Tuesday, October 2, 2007
By DAVE LEVINTHAL, RUDOLPH BUSH, JASON TRAHAN and GROMER JEFFERS JR. / The Dallas Morning News
The Dallas City Hall bribery indictments on Monday rattled a city that has long thought of itself as a model of civic rectitude.
A state representative, two former City Council members and a former Plan Commission member – along with a wealthy developer and 11 others – were accused of violating the public trust, fixing the system to steal money.
"This is a sad day for Dallas," Mayor Tom Leppert said in a City Hall news conference.
Everyone knew that indictments were coming. The FBI had been poking around for more than two years, and most of those charged knew days ago that Monday would bring bad news.
Still, the sweep of the charges was startling. Over the weekend, sources familiar with the investigation said as many as 14 people would be charged. The indictments named 16.
And 12 of those 16, including all of the public officials, are black, raising the specter that old Dallas wounds will be reopened amid charges of institutional racism and unequal justice. One of those indicted, former City Council member James Fantroy, has already warned that the corruption trials will be "the biggest mess since O.J."
The grim-faced mayor spoke hours after U.S. Attorney Richard Roper announced indictments against state Rep. Terri Hodge, D-Dallas; Mr. Fantroy; former City Council member and mayoral candidate Don Hill; former Plan Commissioner D'Angelo Lee; and housing developer Brian Potashnik, among others.
In a nutshell, the government's chief accusation is that public officials in Dallas were paid off to help Mr. Potashnik's company win lucrative low-income housing contracts – and that others aided in the bribery schemes or profited from them.
Former Mayor Pro Tem Don Hill (right) and his wife, Sheila Farrington, arrived with an unidentified man.
Six defendants who appeared in court on Monday pleaded not guilty. Mr. Fantroy, who appeared in court to say he can't afford an attorney, has publicly said that he did nothing wrong.
The 70-year-old has been found to have kidney failure and cancer.
Mr. Potashnik is expected in court today. Other defendants will appear Wednesday.
Over the weekend, Mr. Potashnik said through his attorney that the charges against him were "undeserved." He added that the prosecutors' decision to also indict his father, who is 73, and his wife, Cheryl, "the mother of our 9- and 10-year-old sons," was "cruel and unjustified."
166-page indictment
Mr. Hill, who, like Mr. Potashnik, was indicted along with his wife, professed his innocence as he was leaving the courthouse.
"We're not guilty of any of the things alleged here," he said. "We've had a chance to tell the world we're not guilty. We're just going to prepare for the fight."
His attorney, Michael Heiskell, said the public should not pass judgment too quickly on those charged.
The government, he said, has had 27 months to prepare its case, which he characterized as "vicious lies and accusations" and "a nightmare."
"As true as the morning sun comes up, there will be a new day," Mr. Heiskell said.
In a 166-page indictment, Ms. Hodge, Mr. Hill and Mr. Lee are accused of taking kickbacks in exchange for exerting the influence of their offices in behalf of Mr. Potashnik's company, Southwest Housing Development Co. The company built low-income housing in Dallas and elsewhere under a government program that provided its backers with generous income-tax credits.
In a separate indictment, Mr. Fantroy is accused of embezzling more than $5,000 in federal grant money from Paul Quinn College, a historically black college in southern Dallas.
Mr. Potashnik's father, Jack Potashnik, was charged in a third indictment with income-tax evasion.
And in yet another indictment, Darren Reagan, chairman of the Black State Employees Association of Texas, was charged with five counts of theft of public money. He is accused of falsely claiming that he was not related to someone who was receiving federal housing aid.
He was separately accused of using the black employees' association to "create the illusion of minority community opposition" to an unidentified developer's plans for housing projects in South Dallas, then "agreeing to withdraw such sham opposition in exchange for things of value."
The others indicted were Sheila Farrington, a former political consultant identified in the indictment as "Hill's mistress, and later his wife"; Allen McGill, the president of Mr. Reagan's black state employees' group; Jibreel . Rashad, a construction subcontractor; Rickey Robertson, a partner of Mr. Rashad's; Andrea Spencer, the business manager for Mr. Rashad and Mr. Robertson's company; Ron Slovacek, a business partner of Mr. Lee, the Plan Commission member; Kevin Dean, a former pro football player who is president of an asphalt company; and John Lewis, a lawyer who worked with Mr. Dean.
