Dallas Commissioner Acquitted on Most Corruption Charges

April 28, 2017
By David Lee

DALLAS (CN) – A Dallas federal jury punished federal prosecutors Friday for repeated mistakes at trial when it acquitted Dallas County Commissioner John Wiley Price on seven corruption counts while remaining hung on four others.

After eight days of deliberations, the jury acquitted Price, 66, on bribery, mail fraud and conspiracy charges while failing to reach a verdict on tax fraud charges.

U.S. District Judge Barbara Lynn declared a mistrial on the tax fraud charges and gave prosecutors one month to decide whether to retry Price.

Price is likely the most well-known politician to ever be prosecuted by the federal government in Dallas. His confrontational style and focus on the issues of race and economic equality have made him a controversial figure, but his constituents in south Dallas have comfortably re-elected him for three decades.

His acquittal is a stunning defeat for the U.S. Department of Justice and FBI, who have spent a decade investigating and prosecuting Price.

Judge Lynn urged jurors to “rest with your verdict” and resist talking to reporters about the verdict, but that it was their right to do so if they choose.

The jury also acquitted Price’s assistant, Dapheny Fain, 55, on a lying to federal agents count and conspiracy count.

Prosecutors failed to convince the jury that Price pocketed more than $950,000 in cash, cars and real estate from political consultant Kathy Nealy in exchange for her clients’ bids for county contracts, and more than $200,000 in cash from a clothing store operated by Fain and an art gallery operated by his friend Karen Manning. Nealy will be tried separately from Price and Fain.

Price has insisted the money was from loans he made to Nealy, a close friend, and that large amounts of cash seized by the FBI at his home belonged to Fain, who purportedly kept it there to prevent her from spending it on shopping.

Dressed in a brown suit and bowtie, Price smiled broadly Friday as the verdict was read and hugged his defense team. Surrounded by a large scrum of reporters, Price and Fain proceeded to walk back to work at the Dallas County Administration Building.

Price’s attorney, Shirley Baccus-Lobel of Dallas, told reporters she expected the acquittal.

“That does not mean my heart was not beating 100 miles per hour,” she said.

John Parker, U.S. Attorney for the Northern District of Texas, thanked jurors for their “extraordinary service” during eight weeks of trial and two weeks of deliberations.

“I will be convening with the prosecution team over the next several days regarding where we go from here, consistent with the court’s timeline,” he said in a statement.

Prosecutors stumbled in the final weeks of trial, admitting to several failures to turn over evidence to the defense.

Judge Lynn called the failures “terribly inappropriate and very disappointing.”

She also warned prosecutors before closing arguments she was probably going to throw out the mail fraud charges even if the jury found Price guilty, saying it was “virtually impossible” for the jury to convict based on the poor connection prosecutors made with the alleged crimes and the U.S. Postal Service.

The defense capitalized on the mistakes, accusing federal prosecutors and investigators of incompetence and dishonesty. They argued the prosecution’s parade of testimony and evidence lacked a “smoking gun” showing a conspiracy to bribe, and that the case is built largely on circumstantial financial records.

The defense also attacked the prosecution’s star witness, consultant Christian Campbell, who took a plea deal in exchange for his testimony. They told jurors that Campbell admitted to being a liar while on the stand.

From Courthouse News.

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Texas AG Wants in on Immigration Lawsuit

March 9, 2017
By David Lee

DALLAS (CN) – Texas Attorney General Ken Paxton asked a federal judge Wednesday to let him intervene on the Dallas County sheriff’s behalf in a closely followed case over whether she can keep undocumented inmates under federal immigration holds.

Paxton said Texas has a duty under state law and cooperative agreements with federal officials to hold inmates under U.S. Immigration and Customs Enforcement detainers.

“This is a public safety issue,” he said in a statement Thursday. “If a Texas sheriff cannot lawfully honor an ICE detainer, dangerous people may slip through the cracks of the justice system and back into the community.”

Dallas County Sheriff Lupe Valdez was sued twice in 2015, accused of violating undocumented immigrants’ constitutional rights by holding them for months after having already bonding out due to ICE detainers.

The plaintiffs claim they should have only been held for 48 hours under a detainer. They say a detainer is a civil matter rather than criminal and that Valdez lacks probable cause to hold an inmate based on a detainer alone. The two lawsuits have since been consolidated.

