Q. Okay. And which is the final version? 453,
7 MR. LANGLEY: They are different. 7 454 or 455?
8 Q. (BY MR. FAIRLESS) So did you play a role in 8 A. I can't say.
9 this, too? 9 MR. LANGLEY: Objection, form.
10 A. I played a role in the development of the 10 A. I can't say without seeing the transcript of
11 talking points Commissioner Staples used on that day. 11 the press conference.
12 Q. Is that how y'all work in politics is that 12 Q. (BY MR. FAIRLESS) Would he read it word for
13 y'all come up with things for the politician to say? 13 word? Is that the way those -- I've always wondered
14 Y'all come up with the points and then y'all just tell 14 about that. When there's that press conference going
15 him what the points are and he takes them to the media 15 on, is he reading these word for word?
16 and announces them as his points? 16 A. Sometimes he'll read. Sometimes he will not
17 MR. OWENS: Form. 17 read.
18 MR. LANGLEY: Objection, form. 18 Q. Well, you said I wouldn't know without a
19 A. No, sir. 19 transcript of the media conference. So if you had the
20 Q. (BY MR. FAIRLESS) Well, I mean, y'all came up 20 transcript, then you would know whether or not he used
21 with these things without Todd Staples around, didn't 21 453, 454, or 455 because you would know which one he
22 you? These are points y'all came up with independent of 22 read?
23 Todd Staples, yes? 23 MR. OWENS: Form.
24 MR. OWENS: Form. 24 MR. LANGLEY: Objection, form.
25 A. Commissioner Staples was involved before the 25 Q. (BY MR. FAIRLESS) Right?

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1 A. I probably couldn't say with complete 1 camera.
2 certainty, but I would be able to get closer than I can 2 Q. (BY MR. FAIRLESS) Do you see -- I want you
3 without it. 3 to -- I'm going to underline it here.
4 Q. Who told him look at the camera and wink when 4 MR. FAIRLESS: Can I mark on this,
5 he said that one part during the conference? 5 Kelley?
6 MR. LANGLEY: Objection, form. 6 MS. FRIEDMAN: Have at it.
7 MR. OWENS: Form. 7 MR. OWENS: You've marked on everything
8 A. I don't recall the -- 8 else.
9 MR. FAIRLESS: What's wrong -- what could 9 Q. (BY MR. FAIRLESS) Do you see the part I've
10 possibly be wrong with that? 10 underlined? Can you read that?
11 MR. LANGLEY: Who told him to look at the 11 MR. OWENS: Let the record reflect that
12 camera and wink? That assumes someone told him to do 12 you've underlined something in red.
13 it. 13 MR. FAIRLESS: Right, yeah.
14 MR. OWENS: I think y'all Photoshopped 14 MR. OWENS: On --
15 that. 15 MR. FAIRLESS: It's not an exhibit.
16 Q. (BY MR. FAIRLESS) Who did that? That was your 16 MR. LANGLEY: It's not marked yet?
17 idea, wasn't it? 17 MR. FAIRLESS: No.
18 A. I didn't even recall that the Commissioner 18 Q. (BY MR. FAIRLESS) Here, let me tear that page
19 winked. 19 off and mark it once you're done reading it. Are you
20 Q. You're the brains behind this. 20 done?
21 MR. OWENS: Y'all Photoshopped that. 21 MR. LANGLEY: Make him wait. It drives
22 Q. (BY MR. FAIRLESS) Tell me you did that, right? 22 him crazy.
23 You told him to do that? 23 MR. FAIRLESS: Should we mark the whole
24 MR. LANGLEY: Objection, form. Don't 24 thing, Kelley?
25 answer that. 25 MS. FRIEDMAN: No, because there's
Page 259 Page 261
1 Q. (BY MR. FAIRLESS) How about this e-mail that 1 unrelated stuff in there.
2 you sent. It's from you and it's to the Commissioner. 2 MR. FAIRLESS: Okay.
3 The Commissioner, is that Todd Staples? 3 (Exhibit No. 460 was marked and is
4 A. It is. 4 attached hereto)
5 Q. Okay. So this is to Todd Staples and you 5 Q. (BY MR. FAIRLESS) I've marked this document as
6 specifically tell him... 6 Exhibit No. 460. And at the bottom where I've
7 MR. LANGLEY: I don't have that. 7 underlined in red, that's an e-mail from you to Todd
8 MR. OWENS: Randy is going off the 8 Staples?
9 reservation. 9 A. Yes, sir.
