How the Feds Convicted Don Hill
It's been described as the largest federal corruption case in the history of Dallas, but you wouldn't know it from the paltry number of people who observed the three-month trial. Most days former Dallas Mayor Pro Tem Don Hill and the other four defendants, their legal team and the jury outnumbered onlookers.
There were days when the public interest waned and media coverage was relegated to posts of obscure blogs. Days when jurors and defendants were caught nodding off as the tedium of the trial weighed heavy on their eyelids. Days when the endless autumn rains or prospect of paying another $10 for parking kept people away.
Only not today.
Today, on the 15th floor of the Earle Cabell Federal Building, U.S. District Judge Barbara Lynn's courtroom is packed. Reporters, courthouse observers, lawyers, family and friends of the defendants, and those too damn curious to be elsewhere this dreary October 5 morning are anxiously awaiting the jury's verdicts.
Before the jury returns, Lynn tells the assembled spectators that jurors have reached unanimous verdicts on all counts charging the defendants with conspiring to accept bribes from one affordable-housing developer and extorting money from another.
But more is at stake than the fate of the defendants. Guilty verdicts would leave an unsightly stain on Dallas City Hall that could take years to erase. Not guilty verdicts would deter mounting efforts at City Hall for comprehensive ethics reform and send a message to wayward politicos that the integrity of their more questionable actions could go unchecked.
Judge Lynn, a diminutive woman who has successfully controlled her courtroom through an unmanageably complex trial, instructs those before her to refrain from all outbursts. She brings in the jury and asks the defendants and their attorneys to rise. She reads out loud the first charge on the verdict form—count 10—the conspiracy to commit bribery charge.
Defendant D'Angelo Lee, a friend of Hill's and his former appointee to the city plan commission, stands sheepishly behind his attorney; he appears to be praying. Rickey Robertson, a car dealer, looks confused, as though he doesn't know where he is. Darren Reagan, however, has been here before. Lynn sentenced him to one year in prison after a jury found him guilty in June 2008 of scamming the government by using his elderly mother-in-law as a front to pocket $40,000 in public housing money.
Gone from Hill's face is his trademark gap-toothed grin. He appears solemn, neatly dressed in a dark-blue pinstriped suit, looking more like the lawyer he was trained to be than a defendant. He clasps hands with his wife and co-defendant Sheila Farrington Hill, branded by the prosecution as his former mistress. Ray Jackson, Don's attorney, holds Don's left hand, while Victor Vital, Sheila's attorney, grabs her right. The judge reads the verdict:
"The jury finds the defendant, Donald W. Hill, guilty."
The courtroom remains silent; no one reacts. Lee is the next to be found guilty. Then Sheila. Don gets a better grip on her hand, as if to brace her for the firestorm headed their way.
By the time Lynn finishes, the jury has convicted the defendants on all but six of the 29 counts against them. Don Hill and Lee have each been found guilty of seven counts, Sheila five, Reagan and Robertson two each.
"I don't remember very much on count 10 after she called Sheila's name and said, 'Guilty,'" Don says a day after the trial. "It was so unexpected and so numbing that I really didn't adjust after that."
Several hours after the verdict, juror Nedra Frazier still feels overwhelmed. "Today was very emotional for me and for a lot of us."
Frazier became the final juror after the defense made a last-minute challenge to the racial composition of the jury. Because all the defendants were black, the judge allowed her to be seated as one of four black jurors. Defense lawyers considered her addition a major coup. They figured they had another empathetic juror who would take to heart their arguments that their black clients were being selectively prosecuted for the same kind of conduct that white politicians had gotten away with in Dallas for generations.
But Frazier says race didn't factor into the deliberations. Instead she cites the mountain of damning evidence—wiretaps, transcripts, e-mails, documents, surveillance videos and 44 witnesses—that led jurors to their guilty verdicts. "There were a lot of facts out there," she says.
Sheila Hill couldn't disagree more. A day after the verdict she sat stunned in her lawyer's office, convinced the government had totally failed to prove its case. "The last thing I expected was what we heard [from the jury]."
But Frazier believes there was enough evidence to go around to convict everyone. "Everybody knew what they were doing."
Surprisingly, Frazier rejects the idea that Don Hill was the mastermind behind the entire conspiracy—that the defendants had spun this tangled web, with Hill at its center.
"I think everybody played their part individually," she says.
But that's not what the prosecution would have had the jury believe. Not at all.
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 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.
Potashnik did, however, hire LCG Development Group, a general contractor, after being pushed to do so by then-City Plan Commissioner Lee. Potashnik's company paid LCG, headed by Andrea Spencer (a co-defendant who had pleaded guilty before trial) and Ron Slovacek (a co-defendant who has yet to be tried) for concrete work done on a project outside of Hill's district, with some of the fees traced by the government into a Farrington & Associates bank account in what prosecutors called a "10 percent kickback scheme."
