By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
Supposedly we just had ethics reform at Dallas City Hall. Let's talk about ethics. But let's talk about the real world.
There's this thing in Dallas I call death by a thousand tables. It was at the center of the recent Dallas City Hall corruption trial in federal court in which a city council member and his associates were convicted of bribery and extortion.
In the Don Hill case, real estate developers were trying to get deals done with the city in Hill's council district, over which Hill had total control.
It's a certain scene: While the developers are trying to get their City Hall agreements cinched, they're also trying to hold on to all kinds of things—options on land, promises of funding from banks, agreements with contractors and so on.
So they're stretched. And Don Hill, who has his thumb on the one button that can green-light their deals, knows they're stretched.
All kinds of people start buzzing around the developers, telling them they want this, want that. They're friends of Don Hill. Even his wife. And meanwhile, Don Hill's thumb hovers over that green-light button.
But the developers balk. They don't say yes to the buzzing people. And guess what? Don Hill doesn't mash that button. Instead he tables their deals. The developers get more stretched. Hill tables again. And again. Until finally the developers get stretched so thin they say yes to the buzzers. And Don Hill finally hits the button.
The table. That's where people get stretched.
Notably, it's also the one thing Mayor Tom Leppert's touted ethics reform at City Hall, approved by the city council with fanfare November 9, did not touch. Everything else. But not the table.
Leppert went after lobbyists, who weren't convicted of anything or charged, for that matter, in the City Hall trial. But he did not touch that table.
He could have. He could have taken what was exposed in the Hill trial and worked backward to a reform ordinance that might have meant something, depriving elected officials of the power of the table.
Instead, City Hall and other local entities continue to go to great lengths to preserve and protect their stretching power over contractors who can't take a hint. I want to share with you an especially egregious example, a case that's on appeal and about to go before the Texas Supreme Court.
This one goes back five years to the heyday of the late Lynn Flint Shaw, who was chairman of the board of Dallas Area Rapid Transit and head of Leppert's main political fund-raising committee.
A developer named John Tatum, himself a former DART board member, thought he had a deal to restore and develop an old trolley maintenance facility called Monroe Shop, next to a DART station on Corinth Street in southern Dallas. But the deal kept not getting done. Meanwhile, people were buzzing.
Tatum tells me that Shaw, who died in March of last year in an apparent murder-suicide with her husband, wanted Tatum to hire the wife of a prominent South Dallas clergyman to act as his "community consultant." Tatum, who thought his job was to take a 1913 industrial building and turn it into a museum, didn't know why he needed a community consultant.
DART owns the property. As part of its deal with Tatum, DART was to sell it to him. But Tatum says DART effectively told him he had to close on his loan with his lender before DART would even sign a contract with him, let alone close on the sale of the land.
That's like this. I'm selling you a house. But I tell you, "You have to go get the check from the bank and show it to me, and then I'll agree to sell you the house." It's a type of demand that falls under the technical legal category, "Totally Nutsoid."
The bank will provide the check after the closing. Not before. The bank wants to make sure Mr. Tatum uses the check to buy the building as opposed to going to Bolivia with a topless dancer.
I happen to know Mr. Tatum, and I know he would never do that. But I'm also not lending him several million bucks, am I?
Now here's the difference between Tatum and the developers in the City Hall trial. Tatum is not going to break the law, flirt with breaking the law or even stretch the law by dishing money out the side door to friends of a board member in a federally financed public-entity deal. But because he's a former member of the board himself and a veteran of some hard-fought city politics, he knows his way around the board chair.
Or thinks he does.
For more than a year, while Shaw and others were buzzing around Tatum with demands, DART wouldn't sign its contract with him. Tatum says he finally delivered an ultimatum in 2006 to DART attorney Shirley Thomas.
"I said, 'Look, Shirley, let me tell you something. I'm getting pretty fucking sick of this. We've been working on this thing 15 months, and we're getting nowhere. At the same time we're getting calls from people to sign them up [as consultants], and it looks to me like these are related.
