Salem Abraham in his office on Dec. 19, 2019. David Bowser for The Texas Tribune.
CANADIAN — To tell Salem Abraham his mathematical insights are wrong is to speak fighting words. Numerical analysis is the organizing principle of his life, the way he multiplied his millions, the way he understands the world and himself. He used math to lay out his apple orchard, teach his kids to parallel park and earn the red Chicago Mercantile Exchange trading jacket hanging in his office.
So naturally it was to math that the Texas Panhandle multi-millionaire turned in 2017 after losing a high-stakes oil and gas dispute at the Texas Supreme Court. After persuading a jury and an appeals court that he was right, Abraham had figured the odds of the state’s highest court snatching back his victory were about eight percent.
Yet all nine justices agreed to throw out the judgment he had won against oil giant BP America, basing their decision on one key clause in the disputed lease.
For Abraham, losing was more curious than it was ruinous. What he found inexplicable was that his numbers had failed him.
“For me the problem is not losing a bet,” he said in an interview. “It’s mis-figuring the odds.”
Scrutinizing his formula, he divined one major factor he had initially excluded when assessing his chances at the state’s highest civil court. Texas is one of just six states where all judges are elected on partisan ballots, and justices’ campaigns are largely funded by the whiteshoe lawyers and law firms who appear before them. Good government advocates have long argued that campaign contributions may influence rulings. Every living Texas Supreme Court chief justice has called for reforming the system, if for no other reason than to shed the appearance of impropriety.
Abraham’s attorneys John and Joe Lovell of Amarillo, and another Panhandle firm whose partners include a longtime state lawmaker. His foes were represented by, among others, two elite Texas firms, Thompson & Knight and Locke Lord, whose political action committees and attorneys gave at least $213,950 to the all-Republican high court justices during the gestation of the case.
An odds man by trade, and a wealthy Republican donor in his personal life, Abraham understands that political contributions are business decisions, bets.
Had the law firms’ campaign contributions skewed the odds in his case? He wanted to know.
So he set a pair of data mavens at his firm — guys who helped Abraham strategize in the oil and gas business and suss out price changes in the futures market — to the task. They scoured a decade of high court rulings, cross-referencing outcomes with campaign contributions.
Based on their work, Abraham now believes he understands the mathematical proclivities of the Texas Supreme Court: If you are a billion-dollar company represented by one of nine elite law firms, you are 5.4 times more likely to win some or all of what you seek from the justices.
The biggest advantage, Abraham’s team found, is that certain high-powered firms — the ones pouring money into Supreme Court campaign coffers — are simply more likely to get their cases heard at the discretionary court. And once they’re in the door, they are more likely to win.
Abraham is hardly the first to draw a statistical link between campaign contributions and court decisions. The Texas Supreme Court, whether dominated by Republicans or Democrats, has fended off such suspicions for decades.
But Abraham believes numbers speak volumes, and his team’s statistical findings have persuaded him to join the former judges and good government types calling for change. As a wealthy Republican donor, he figures his voice will carry a bit. His timing is good: A new legislative commission will spend this year studying the issue. Abraham has already met with the governor more than once. This week he published his data with great fanfare, and a documentary is set for release later this year.
His numbers, he knows, may not explain every nuance, but they’re a window into a problem. Now he just has to make people look.
In math he trusts
When he was an undergraduate finance student at Notre Dame, Abraham said, professors tried to tell him his mathematical theories about the markets — he thought he could make a fortune betting on futures — would never work. Three decades later, his ideas pour the fuel into his private jet.
He got interested in trading toward the end of college, and realized he could return home to Canadian to marry his high school sweetheart, Ruth Ann, and still make a living running numbers.
For decades he has been a professional oddity in his dry Panhandle hometown of about 3,100 people, a financier in a town of ranchers and oil workers, where school class size fluctuates with oil prices. To the elite firms in New York and Chicago, Abraham and his team of non-Ivy League data guys have been an object of curiosity. On some days, his firm, on Main Street above the town’s only steak house, reportedly represented a full one percent or more of the daily trading volume on the Chicago Mercantile Exchange.
