Galveston GOP chairman and splinter group agree to a settlement in months-long dispute

Months of infighting and legal wrangling within the Galveston County Republican Party finally ended Friday -- at least temporarily.

Party Chairman Carl Gustafson and a group of eight precinct chairs dissatisfied with his leadership came to an agreement in Galveston County Constitutional Court on Friday, days after visiting Judge Lisa Burkhalter implored the two sides to settle their differences rather than drag out a prolonged legal fight.

"I'm glad we were able to reach an agreement today," said Reese Campbell, the attorney representing three of the eight precinct chairs. "It's unfortunate that an agreement had to be reached in a courtroom instead of a meeting. Nobody wins in this situation."

Gustafson, the party chairman had accused the eight precinct chairs -- referred to as the steering committee -- of attempting a "political coup" to oust him and take control of the local GOP's bank account. He alleged that the steering committee called an unauthorized meeting in November with the intention of amending the county party's bylaws to remove him as chair.

The steering committee countered that Gustafson was trying to use the court to enrich himself and that he has no individual right to control the bank account since the account is in the name of the Galveston County Republican Executive Committee.

In response to the infighting, Moody National Bank filed a lawsuit in February against the Galveston Party Executive Committee, of which Gustafson is the chairman, asking the court to declare who had legal rights to the party's bank account.

The agreement, which came after several hours of closed-door negotiations between Todd, Campbell and Tom Dickens, the attorney representing the other five precinct chairs, will stay the case until July 16, and keep the existing relationship with Moody National Bank in place - meaning that Gustafson will remain in control of the party funds - until the new party term begins in June.

The precinct chairs also agreed to take no action on the county party bylaws until the new term starts, at which point the bylaws can be rewritten and ratified by the party, including Gustafson, who was re-elected as chairman in the March primary. All eight of the precinct chairs in the steering committee will be seated in the next party term, except for Janis Lowe, who was defeated in the primary. Another, Kathy Rogers, will enter a runoff election against Kevin Holland II in May.

The parties, including Moody Bank, also agreed to dissolve the lawsuit if the agreement is not violated by either side by July 16, and that all parties would bear their own costs and attorney fees.

"What everyone's trying to do is restore the party back how it should be, so it can conduct business the way it was intended to be conducted – for the betterment of the party," said Alton Todd, Gustafson's attorney. "Hopefully, everybody can put their disagreements behind them. I'm confident this group can."

And yet while the legal battle subsided, the lingering tension in the courtroom was palpable. As soon as the agreement was announced and the hearing adjourned, Gustafson walked out of the courtroom without speaking or looking at the precinct chairs sitting across the room.

When asked whether he was pleased to put the party turmoil behind him, Gustafson gave a clipped response.

"I feel fine with it," he said. "I signed it."

Alicia Youngblood, one of the precinct chairs on the steering committee, sounded less convinced that the two sides could move forward. Youngblood said that while removing Gustafson as chairman "would have made things more smooth," she was satisfied with the agreement struck on Friday.

"We can move forward and continue our business as a Republican Party in Galveston County, and I think we're gonna be fine," Youngblood said. "I think it might be difficult, maybe. We'll see."

Youngblood added that there were still many outstanding issues to sort out before July 16.

The party has a tentative meeting scheduled for April 24, but it's unclear if the eight precinct chairs that challenged Gustafson will be allowed to attend per the terms of the agreement. There is also the matter of writing new bylaws for the new party term, which is what started the dispute in the first place.

But when asked whether he would welcome the precinct chairs back into the fold, Gustafson struck a different tone.

"I would love to be able to do that," Gustafson said. "I always have an open door and I'm always open to resolving differences."

Nick Powell covers Galveston County for the Chronicle. Follow him on Twitter and send him tips at nick.powell@chron.com