10 MR. FAIRLESS: Yeah. 10 Q. And you're telling him at one point what Bryan
11 MR. OWENS: Earth to Randy. 11 wants him to do and I see that carbon copied on that
12 MR. LANGLEY: Where is it again, Kelley? 12 e-mail is Bryan Black, with that same unique spelling,
13 I'm so far off the reservation, I can't find it. Oh, 13 B-r-y-a-n. So I assume when you say Bryan wants him to
14 Bryan. 14 do something, you're talking about Bryan Black?
15 Q. (BY MR. FAIRLESS) Who's Bryan, Bryan Black? 15 A. Yes, sir.
16 A. Bryan Black is our Director of Communications. 16 Q. And Bryan Black is the communications guru?
17 Q. Okay. So you told Todd Staples that Bryan 17 MR. OWENS: Form.
18 Black intends, quote, that at -- you said as the time. 18 A. Bryan Black is the director of communications
19 I'm assuming you mean at the time -- intends that at the 19 at the Department of Agriculture.
20 time, you would drive the message to the camera, end 20 Q. (BY MR. FAIRLESS) So Bryan Black -- it's not
21 quote. That's when Todd Staples winked at the camera, 21 unusual for Todd Staples to take some direction from
22 isn't it? 22 Bryan Black when it comes to communications with the
23 MR. LANGLEY: Objection, form. 23 media?
24 MR. OWENS: Form. 24 MR. LANGLEY: Object to form.
25 A. I don't even recall that he winked at the 25 Q. (BY MR. FAIRLESS) Fair?

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1 A. It's not unusual. 1 than Bryan intends, as that sentence says there.
2 Q. Okay. And read what I highlighted. You can 2 Q. (BY MR. FAIRLESS) Right. But did Bryan tell
3 read it. Go ahead. No. I mean, read it out loud just 3 you what he wanted Todd Staples to do to drive home the
4 like school. 4 message?
5 A. Yes, sir. Bryan intends that as you -- Bryan 5 A. I assume the rest of that sentence.
6 intends that at the time you would drive the message to 6 MR. LANGLEY: Did he tell you is what
7 the camera. 7 he's asking?
8 Q. And what message are you wanting Todd Staples 8 A. I don't recall.
9 to drive to the camera? 9 Q. (BY MR. FAIRLESS) Would the wink accomplish
10 MR. LANGLEY: Objection, form. 10 that?
11 Q. (BY MR. FAIRLESS) I mean, what were you talking 11 MR. OWENS: Form.
12 about when you said at the time you would drive the 12 MR. LANGLEY: Objection, form.
13 message to the camera? What message? 13 Q. (BY MR. FAIRLESS) No. I just want to know.
14 A. There were evidently previous sentences. There 14 Does the wink accomplish that driving home the message
15 are some bolding in the talking points. 15 to the camera?
16 Q. Okay. And the bold that I see on Exhibits 453, 16 MR. LANGLEY: Objection, form.
17 454, and 455, are those the points that Todd Staples is 17 A. I don't recall that he winked at the camera.
18 to drive to the camera? 18 Q. (BY MR. FAIRLESS) Okay. Never mind. Okay,
19 MR. OWENS: Form. 19 Exhibit 457 and Exhibit 456. They've got a copy.
20 MR. LANGLEY: Form. 20 MR. OWENS: Let me just see which ones
21 A. I don't know which of these was attached to 21 they are.
22 this e-mail. Do you? 22 MR. FAIRLESS: They were all in order
23 Q. (BY MR. FAIRLESS) I don't. Well, do you 23 when I gave them to y'all.
24 know -- but you're the one who wrote this. Do you know 24 MR. OWENS: Yeah. Then you went out of
25 what you were talking about at the time? 25 order, Randy.
Page 263 Page 265
1 MR. OWENS: Form. 1 MR. FAIRLESS: One page.
2 A. I was talking about some bolding in some 2 MR. LANGLEY: This one.
3 talking points that were attached to this e-mail. 3 MR. OWENS: This one.
4 Q. (BY MR. FAIRLESS) Right. But do you know if 4 MR. LANGLEY: And this one right here,
5 that has to do with Exhibit 453, 454, or 455; or were 5 yep.
6 there other talking points? 6 MR. OWENS: Okay. Exhibit 457. What's
7 A. I don't -- I don't know which of these. 7 the other one?
8 Q. Well, we see bolded in 453, 454, and 455 is the 8 MR. LANGLEY: I didn't see it yet.
9 sentence: And one Texan cheated is one Texan too many. 9 MR. OWENS: 456, got it.
