“Your boss is a crook!” Arthur Golden, a partner at Davis Polk & Wardwell and a lawyer for Big Tobacco, screamed into the telephone in the fall of 1998. “A crook!”
On the other end of the line, Harry Potter, then a special assistant attorney general in Texas running the tobacco litigation, sat stunned.
He and Golden had spent scores of hours together at the negotiating table working out the details of the historic $15.3 billion settlement agreement between the state of Texas and large cigarette makers. Throughout those grueling negotiations, Golden had always remained low-key, unemotional and deeply thoughtful.
But not on this day. Not on this phone call.
“Arthur was extremely angry — livid,” Potter said. “He talked about secret lawyer contracts. I didn’t know anything about it, but it sent chills throughout my body. I knew right away, something was wrong.”
Hours later, Potter logged into the Texas attorney general’s confidential internal database, where he discovered previously secret contract agreements created by his boss, then-Texas AG Dan Morales.
The documents — fabricated, backdated and endorsed with forged signatures, according to prosecutors — were designed to route $260 million from the tobacco settlement to Morales’ long-time friend and former law partner, Houston lawyer Marc Murr.
“I was devastated by what I saw,” Potter told The Texas Lawbook in an interview. “I knew right away, this is really bad.”
A devout Morales supporter who believed his boss was a courageous, rising star in Democratic politics, Potter proved his stronger loyalties were to the law and legal ethics.
“I thought Dan was a young, energetic, highly intelligent lawyer with almost unlimited potential,” he said. “He seemed destined for higher office.”
Potter’s revelation of the secret contracts and his subsequent cooperation with the FBI launched a federal criminal investigation that sent Morales to prison and created what Potter and others call “an unfortunate controversial cloud” over the state’s unprecedented legal victory against tobacco industry giants, including Phillip Morris, R.J. Reynolds Tobacco and Brown & Williamson Tobacco.
A Legacy that Continues
Exactly three decades ago, Morales selected Potter to be his deputy attorney general overseeing the controversial lawsuit against Big Tobacco. Potter helped develop the legal strategy against the cigarette companies. He played a key role in the selection of the outside trial team — a powerhouse group that would be known as “The Big Five” — that consisted of Houston plaintiffs’ lawyers Walter Umphrey, John Eddie Williams and John O’Quinn, as well as Harold Nix of Daingerfield and Wayne Reaud of Beaumont.
Potter attended the depositions, reviewed every major motion before they were filed and attended every court hearing in Texarkana.
He was the lead lawyer representing the state of Texas during settlement negotiations that resulted in the tobacco companies paying Texas more than $15.8 billion over the past 30 years, including $430.7 million in 2025. The settlement forced tobacco makers to eliminate their marketing to teenagers and increased the price of cigarettes by nearly $2 per pack, which led to a substantial reduction in cigarette use that continues to this day.
And then there was Potter’s central role in the downfall of Dan Morales.
Potter continues to hold a place of high regard in the Texas legal ethics community. Since 2004, he has served on the Texas Professional Ethics Committee, which writes ethics opinions on compliance with the Texas Disciplinary Rules of Professional Conduct. He also defends lawyers — more than a dozen so far in 2026 — in bar-grievance matters, and he is frequently called as an expert witness in cases involving legal ethics, including malpractice cases and fee disputes.
Despite the famous name — J.K. Rowling published her first novel, Harry Potter and the Sorcerer’s Stone, in the U.S. in 1998 — Potter remained out of the spotlight throughout it all. Throughout the tobacco litigation, Potter deferred to Morales and the trial lawyers to make comments to the news media.
In fact, in the 30 years since the state of Texas filed its lawsuit against Big Tobacco in the spring of 1998, Potter has given three on-the-record interviews, including in 2015 with The Texas Lawbook and now a series of new interviews looking back with The Lawbook.
‘Harry Was Put in an Almost Impossible Situation’
Former Mississippi Attorney General Mike Moore, the lawyer who led the national litigation battle against Big Tobacco, said Potter is “an unsung hero and a role model for other lawyers and leaders.”
“From the first time I met Harry in 1995 and ever since, I will say that I have never met a lawyer who is more honest, more thoughtful and more deserving of the public trust than Harry Potter,” Moore told The Lawbook in a recent interview. “He has a famous name now thanks to J.K. Rowling and the Harry Potter books, but the real Harry Potter never sought the limelight and he always worked for the public good. Harry Potter’s magic wand is his loyalty to the law and legal ethics.”
“Harry Potter is a great lawyer, and he is above reproach,” Moore said. “Harry was put in an almost impossible situation, to have to go against his mentor and boss, but he did what was right and he did it without any praise or accolades.”
Harry Grant Potter grew up in Lampasas, a rural community of about 6,000 people about an hour north of Austin.
“The people are genuine and the salt of the earth,” he said. “It was a real community.”