Math, he believes, is far more reliable than emotions, and he’s applied his odds-based approach to everything in his life. When planting an orchard — Canadian, Abraham boasts, is the sparse panhandle’s “oasis” — he relied on 100 years of weather data to predict individual fruit trees’ likelihood of survival, and used the Pythagorean theorem to ensure a neat layout.
Trim and blue-eyed at 53, Abraham still bounds up stairs with the energy of a younger man, but he’s begun to pull back his investment portfolio as he and his wife prepare to send their youngest kids off to college. (He has tried working up a mathematical theory to explain elite college admissions, based on the sample size of his eight high-achieving children, but to his chagrin, there’s simply no sense to it.)
Over decades in Canadian, he has learned a little something about politics, both small-town and big-time. When his grandfather was growing up, Old Lady Simpson, who owned the only pool in town, decreed “no Syrians or Mexicans” were allowed in, excluding his family of Lebanese merchants. Now Abraham owns the pool.
His grandfather, Malouf Abraham (“Oofie” to everyone who knew him) was one of three Republicans in the Texas House in 1967.
Over time, Abraham has come to understand politics as just another game of odds. He was an early supporter of Texans for Lawsuit Reform, a tort reform lobbying group whose political action committee is among the biggest players in state races, and he has given $55,500 to Gov. Greg Abbott, making him the type of contributor who can get a meeting.
He hasn’t been a stranger to the court system. In 2012, after he was asked to leave a political event, he sued a conservative news site for defamation, claiming its write-up had mischaracterized the incident.
His best lesson in politics was self-taught. Abraham served for more than a decade on the Canadian ISD school board — basically a requirement, he said, when your kids constitute 1 percent of the school district. He wanted to send his eight kids to fancy universities, but most looked for four years of a foreign language. Canadian schools only offered three.
In 2007 he flew down to the state capital to talk to lawmakers about education in rural districts. He spent, he figures, $50,000 during that legislative session on private flights and lodging and whatnot. And he had to beg for meetings.
So the next year he drew up a new theory. He decided to give about half that sum, roughly $25,000, in $1,000 and $2,000 increments to select lawmakers — education committee members, leadership.
The next year, the interesting doors were all open to him. It made him want to take a double-long hot shower when he got home to Canadian. But he had learned a little more about how money changes the odds in Austin.
Almost a decade later, he became convinced that money had the power to shift the odds at the high court, too.
Around 2011, Abraham who also dabbles in oil and gas, began sniffing around a lease covering 2,113 acres in Hemphill and Lipscomb Counties.
BP had taken gas from the land for about a decade, but the wells were drying out. Under the terms of its lease, BP would lose its rights once all the wells were dead. One well had been plugged in 2009, and the other two were lagging. Abraham saw an opportunity.
If he could get in with the property owners on the front end and secure what’s called a top lease — like being next on the dance card — he could drill new wells once BP moved out.
Only BP was in no hurry to move. The oil giant was all but set up with a different company, Mewbourne, interested in drilling new wells on the land, but those partners were hesitant to move forward after Abraham secured the top leases, court records show. BP asked Abraham to surrender his top leases and he did not. With legal action looking likely, BP didn’t drill.
In 2012, the #10 well was plugged, and the final one, #11, was barely producing. BP shut it in that June. Its right to the land now hung by one slim string: a shut-in royalty clause, which allowed BP to keep paying landowners for the rights even if it wasn’t pumping. Writing those checks could keep the lease alive, but only if the #11 well was still technically capable of production in paying quantities.
Abraham did not think the well was capable, so he sued in August 2012, asking a Panhandle judge to declare BP’s lease dead and his own kicking. That’s how they came to be at the Lipscomb County courthouse — where turkeys, which outnumber people in the town, are often seen on the steps — one morning in 2013. It’s about as far from Austin, and its politics, as you can get; Canadian is closer to five state capitals than it is to Austin, and Lipscomb County is yet further north.
As Abraham tells it (an attorney for BP declined to comment on the record for this story) the parties and their attorneys were milling around in the courtroom about an hour before jury selection was supposed to start. With time to kill, Abraham had a question for the BP team: They wouldn’t buy him lunch to settle; they were that confident that they’d win the case, he recalled. Why?