10 That's bolded in all three of these -- 10 Q. (BY MR. FAIRLESS) Are these more talking
11 A. Which number? 11 points?
12 Q. 453, 454, and 455. 12 MR. LANGLEY: Again 457, 456, is that
13 A. Oh, okay. 13 what you're talking about?
14 Q. The three that you said were just different 14 MR. FAIRLESS: Right.
15 versions of the same, they all -- each one of those have 15 A. Yes, sir.
16 it bolded that one Texan cheated is one Texan too many, 16 Q. (BY MR. FAIRLESS) Does Todd Staples get talking
17 correct? 17 points for everything, or just when he's addressing the
18 A. Yes, sir. 18 media?
19 Q. And how did you want Todd to drive home the 19 A. It depends on the situation.
20 message to the camera? 20 Q. If he's giving a speech or talking to a group,
21 MR. LANGLEY: Objection, form. 21 is he being given talking points?
22 Q. (BY MR. FAIRLESS) I mean, what did you have in 22 A. He'll be given briefing material, including
23 mind when you said drive home the message to the camera? 23 talking points.
24 MR. LANGLEY: Objection, form. 24 Q. And so did you help draft these?
25 A. Well, I don't know what I had in mind other 25 A. I helped draft the talking points that were

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1 given to the Commissioner. There's a few versions here. 1 MR. OWENS: Form.
2 Q. Right. There's a lot of versions there. But 2 Q. (BY MR. FAIRLESS) And I'm not asking you did
3 I'm talking now specifically about 456 and 457. Did you 3 you take the information that you got back and interpret
4 help draft those? 4 it a certain way or assume that it means a certain
5 MR. OWENS: Form. 5 thing.
6 A. I -- yes, sir. I helped draft the talking 6 I'm asking you what direct evidence do
7 points that were given to the Commissioner. 7 you have that PWI was intentionally shortchanging Texas
8 Q. (BY MR. FAIRLESS) And the document that you 8 consumers?
9 sent to the other states, this form document we talked 9 MR. OWENS: Form.
10 about, was that a regulatory alert? 10 MR. LANGLEY: Objection, form.
11 A. I believe that's what it was called. 11 A. The evidence of the inspections would indicate
12 THE WITNESS: I don't know how much time 12 that there's a significant issue there. 58 percent
13 we've got left, but I'm going to need a break before too 13 noncompliance when everyone else in the state operates
14 long. 14 at a 5 percent noncompliance rate.
15 THE REPORTER: Eight minutes. 15 MR. FAIRLESS: I'll object as
16 THE WITNESS: I can wait. 16 nonresponsive.
17 MR. LANGLEY: You can have a break 17 Q. (BY MR. FAIRLESS) That -- assuming you were
18 whenever you want a -- Randy, how much longer do you 18 right, that could lead to some assumptions.
19 think you have? 19 A. Okay.
20 MR. FAIRLESS: Not much more. I couldn't 20 Q. But that is not direct evidence that pumps were
21 have much more time. How much time do I got? 21 set to intentionally shortchange consumers. That just
22 THE REPORTER: Eight -- eight minutes. 22 shows that at the time the testing was done, assuming
23 MR. OWENS: I mean, you can wrap up. Do 23 the testing was valid, correct, and accurate and was
24 you need a restroom break or something before that, or 24 done by competent officials, that the pumps were found
25 do you want to go ahead get her done? 25 to be in the negative; thereby, shortchanging consumers
Page 267 Page 269
1 THE WITNESS: No. I'm fine. 1 depending on how you interpret tolerances. Okay?
2 Q. (BY MR. FAIRLESS) All these talking points that 2 So I'm taking all of that out of the mix
3 have the word "intentional" in them, what evidence, 3 and saying -- asking you what direct evidence do you
4 direct evidence, did you have that any of the conduct of 4 have -- not what conclusions can you make from the
5 PWI was intentional? 5 information you looked at. But what direct evidence do
6 A. Where are you -- where are you talking about? 6 you have of intentional shortchanging Texas consumers?
7 Q. All over these documents. 7 MR. OWENS: Form.
8 A. Okay. 8 A. There are a number of factors that -- a number
9 Q. I'm looking at Exhibit 457. Let's see, it's in 9 of findings that came out of these inspections. The
10 the first paragraph twice. It's in the last paragraph. 10 noncompliance at the pump being a portion of them. The
11 And those are just the first two I've looked at, so... 11 observations our inspectors made about the timing of
12 MR. LANGLEY: Your question is what? 12 some of the calibrations being others.
13 Q. (BY MR. FAIRLESS) Is what direct evidence do 13 Q. (BY MR. FAIRLESS) I don't even understand that.
14 you have that PWI intentionally did anything to 14 How is that direct evidence?