Mr. Roper, the U.S. attorney, would not rule out further indictments.
"I hate to say whether the investigation is over or not," he said.
The prosecutor said the investigation, which began more than two years ago, was the biggest, most expansive public corruption case he has seen in more than 20 years as a prosecutor.
In the weeks and months leading up to the release of the indictments, some current City Council members, including Mr. Leppert, were critical of the way the federal investigation seemed to be dragging on. They called it a needless cloud over city government.
And some political allies of those targeted speculated that the FBI lacked sufficient evidence to build an effective case.
After months of silence, the feds on Monday pointedly rebutted such criticisms.
"If you read the details spelled out in this lengthy indictment, I think you'll begin to see that the conspiracies and other crimes that had to be unraveled by our agents were complex and designed to be hidden from authorities," said Robert Casey, special agent in charge of the Dallas FBI office.
"In cases like this, we encounter people ... who are not that eager to cooperate and often times don't tell us the truth," he said. "These factors contributed to the length and direction of many aspects of this investigation."
He said federal officials conducted hundreds of interviews, executed more than 40 search warrants, collected thousands of gigabytes of electronic information, examined 3,000 different events and analyzed 200 bank accounts and hundreds of boxes of documents.
"Sense of duty"
The FBI agent bristled at the notion that the investigation was in any way racially motivated.
"We were motivated only by a sense of duty to this community and the country," he said. "We did our duty, and ... we did it with integrity, professionalism and objectivity, without regard for politics, power, wealth, status or any other considerations."
Ms. Hodge, the state representative, is the only current elected official named in the indictment. She will not be required under Texas law to surrender her legislative seat.
She did not speak with reporters as she entered or left the federal building.
But on hand for her day in court was Albert Black, former chairman of the Greater Dallas Chamber of Commerce and a civic leader frequently mentioned as a possible mayoral candidate. Mr. Black said he was there to lend support to an old friend.
"She's as tough as she can be," Mr. Black said.
Mr. Lee – who was appointed to the Plan Commission by Mr. Hill, then forced to step down under pressure from then-Mayor Laura Miller – said he was innocent as he walked into the courthouse.
"I am ready for it to all be over," he said. "It's been going on for too long – two and a half years – and I'm just ready for the chips to fall."
Mr. Fantroy was accompanied by defense attorney Cheryl Wattley, but she told U.S. Magistrate William Sanderson Jr. that she was only there until Mr. Fantroy could secure other legal representation.
As she entered the courthouse with the former council member, she said: "I am not making any comment except to say, 'Get out of our way.' "
PAST SCANDALS
2000 – Longtime Dallas City Council member Al Lipscomb is convicted on 65 counts of conspiracy and bribery for accepting bribes from a cab company owner in exchange for favorable votes at City Hall. Sentenced to 41 months of home confinement and a fine of $15,000, Mr. Lipscomb is released in 2002 when a U.S. federal appeals court rules that U.S. District Judge Joe Kendall abused his discretion by moving Mr. Lipscomb's trial to Amarillo from Dallas over the defense's objections. U.S. Attorney Jane Boyle says a second trial would "not serve the interests of justice" and she declines to prosecute Mr. Lipscomb a second time.
THE AFTERMATH: Mr. Lipscomb said in 2002 that he would not run again for public office but did so in 2005, losing in a District 8 runoff to then-council member James Fantroy. Mr. Lipscomb briefly flirted with running again in 2007 but decided against it.
1997: The Dallas City Council's pre-eminent fiscal watchdog, Paul Fielding, maintains his innocence but resigns his council seat during an FBI investigation into suspected criminal activity. Several months later, Mr. Fielding abruptly pleads guilty to two felony counts of bribery and extortion and is later sentenced to 41 months in federal prison and ordered to pay $899,000 in restitution.
THE AFTERMATH: Mr. Fielding has not re-entered politics, but his sister, Linda Koop, is serving her second term as District 11's City Council representative.
Dave Levinthal