Posted on 10/02/2007 5:44:51 AM PDT by cbkaty
Probe into corruption in Dallas snares 16 Indictment names legislator, ex-councilman and former mayor pro tem
DALLAS — A meeting behind a church with $10,000 cash changing hands, five-figure gifts for a city councilman's "birthday party" and a mistress funneling bribes through a sham consulting company were among details spelled out Monday in a federal indictment alleging corruption at Dallas City Hall.
The 166-page indictment accuses state Rep. Terri Hodge, D-Dallas, and former Mayor Pro Tem Don Hill of extortion and bribery in soliciting and taking payments from affordable housing developers.
Former City Councilman James Fantroy was indicted separately on a charge that he embezzled more than $5,000 from traditionally black Paul Quinn College, where he was a director and treasurer of a program that received federal money.
In all, 16 people were indicted following an FBI-led public corruption probe that burst into view more than two years ago when agents raided city offices.
Hodge, Hill and others are accused of taking tens of thousands of dollars from real estate developer Brian Potashnik in exchange for helping his company obtain federal tax credits for low-income housing projects in predominantly minority neighborhoods.
"They extorted developers, and other times these developers would bribe public officials to obtain their support," U.S. Attorney Richard Roper said in a press conference.
The payments in the "complex and multilayered" scheme were designed to be difficult to trace, Roper said. They took several forms, including cash payments disguised as gifts, subcontracting fees and consulting fees paid to the city officials' associates.
In one instance detailed in the indictment, Hill is accused of meeting with two conspirators behind a church, where one handed him "at least $10,000 in cash" extorted from a developer. The indictment did not specify how much money changed hands but accused Hill of failing to pay federal taxes on $216,000 in unreported income between 1996 and 2004.
'A sad day for Dallas'
The government alleges that six-term representative Hodge received free rent and utilities at a Potashnik-owned apartment complex and also had him install $2,000 worth of carpet in an east Dallas house she owns. She is accused of fraud in not reporting $52,400 of taxable income between 2001 and 2005, all from Potashnik.
Others indicted include Sheila Farrington, identified by the government as Hill's former mistress and current wife; former Dallas planning commissioner D'Angelo Lee; and Darren Reagan, CEO of the Black State Employees Association of Texas, an organization that federal officials say represents no black state employees.
"This is a sad day for Dallas," said Mayor Tom Leppert. He sought to reassure residents that "all rules of ethics and conduct will be vigorously enforced."
Some targets of the probe and their supporters have raised questions over the past two years about the investigation because it ensnared only black officials. Robert Casey, special agent in charge of the Dallas FBI office, addressed the racial issue as the indictments were announced.
"There are those who have called into question the motives of the FBI in this investigation, and I want to dispel that one right now," he said. "We were motivated only by a sense of duty to this community and the country."
Hodge refused to comment on the case as she entered the Earle Cabell Federal Building to surrender Monday morning. Hill and his wife also surrendered, entered not guilty pleas and were released without having to post bail.
"We're not guilty of any of the things alleged here," said Hill, who before the 2005 FBI raid on his office was seen as a top mayoral candidate. "We're just going to prepare for the fight."
Fantroy arrived at the courthouse in a wheelchair, accompanied by his attorney, Cheryl Wattley. "I'm not making any comment except to say, 'Get out of our way,' " Wattley told reporters and photographers.
Potashnik, who with his wife, Cheryl Potashnik, faces multiple counts of bribery and conspiracy, called the charges ''unfair and cruel" because he said he has been cooperating with investigators.
''We ask for people to wait for the facts and give us the benefit of the doubt," he said.
The indictment alleges that Hill and Lee, his appointee to the city zoning panel, pushed Potashnik in October 2004 to give Farrington a "sham consulting agreement," paying her $175,000 over 12 months.
Farrington, then Hill's girlfriend, registered her consulting firm two days later and opened a bank account with a $14,583 installment from Potashnik, the indictment states.
The indictment traces months of e-mail between Hill and Farrington, including his response to her request to the developer that a payment be made early. "EXCELLENT!" Hill replied in his e-mail.
Lee once asked Farrington to withdraw cash so he could pay his church tithe, the indictment alleges. Lee also directed Potashnik to award construction subcontracts to his associates, who in turn paid kickbacks to Lee and Farrington, according to the indictment. One $182,000 contract led to an $18,000 kickback.
'Sham' minority opposition
Other payments to Hill were solicited as contributions to "Don Hill's birthday party." At least $12,900 was deposited in Farrington's account as a result of those requests, the indictment details.
Another developer, not named in the indictment, was subject to shakedowns in the form of "sham" objections by Reagan's black state employees group, the government alleges.
"Reagan would and did use (his association) to create the illusion of minority community opposition to the developer's affordable housing projects in South Dallas," the government alleges.
The indictment says Reagan, acting on behalf of Hill and Lee, agreed to withdraw his opposition in exchange for a $100,000 initial payment, a $15,000 retainer, $85,000 when the development's financing closed, $1,500 per hour for consulting services and 5 percent of the developer's fee and cash flow.
A separate count of the indictment accuses Reagan of failing to report $520,000 of income between 2001 and 2005.
thomas.korosec@chron.com
The bribe TAKERS:
Terri Hodge
Don Hill
James Fantroy
D'Angelo Lee
From left: Allen McGill, Gail Terrell, and Darren Reagan -- all implicated.
Yep -- it looks racially motivated to me!
Blacks taking from Whites ---- Just like in Zimbabwe!
< /sarcasm> a little
At least it's front page for a day. The New York Times would run a similar story about corrupt NY Dems on page A19. Even then it would take until paragraph number 6 before they revealed the party affiliation, if they even bothered to.
Now if it was GOP members, that would be included in the headline.
No, it's a great day for Dallas. We just got a whole bunch of crooks off the streets.
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