The case has nationwide implications, as it was cited by Maricopa County Sheriff Paul Penzone in Arizona last month when he decided to no longer hold inmates with ICE detainers.

Valdez incensed state lawmakers in October 2015 after she announced she would no longer comply with immigration hold requests for inmates accused of minor offenses. Gov. Greg Abbott said the decision “poses a serious danger to Texans” and that the detainers give ICE “critical notice and time” to take inmates into federal custody.

Valdez has declined to comment on the case, citing ongoing litigation. She has argued in court the case should be tossed because she has qualified immunity. She also disputes the due process claim, stating it fails to meet the standard of “shocking the conscience” to where it “violates the decencies of civilized conduct.”

Paxton’s motion to intervene in the case comes three months after he assured voters that state lawmakers would end sanctuary city policies during the current legislative session.

He cited several filed bills, including Senate Bill 4, that would require police officers to provide notice to a judge or magistrate that an arrested person is illegally in the country if he or she cannot prove their legality within 48 hours.

From Courthouse News.

Damning Testimony in Political Corruption Trial

March 9, 2017
By David Lee

DALLAS (CN) – The prosecution’s star witness testified Wednesday how indicted Dallas County Commissioner John Wiley Price would nudge companies who wanted his support on lucrative county contracts to hire political consultant and co-defendant Kathy Nealy, who allegedly passed on bribes to Price.

Christian Campbell, a political consultant, was indicted in 2014 with Price, Nealy and Price’s chief of staff Dapheny Fain in a massive federal bribery case.

Prosecutors accuse Price of taking more than $1 million in cash, cars and real estate from Nealy and others for his influence, inside information and votes on the Commissioners Court, then failing to report the bribes on state-mandated financial disclosure statements and his federal tax returns.

Price is being tried with Fain; Nealy will be tried separately.

Campbell told federal jurors during direct examination Wednesday that Price gave him and Nealy confidential bid information that helped his client, oil services firm Schlumberger, outbid other companies for a $40 million information technology contract in 2002. He said Schlumberger’s original bid was as high as $70 million before Price gave him information on where the bid ranked.

He testified that Nealy became confrontational if she believed Campbell’s clients were dragging their feet on paying her, often unleashing expletive-filled threats that she “could make things bad for them.” He said he believed Nealy was paying Price for influence, based on “the way she acted,” and the “comments, threats and suggestions” she made, and that she had the power to cancel contracts if she was not happy.

Campbell testified that Price urged him to hire his friends, and that Price wanted Campbell to hire one of his friends to help consult on Schlumberger’s bid. He said Price also wanted Schlumberger give a job to the daughter of state Rep. Helen Giddings, D-Dallas.

Campbell said Price complained to Schlumberger for not paying Nealy after he wrote a recommendation letter to officials in Lee County, Florida, in support of the company’s bid on a contract there.

Prosecutors read to jurors letters written by Price that complained about her not being paid a success fee on the contract and her contract not being renewed.

Price’s attorney, Christopher Knox, of Dallas, disputed how much influence Nealy had on Price, getting Campbell to acknowledge during cross-examination that companies that hired Nealy did not always have the winning bid on county contracts.

Knox said that Price’s complaints to Schlumberger were more about holding the company accountable on promises to hire certain minority subcontractors.

Regarding one alleged bribe payment in particular, Knox said it was for an unrelated art sale, and that “art” was written in the memo section of the check.

Campbell pleaded guilty in 2015 to one count of bribery concerning a local government receiving federal benefits. He will receive a lighter sentence in exchange for testifying against the remaining defendants. Under the deal, Campbell admits that he willfully joined a conspiracy to bribe Price and that “paying Nealy and acceding to her demands literally bought” Price’s influence.

Campbell also testified in 2016 against former BearingPoint executive Helene Tantillo, who was sentenced to six months in federal prison.

His testimony helped convict her on two counts of making false statements to law enforcement. An Austin federal jury concluded she falsely told FBI agents that a temporary $10,000 increase in consulting fees paid to Campbell was going to a charity. Prosecutors in that case said the increase went to Nealy, regarding BearingPoint’s bid on a county records digitization contract in 2004.

Campbell gave more details about BearingPoint’s bid on Wednesday, testifying that Tantillo told him she wanted to hide the extra payments. He said that the day after he paid Nealy $7,500, she passed $2,500 to Price, who then got involved in the bid. Prosecutors in Tantillo’s case said that by this point BearingPoint had been rejected by a county selection committee as a bidder, but Price persuaded it otherwise and voted for the bid.

