Last spring, Tarrant Regional Water District board member James Hill had a question: Why was a water district website advertising an event held by Shanna Granger’s company?
That event, Fort Worth Oktoberfest, was previously hosted by the water district and brought in a $144,388 profit in 2021 – the first year it was profitable. But, with the agency backing away from event planning in 2022, former water district employee Shanna Granger sought to organize Oktoberfest herself.
Granger’s new company, Prost Production, obtained permission from water district general manager Dan Buhman to hold the event at Panther Island Pavilion, a water district-owned property; use the same website URL as the water district’s Oktoberfest celebration; and donate part of its earnings to the water district, which was set to be the event’s charitable beneficiary.
Around the same time, Shanna Granger, the wife of former Panther Island executive J.D. Granger, accepted a $150,000 loan to fund the event from her mother-in-law: U.S. Rep. Kay Granger, R-Fort Worth.
None of that was known to Hill or his fellow board members before May 2022, he said. Hill was concerned that the water district was opening itself up to legal issues by essentially giving a profitable event to a private company without board approval, especially to a business owned by Shanna Granger. She previously planned Oktoberfests for the water district before departing in November 2021.
Hill informed Buhman of his concerns, ultimately leading the water district to terminate Granger’s permit.
The decision never went before the water district’s five-member board, and Granger moved the Oktoberfest event to Trinity Park — but not before filing suit against the agency in June. Tarrant County District Court Judge Chris Taylor is expected to rule Jan. 19 on whether the lawsuit will proceed to trial.
“I wanted to make sure that our dealings with the Grangers or anyone else … was consistent with the manner that we would treat anyone else, no more favorably than any other member of the public,” Hill said in an Aug. 8 deposition. “I wanted to make sure that if we were disposing of something that produced net positive income, that we were doing so appropriately.”
The permit dispute has resulted in a protracted legal battle between one of Fort Worth’s most influential families and the government agency with which the Grangers are intertwined. Until Oct. 31, J.D. Granger earned $72,000 for consulting work for the water district after leaving his official position last April.
U.S. Rep. Kay Granger’s financial investment in Oktoberfest, coupled with J.D. Granger’s employment contract and Shanna Granger’s permit agreement, could create a perception among the public that nepotism is influencing how decisions are made at the water district, said John Pelissero, a senior scholar at the Markkula Center for Applied Ethics at Santa Clara University.
“It undermines the public’s confidence and trust in the (water district) and the congresswoman herself more specifically,” Pelissero said. “There seems to be an effort to advance some private interest and private benefit, rather than the public’s interest and benefit here.”
U.S. Rep. Kay Granger, the new chairwoman of the House Appropriations Committee, holds the purse strings of the federal government, making her one of the most influential members of Congress.
A spokesperson for the congresswoman, who has been involved in advocacy efforts for the water district’s Panther Island/Central City Flood Project for decades, did not respond to requests for comment.
“We are confident the judge will allow the case to move to trial,” Greg Jackson, Shanna Granger’s attorney, said in a statement. “My client had a signed contract and paid all requisite fees for lease of the Panther Island Pavilion. TRWD unlawfully rescinded the contract, so now the only resolution is for the court to step in.”
Water district lawyers have argued that the case should be dismissed with prejudice, which would prevent the suit from being filed again. Chad Lorance, a water district spokesman, said the agency cannot comment or speculate on how the court will decide the case.
Lawyers respond to $150,000 loan from U.S. Rep Kay Granger
Depositions reviewed by the Fort Worth Report reveal divisions that go far beyond where tourists can enjoy German beer.
During her Aug. 4 deposition, Shanna Granger acknowledged signing a loan agreement with her mother-in-law, U.S. Rep. Kay Granger, to fund Oktoberfest around the time that her company received a permit to host the event at Panther Island Pavilion. The Grangers’ ties to the water district have long faced scrutiny and allegations of nepotism, according to previous Fort Worth Report coverage.
No law precludes elected officials from loaning personal dollars to their family for the purpose of creating a new business, Jackson said. Prost Production shopped financing options and the best interest rate offer came from a family member, with an agreement to repay the principal back by Oct. 15.
“There is no connection with any public funds and to insinuate otherwise is defamatory and misleading,” Jackson said. “There is nothing that precludes elected officials from loaning personal dollars to their family for the purpose of creating a new business.”
Discussion of the loan is an irrelevant political distraction from the merits of the lawsuit and the true harm in the case, Jackson said.
“TRWD hoped the media would take a spin that diverted the story from the fact that they clearly violated the open meetings act, breached a contract, took Prost’s right to use a facility that she had a contract for based off board member prejudice against the Grangers,” Jackson said.
