Bush Tangled in Funeral Industry Suit : Whistle-blower: Former chief regulator accuses governor’s staff of pressing for her firing. He wins exemption from testifying, but lawyers may appeal.

There’s little appeal to surfacing in a lawsuit, especially one involving alleged influence peddling, harassment and faulty embalming.

But when it comes to the whistle-blower case now embroiling Texas’ funeral industry, it’s hard to say who wants the publicity less: governor and presidential hopeful George W. Bush, who eluded testifying in the case last week, or Service Corporation International, the Houston funerary titan whose hallmark is tasteful discretion. Both are under close scrutiny in the wake of former funeral industry regulator Eliza May’s 7-month-old suit against the state, SCI and its chairman. Although Bush is not a defendant, his staff is accused of pressing for May’s firing, and Bush was subpoenaed to testify until winning exemption last week from a county district judge. May’s lawyers say they may appeal.

Despite growing notoriety, there’s little agreement on what the case is really about. A wronged reformer demanding justice? A partisan grudge against a GOP governor? Or a result of meddling by SCI, the world’s largest funeral firm, in its own regulation?

SCI chief Robert Waltrip has had little to say on the subject, in keeping with his company’s penchant for understatement despite its enormous reach. Over four decades, Waltrip transformed the funeral industry by consolidating services and buying and then streamlining funeral homes while leaving their original names intact. Houston-based SCI has quietly orchestrated more than 4 million funerals for clients humble and great, including John Lennon and Jacqueline Kennedy Onassis.

Both Bush and Texas Atty. Gen. John Cornyn, May’s court papers say, received large campaign donations from SCI’s political action group. In addition, Waltrip is a Bush family friend who gave more than $100,000 to former President George Bush’s presidential library.

SCI’s presence also pervades the industry’s regulatory system. Until about a decade ago, Texas’ Funeral Services Commission shared not only office space but a lawyer with the funeral trade group for the industry it regulated. And at the time May was fired, the agency included nine board members, four of whom were industry members and two of whom worked for SCI.

“It’s kind of unusual,” said attorney Lamar Hankins, president of the Funeral and Memorial Society of America, a Vermont-based consumer group. “The [Texas] Railroad Commission, for example, [which regulates the oil industry] is not made up of oil executives.”

According to May, former executive director of the commission, these relationships led to a conspiracy. SCI, Bush and his staff, she alleges, pressured the commission to fire her for leading an inquiry that resulted in a $445,000 fine against SCI.

Bush and SCI both strongly deny the allegations, arguing that May is trying to generate publicity by using their names. A former treasurer for the state Democratic Party, May joined the commission in 1996, with Bush’s approval, at a time when the agency was in dire need of leadership. Her predecessor had been charged with aggravated perjury, the chief before him was charged with sexual harassment and a 1995 state audit revealed procedural failures throughout the agency.

Known as a stern administrator, May began probing SCI in early 1998, after hearing complaints about unlicensed embalmers in its funeral homes in Dallas. Complaints about the company continued into July, when survivors of a popular Wichita Falls newscaster were traumatized by a botched embalming that left their relative’s body leaking maroon fluid and drawing gnats.

In response, officials subpoenaed records from more than two dozen SCI funeral homes and made unscheduled visits to funeral homes in Dallas and Fort Worth.

Furious at what he termed “storm trooper tactics,” Waltrip went to Austin, personally delivering letters of protest, first to the regulatory commission, then to the governor’s office.

Though Bush maintains he played no role in May’s firing and claimed later he exchanged only pleasantries with Waltrip that day, Newsweek this month quoted an SCI lawyer who recalled the governor saying, “Hey, Bobby, are those people still messing with you?”

In the weeks after, May alleges, she was asked to call Bush’s then-chief of staff, Joe Allbaugh, about the inquiry, and several Bush staffers called her to inquire about her investigation. SCI staffers began calling her acquaintances to gather information on her, she maintains.

In the state Legislature, lawmakers who had received SCI donations attempted to dismantle the commission. After consumer advocates protested, the effort instead led to the group’s reconfiguration by the Legislature, as well as a regulatory change beneficial to SCI. Then, in February, the commission fired May, saying it had lost confidence in her. The next month, she filed her lawsuit.

Noting May’s long history as a Democratic activist, some supporters of Bush and SCI call the suit a vendetta against a rising Republican presidential candidate.

“This is politics,” Bush has said. “Every single time somebody has a lawsuit, do you want your governor being dragged through the court? The answer is no, particularly when the lawsuit is frivolous like this.”

“We got pulled in because of Bush,” SCI spokesman Bill Miller said. “We got named for the publicity value that we brought to the suit.”

The next step in the case is the gathering of depositions, which may not begin until October.

To consumer advocate Hankins, however, May’s suit points to the historically weak regulation of the funeral industry, both here and nationwide. In that sense, he said, SCI is not unique--just very effective.

“SCI is not different from any other industry that’s regulated by the government,” he said. “They try to influence the regulatory process, and they do it very well.”