From Courthouse News.

Political Corruption Trial Kicks off in Dallas

February 28, 2017
By David Lee

DALLAS (CN) – Federal jurors heard sharply different portrayals of Dallas County Commissioner John Wiley Price on Monday during opening statements in his highly anticipated government corruption trial.

Assistant U.S. Attorney Nicholas Bunch portrayed Price, 66, as a self-interested crook who took more than $1 million in bribes for his influence and votes on the powerful Commissioners Court. He accused Price of hiding the bribes and failing to report them on state-mandated financial disclosure statements or in his federal tax returns.

Prosecutors say Price took more than $950,000 in cash, cars and real estate from political consultant Kathy Nealy in exchange for support for her clients, and more than $200,000 in cash from a clothing store operated by Price’s assistant Dapheny Fain and an art gallery operated by his friend Karen Manning.

Price was charged in July 2014 with conspiracy to commit bribery concerning a local government receiving federal benefits, conspiracy to defraud the IRS, six counts of deprivation of honest services by mail fraud, and three counts of subscribing to a false and fraudulent income tax return.

Manning and political consultant Christian Campbell pleaded guilty in 2015 and will testify against Price. Nealy will be tried separately. Fain is being tried alongside Price. Her attorneys elected to give an opening statement later in the trial.

Prosecutor Bunch repeatedly told the jury to “follow the money,” accusing Price of feeling “entitled to something more” than his $100,000 annual salary.

“When you strip away the details, the evidence is simple,” Bunch said. “Follow the money – all of it points to greed, corruption and lies.”

Defense attorney Shirley Baccus-Lobel, of Dallas, rejected the bribery accusations as “ludicrous” and “preposterous,” describing Price as fiscally conservative in spending public money.

She said Price has made many political enemies during his 30 years in office and is being targeted for that. Price is well known for leading protests against Parkland Hospital and the Dallas Police Department regarding dissatisfaction with minority hiring. He made headlines last year for a shoving match at a gospel radio station during a debate with other Democratic nominees for his job that devolved into personal attacks.

“He is not extravagant … he is flamboyant. That is his schtick,” Baccus-Lobel told the jury. “Behind that persona is the most diligent, devoted public servant you will ever see in your life.”

She downplayed the alleged exchanges of money with the three women, acknowledging that the unmarried Price “has a fondness” for women, with whom he acts much like a husband.

“We are not going to hide that,” she said.

Baccus-Lobel denied that Price “belongs to anyone,” describing his relationship with Nealy as the same as any other between a lobbyist and elected official.

“Whether you like it or not, lobbying and political consulting are legitimate businesses in the United States,” Baccus-Lobel said.

She described Price as a loyal friend who accepted calls for help from many people, not just Nealy.

Baccus-Lobel criticized the years-long gap between the alleged crimes and the prosecution,  saying it makes presenting a defense harder due to passage of time. She said many of the alleged crimes in the indictment are “old stuff” that are excluded by statutes of limitations.

Prosecutors called their first witness after opening statements.

County Administrator Darryl Martin testified that Price is one of the “hardest working” people on the five-member administrative body. He described the county’s process for soliciting and selecting outside bids for contracts, saying that no county official is to give information to a bidder about a competitor’s bid. Prosecutors say Price fed such restricted bid information to Nealy for her clients’ benefit.

The lone Republican member of the Commissioners Court tried to have Price suspended immediately after his indictment, but the measure died for lack of a second. Price was reelected comfortably in 2012 after the FBI investigation became public, and was reelected again in 2016 as he awaited trial.

Former BearingPoint executive Helen Tantillo, of Austin, was sentenced to six months in federal prison in April 2016 for lying to federal officials in the Price investigation.

A federal jury in Austin concluded that Tantillo falsely told FBI agents that a temporary $10,000 increase in consulting fees paid to Campbell “was to make a charitable donation to the favorite charity” of an unidentified Dallas County commissioner. Prosecutors said Tantillo knew the money was, in part, to pay Nealy.

Opening statements in Price’s trial were originally set to begin last Thursday, but were delayed several hours due to a juror becoming ill and needing hospitalization. A second juror requested Friday off to care for an ill relative.