15 shortchange consumers, much less intentionally cheated 15 MR. LANGLEY: Objection, form.
16 consumers? 16 MR. OWENS: Form.
17 A. The results of the inspection were so 17 Q. How are the findings --
18 significantly higher than the standards that are met by 18 MR. OWENS: Let him answer the question.
19 every other retail fuel operator in Texas. 19 Go ahead.
20 MR. FAIRLESS: I'll object as 20 MR. FAIRLESS: He wasn't even saying
21 nonresponsive. 21 anything.
22 Q. (BY MR. FAIRLESS) Y'all didn't -- we've already 22 MR. OWENS: He was about to talk about
23 covered that, remember? Y'all didn't do any blitz of 23 what the inspectors saw.
24 any other retail motor fuel device owner in the state of 24 A. As our inspectors reported back to us, they saw
25 Texas. And that's not direct evidence anyway. 25 calibration employees operating immediately ahead of our

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1 employees. Our inspectors would identify pumps that had 1 Texas consumers?
2 just been calibrated that were still out of calibration. 2 MR. LANGLEY: Objection, form.
3 There were a number of things that observations combined 3 MR. OWENS: Objection, form.
4 with the inspection results. 4 A. There was an enormous amount of evidence that
5 Q. (BY MR. FAIRLESS) Does that tell you a little 5 came out of these inspections that it -- that revealed
6 bit about the competency of your testing when the 6 that this company was shortchanging Texas customers at a
7 testing is being done on the heels of somebody, an 7 much higher rate than anyone else in this state. And
8 independent third party, calibrating pumps and yet your 8 that's reason for us to be concerned as to why that
9 testers still find the pumps out of calibration? 9 would be happening.
10 A. I have complete confidence in the inspectors of 10 MR. FAIRLESS: I'll object as
11 the Texas Department of Agriculture. 11 nonresponsive.
12 Q. So the only thing evidently that tells you is 12 Q. (BY MR. FAIRLESS) And I would disagree with you
13 the people who are calibrating in front -- immediately 13 wholeheartedly. But even if I did agree with you, how
14 in front of the inspectors are either complete idiots or 14 do those results show anything other than what the pumps
15 they still are setting pumps to the negative, even 15 were found at, as opposed to what the mind set and the
16 though they know the TDA has an inspection soon to 16 intent was for the company who hired the individuals
17 follow? 17 that did the calibrations?
18 MR. OWENS: Objection, form. 18 MR. OWENS: Form.
19 MR. LANGLEY: Objection, form. 19 A. The significance of the data that came out of
20 Q. (BY MR. FAIRLESS) Which would, oh, by the way, 20 the inspections.
21 they are indeed idiots? 21 Q. (BY MR. FAIRLESS) Say that one more time.
22 MR. OWENS: Objection, form. 22 A. The significance -- I was waiting on you.
23 MR. LANGLEY: Objection, form. 23 Q. Okay, thanks.
24 Q. (BY MR. FAIRLESS) Do you not see the rub there? 24 A. The significance of the data that came out of
25 MR. OWENS: Form. 25 the inspections. We've -- in my time at the Department
Page 271 Page 273
1 A. I don't recall the question. 1 of Agriculture, I have never seen a company in this
2 Q. (BY MR. FAIRLESS) What would be the possible -- 2 state shortchanging Texas consumers that significantly.
3 no. What would be any rational explanation why somebody 3 I find it unacceptable. I find it unacceptable for
4 would send calibrators out ahead of the TDA and then 4 pumps in this state to be shortchanging customers at a
5 have those calibrators calibrate to the negative, 5 rate of 58 percent.
6 knowing the TDA is soon to follow? 6 MR. FAIRLESS: I'll object as
7 MR. LANGLEY: Objection, form. 7 nonresponsive.
8 MR. OWENS: Form. 8 Q. (BY MR. FAIRLESS) Now it sounds like you're
9 Q. (BY MR. FAIRLESS) Give me a single rational 9 running for office. What is this document right here?
10 explanation. 10 MR. LANGLEY: Objection, form.