According to Abraham’s telling, a BP attorney acknowledged: We’re going to lose at the trial court, and again at the court of appeals. But we’re going to win at the Texas Supreme Court.
Of all the reasons that might have explained the lawyer’s confidence — for instance, that the conservative high court would have a more exacting approach than a Panhandle jury — Abraham zeroed in on three: The lawyer was stupid, he was arrogant, or he knew something Abraham didn’t know.
What Abraham did know, characteristically, were the odds. The Texas Supreme Court hears only about 10 percent of the cases appealed for its review. Of those cases, the high court overrules the lower court in about 80 percent.
Multiply those, and Abraham figured there was just an eight percent chance of losing at the Texas Supreme Court if the case ever got there. That left him with a winning 92 percent. Abraham figured those odds were all he needed to know.
Only the BP lawyer turned out to be right. Abraham won at trial, and then at the court of appeals. But when the Texas Supreme Court agreed to hear the case, Abraham began to think that maybe the BP attorney had known something he didn’t. Because the court overturns more verdicts than it affirms, Abraham figured his odds of prevailing had dropped from 92 percent chance down to more like 20.
In April 2017, the Texas Supreme Court came down against him unanimously, its decision hanging on one question put to the jury. They’d been asked if #11 well was “incapable of producing in paying quantities” on June 13, 2012, and decided “yes.”
The justices accepted a BP argument that the question that won the case for Abraham focused on the wrong day. Asked a similar question about an earlier period, the jury had answered “no.”
Justice Paul Green wrote that the key date was June 4, the day that “gas was last sold or used.” The jury question that originally won the case for Abraham, Green wrote, “did not track the clear language of the lease.”
To some it was an example of a pro-producer court going out of its way to hand BP a victory. To others the high court was chastising a couple of trial lawyers for failing to carefully read their lease. The Texas Land & Mineral Owners Association said the court had erred. The Texas Oil and Gas Association sided with BP.
To Abraham, the ruling was dead wrong, and he didn’t shy away from saying so. He immediately thought back to the prediction made by the BP bigshot in the little courthouse in Lipscomb County.
Abraham asked the court to reconsider his case, soliciting friend-of-the-court briefs from anyone he could, including state lawmakers and billionaire oil magnate T. Boone Pickens, a personal friend.
While the rehearing motion was pending Abraham opened his mailbox to find a routine campaign fundraising solicitation from Jeff Brown, then a Texas Supreme Court justice. Abraham knows he is on a number of GOP donor mailing lists. Nevertheless it rubbed him the wrong way.
He didn’t touch the return envelope. A month later, the decision came down against him: The court would not reconsider.
Abraham, who learned oil and gas law at Oofie’s knee, still believes he was right in the courtroom. He became convinced that he’d lost outside it.
“I can play politics,” Abraham said. “I didn’t know we were playing politics.”
The “favorite nine”
It wasn’t sour grapes, Abraham insists, so much as it was curiosity. That fall, he directed a pair of his employees to analyze money and politics on the Texas Supreme Court.
It wasn’t much of a mathematical challenge. “We’re used to millions of data points,” Abraham said. “This is like first grade.”
Texas Supreme Court hopefuls raise hundreds of thousands of dollars for their statewide bids. Abraham and his team wanted to know where that money came from, and began compiling lists of judges’ campaign contributions.
The answer: lawyers, law firms and lobbyists. Using media reports and public disclosures, Abraham’s data team sussed out a group of major law firms they would come to call the “favorite nine.” Along with their attorneys, those firms — Baker Botts, Locke Lord, Haynes and Boone, Vinson & Elkins, Jackson Walker, Thompson & Knight, Norton Rose Fulbright, Bracewell and Hunton Andrews Kurth — had donated more than $3 million to Texas Supreme Court justices from 2006 to 2016. During that same time span, the justices had raised a total of about $20 million.
While a colleague tackled contribution data, Larry Smith culled Texas Supreme Court cases. He trimmed away off-point cases — pro se cases and writs of mandamus — to derive a list of more than 7,000 cases over the same decade that seemed representative of the court’s behavior in upholding or reversing lower court rulings.