The trial is expected to last for more than four months.

From Courthouse News.

Oil Fortune Heir Says Fmr. District Attorney Ordered Break-In

February 23, 2017
By David Lee

DALLAS (CN) – An heir to the Hunt oil fortune sued former Dallas County District Attorney Craig Watkins on Tuesday, claiming he used his office’s investigators as an “armed goon squad to solve a burgeoning legal and political problem.”

Albert G. Hill III says Watkins had him indicted in March 2011 on “bogus charges” of mortgage fraud after being bribed by Hill’s family members and others to frame him and to “ensure his defeat in various civil lawsuits in state and federal court.”

“But that scheme was beginning to unravel and Mr. Watkins was desperate to cover his tracks,” the 10-page complaint, filed in Dallas Federal Court, continues.

Hill is the great-grandson of Texas oil tycoon H.L. Hunt. He sued several of his relatives in county court in 2007 for fraud, claiming he received no benefits from trusts Hunt set up for his children.

“Mr. and Mrs. Hill moved to Atlanta to get away from the harassment and political corruption in Dallas, but the reign of terror continues to this day, so Mr. Hill has filed this case to put an end to it,” Tuesday’s complaint states.

Hill says the criminal case against him was “falling apart” and alleges Watkins sent investigators to his Highland Park home in February 2013 “in a desperate (but unsuccessful) attempt to gain leverage” before a hearing the next month.

According to the complaint, “The local police did not intervene because the investigators said they entered the home pursuant to a search warrant, but in reality the investigators had no search warrant. Instead, the investigators entered the home at the personal direction of then-District Attorney Craig Watkins.”

Hill says all charges against him were dropped during the March 2013 hearing “because of egregious misconduct” by Watkins and his staff.

“Mr. Watkins’ former chief investigator [Anthony L. Robinson], meanwhile, was wiretapped by the FBI and pleaded guilty to accepting a $200,000 bribe in another case,” the complaint states.

At that hearing, the trial judge wanted Watkins to answer questions under oath about the alleged prosecutorial misconduct. Watkins took the stand but declined to answer questions, citing attorney-client and work-product privileges.

The state’s highest criminal appeals court, the Texas Court of Criminal Appeals, ruled in Sept. 2016 that the trial judge did not abuse her authority when she forced Watkins to answer the questions under oath.

Now in private practice, Watkins did not immediately respond to an email message requesting comment Wednesday afternoon.

Along with Watkins, Hill sued the Albert Hill Trust and Branch Banking & Trust Company, as well as 17 others – including family members – he claims were involved in the misconduct.

Hill seeks actual and punitive damages for breach of fiduciary duty and tortuous interference. He is represented by Ty Clevenger in New York.

One of Hunt’s 15 children, Lamar Hunt, helped found the American Football League and owned the Dallas Texans, which later became the Kansas City Chiefs of the National Football League. He also helped found Major League Soccer and owned the Columbus Crew and FC Dallas.

A Santiago Calatrava-designed bridge spanning the Trinity River west of downtown Dallas is named after another of Hunt’s children, heiress and philanthropist Margaret Hunt Hill.

From Courthouse News.

Dallas County Fights Texas AG on Incident Reports

December 29, 2016
By David Lee

AUSTIN, Texas (CN) – Dallas County claims in court that Texas Attorney General Ken Paxton was wrong when he said the county’s sheriff must disclose death and accident reports about an unarmed man who died in the county jail’s lobby last year.

Dallas County sued Paxton in Travis County District Court on Tuesday, disputing his ruling on a Texas Public Information Act request filed by Dallas attorney Scott Palmer in September. Palmer represents the estate of Joseph Hutcheson.

Hutcheson, a white man from Arlington, allegedly parked his truck outside of the jail on the morning of Aug. 1, 2015, and ran inside, yelling that his wife was trying to kill him. Officials said he was handcuffed to calm him down and prevent him from being a threat to others or himself.

Hutcheson can be seen on video flailing his legs on the ground before going limp, resulting in deputies performing CPR. He died shortly thereafter.

Dallas County Sheriff Lupe Valdez placed at least six deputies on restricted duty after Hutcheson’s death. A grand jury declined in June to indict four of the deputies involved.

Dallas County asked Paxton to weigh in on Palmer’s open-records request that asks for the complete criminal investigation file, all video footage of the incident and all recorded statements or interviews, among other records. It says Palmer is seeking discovery for a possible civil-rights lawsuit against the county.