Potashnik felt he was being squeezed too hard by LCG, whose bid on each of two projects in Hill's district was $250,000 too high. A May 4, 2005, wiretap revealed Lee balking at lowering the bid and explaining to Slovacek that the $250,000 was a "tax" added to each project—$200,000 to Lee for brokering the deal, $50,000 to Spencer, who is black, for being the minority participant. Slovacek countered that removing the "tax" would allow them to match or underbid other contractors. But Lee told him they couldn't afford to do it for "Kibbles 'n Bits."
Potashnik testified that he found Lee's pressure to hire LCG "offensive," which led him to hire a different contractor, but he continued to work with Lee, fearing that if he didn't it would come back to haunt him. "I was basically in a state of denial. I looked the other way, put my head in the sand and didn't ask the right questions."
Potashnik's testimony cut both ways, weaving the fabric of conspiracy but also showing how loosely connected its threads were to Hill. During his four days on the stand, the prosecution played a May 2, 2005, wiretap that had Lee complaining to Hill about his LCG problems. Hill appeared to be giving his planning commissioner an ethics lecture, explaining that Lee couldn't profit off deals he voted on as a public official.
On cross-examination, defense lawyers attacked Potashnik for his "sweetheart" plea deal and his relationship with former Mayor Miller. Potashnik, his wife and father had together contributed $66,000 to her political campaigns and the strong mayor referendum she supported. And a day before her vote on a Southwest Housing project, Miller received a $10,000 contribution from the Potashniks. The implication? Why were five black people on trial, while Miller, a wealthy white woman, was not?
Since deciding not to run for a second full mayoral term in 2007, Miller had managed to stay out of the limelight, deferring to her successor, Tom Leppert, who quickly became the face of the city. But when the elegant, smartly dressed former journalist entered the courtroom on August 6, it seemed as though she had never left office.
A poised witness, Miller was witty when she wanted to be, combative when she needed to be. She testified she and Hill admired each other, and there were many issues regarding affordable housing upon which they agreed. There were three issues, however, upon which they didn't agree: handing out tax abatements to developers, a subsidy to attract the Cowboys to build its new stadium in Dallas and ethics reform. As mayor, Miller championed tough new ethics rules while Hill saw them as a stigma that branded the majority-minority council untrustworthy.
Miller recalled first meeting Bill Fisher at an August 23, 2003, council meeting. He was pitching the council on one of his proposed developments when Miller leaned toward Hill and asked why council member Fantroy had recused himself from the proceedings. Hill explained that if Fisher's project was approved, Fantroy would stand to benefit, because his company would be handling security at the new development.
"I thought it was inappropriate for that relationship to occur," Miller told the jury. So she confronted Fisher right there (by some accounts, creating a huge "ruckus"), and he confirmed the arrangement.
"Are you kidding?" she asked and immediately called the council into a closed-door executive session to discuss the propriety of the arrangement with then-City Attorney Madeleine Johnson.
Miller testified that Hill didn't understand her concerns, and "he was very emphatic about it." Hill began pacing around the council chambers. "He was very loud. He was aggravated."
Although Miller told the council she thought "everything was wrong with it," Johnson advised council members that Fantroy's recusal resolved any ethical dilemma. This gave the defense the cover it needed to argue that Hill's integrity was intact. Johnson's legal opinion, however, didn't placate the feisty Miller who next contacted Sarah Dodd, then a KTVT-Channel 11 news reporter. Her broadcast caught the attention of the FBI, which opened the investigation that gave rise to the current trial.
Prosecutor Saldana asked Miller what she thought of Fisher. "I thought he was doing something unethical in order to get support for his projects."
She held a higher opinion of Potashnik, though. In her cross-examination by Jackson, she admitted she often touted Potashnik's projects and had sent letters of support for Southwest Housing to Austin and San Antonio less than a month after receiving a campaign contribution from him. She also testified she had done nothing wrong; it was "perfectly legal" to accept campaign contributions.
On direct examination, Miller testified that Potashnik had told her he felt uncomfortable making a $40,000 donation to former council member Leo Chaney's book fair. "I said that if he had concerns, that he should go to the FBI."
Although Potashnik never took his complaints that far, Fisher did, becoming an FBI informant and agreeing to wear a wire and carry a large briefcase concealing a video camera. At one meeting at Starbucks, Lee grew suspicious of Fisher's "big bag" and even patted Fisher down. But that didn't stop Lee from incriminating himself after they sat down to talk.
Fisher, a stout man who resembles Rush Limbaugh, took the witness stand on August 11. Jerry Killingsworth, the city's housing director, had previously testified he didn't trust Fisher. "He had credibility issues with me."
Although the defense counted heavily on the jury having similar issues, Fisher appeared professional and serious when testifying, sounding knowledgeable and cautious.