Then the spreadsheets were combined.
Any Tom, Dick or Harry had an 11 percent chance of getting his case heard at the high court over the period they examined. But petitioners represented by one of the “favorite nine” law firms, Abraham’s team found, had a 38.6 percent chance of getting the high court to consider their case. And if Tom or Dick, represented by a “favorite nine” firm, also happened to be attached to a company worth at least $1 billion, his chance of getting his case heard was even higher: 52.7 percent.
The biggest challenge tends to be getting through the door. Any petitioner who gets the Supreme Court to hear her case has a 78.8 percent chance of winning at least some reversal, the team found; the discretionary court is more likely to take cases that require correction. For parties represented by a “favorite nine” firm, that rate climbed to 84.4 percent; for billion-dollar clients with a “favorite nine” firm, it was 89.6 percent.
Multiply those together, and an average petitioner’s chance of winning at the court becomes 1 to a wealthy favorite’s 5.4.
Looking at his math now, Abraham believes BP always had a better shot — 52.7 percent, not 10 — at getting before the justices, and even better odds of winning — 89.6 percent, not 80 — once it did. His initial calculation, he figured, had been wrong.
It’s like that moment at the poker table, Abraham said: If you don’t know who the sucker is, it’s you.
Abraham would be the first to agree that correlation does not always equal causation — but in this case he believes the link is too strong to show anything other than an exchange of cash for judgments.
“Either they gave money, so they got rulings, or they got rulings, so they gave money,” he said. “Which caused which? They’re both equally bad.”
Many attorneys and judges reject Abraham’s suggestion that the money affects the rulings, pointing out that his conclusion rejects other explanations. To them, it’s simple: The best attorneys get the best results. The big companies hire the best attorneys. Top law firms give to top judges because, well, that’s just how it works.
Texas Supreme Court Justice Brett Busby, who was appointed to the court in 2019, said an analysis of contributions and case outcomes excludes “important factors like the quality of counsel and the strength of their arguments on the law and the facts.”
“I base my decision on those arguments,” Busby said.
Texas Supreme Court Chief Justice Nathan Hecht, who has long advocated for changing how Texas picks its judges, declined an interview request.
“I don’t think any lawyer or law firm believes that because he or she donates money to a judicial candidate, that they’re going to be treated any better in that courtroom,” said Jonathan Neerman, a partner at Jackson Walker who leads the firm’s political action committee. “I understand the analysis may show that correlation, but I think it’s much more to do with the attorneys and the quality of advocacy than any donations made to judges.”
“I have not seen nor do I believe there is any connection between political contributions to members of the Texas Supreme Court and results,” said Ben Mesches, a partner in Haynes and Boone’s Appellate Practice Group. “Our firm’s track record results from a deep bench of talented, experienced Texas Supreme Court advocates.”
Representatives from Thompson Knight, Locke Lord and the other law firms did not return requests for comment.
Another objection: The high court hears cases that present new and unresolved legal issues. Companies or individuals whose cases present novel challenges seek out the best representation they can find.
Other attorneys cite Abraham’s oversimplifications, or omissions. To call any fraction of a “reversal” a victory for the petitioner is a generalization, but in some cases could even be misleading. Attorneys for the state of Texas — who lack a wealthy firm’s political action committee — also get more of their petitions granted than the average party.
“If you were to go behind the numbers, my guess is that you will find very competent lawyers representing the clients who prevail,” said Wallace Jefferson, a former Texas Supreme Court chief justice who is among the leaders in calling for reform to the system.
Abraham acknowledges his data are imperfect. But to him, the statistics are too stark to be coincidental, or explained away by any of those factors.
Abraham is not the first to mark this pattern
In the late 1980s, an infamous “60 Minutes” segment called “Justice for Sale” found that the Texas Supreme Court — then dominated by Democrats — seemed bent heavily toward its contributors, many of them plaintiffs’ attorneys.