11 MR. LANGLEY: Objection, form. 11 MR. OWENS: Objection, form.
12 A. I can't speculate as to why someone would do 12 Q. (BY MR. FAIRLESS) Just the top part when you
13 that. 13 say you want SWR -- is it him that wrote that? You want
14 Q. (BY MR. FAIRLESS) I don't want you to 14 SWR -- I'm not copying SWR since she is insulated on
15 speculate. I want you to give me a single rational 15 this one. What does that mean?
16 explanation. 16 A. SWR is our chief of staff.
17 MR. LANGLEY: Objection, form. 17 Q. What's SWR stand for?
18 A. Mr. Fairless, I can't speculate on why someone 18 A. It's her initials.
19 would do something like that. 19 Q. Right. What -- say her name.
20 Q. (BY MR. FAIRLESS) Okay. So is that the only 20 A. Shannon Wickliffe Rusing.
21 direct evidence that you have? That there were 21 Q. Okay. So you want her insulated on this one.
22 calibrators out there ahead of the TDA and the TDA came 22 What is it you want her insulated on? Because the
23 along after that and still found the pumps to be in the 23 subject is confidential, Operation Spotlight.
24 negative, so is that the direct evidence you have with 24 A. Out of respect for those we regulate, we have
25 regard to pumps being intentionally set to shortchange 25 protocols at the Department of Agriculture to insulate

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1 the person who executes an enforcement order from those 1 understood that when I said PWI, I've meant Sunmart?
2 staff who have access to details of any particular case. 2 A. Yes, sir.
3 Again, out of respect for the regulated entity. 3 Q. Okay. Did you have any involvement with postal
4 MR. FAIRLESS: Did you understand that? 4 inspectors? Have you met with any postal inspectors
5 MS. FRIEDMAN: No. 5 about PWI?
6 MR. OWENS: How -- I know we're... 6 A. No, sir. Postal inspectors?
7 MR. FAIRLESS: Yeah. You're going to let 7 Q. Postal inspectors? Federal investigators?
8 me wrap up though, right? 8 A. Okay. No, sir.
9 MR. OWENS: I'm going to let you wrap up. 9 Q. Have you met with any of them?
10 MR. FAIRLESS: It's not going to be long. 10 A. No, sir.
11 MR. OWENS: I'm going to let you wrap up. 11 Q. Have any discussions been brought to you that
12 Q. (BY MR. FAIRLESS) Can you say that again? I 12 any of your people at the TDA have had with postal
13 didn't understand that. 13 inspectors, US postal inspectors?
14 A. Sure. We have a protocol at the Department of 14 A. No, sir.
15 Agriculture. 15 Q. Okay. Let me show you what's been marked as
16 Q. Right. 16 Exhibit 462.
17 A. To protect the person who enforces -- who 17 MR. FAIRLESS: Kelley, do you have one
18 executes enforcement orders from details of a particular 18 for them?
19 case. 19 MS. FRIEDMAN: Yes.
20 Q. What does that mean executes enforcements 20 Q. (BY MR. FAIRLESS) And if you start reading
21 orders? The person who signs off on them? 21 these e-mails from the bottom up, that's how I'm told
22 A. Who executes it. That's the signature is what 22 that these things are read. Do you see the -- yeah. I
23 executes it. 23 wasn't even going to the previous page. I'm just
24 Q. Right. That's what I want to know. What 24 looking at that first page. It says we've shut down
25 you're talking about when you say execute just means 25 about 36 stations so far yesterday and today. And --
Page 275 Page 277
1 signed it, who signed it. No. I'm saying that's what 1 MR. OWENS: Bottom of Page 1.
2 you mean? 2 A. Oh, yeah.
3 A. Oh. Yes, sir. 3 Q. (BY MR. FAIRLESS) Do you see it?
4 Q. Execute just means signed? 4 A. I'm with you now. Yes, sir.
5 A. Yes, sir. 5 Q. Then Todd Staples is saying, great, we should
6 Q. All right. Okay. Can I see that for one 6 treat the team to some Nilgai sausage wraps sometime for
7 second? 7 all their efforts. Did y'all do that?
8 MR. FAIRLESS: Ms. Court Reporter, can we 8 A. No, sir.
9 put a sticker on this? 9 MR. LANGLEY: What kind of sausage wraps?
10 (Exhibit No. 461 was marked and is 10 MR. FAIRLESS: Nilgai, that's deer.
11 attached hereto) 11 MR. LANGLEY: Nilgai, Nilgai.
12 MR. FAIRLESS: Kelley, do you have 12 MR. FAIRLESS: Nilgai? I've never heard
13 another copy? It's Exhibit 461. So since I'm on a 13 it called Nilgai.
