Whistle-Blowers Claim City Misused Housing Money

Federal dough meant for affordable housing went to downtown.

Riddle: What does the city of Dallas have in common with Westchester County, New York? This is a hard one.

They're a county. We're a city. They're Yankees. We're not. Their median home value is $559,800, according to the census. Ours is $128,800. Getting tired of this? OK, I'll tell you.

We just got hit by exactly the same kind of lawsuit Westchester County got hit with in 2006 alleging they had lied more than 1,000 times to the federal government in order to fraudulently collect hundreds of millions of dollars in federal housing money. In 2009, after a federal judge agreed the county had made false claims, Westchester settled the suit for $62.5 million.

Jen Sorensen

Our situation is different in one compelling aspect. We're on the line for a ton more money. The lawyers bringing the suit are Kohn, Kohn and Colapinto of Washington, D.C., recognized as one of the nation's top firms, maybe the top one, in fact, in the representation of whistle-blowers in and out of government.

And that's what this is — a whistle-blower suit alleging that the city of Dallas made multiple false claims between 2000 and the present in order to collect major amounts of money from the Department of Housing and Urban Development.

The suit alleges that Dallas City Hall falsely portrayed itself as using federal money to combat segregation when in fact it was using it to further segregation.

That's not exactly why the suit says Dallas broke the law. Dallas broke the law, according to the lawsuit, because it lied in violation of the False Claims Act.

The False Claims Act can be enforced criminally (off to the calaboose) or civilly (write a big check). On the civil side, it can be enforced by ordinary citizens or whistle-blowers. Qui tam, lawyers call that.

Let's say your neighbor owns a small business that has a contract with the post office to shred and dispose of unclaimed mail in an environmentally responsible manner. You know he's dumping the stuff in the river. You can bring a lawsuit against him on behalf of the post office.

If you can prove he's doing it, and if you can prove that nobody would ever have found out if it hadn't been for you, you can demand a cut of whatever settlement or jury award he winds up having to pay to the post office.

In our case, the whistle-blowers are two developers, Curtis Lockey and Craig MacKenzie, who have claimed they lost $30 million in 2007 when the city squelched their major renovation project at 1600 Pacific Ave. downtown. They say the city got mad at them because they wanted to obey federal law and put affordable or low-rent apartments in their project. The project was to be paid for in part by federal money that's supposed to go for affordable housing.

In fact, Lockey and MacKenzie claim they discovered a major kink at City Hall. They say the city was desperate to pump up downtown living by converting empty office towers to apartments, but the city wanted downtown to be fancy and affluent, not modest and diverse.

Lockey and MacKenzie say they had conversations and even saw paper in which the city was offering developers federal affordable housing money but requiring them to break the law by not providing the required amount of affordable housing.

Do they have a grudge? Yeah, they have a $30 million grudge. Most of us couldn't afford to have a grudge a 10th that size. You see a guy with a $30 million grudge coming at you down the street, get out the way.

They took their complaint about their own deal to the U.S. Department of Housing and Urban Development a year ago. They're still waiting to hear what HUD has to say about it.

Now, in a totally separate matter, they have emerged as the qui tam whistle-blowers in this lawsuit, unsealed just last week by a federal judge. The suit is based on issues far beyond their personal situation and paints a portrait of Dallas that should make us all very uncomfortable.

Here is a city that describes itself without the least hint of a blush as divided into North Dallas and South Dallas. White and black.

The city's only daily newspaper proudly publishes a series of articles on its editorial page about the need to spruce up southern Dallas. City Hall brags about how much affordable housing it has steered into southern Dallas.

Maybe even more troubling, the city's African-American leadership demands that city resources be divvied up better north and south. Black leadership sabotages and tries to run off major economic development in southern Dallas because the developers are white and belong in North Dallas. Must have gotten lost.

OK, just in case you and I are getting lost, too, allow me to pause and point out what's wrong with this picture, according to the federal officials who hand out housing money.

There's not supposed to be a North Dallas.

You know what's even more shocking? There's not supposed to be a South Dallas, either. That's called segregation.

I'm not even talking about social policy here. I'm talking about the dictionary. Line down the middle. White folks over here. Black folks over there. Segregation. A bad thing. Not a good thing. They don't give you money to promote segregation. They give you money to promote desegregation. Can you believe we still have these conversations?

1
 
2
 
All
 
Next Page »
 
My Voice Nation Help
33 comments
Guest
Guest

History of Fair Housing

On April 11, 1968, President Lyndon Johnson signed the Civil Rights Act of 1968, which was meant as a follow-up to the Civil Rights Act of 1964. The 1968 act expanded on previous acts and prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, sex, (and as amended) handicap and family status. Title VIII of the Act is also known as the Fair Housing Act (of 1968).

The enactment of the federal Fair Housing Act on April 11, 1968 came only after a long and difficult journey. From 1966-1967, Congress regularly considered the fair housing bill, but failed to garner a strong enough majority for its passage. However, when the Rev. Dr. Martin Luther King, Jr. was assassinated on April 4, 1968, President Lyndon Johnson utilized this national tragedy to urge for the bill's speedy Congressional approval. Since the 1966 open housing marches in Chicago, Dr. King's name had been closely associated with the fair housing legislation. President Johnson viewed the Act as a fitting memorial to the man's life work, and wished to have the Act passed prior to Dr. King's funeral in Atlanta.