Potter’s father spent his career in the Air Force. His mother was a stay-at-home mom born in Okinawa, which is where his parents met. Neither graduated from high school, although Potter said they “were among the most principled, insightful and emotionally intelligent people I’ve met.”
During Potter’s freshman year of college at the University of Texas, his father died of lung cancer, which he said “obviously fueled my passion for the tobacco litigation.”
After college, he earned his law degree from the University of Texas in 1987 and returned in 1999 to teach legal ethics.
Like so many lawyers of his generation, Potter was partially inspired to become an attorney by watching reruns of Perry Mason as a kid.
In 1988, he joined the Texas attorney general’s office as a law clerk under then-AG Jim Mattox. He would go on to accept a job in the AG’s office as senior counsel, where he represented state court judges when they were sued and defended state laws challenged as unconstitutional. Potter successfully defended challenges to the Texas sodomy law — a position that he said later bothered him even back then.
Morales held a regular event called “Coffee with the General” to celebrate or recognize successes by lawyers in the office.
“He handed us a coffee mug, but there was never any coffee in it,” Potter said, laughing.
Under Morales, Potter was promoted to deputy division chief over litigation and then to special assistant AG in 1995 — a position that paid $82,000 a year.
“I loved the public service, the people I worked with and the ability to have substantial responsibility and to gain valuable experience as a young lawyer, often in cases with significant public policy implications,” he said.
Morales became Texas attorney general in 1991 following Mattox. Both were Democrats, but that’s about all they had in common.
“Mattox was very aggressive, while Dan was much more conservative, more cautious and more pro-business,” Potter said.
Morales, a Harvard University Law School alum, was a shining star in the Democratic Party. Hispanic and conservative, he regularly had better approval ratings than the governor he served, George W. Bush.
‘Taking on the Cigarette Industry’
Potter said Morales approached him in late 1995 about “tackling a new project taking on the cigarette industry.” Together, they met with Mississippi AG Moore at an annual meeting of the National Association of Attorneys General to discuss the possibility of Texas jumping into the fray.
“Mike met with us, trying to get Texas to file its own lawsuit,” Potter said. “Like most of Dan’s top advisors, I thought it was absolutely the right thing to do from a public policy and legal perspective, but it came at great risk to him politically. We knew the tobacco industry would come after him, and we believed he could have cruised to a higher office. He took a political risk to do the right thing at a time the tobacco industry was undefeated in personal injury litigation.”
During the months that followed, Morales and Potter met with lawyers across Texas about representing the state in a possible lawsuit against the cigarette makers.
With Potter’s advice, Morales chose a group of plaintiffs’ lawyers known as “The Big Five” — Umphrey, Williams, Reaud, Nix and O’Quinn. The Big Five agreed to each deposit $10 million into a fund to pay the cost of the litigation. In return, they would receive 15 percent of any money they won for the state. If the state lost, the lawyers would get nothing.
“The Big Five turned out to be a fantastic choice,” Potter said. “They were the ‘junkyard dogs’ that Dan wanted. These lawyers did amazing work.”
Three of the five — Umphrey, O’Quinn and Nix — have died in the years since the settlement.
‘Did Not Need Murr’s Help, Did Not Want Murr’s Help’
From 1995 and through the filing of the lawsuit and during 1996, Potter and the Big Five say they never heard the name Marc Murr.
In a joint interview last month, Potter and Williams said the first time the name Marc Murr surfaced was Jan. 8, 1997, in a private meeting Morales called with the Big Five at the Four Seasons Hotel in downtown Austin, a regular place for Morales to meet with dignitaries and journalists.
“Dan told us first that he wanted us to add Murr to the trial team or get this guy some money but keep it out of the newspapers,” Williams said. “In this meeting, Morales said ‘You must take care of him.’”
“We said we would walk away from our fee over this,” he said. “It just did not meet the smell test.”
Potter, who was there, agrees.
“Walter [Umphrey] went ballistic and told Dan that they did not need Murr’s help and did not want Murr’s help,” Potter says. “Walter said if Murr was brought into the case, he would not be involved at all. He said he was offended as a taxpayer.”
Morales went silent and dropped the subject at the meeting.
Potter and the Big Five all thought that would be the last that they heard about Murr.
They were wrong.
The Texas lawsuit was settled Jan. 16, 1998, for $15.3 billion, to be paid over 25 years.
The parties also agreed that the law fees for the states, including for the Big Five, would be paid separately by the tobacco companies and those fees would be determined by an arbitration panel. The three-member panel awarded the Big Five $3.3 billion in fees.
Secret Fee Contracts & the FBI
During the summer of 1998, Morales approached Potter, according to confidential internal FBI FD-302 forms, which are official agent interview summaries, about inserting a paragraph into the lawyer fee agreement granting Murr a $10 million credit.
“Morales informed Potter that Murr was going to receive a $10 million advance from the state,” the FBI document states. “Potter informed Morales that the state could not do that and that it was unconstitutional. Morales backed off of this idea after this discussion.”