14 limited amount of time just to wrap up, can we take a 14 MR. LANGLEY: You haven't?
15 break for just a minute and then I'll just see what else 15 MR. FAIRLESS: Uh-uh.
16 there is? 16 MR. LANGLEY: You're not from south
17 MR. OWENS: Sure. 17 Texas, are you?
18 THE VIDEOGRAPHER: Off the record, 4:57. 18 MR. FAIRLESS: No. I'm from east Texas,
19 (Recess taken) 19 and we call them Nilgai guy.
20 (Exhibit No. 462 was marked and is 20 Q. (BY MR. FAIRLESS) But you see on the middle of
21 attached hereto) 21 the page when they were talking about 36, they qualify
22 THE VIDEOGRAPHER: We're back on the 22 that it's not 36 stations that have been shut down.
23 record at 5:06. 23 That it's 36 places where presumably test results
24 Q. (BY MR. FAIRLESS) Today, there have been times 24 demonstrate that 60 percent or more of the pumps were in
25 when I've asked you questions about PWI. Have you 25 favor of the station. Do you see that?

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1 A. Yes, sir. 1 shutting down the whole stations. We're only shutting
2 Q. What's the -- 2 down pumps that were in the negative that we believe
3 A. You're -- 3 fell within the 60 percent predominance findings?
4 Q. What's the difference? You're the one writing 4 MR. OWENS: Form.
5 these. What qualification are you making there? 5 A. The way the predominance rule is working in
6 A. We... 6 this situation, is the -- if you -- if there was a pump
7 MR. LANGLEY: Are we talking about the 7 tilted in favor of the company --
8 same statement? I mean, which one are you asking about? 8 Q. (BY MR. FAIRLESS) Found in favor, right. Go
9 MR. FAIRLESS: Thirty-six. 9 ahead.
10 MR. LANGLEY: Okay. So in the middle of 10 A. -- that pump would be counted in the
11 the page? 11 calculation to determine what percentage of the pumps
12 MR. FAIRLESS: Well, it starts at the 12 were tilted in favor of the company.
13 bottom. 13 Q. Got it. And then if you come up with
14 Q. (BY MR. FAIRLESS) See, at the bottom you're 14 60 percent, are you going to shut down the whole station
15 saying they shut down 36 stations and all I'm getting at 15 or just the 60 percent or whatever percentage were in
16 is -- 16 favor of the station?
17 MR. OWENS: So far yesterday and today. 17 A. We'll tag the pumps. We're tagging the pumps
18 MR. FAIRLESS: Right. We just covered 18 out of order that were tilted in favor of the company in
19 that. 19 that situation.
20 Q. (BY MR. FAIRLESS) The 36 stations -- 20 Q. Why do you keep saying predominance threshold
21 MR. LANGLEY: But your specific question 21 when everybody else in this case has made it a special
22 is about this right here? Is that what you're talking 22 point to say predominance rule? All the other TDA
23 about? 23 people are singing the predominance rule song. Why are
24 MR. FAIRLESS: No. I'm talk about both 24 you saying predominance threshold?
25 of them. 25 MR. OWENS: Objection, form.
Page 279 Page 281
1 MR. LANGLEY: Okay. All right. Do you 1 A. I won't speak to why someone says a different
2 understand? 2 word than I say.
3 Q. (BY MR. FAIRLESS) Are you distinguishing when 3 Q. (BY MR. FAIRLESS) Well, they're all your staff.
4 you say actually no, we just realized that what was 4 They work for you. I'm just wondering why you have a
5 being said was wrong. What are you talking about? What 5 different word than the rest of them. It's kind of
6 was wrong? 6 unique.
7 A. Hang on. Okay. The distinction is these 7 A. There's a threshold that's established by
8 stations we're talking about violated the predominance 8 national standards that is based upon a predominant
9 threshold, which I corrected to clarify that results in 9 number of the pumps being tilted in favor of the
10 tagging the pumps that were tilted in favor of the 10 company. When that threshold is met, higher penalties
11 company out of order. 11 can be assessed.
12 Q. As opposed to shutting down the whole station, 12 MR. FAIRLESS: I'll object as
13 which is what was being broadcast to the media? 13 nonresponsive.
14 A. I don't know that that's what was being 14 Q. (BY MR. FAIRLESS) I just want to know why you
15 broadcast to the media. There were some stations that 15 use that word and everybody else has been using the word
16 were shut down in their entirety because 100 percent of 16 rule instead of threshold.