"'So I'm going to tell you what. I don't think there's any substance to the board telling us we have to get a financing commitment letter. This is just a straw to delay this thing.
"'We're going to try one more time, and then I'm going to come to the board tomorrow night and I'm going to tell them publicly what's going on here.'"
Tatum says he had a signed contract in half an hour.
By the way, I happen to know Shirley Thomas, the DART lawyer, as well, and she's not the problem. Tatum's problem was Lynn Flint Shaw.
But now Tatum had a deal. Right? Well, he thought he had a deal.
Once the contract was signed, Tatum's company poured on the coal, assembling plans, doing due diligence with the state historic preservation officer, locking up the financing, getting ready for the final closing at which his firm was to acquire the property and begin refurbishing it as a transit museum for DART.
He didn't hire the preacher's wife. He didn't hire any of Lynn Flint Shaw's cronies. He won. Right?
When the appointed day and hour arrived for DART to transfer the property to him, Tatum showed up for the closing. Others parties showed. But DART never appeared at the closing. They just walked the whole deal.
Here is where it gets really good.
DART had signed a contract with Tatum. Under most circumstances, units of government are protected by an ancient principle in the law called sovereign immunity and cannot be sued. But who would sign a contract with a unit of government if the contract can't be enforced? So the law also provides specific instances where local governments can waive their own sovereign immunity by signing contracts. They can agree to be bound by their word, in other words.
Otherwise their word would be worthless.
One of the instances provided in the law in which a government waives its immunity is a contract for goods and services. Tatum's agreement was a development deal in which the service to be provided was the conversion of the disused trolley repair shop into a museum.
Tatum sued. DART went to court and argued it was not bound by its word. DART said the deal included a transfer of land—the shop—and therefore was not a contract for goods and services but a real estate transaction. Real estate transactions are protected by government immunity.
Judge Carlos Cortez in the 44th Judicial District Court pretty much slammed DART to the floor with a ruling that said DART was totally bound by the agreement it had signed with Tatum. DART appealed Cortez's ruling to the 5th Court of Appeals in Dallas.
Last July 28, the appeals court slammed DART again. "We conclude DART's governmental immunity to [Tatum's] suit for breach of the contract was clearly and unambiguously waived..." the court wrote. "We affirm the trial court's order..."
DART is now appealing the appeals court ruling to the Texas Supreme Court. In that appeal, DART has been joined by the City of Dallas.
The City of Dallas' argument is mainly that giving people like Tatum the right to enforce their contracts with local governments could cost those governments a ton of money:
"Disagreements arise," the city's brief says, "and the City of Dallas has claims, threatened litigation and ongoing litigation concerning breach of contract claims that collectively total several million dollars."
God forbid we should give all those beggars the right to pursue justice in the courts. Think of the cost! Especially when justice shows a troubling propensity to come down on their side.
DART spokesman Morgan Lyons told me DART would not comment on this case because it's in litigation. Dallas city attorney Tom Perkins said, in part, "The city believes that the Court of Appeals' jurisdictional ruling was improper and inconsistent with the rulings of other Texas courts of appeals, and has the potential to subject the city to costly litigation..."
This would all be fairly dry legal stuff if it were not for the context. I'm talking about death by a thousand tables—the very process we just saw illuminated in gruesome detail in the three-months-long Dallas City Hall corruption trial.
It doesn't even sound like America, does it? It sounds more like a scene from some 1940s noir movie with Sidney Greenstreet and Peter Lorre, with lots of sweaty armpits, clattering ceiling fans and that...that dratted sound...that horrible...buzzing.
You don't have to put a gun to the developer's head. You just stretch him. Stretch and buzz. Stretch and buzz. And then, just think what it does to tell that developer you can enforce the contract on him but he can't enforce it on you. His word is his bond. Yours is bubblegum.