“Pay to Play,” a 2001 study by the watchdog group Texans for Public Justice, found that justices were almost four times more likely to hear cases brought by contributors than cases brought by non-contributors. Justices accepted 9 percent of petitions filed by lawyers who had not contributed, but as many as 74 percent from one top-donating law firm.
Just as important as impartiality is the appearance of impartiality. Here’s one more number: 83 percent of Texans, according to a state government study conducted in 1998, felt that campaign contributions to judges have a “very significant” or “somewhat significant” influence on those judges’ courtroom decisions.
Abraham’s “study does reveal a flaw in the system, which is that, whether proved or not, the fact that our system permits lawyers and firms to contribute to campaigns undermines the public’s faith in a fair and impartial system of justice,” Jefferson said.
Showing his work
For two years, the revelations stayed mostly in Canadian. But lately Abraham has started sharing his data more widely. He published a website this week — texansforcashfreecourts.com — that includes his findings and methodology. He plans to roll out a “cash-free courts” pledge for lawmakers and judicial candidates. A documentary of his findings is set to follow later this year.
He’s also started telling the story of his case publicly. He told it at a committee hearing at the Capitol last year as lawmakers debated judicial selection. He told it again last fall at an Austin lobbyist luncheon, where he sat on a panel alongside two Republican judges. He talked until black-clad waiters started to distribute the dessert, baby apple crumbles in little Mason jars.
“I would tell medium-sized and small business owners, and I would tell workers coming to Texas: Be careful. Don’t end up at the Texas Supreme Court. Good luck if you’re there,” he told a room of lobbyists, lawyers, lawmakers and judges. “I wouldn’t sue anybody richer than me in Texas.”
Beside him on stage, Busby, a justice on the court, had figured his lips into a tight horizontal line, not a smile but rather a practiced sort of non-frown. His head tilted politely in Abraham’s direction.
“I’m a bit of a rebel, I apologize,” Abraham said to uncomfortable laughs, his own among them.
Abraham would’ve liked to share his numbers earlier. But he has always been a Republican and for a while he was willing to stay in line. He said Republican leaders “at the highest level” asked him to sit on his findings, assuring him that a push on judicial selection would come during the 2019 session of the Texas Legislature. They warned that his figures would embarrass Republican judges ahead of an election. Abraham, a donor, has met with the governor on the matter more than once. Abbott himself quietly pushed for a judicial selection reform bill in 2019, but it died, as versions have for decades, because politically the issue is all-but impossible.
The 2019 session came and passed without any major changes, though lawmakers did create a new commission to study judicial selection.
The inside route did not work, so now Abraham is taking the outside path. It’s not a partisan problem, he believes, but a problem with the Texas Constitution. The documentary, which one of his sons produced, includes undercover film from the Texas Supreme Court Historical Society’s annual John Hemphill dinner, when lawyers from the “favorite nine” firms mingle with justices over catering.
As part of his efforts, Abraham has also devised a bit of a sting routine.
On a chilly winter day in Canadian, he performed it for a Texas Tribune reporter, dialing up the reelection campaign headquarters of Hecht, the chief justice of the Texas Supreme Court.
“I was looking to give a donation,” he said, identifying himself and spelling the name of his company. “What if I have a case coming up before the Supreme Court? Is that a problem or not?”
“No, typically it’s not. Some people have asked me that before and I’ve checked with Chief Hecht every time and he says it’s not a problem,” a campaign staffer said. “I can double check with him if you’d like, but that shouldn’t be a problem.”
Justin Dudley, a consultant for Hecht’s campaign, said “we make every effort to not solicit or accept a contribution from any parties who has a pending case in front of the court.”
On the panel back in November, Busby, who had not seen Abraham’s analysis, rejected the suggestion that donations influence the court.
“I personally approach every case by deciding a case on the law and the record… not who the parties are and who gave money,” he said.
Still, he acknowledged, “you can’t argue with the statistics.”
This article first appeared on the Texas Tribune. Click here to read it in its original form.
Carla Astudillo contributed reporting.
Disclosure: BP America, Texans for Lawsuit Reform, the Texas Oil and Gas Association, Haynes & Boone, Vinson & Elkins, Jackson Walker, Fulbright & Jaworski, and Bracewell LLP have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.