Paxton responded on Dec. 16 that certain information can be denied because a litigation exception under state law applies. He said Palmer had previously sent Valdez a letter stating he had been hired “to pursue a possible civil rights violation claim” for excessive force.

On the other hand, Paxton ruled the county must disclose the custodial death report, the accident report and completed investigations and evaluations relating to the incident.

The county argues in its Dec. 27 lawsuit that all of the records requested are protected by the litigation exception.

“It is undisputed that the requestor is seeking the Sheriff Department’s investigative files, personnel files, and standard operating procedures for the sole purpose of filing suit against Dallas County,” the 12-page complaint states. “The letter ruling accepts that the litigation exception applies yet ordered the Sheriff’s Department to turn over the entirety of their file to the requestor to prepare for filing suit against Dallas County.”

The county also argues that the information in the investigation file that did not result in a criminal conviction is confidential and cannot be disclosed under the law.

“Dallas County may at any time raise an exception based on a requirement of federal law or one involving the property or privacy interests of another person,” the complaint states.

Dallas County seeks a declaratory judgment that it does not have to comply with Palmer’s records request. It is represented by Assistant District Attorney Tammy J. Ardole.

From Courthouse News.

Dallas Election Judge Fired for Racist Posts

November 7, 2016
By David Lee
DALLAS (CN) – The Dallas County Commissioners Court fired a white election judge last week after receiving complaints that he posted racial slurs against black people on social media.
Commissioners fired Randy Smith, 43, at their Nov. 1 meeting, by 5-0 vote. They received a complaint on Oct. 10 regarding posts Smith allegedly made on Facebook on July 12, 2015. The posts have been taken down.
“why do people post so much crap on niggers when 3 yrs ago i was stabbed and almost lost my life because of one, i know there some good blacks no offence to them” Smith posted, according to a letter of complaint attached to a letter from the Dallas County Elections Department to Smith, telling him his “immediate removal as Election Judge has been requested.”
The letter of complaint, to Assistant Elections Supervisor Tandi Smith, includes two more quotes attributed to Randy Smith’s Facebook, all on July 12.
“i know some good blacks so I don’t count them if i did it would be done on one hand,” the second post states.
The third says: “if anyone questions why i say it spend 27 days in icu with your life on the line and see how you feel.”
Dallas County Judge Clay Jenkins gave Smith the opportunity to respond to the allegations before the vote was taken. A county judge in Texas is the head of the county commission. Texas’ 254 county commissions function similarly to a weak-mayor city government, with the county judge, as head, voting as a regular member of the commission.
Smith admitted he posted things on Facebook, but said they were his “personal opinions” and not official positions.
However, the letter of complaint to Tandi Smith says that Randy Smith identifies himself on his Facebook page as “Election Judge, Precinct Chair Dallas County.”
Randy Smith told the commissioners “I was not representing the county or the spot of an election judge,” according to a recording of the meeting. “I was just stating an opinion which I do realize was wrong. Since then, I have deleted the Facebook account and I am asking that it at least be considered that I have 20 years of experience. They always need election judges and workers. I request some kind of suspension instead of just removal from office. At that time, I did not know what I was saying.”
When pressed by Commissioner John Wiley Price as to what the posts actually said, Smith said he did not remember. The audience then burst into laughter.
“You are joking, right?” Price asked incredulously.
“I am serious,” Smith replied. “I don’t remember everything, honestly.”
A member of the audience handed Smith a tablet displaying his Facebook posts. Price pressed Jenkins to have Smith read the posts aloud for the record.
“I want to hear what he said,” Price said.
“No, let’s not even,” Jenkins replied.
“I will admit that was said,” Smith said. “Sometimes people say things at the spur of the moment and later come to regret it. That’s what basically happened on this. I was wrong but I have deleted the account.”
Commissioner Mike Cantrell told Smith before the vote that if he was terminated, his name would have to be resubmitted by the Democratic Party if he wants to be considered for election judge again.
Dallas County Elections Administrator Toni Pippins-Poole said that election judges must treat other people with respect as part of their job.
“We let them know there are causes that you can be removed for, so we give that to every judge at the beginning of their terms,” she said. “They are aware of what the commissioners court expects of them.”

From Courthouse News.