Earlier testimony from Kathy Nealy gave jurors a glimpse of the behind-the-scenes roles political consultants play in representing their clients' interests before the council. Nealy, who is black, lobbied South Dallas council members and earned $175 per hour plus a $20,000 bonus each time a client's project passed the plan commission or city council; prominent consultant Carol Reed, who is white, earned $100,000 to secure the votes of North Dallas council members. Fisher testified he had retained both, saying Nealy had urged him to sign the security contracts with Fantroy to get his deals approved. This contradicted her testimony.
Fisher admitted that Hill never directly extorted money from him, but felt Hill was the unseen hand behind a conspiracy to do so. "All roads led through Don Hill," he said. "None of this could have happened without Don Hill controlling the votes on all of these matters, the zoning votes, the tax credit matters, all of these."
Fisher testified that Hill encouraged him to employ minority contractors on his projects, even suggesting he meet with Reagan, which Fisher did. On one development still seeking council approval, he entered into a large contract with Reagan to serve as his project manager. But that's not what brought him to the FBI. It was only after Fisher was pressured by Lee to donate $7,500 to Hill's surprise birthday party the day Fisher's project came up for a council vote that he felt compelled to go to the authorities. (A phone message introduced as evidence had Lee asking Fisher for $2,500.)
"I thought it was improper," Fisher testified. "I had matters pending, and $7,500 is way over the campaign limits."
Wiretaps played during Fisher's testimony also implicated co-defendants Rickey Robertson and Lee in a telling scheme. Fisher had been resisting Lee's attempts to pressure him into hiring Robertson's company, RA-MILL, as a subcontractor. When Fisher protested that Robertson, a car dealer, had no real construction experience, Lee proposed "Plan B": Fisher would pay him anyway.
Asked prosecutor Busch, "So their Plan B is, 'If you pay us $540,000, we won't do any work on this project?'"
"Yes, but we'll pass your zoning cases," Fisher testified.
Fisher's testimony and Lee's wiretap did so much damage to Lee that his lawyer was left with little choice but to claim entrapment, a last line of defense for most criminal attorneys. Hill's culpability, however, wasn't nearly as concrete: He rarely spoke to Fisher, and the government had so far failed to prove that Hill directly exchanged money for votes.
Vital also figured he'd scored points when he read a transcript of a December 6, 2004, taped conversation between Fisher and Lee. "The mayor is, in my opinion, doing something that she should not be doing," Fisher said. "She's taking massive campaign donations from Brian, and in exchange for that, in a tit-for-tat, she is opposing my projects." Fisher also said that Potashnik had given Miller $100,000 in the past year, and "you don't see it all in the campaign." Vital jumped on this as support for the defense contention that, unlike the defendants, Miller was able to avoid prosecution because she is white.
Hill, who had remained confident bordering on cocky throughout the government's case, had not heard anything yet that would keep him off the stand. The other defendants would not testify in their own defense, but Hill stood ready to be his own best witness.
Or his worst.
Fielding two days of softball questions from his lawyer's direct examination, Hill came across to the jury as the likable guy that he is: a dedicated public servant who, upon taking up his council position in June 1999, sought to follow the advice of former City Council Member Maxine Thornton-Reese, who urged him to accomplish two goals: "unite the African-American council members" and revitalize downtown.
Hill made a point of speaking directly to the jurors, something lawyers always advise their clients to do, and seemed sincere when asked by Ray Jackson how he felt about the prosecution's use of the term "mistress" when referring to his wife Sheila.
"That's been the most painful part of the entire trial," he said—that she had to pay the price for his adultery.
Hill maintained that no one knew that she was his mistress: not Brian Potashnik, not D'Angelo Lee. He had managed to keep their affair quiet, even though Lee and Sheila had gone into business together (they used her last name because Lee had credit problems, testified Hill) and Potashnik had their firm on a monthly $14,500 retainer (with Sheila receiving $2,500 and Lee the rest, according to Hill).
Hill claimed he never encouraged Fisher to hire Darren Reagan as a project manager on one of his affordable-housing developments, and he only learned afterward that Lee was profiting from a concrete contract with Potashnik for a development outside of his district. But at no time did he accept bribes or extort money from Potashnik or Fisher. And Hill maintained that while he wanted minority participation in the projects, it was never in exchange for his vote.
On September 8, the third mundane day of Hill's direct, Jackson asked about some of the more damning allegations against Hill. What about the infamous $10,000 cash payment captured on surveillance, showing Reagan handing him an envelope in a church parking lot of Friendship-West Baptist Church? Hill said he never expected to see Reagan there, and Reagan told Hill that the money was partly a campaign contribution from him and Allen McGill, his partner in BSEAT and a co-defendant who had pleaded guilty before trial. The rest was for D'Angelo Lee, whom Reagan expected to be working with in the future. Reagan also showed Hill an invoice from BSEAT to Fisher, along with a copy of Fisher's check to the company.