Members of Congress are allowed to provide personal loans using private funds to “the spouse, parent, sibling, or child” of the congressperson without including the loan on a financial disclosure form, according to requirements from the U.S. House Committee on Ethics. The statute does not mention the spouses of children.
Granger has not yet filed a financial disclosure statement for 2022. The filing deadline is May 15, according to the U.S. House Committee on Ethics instruction guide.
Buhman, the water district’s general manager, was not aware the congresswoman provided Shanna Granger with a loan until the depositions were released, Lorance said. At the time, there were no concerns about potential conflicts of interest with the loan because the water district was unaware of it, Lorance said.
Even if the loan is not required to be disclosed, there is a real possibility that the public will view the relationship between the Grangers and the water district as a conflict of interest, Pelissero, the Santa Clara University ethics scholar, said.
“It’s really incumbent on public officials, including the congresswoman, to ensure that their personal financial dealings don’t in any way appear to have a conflict of interest,” Pelissero said. “The ethical problem that comes up when you have these kinds of perceptions developing among the public is that it undermines the public’s confidence and trust in the (water district) and the congresswoman herself more specifically.”
Private loan agreements are a common practice for companies in the business of producing festivals, Jackson said. Because their funding sources are private dollars, it is irrelevant to the public where they come from, he added.
“Prost secured all the private financing necessary to produce one of the largest events in Fort Worth,” Jackson said. “Prost’s private financing is not public info. If someone wants to invest, have them give her a call.”
Attorney claims water district has ‘prejudice’ against Grangers
Water district attorneys have repeatedly asked Taylor, the district judge, to dismiss Granger’s lawsuit with prejudice, therefore banning her from pursuing the issue again in district court.
In July, Taylor tossed Granger’s claims for breach of contract and tortious interference, defined as intentional interference with a contractual relationship. Taylor agreed with the water district’s argument that the agency and its board members have legal immunity.
But Taylor allowed two other claims to move forward, including Granger’s allegations that water district board members violated the Texas Open Meetings Act and the Texas Constitution’s due course of law and taking clauses.
Joel Geary, an attorney hired by the water district, argued in an Oct. 25 filing that there is no evidence that a quorum of the board met outside of a public meeting to discuss Granger’s permit. The constitutional clause does not apply because Granger never had a lease or property interest by obtaining a permit to use Panther Island Pavilion, Geary wrote.
How we reported this story
Shanna Granger filed her lawsuit against the Tarrant Regional Water District in Tarrant County district court on June 13, 2022. In July and August, attorneys for both sides conducted sworn depositions with Shanna Granger, J.D. Granger, Dan Buhman, Leah King and James Hill.
With the exception of J.D. Granger, those depositions became available through the Tarrant County district clerk’s office as part of an Oct. 25 filing by Joel Geary, an attorney representing the Tarrant Regional Water District. Full copies of those depositions can be found here.
Jackson, Shanna Granger’s lawyer, said the water district’s unlawful rescinding of the permit caused monetary hardship, including unexpected event costs associated with booking a last-minute location at Trinity Park that did not have the amenities at Panther Island Pavilion. The event also lost revenue because of late advertising of the new venue, Jackson said.
Citing depositions with Hill and water district board president Leah King, among others, Jackson thinks board members targeted Shanna and J.D. Granger. The water district allowed other private companies to produce events with no intervention, and attempted to negotiate an agreement with the nonprofit Downtown Fort Worth, Inc. to take over the Oktoberfest event, he said.
“We believe that board members improperly directed the general manager to terminate the lease without cause for the sole purpose of targeting the Grangers by directing the GM that they expect no contract or business with the Grangers,” Jackson said. “We also know that TRWD was willing to do the same rental with Downtown Fort Worth Inc., but not with Prost Production, which was a clear prejudice against Shanna Granger.”
Lorance, the water district spokesperson, described a different relationship between water district management and the Grangers.
“The relationship was, and has always been, professional and respectful,” Lorance said of J.D. Granger’s employment contract with the water district.
Water district leaders have revised internal permitting processes to avoid similar situations in the future, Lorance said.
In her Aug. 8 deposition, board president King said her concern about the permit was driven by the water district’s work to update policies about gifts and nepotism after highly publicized incidents in 2021 – including one involving J.D. Granger.
“I want the public to know that TRWD operates within the standards and expectations that the public would have,” King said. “At the end of the day, I want anyone that has a question about the operations here to feel comfortable and confident that what we do and how we do it is done, you know, at the highest level possible.”
Haley Samsel is the environmental reporter for the Fort Worth Report. Her position is supported by a grant from the Marilyn Brachman Hoffman Foundation. Contact her by email or via Twitter.
Rachel Behrndt is a government accountability reporter for the Fort Worth Report. Contact her by email or via Twitter.
At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.