Dallas Extortion and Bribery Case Nets 16 Indictments

By Karyn Chenoweth Oct 2, 2007, 16:50 GMT

Several current and former Dallas city officials took part in a bribery and extortion scheme involving cash kickbacks for affordable housing projects, according to federal indictments unsealed Monday.

Sixteen city officials were indicted, including Don Hill, a former mayor pro tem once a contender in the mayoral race until the federal investigation became public more than two years ago.

The main 31-count, 166-page indictment handed up by a grand jury last week charged 13 other people, including State Representative Gladys Hodge, Democrat of Dallas; D’Angelo Lee, a former Dallas Plan and Zoning Commission member; and Brian Potashnik and Darren Reagan, both developers.

Reagan was also charged in a separate indictment with theft of public money.

Two other indictments related to the investigation charged two people not named in the main indictment; Potashnik’s father, Jack, was charged with tax evasion, and former City Councilman James Fantroy Sr. with embezzlement.

The New York Times reports that Richard B. Roper, the United States attorney for the Northern District of Texas, "called the investigation the most complicated public corruption inquiry of his 25-year career."

"The public officials, Reagan and Potashnik, the president of Southwest Housing, are accused of trading tax credits, lucrative developer fees and other incentives connected to the housing projects. They face prison terms and multimillion-dollar fines if convicted."

Hill pleaded not guilty and was released Monday afternoon on his own recognizance.

The Times reports his lawyer, Michael P. Heiskell, said it was “suspicious” that all of the public officials named in the indictment were African-American.

“They always seem to investigate the poor, the disenfranchised and the minorities, and this is just another example of that,” Heiskell said. “We feel that the charges are unfounded.”

Robert E. Casey Jr., the F.B.I. special agent in charge of the Dallas field office, dismissed criticism of the potential motivations and pace of the investigation, saying it was “baseless.”

“The conspiracy and other crimes that had to be unraveled by our agents were complex and designed to be hidden,” Special Agent Casey said.

The Times reports that authorities "issued more than 40 search warrants, analyzed 200 bank accounts and conducted hundreds of interviews during the investigation."

Countering the potential racism allegation, the investigation was said to be carried out without regard to “politics, power, wealth, status or any other consideration,” Special Agent Casey said to the Times.