Subsequently, Lee and Sheila showed up at the church, but rather than give $5,000 to Lee, Hill handed it to Sheila, who would later deposit it in her Farrington & Associates bank account. So what appeared to be a $10,000 bribe from Fisher to Reagan to Hill was explained away by Hill as a fee for Farrington & Associates and a campaign contribution for Hill to fight the strong mayor referendum. Hill then reported the $5,000 as separate $1,000 contributions coming from Farrington, Reagan, McGill, Lee and Lee's wife. What might have appeared to jurors as cover-your-ass accounting could have looked worse. "Why not pocket it and move on down the road?" asked Jackson.
"That's what everyone wanted to expect of us, but we weren't going to do that," Hill said.
Jackson turned Hill's attention to another potential land mine—a wiretap, which prosecutors had introduced in anticipation of Hill taking the stand, of a conversation between Hill and Lynn Flint Shaw, a prominent political operative who was murdered last year by her husband. When she spoke with Hill, he was trying to broker a deal between the black community, which was interested in defeating Miller's strong mayor referendum, and wealthy white arts patrons, who were seeking city support to subsidize a maintenance contract for the arts district, which Miller opposed. Both Hill and Shaw were raising funds to defeat the strong mayor referendum. (Hill contributed his $5,000 from Reagan to the anti-strong mayor campaign.) But Hill wanted the arts community to contribute as well.
"They need to get $50,000 to $100,000 and get it to you by the end of the week," Hill told Shaw, "because if I don't see no money, I'm not voting on no maintenance contract."
Although the conversation had nothing to do with the pending prosecution, it did smack of the same kind of pay-for-play bribery for which Hill was on trial.
On direct, Hill offered a brief explanation of the conversation, whose sting was hard to mitigate. Wisely, Jackson moved through it quickly and changed directions.
Under the aggressive cross-examination of prosecutor Busch, Hill's calm façade quickly cracked. The prosecutor wasted no time in bringing out the self-serving inconsistencies in Hill's direct and came close to completely destroying his credibility.
Hill had testified that he recalled being told by the FBI that he was the "subject of an investigation but not a suspect or a target."
Was it a "clear lie," Busch asked, when Hill told the media that he wasn't the subject of an FBI investigation? To which Hill awkwardly responded, "No."
On direct, Hill had testified that he had no idea that Reagan was going to show up at the church parking lot—a minor point until Busch produced a transcript of a prior conversation between Hill and Reagan confirming a meeting would take place the next day. And why didn't Reagan just give Lee's share of the "payoff money" to Lee when he showed up at the church? Hill had no answer. And why did Hill break the remaining $5,000 into lesser $1,000 campaign contributions? Because he thought that was the legal limit. Not so, as Busch pointed out, as he read Hill the state law, which put the maximum cash contribution at $100.
Five o'clock couldn't have come too soon for Hill, who didn't have a much easier time the following day. Hill's credibility took another hit when Busch brought up his use of a fax machine, which would have been insignificant had Hill not lied about its location and ownership. First he told the jury that he didn't have a fax machine at his house (Busch presented a photo of one taken at his home during the FBI raid in June 2005), and then he said the machine belonged to his ex-wife, Vivian (Busch showed Hill a document that proved he knew the fax machine was city property). By the close of cross, Hill could no longer look at Busch, was awkwardly taking long pauses before answering, had repeatedly incurred the judge's scorn for being non-responsive and appeared, at times, to bury his head in defeat. Few courthouse observers doubted that Hill's decision to take the witness stand was a huge mistake.
Whether that mistake alone cost him an acquittal is somewhat academic. Jurors interviewed after deliberating on and off again for six days say it was the overwhelming weight of the government's evidence that caused them to return their verdicts of guilt.
"The jury's verdict today," announced U.S. Attorney Jim Jacks in a post-trial press conference, "shows that the citizens of this community do not want a government where the game is rigged and the people in positions of power seek to further their own interests before that of the citizens they are supposed to be serving."
Aided by the testimony of Fisher and five of the 14 co-defendants who had pleaded guilty, the prosecution secured a major victory, but it's not over yet. Separate trials for state Representative Terri Hodge, Ron Slovacek and Jibreel Rashad, Robertson's partner in RA-MILL, are forthcoming. Cheryl Potashnik, Brian's wife, has pleaded guilty and will testify against Hodge, who is charged with accepting rent and utility subsidies from the Potashniks in exchange for letters of support for Southwest Housing.
But don't think for a moment that Don and Sheila Hill have been humbled by the verdict or are giving up the fight. Both are appealing their convictions.
"It's not like some little game, and if you lose, oh, you lost the game. People's lives are at stake," Sheila insists. "It's just the next step of being lynched."