DC
DC

Great Information, keep it coming!

Ms Freedmans
Ms Freedmans

Can I get in on this lawsuit????????????????????

DC
DC

Thanks for the information! Keep it coming!

Bettyculbreath
Bettyculbreath

Dallas city Hall has been doing this ,and they all know it.I was on Plan Commission and did the zoning case you spoke about that got the 25 million loan,I never shall forget.I went to the complex near City Place to check affordable units, there were none.I reported it to City Manage,his response was,affordable does not mean low rent. Same reason some Dallas Coucil members are mad with Dallas Airport Board members ,and changed policy to get rid of us, we refused to violate Federal Law for them to balance their budget.I hope they go to jail,what they did ,and approved is just as illegal as what Don Hill did.

Gusbunny
Gusbunny

"...because it lied in violation of the False Claims Act."

Jim, Dallas has been in violation of the False Claims Act as long as I can remember. It's just that some days are more False than others.

Max from the Sandspit
Max from the Sandspit

Way to go Jim, this could get fun. Can you imagine J Wiley playin' Queen for the Day and rolling on Hillwood among others cuz his and their paw prints are all over this.

Che_Boludo
Che_Boludo

Not only is this segregation manipulated by the establishment but also exposes the "black leaders" whose interests are self-serving which doesn't necessarily coincide with the interests of the people they supposedly represent,

Montemalone
Montemalone

Nothing will happen to the people ultimately responsible, they have and control too much money. Don Hill was a small time stepandfetchit, easy to blame and publicly punish.Unfortunately, the resulting civil penalties will be paid by all of us. Get ready for a bump in the water bill y'all.

JustGuessing
JustGuessing

"Federal Judge Reed O'Connor has had this thing on his desk for months. Selected for the federal bench in 2007 by Senators John Cornyn and Kay Bailey Hutchison and nominated by George W. Bush, O'Connor could have kicked the whole thing. Instead, last week he granted a motion for trial."

Can you imagine the phone calls (just a guess) between the Judge, Cornyn and KBH. Judge says - KBH, Cornyn, what the hell am i supposed to do with this case? KBH/Cornyn - Take care of it! Judge - What the hell does that mean? Cornyn/KBH - You know!!!

Mister_Mean
Mister_Mean

Send them all to Federal prision with a lengthy term.

DM
DM

Well, if wall street cannot regulate itself and government can't regulate itself, then we need to be a nation of whistle blowers to end this behavior thats tearing apart AMERICA!

If anyone at City Hall or DHA or the County knows of wrongdoings you are protected by whistle blower laws and cannot be fired for being a hero by reporting it for the good of America!

Come forward and be a HERO!!!

Guest
Guest

Boy, this really is a BLACK and WHITE issue! For a mayor that bought the southern vote to become mayor, its going to really be hard to deliver on those backroom south dallas deals!

whodunnit
whodunnit

Let's see JFK's civil rights laws, Dealey Plaza, JFK assassination, 50 years, and now this federal lawsuit. Talk about conspiracy theory. There really is true justice.

SteveT
SteveT

It would be interesting to know what the City Auditor's Office found during its regular reviews of the City's use of HUD money (the Auditor's Office has a whole division devoted to this function).

Replay
Replay

Sounds like Mayor Mike has a very basic decision to make. He can become a part of this problem, or he can distance himself from it. It's very simple.

trannyntraining
trannyntraining

Is this what Mayor Mike is thinking about, when he states that "south Dallas is always on my mind"?

DC
DC

Sure, come forth with information.

Guest
Guest

Yeah, the supposed "black leaders" are nothing less than modern day slave masters selling out their slaves!

DM
DM

Nope, city hall will be cleaned out as a result of this. Just wait and see!!!

FriendsInLowPlaces
FriendsInLowPlaces

This would actually be a brilliant way to ensure your pension and get rid of these corrupt city staffers all at the same time.

JimS
JimS

Mmmmm. Don't forget your hat.

Bettyculbreath
Bettyculbreath

South dallas got nothing from this deal.Big White developers made money and built UpTown,DownTown and all around Town with encouragement from Dallas city Hall.City Hall requested wavier for some developers to not have the required number of affordable units. I look at the all so want to be Rich downtown and I laugh they don't know they are living in HUD properties just like Section 8 and Public Housing projects.

whodunnit
whodunnit

Puhleeze. You're joking, right?

SoDo
SoDo

No, he can either be part of the solution or part of the problem. You stand corrected. Because he appears to be such a sell-out, i am betting on the latter.

Replay
Replay

South Dallas is always on his mind because he's struggling to figure out how he is going to make good on all his campaign promises without all the Federal Funds he would have used. Good luck, Mayor Mike!

Max from the Sandspit
Max from the Sandspit

You god damn you heathens quit the hate on for all them black ministers and the flocks they fleece. Just cuz they can't afford a God Rocket don't make them bad peoples. Just pikers in the grand scheme of thangs.

LB
LB

Selling out their own people's interest to the rich white folk up North! Enough of it. It's time to educating some these people, so we can make it right and unite to fight.

Jada Wooten
Jada Wooten

Thanks to the people they elected!!!!!!!!!!!!!!!!!!

Guest
Guest

Yep, now he has to run to raise dollars from the oligarches!

Replay
Replay

Maybe Mayor Mike can get someone like Habitat for Humanity to lead the charge! Uh, yeah, he's already doing that.

 
Loading...