17 the pumps were cheating the customer. 17 A. I can't speak to why anyone else used a
18 MR. FAIRLESS: I'll object as 18 different term.
19 nonresponsive. 19 Q. And has Texas adopted Handbook 44.
20 Q. (BY MR. FAIRLESS) Do you see the part we just 20 MR. OWENS: Objection, form.
21 realized that was being said wrong. Being said to who? 21 MR. LANGLEY: Objection, form.
22 A. I guess in -- 22 Q. (BY MR. FAIRLESS) Wait a second.
23 Q. Being said to the media? 23 A. Has Texas --
24 A. -- the e-mail previously. 24 Q. Wait, wait.
25 Q. Okay. So the clarification is we're not 25 MR. LANGLEY: Oh, he's got the business

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1 card again. 1 A. Not that I can recall.
2 Q. (BY MR. FAIRLESS) As Drew DeBerry, Deputy 2 MR. FAIRLESS: Okay. That's all the
3 Commissioner of Agriculture, has the great state of 3 questions I have. I'll reserve whatever additional
4 Texas adopted Handbook 44? 4 questions I have until the time of trial.
5 A. We utilize Handbook 44 as the national 5 MR. OWENS: So will we.
6 standard. 6 MR. LANGLEY: Okay.
7 MR. OWENS: Form. 7 THE VIDEOGRAPHER: Off the record, 5:16.
8 Q. (BY MR. FAIRLESS) So the answer is yes? 8
9 MR. LANGLEY: Objection, form. 9
10 Q. (BY MR. FAIRLESS) Yes? You can say it. It's 10
11 okay. 11
12 MR. LANGLEY: Objection, form. 12
13 A. Yes. 13
14 Q. (BY MR. FAIRLESS) Pre-depo meetings, who did 14
15 you meet with to get ready for your deposition? I don't 15
16 want to know what y'all talked about. I just want to 16
17 know who you met with. Who was there? Who was in the 17
18 room? 18
19 A. I met with the two gentlemen here from the 19
20 Attorney General's Office. 20
21 Q. The John twins? 21
22 MR. LANGLEY: The two gentlemen, and we 22
23 are gentlemen. 23
24 MR. FAIRLESS: You throw that word around 24
25 loosely. 25
Page 283 Page 285
1 Q. (BY MR. FAIRLESS) And when did you meet with 1 SIGNATURE AND ERRATA PAGE
2
2 them? Today? PAGE LINE SHOULD READ REASON
3 MR. LANGLEY: You've got one minute 3
4 ________________________________________________________
4 according to the videographer. 5 ________________________________________________________
5 A. I met -- we met this morning. We met a 6 ________________________________________________________
7 ________________________________________________________
6 couple -- 8 ________________________________________________________
7 Q. (BY MR. FAIRLESS) Today is not the only meeting 9 ________________________________________________________
8 y'all have ever had, is it? 10
I, DREW DEBERRY, have read the foregoing
9 A. No, sir. 11 deposition and hereby affix my signature that same is
10 Q. All right. I mean about this. It's not the true and correct, except as noted above.
12
11 only meeting y'all have ever had? ______________________
12 A. No, sir. 13
14 DREW DEBERRY
13 Q. Before Operation Spotlight and the, quote, 15 ********
14 trend, end quote, you noticed for Sunmart, had you ever 16 THE STATE OF TEXAS:
15 been involved in weights and measures enforcement to COUNTY OF ____________
17
16 this degree? 18 BEFORE ME, ______________, on this day
17 MR. OWENS: Form. personally appeared DREW DEBERRY, known to me or proved
19 to me under oath or through ____________ (description of
18 A. I've been deeply involved in weights and identity card or other document) to be the person whose
19 measures regulatory programs since we came into this -- 20 name is subscribed to the foregoing instrument and
acknowledged to me that they executed the same for the
20 since I came into this position in '07. 21 purposes and consideration therein expressed.
21 Q. (BY MR. FAIRLESS) Have you had meetings with 22 Given under my hand and seal of office
this ______ day of ____________, 2010.