It was December 1998, as the national arbitration panel was receiving fee applications from lawyers who worked on the tobacco litigation, that the new contract between Morales and Murr surfaced. The agreement granted Murr a three percent contingency fee, which would have awarded Murr $519 million.
It was during this period that Murr and Morales met with prominent Austin political advisor George Shipley, who “stated that he hoped Murr looked good in prison stripes because he [Murr] was going to end up in Leavenworth,” according to the FBI FD-302 reports.
Murr’s fee petition submitted to the national arbitration panel came with an affidavit signed by Morales stating that Murr advised him on the tobacco litigation from start to finish, including selecting the legal team, consulting on the allegations and venue and the eventual settlement discussions. The petition also came with another surprise: A separate secret arbitration panel established by Morales had already awarded Murr $260 million.
Morales’ affidavit stated that Murr was his “co-pilot in the tobacco litigation.” The attorney general stated in writing that Murr was his “primary adviser regarding the negotiation/settlement of the litigation.” At other points, Morales said Murr was his “secret weapon.”
“Potter informed Morales that there was no evidence that Murr had done any work in the tobacco case and that it looked bad that the AG was pushing for Murr’s fee. Morales informed Potter that he consulted with Murr on a weekly basis and that nobody would ever notice Murr’s fee application because Murr was getting very little in comparison to other attorneys,” the FBI FD-302 report states.
Dallas Morning News Breaks the Murr Story
The same week of Golden’s call to Potter, The Dallas Morning News obtained the three contracts and Morales’ affidavit from lawyers involved in the litigation. The newspaper hired two former FBI forensic document experts to examine the contracts.
The contracts, the experts told The News, were the result of “severe document manipulation.” The signature lines in the contracts were copied and pasted from other contracts, the experts stated.
The Dallas Morning News quoted more than a dozen lawyers intimately involved in the litigation who said that Murr attended none of the witness depositions, signed no court documents, made no courtroom appearances in the litigation and participated in none of the settlement discussions. They scoffed at the notion that Murr was Morales’ copilot.
“I was in the cockpit for the entire litigation, and I never saw Marc Murr once,” Ron Motley, a South Carolina lawyer involved in the case, told the DMN in 1998.
Editor’s note: Texas Lawbook reporter Mark Curriden was the legal affairs reporter for The Dallas Morning News and covered the tobacco litigation for The DMN.
Murr’s legal fee filing before the arbitration panel landed on Golden’s desk, which led to his call to Potter, who searched the Texas AG’s database and discovered the previously nonexistent contracts with Murr, which led to the first call to the FBI.
According to the FBI FD-302 forms obtained by The Lawbook, there were multiple versions of the fee contracts. Some of them show signatures dated 1996 and others 1997, but none were created in the state AG’s system until 1998.
“The creation date of the documents didn’t match the dates of the signatures,” Potter says. “I printed the contracts just in case they mysteriously disappeared.”
Despite Morales’ claim that Murr consulted the AG throughout the litigation, Potter first met Murr in 1997 when Murr came to the AG’s office, according to the FBI reports.
Then, in December 1997, Murr made a surprise appearance at settlement talks between the state and lawyers for the cigarette makers.
“During a break in this session, Potter asked Murr what his role was in the negotiations and if he had a contract. Murr said he did not have a contract with the state,” according to the FBI 302 report.
Just a few days later, the Mississippi AG, who led the national litigation against the cigarette makers, received a call from the FBI.
“They asked me if I had been at the tobacco settlement meetings and whether I had seen Marc Murr attend any of them,” Moore said in a 2015 interview with The Lawbook. “I said I attended every single meeting and that I never heard of the guy and never saw him at any of our meetings. The only reason I knew Murr’s name was because of The Dallas Morning News articles.
“Harry Potter was the only lawyer from the state of Texas at the meetings, and I knew Harry was as honest as could be,” Moore said.
In the end, the national arbitration panel awarded Murr $1 million in legal fees.
A Greek Tragedy
Morales could not be reached for comment for this article.
“I cannot tell you the entire story right now, but one day, I will be able to explain everything to you,” Morales told the DMN in a 1999 interview.
Morales never spoke to the journalist again.
“I can tell you that The Dallas Morning News articles totally freaked Dan out. Your articles scared Dan to death,” Potter said. “He was noticeably shaken.”
A four-year-long investigation ended in 2003 with a federal grand jury indicting Morales for his role in trying to secure the fees for Murr and for illegally using campaign contributions to buy a house. He pleaded guilty to some of the charges and served nearly four years in prison.
“It’s like a Greek tragedy,” Potter said. “Was it hubris? I fear he saw all these people getting rich and he got nothing personal from it even though he took all the risks. We may never know the real reason.”
“It was so sad that such a brilliant person could make such mistakes of such a monumental proportion,” Potter said. “We did a lot of great work and achieved some amazing successes, but I am afraid that it will all be tainted by Dan’s actions and extremely poor judgment.”
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