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Texas Standard

In Depth: Texas Rangers' Hemp Scheme Investigation Focuses On Sid Miller's Top Political Aide

Illustration of Todd Smith with a legal document.
Illustration of Todd Smith with a legal document.

From Texas Standard:

On the morning of Aug. 28, 2019, Todd Smith was running late for a meeting. It would be a busy few days for Smith, a lobbyist and Agriculture Commissioner Sid Miller’s top political adviser.

He had to go to Houston later in the day, but this breakfast meeting was too important to skip. Before he left Austin, he stopped in at an I-HOP right off I-35, just a few miles from his home. He had a meeting with Nathaniel Czerwinski, a musician and activist who working at an Austin CBD shop at the time.

The Texas Agriculture Department was in the middle of crafting its regulations for hemp cultivation. After 88 years of prohibition, the non-psychoactive cousin of marijuana had become legal to grow once again in Texas earlier in 2019.

Czerwinski wanted to help write the regulations. He was told by a Texas Department of Agriculture employee named Richard Gill — who declined to comment for this story — that the best way to do that was to talk to Todd Smith.

According to Czerwinski, he and Smith met twice in Austin – once at a barbecue restaurant and then at the I-HOP a couple weeks later. They talked about the future of hemp and marijuana in Texas, and how Czerwinski wanted to be involved in it. Smith could help with that.

“What Todd had tried to sell me is an idea that I could get to the front of the list for hemp farming,” Czerwinski said.

Arrest affidavits say that Smith said he could ensure Czerwinski would be one of the very first people in the state to get a license to grow hemp, which he wanted to do.

All he had to do was pay Smith $25,000.

At the time, this seemed like a golden opportunity.

“Oh, I thought it was a great idea at first,” Czerwinski said.

He said he got the impression that Smith was making this offer in coordination with Commissioner Miller.

“Todd Smith indicated several times that he was in direct conversation with Sid Miller about these setups,” he said.

At the I-HOP, Smith gave Czerwinski an invoice for the $25,000. It said the money would be used for consulting and a public poll on hemp. Czerwinski took it with him and gave Smith a CBD sleep aid as a parting gift.

Czerwinski thought hard about paying Smith the money. He didn’t have that much cash, so he planned to take out a loan or borrow from friends. When he talked to other people about the plan though, they weren’t as enthusiastic as he was.

“They told me essentially that this guy was going to rip me off really hard,” Czerwinski said.

And now, in so many words, that’s what Smith’s been charged with doing. On Thursday, Texas Rangers arrested him during a traffic stop in Travis County.

Smith was charged with theft of between $30,000 and $150,000 — a third-degree felony. On Sunday evening, Smith’s lawyers released a written statement saying in part: “Todd never violated any laws and did not steal anything from anyone. Todd looks forward to continuing his cooperation with law enforcement and the district attorney to clear his name.”

According to arrest warrants, Czerwinski was not the only person to whom Smith offered this kind of deal. The documents say that Smith and an associate named Keenan Williams, who was arrested in February in connection with the scheme, collectively approached at least six people about paying for hemp licenses. Two of them — would-be investors from Texas named Andre Vinson and William Cavalier — paid. Williams, Vinson and Cavalier did not respond to requests for comment for this story.

Smith allegedly ended up with $55,000 through the scheme. Williams allegedly made $77,500.

The warrant shows Smith had a similar pitch for everyone: In exchange for cash, he could get you exclusive access to a hemp license, a potentially lucrative asset in the brand new industry. However, when the Texas Department of Agriculture released its rules for the state’s hemp program, they showed the state had no plans to limit the number of licenses it granted.

Williams told investigators he thought everything was on the up-and-up. He also shared a recording of a call between himself and Smith, in which Smith says about the deal: "You do realize this is not supposed to happen."

When asked about these allegations in January last year, Miller said they were “crazy talk.”

Miller was at a public hearing on the state’s hemp regulations in Waco. It was an opportunity for would-be hemp industry members to weigh in on the proposed rules. Nathaniel Czerwenski was there. When it was his turn at the mic, he brought up the deal that Smith had offered him.

“I myself have actually, like, been hit up by the chief lobbyist for Sid Miller to try to get some information on hemp farming. And they asked me for $25,000 to get in front of all these farmers for hemp farming,” he said. “How is that even possible?”

Miller laughed when asked about the allegations.

“That’s just absurd, he said. “I mean, if you read our material, our frequently asked questions, there’s information on there about how to get a license, who can get a license, are the licenses going to be limited. We plainly say it’s a hundred bucks, we’re not going to limit the licenses, first come first serve, it’s, it’s all out there. That was, that was crazy talk.”

The Texas Department of Agriculture has not responded to more recent requests for comment for this story.

This isn’t the first time Smith has gotten in trouble through his connection to the agriculture department. The Texas Tribune reported in 2016 that Miller gave Smith’s wife the highest paid job in the department. And in 2018, the Austin American-Statesman reported that Smith asked a Miller campaign donor for a $29,000 loan.

But Commissioner Miller has remained loyal to Smith.

Since 2015, when Miller became Texas’ ag commissioner, his campaign has paid Smith more than $165,000. Smith’s arrest warrant says he had access to the TDA office, and emails show that he and the agency’s senior staff communicated about Miller’s media appearance and strategy.

Court proceedings for Smith and Williams haven’t started yet. The crimes they’re charged with carry a penalty of two to 10 years in prison, and a fine of up to $10,000.

Travis Considine, a spokesman for the Texas Department of Public Safety, said the department could not provide further details about the investigation, because it is still ongoing which means there could be more arrests.