22 Todd Staples subsequent to this lawsuit being filed 23
23 about PWI? _______________________
24 A. I don't believe -- since the lawsuit was filed? 24
Notary Public in and for
25 Q. Yes, sir. About PWI. 25 The State of TEXAS

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1 CAUSE NO. 2008-45087 (CONSOLIDATED) 1 SUPPLEMENTAL CERTIFICATION PURSUANT TO RULE 203
2 ALLISON SNODDY, et al ) IN THE DISTRICT COURT 2 CAUSE NO. 2008-45087 (CONSOLIDATED)
Plaintiffs, ) 3 ALLISON SNODDY, et al ) IN THE DISTRICT COURT
3 v. ) Plaintiffs, )
PETROLEUM WHOLESALE, INC. ) 4 v. )
4 et al. ) PETROLEUM WHOLESALE, INC. )
Defendants, ) 5 et al. )
5 and ) Defendants, )
STATE OF TEXAS ) HARRIS COUNTY, TEXAS 6 and )
6 Plaintiff ) STATE OF TEXAS ) HARRIS COUNTY, TEXAS
v. ) 7 Plaintiff )
7 PETROLEUM WHOLESALE, L.P., ) v. )
8 PETROLEUM WHOLESALE, L.P., )
d/b/a SUNMART; and PWI GP, LLC)
8 Defendants ) 334TH JUDICIAL DISTRICT d/b/a SUNMART; and PWI GP, LLC)
9 Defendants ) 334TH JUDICIAL DISTRICT
9 JOB NUMBER: _____________
10 JOB NUMBER: _____________
10 ORAL VIDEOTAPED DEPOSITION OF DREW DEBERRY 11 ORAL VIDEOTAPED DEPOSITION OF DREW DEBERRY
11 APRIL 26, 2010 12 APRIL 26, 2010
12 I, Paige S. Watts, Certified Shorthand 13 I, Paige S. Watts, Certified Shorthand
Reporter in and for the State of Texas, hereby certify Reporter in and for the State of Texas, hereby certify
13 to the following: 14 to the following:
14 That the witness, DREW DEBERRY, was duly 15 That the deposition was submitted on the
sworn by the officer and that the transcript of the oral _____ day of _________, _______, to the attorney for the
15 deposition is a true record of the testimony given by 16 witness for examination and signature, and was ___ was
the witness. not ___ returned to me by the _____ day of __________,
16 That I am neither counsel for, related 17 ________.
to, nor employed by any of the parties or attorneys in 18 That the attached correction sheet
17 the action in which this proceeding was taken, and contains the changes, if any, and reasons therefor made
further, that I am not financially or otherwise 19 by the witness.
18 interested in the outcome of the action. 20 That the original deposition transcript,
That the charges for the preparation of or a copy thereof, together with copies of all exhibits
19 the foregoing completed deposition and any copies of 21 was delivered, in accordance with Rule 203.3, to the
exhibits are $__________, charged to attorney for attorney or party who asked the first question appearing
20 Defendant, Petroleum Wholesale. 22 in the transcript on the ____ day of __________,
That amount of time used by each party at _______.
21 the deposition is as follows: 23 That pursuant to information given the
22 Mr. Fairless.............6 hours, 14 minutes deposition officer at the time said testimony was taken,
23 Mr. Langley..............0 hours, 0 minutes 24 a copy of this certificate has been filed with the clerk
24 Mr. Owens................0 hours, 0 minutes and has been served on all parties of record as listed
25 25 below:

Page 287 Page 289


1 That pursuant to information given the 1 Mr. Langley, Attorney for PLAINTIFF, STATE OF TEXAS
deposition officer at the time said testimony was taken, 2 Mr. Fairless, Attorney for DEFENDANT, PWI GP.
2 a copy of this certificate has been filed with the clerk 3
and has been served on all parties of record as listed 4
3 below: 5
4 Mr. Langley, Attorney for PLAINTIFF, STATE OF TEXAS 6 Certified to by me this ____ day of
5 Mr. Fairless, Attorney for DEFENDANT, PWI GP
7 ___________, ________.
6
7 8
8 9
9 **************** 10
10 11
11 12
12 Certified to by me this _______ day of 13
13 _____________, ___________. 14
14 15 __________________________
15 16 Paige S. Watts, CSR, RPR
16 CSR Certificate Number: 8311
17 17 Expiration: December 31, 2010
18
Firm Registration Number: 169
19 __________________________ 18 Ross Reporting Services, Inc.
20 Paige S. Watts, CSR, RPR
CSR Certificate Number: 8311 11706 Playa Court
21 Expiration: December 31, 2010 19 Houston, Texas 77034
Firm Registration Number: 169 281-484-0770
22 Ross Reporting Services, Inc. 20
11706 Playa Court 21
23 Houston, Texas 77034 22
281-484-0770 23
24 24
25 25

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