The Source of Dallas' HUD Problem

It's not me. It's the two whistle-blowers suing the city.

Not that you asked, but here's what it's like to be me. I'm walking my dogs, Penny and Dorothy, up and down alleys in East Dallas, and I've got my little cell phone ear-bug deal going so I can talk to people and keep my hands free for clean-ups. And this is what I hear in my ear:

"... white scientists, well-known fact, created AIDS, took it to Africa (click, ring); mayor of Dallas, well-known fact, member of Mafia (click, ring); Masonic conspiracy to divert Trinity River, well-known fact (click-ring); Elvis, well-known fact, moved to Dallas after sex change, was elected to City Council ..."

Maybe I ask, "After the sex change operation, what race was she?" But most of the time I just keep walking and cleaning up, because those are my jobs — talking to people and cleaning up after my dogs.

Daniel Fishel

Do I even check out what people tell me? Of course I check out what they say or you'd be reading here how the mayor is a Martian with a sex-change operation who's trying to divert the Trinity River and give people AIDS. But people do call. And I do listen. All. Day. Long.

So last week I'm doing another part of my job, patrolling court documents online, while somebody on the ear-bug tells me about the Masons, and I stumble across a very unlikely character in a federal court case. Me. Yours truly. Right in the middle of this incredibly complicated federal lawsuit I'm looking at, it says, "Schutze criticizes Dallas City Hall for potentially submitting false claims to HUD (U.S. Department of Housing and Urban Development)."

Schutze? Schutze who?

I tell the guy on the ear-bug there's a city bus careening right at me and I can't get out of the way so no need to call me back, ever. I pull the plug, and I go back and look at this damn thing carefully. I am reading a brief submitted in March 2012 by lawyers for the Dallas Housing Authority in a lawsuit against the DHA and the city by developers Curtis Lockey and Craig MacKenzie, who claim the city has been defrauding the government for a decade or more by deliberately misspending federal desegregation funds. The suit is a whistle-blower action in which Lockey and MacKenzie are claiming a reward under the federal false claims law. That law basically offers payments to citizens who report frauds on the federal government.

I should have read this whole docket more closely long ago, but, you know, I've got the ear-bug, and then there are the dogs. Anyway, I look at the most recent filings and see that Lockey and MacKenzie are back in the court of U.S. District Judge Reed O'Connor. I wonder why.

O'Connor dismissed their whistle-blower case a year ago on some kind of grounds I never fully understood at the time, basically saying they weren't really the whistle-blowers so they couldn't claim a reward. I did know their case was tossed out, just wasn't sure how or why.

The big recent event in this entire picture was the release of a scathing four-year federal investigative report at the end of November accusing Dallas City Hall of engaging in massive concerted fraud against HUD. HUD says Dallas took hundreds of millions of dollars in desegregation money and used it to build fancy condos for white people downtown, among other major no-no's.

The report gives direct credit to Lockey and MacKenzie for tipping HUD off to problems at Dallas City Hall. The report demonstrates, however, that federal investigators, going far beyond the allegations brought to them by Lockey and MacKenzie, discovered a broad pattern of cheating to which Lockey and MacKenzie's allegations were only the tip-off.

In other words, this four-year federal investigation gives Lockey and MacKenzie credit for blowing the whistle, so Lockey and MacKenzie are back in O'Connor's court with a motion asking him to look at the HUD report and reconsider his finding that they were not the whistle-blowers.

I am at my computer looking at the docket. The guy on the ear-bug is talking to me, and I'm saying, "Oh, yes, well, the Masons, yeah, ever since that damn moon shot, well-known facts, yes, sir," and all of a sudden I wonder who the judge thought the original whistle-blower was. So I go back up the list of documents and look at the briefs filed last year by the Dallas Housing Authority and the city.

And there I am! The city and the DHA told O'Connor I was the whistle-blower! They cite a June 10, 2010, article I wrote under the headline, "City Hall had better look over its shoulder because HUD is getting ready to kick some fair-housing butt."

My first thought, when I see that line in the brief is, "Don't tell people I said 'butt'! Not in a federal court document! Goodness gracious."

But when I read on, I get the full drift. The position being taken by the city and DHA is even more ludicrous than I could ever have imagined.

The law says Lockey and MacKenzie are "parasitic relators" of the facts if there were other public disclosures before they made their report. In order to claim a reward under false claims, they have to be the original source of the information that tipped the government off to the fraud.

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Jim, so the big question is when are they cutting you a check?  LOL...