How the Feds Convicted Don Hill

The convoluted corruption case was filled with lots of City Hall jargon, clunky acronyms, more than 5,800 government exhibits and untold unanswered questions. But in the broad strokes of the prosecution's June 29 opening statement, it was clear the case would have something else: sex appeal.

There was the longing of forbidden love between Don and Sheila who had been carrying on a clandestine affair for roughly five years before it ended his marriage. There was the $10,000 cash payment to Don Hill outside a prominent South Dallas church, extorted by co-conspirator Darren Reagan from affordable-housing developer turned informant Bill Fisher. There was the $15,000 BMW given by Sheila to Don as a supposed legal retainer, the money for the car funneled through a bribery scheme that had developer Brian Potashnik hiring Sheila as a $14,500-a-month consultant. There was the hundreds of thousands of dollars handed out by Potashnik and Fisher in minority contracts for little or no work done, and the 30,000 wiretapped conversations, several of which were excerpted by the prosecution to give the jury a taste of more to come.

The government told the jury that in late 2004, Fisher and Potashnik were engaged in a turf battle to develop affordable-housing projects in South Dallas. Each developer had proposed an affordable-housing project that competed against the other in three separate neighborhoods. By law, each area was entitled to only one council-approved project for coveted federal tax credits. So the loser had significant capital at risk.

“[The guilty verdict] was so unexpected and so numbing that I really didn’t adjust after that.”
Danny Fulgencio
“[The guilty verdict] was so unexpected and so numbing that I really didn’t adjust after that.”


Jim Schutze: What Don Hill's conviction means for Dallas.

Web extra: Read the transcript of our interview with Don and Sheila Hill after their convictions, on Unfair Park.

Web extra: More photos from outside the courthouse during the trial.

The defense attorneys, four of whom had been court appointed, were led by two black lawyers, Jackson and Vital, both younger than 40. In his opening statement, Jackson wasted no time attacking the credibility of the prosecution's star witness, Fisher, who had turned to the FBI in November 2004 after he claimed Lee asked him to donate $7,500 to a surprise birthday celebration for Hill and pressured him to hire unqualified subcontractors. Fisher is "conniving and dishonest," Jackson told the jury. And he even hired a private security firm owned by former city council member James Fantroy to gain Fantroy's crucial vote for Fisher's projects: "It's like the pot calling the kettle black," Jackson said. Because Potashnik simply built better projects, Fisher, Potashnik's former employee, "was angry, and he wanted to do something about it."

Though a risky trial strategy, Jackson told the jury that his client Don Hill would be testifying in his own defense. "What better evidence for you than to hear it from the horse's mouth?"

Up next was Sheila's attorney, Vital, who, like Jackson, appeared willing to throw former City Plan Commissioner Lee under the bus. He branded the co-defendant a "big spender" and said he had productivity issues. He stressed that his client's affair with Don Hill didn't make her a criminal, and yes, she was providing legitimate services for Potashnik's Southwest Housing—though he acknowledged that she was a poor record-keeper and "scatterbrained."

Rather than begin its case with a bang, the government, led by Assistant U.S. Attorneys Marcus Busch, Sarah Saldana and Chad Meacham, began with a painfully prolonged whimper. While star witnesses—Potashnik, Fisher and former Mayor Laura Miller—waited in the wings, the government tediously laid the predicate for their testimony by calling just-the-facts FBI agents who introduced the government's warehouse of physical evidence.

It wasn't until July 22 that Potashnik took the stand. His appearance was a triumph for the government, which a day before jury selection had turned Potashnik from a defendant adamantly maintaining his innocence into a witness for the prosecution. An 11th-hour plea offer was apparently too good to refuse.

Like Fisher, his first brush with City Hall shenanigans came from Fantroy and his security business. Potashnik testified that he had hired J.L. Security and Investigations to protect some of his developments, but fired the company after theft increased at three properties. Outraged, Fantroy vowed to never again support his projects, and from this encounter, Potashnik said he learned a valuable lesson. "If I did not work with elected officials and succumb to the pressure imposed, I would not be able to gain support."

That's why he "crossed the line," he said, by paying Farrington & Associates—a consulting company formed by Sheila and Lee—more than $14,500 a month, even though Sheila wasn't doing any actual work. Potashnik testified that Don had referred him to Sheila, though he was unaware at first of their ongoing affair or that Lee owned a piece of Farrington & Associates. He told the jury he didn't need a consultant, but feared that if he didn't hire Sheila, he would be denied "the political support to move forward."

Potashnik said he often felt pressured, though he couldn't cite instances of direct pressure coming from Hill. He did tell Hill that he felt threatened by Reagan, head of the Black State Employees Association of Texas, which didn't represent any actual employees. Reagan knew Hill through Kathy Nealy, Hill's close political confidant, and from his redevelopment of a South Dallas shopping center. Reagan wanted to become the project manager for two proposed Southwest Housing developments in Hill's district and wanted Potashnik to pay him a startling $250,000 plus a like amount generated from the projects. And what would Reagan provide in exchange? He would ensure the projects met all minority hiring goals, said Potashnik, goals necessary to enlist Hill's support. But Potashnik didn't succumb and refused to hire Reagan.

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