$800 Grand, Sex Extortion, Pit Bull Attacks: No Red Flags Seen at City Hall.

The old HUD cash drawer: If you don't hurry up and grab some, some other less deserving person will steal it.
The old HUD cash drawer: If you don't hurry up and grab some, some other less deserving person will steal it.

Late yesterday, just before finally answering my days-old question about it, the city manager sent a memo to the City Council characterizing $800,000 repaid to U.S. Department of Housing and Urban Development as a kind of technical accounting error and no big deal.

Most of it involves money stolen by city employees from a fund intended to help recently released felons with HIV -- about the most helpless, friendless, lost, vulnerable wretches on the face of the Earth. One city employee sentenced to 15 years in prison for it a couple days ago was using the money to set up a love-nest for a woman from whom he was extorting sex. Another one, the person in charge of the program, indicted but not yet tried, was using the money to give an apartment to her relative who was in trouble for setting a pit bull on a person.

The memo from City Manager A.C. Gonzalez is below. You can read it for yourself. I just know too much about how outrageous this really is. For example, another 67 grand the city had to turn back to HUD was money that went to the South Dallas Fair Park Inner City Development Corp. That's the entity run by former City Council member Diane Ragsdale that has been a central player in a saga I have been telling you about for years -- the car wash on MLK in South Dallas that the mayor wants to run out of business so Ragsdale or somebody else can have the property.

So basically you've got the city acting under color of official right to stiff-arm this guy who makes his money by working and doing business. You've got Ragsdale's outfit waiting in the wings, funded with free money from HUD. And even at that the louses can't keep their hands out of the cookie jar long enough to avoid having to give the cookies back.

And then you get this supercilious memo from the city manager saying, between the lines, there's going to be some crap in the Dallas Observer tomorrow about some money we had to give back, but don't sweat it, because the feds are suckers and we can get all the money back from them anyway.

Oh, don't worry that our employee was just sentenced to 15 years for stealing money and extorting sex. That's not a red flag. Don't worry that the person over the whole program has been indicted. Don't worry that we had to fire the whole staff and suspend the whole program. No big deal. HUD's a sucker. We can get them to give the money back after the headlines die down.

Let me remind you why we know one syllable or whisper about any of this. We only know about it because an anonymous commenter here on Unfair Park, pretty obviously a City Hall insider, blew the whistle a couple weeks ago. The commenter, calling him or herself "bigbexardaddy," reported that gendarmes from the HUD Office of the Inspector General are at City Hall delving deep into "all programs" involving HUD money and that "hundreds of thousands [have been] ordered repaid so far."

All of this is happening pursuant to another saga we have talked about here a lot, the "Lockey and MacKenzie" complaint against the city, in which two developers successfully persuaded HUD that Dallas has been misappropriating hundreds of millions of dollars and practicing deliberate racial segregation in violation of federal law. That one hasn't even yet fully hit the fan in terms of a settlement, but bigbexardaddy put us on to an interesting aspect of it; what he was really telling us was that HUD, when it began to looking into Lockey and MacKenzie, stumbled on sleaze and corruption all over the map where the city has been dishing out HUD money.

Gonzalez's memo makes it look as if the city had to pay back HUD $625,814 in the sex extortion and pit-bull attack matter only as sort of a technicality, because, you know, the sex-extorter and his boss, the pit-bull lady, had sort of handled the files, and you never know. Really it was the city that led the investigation some of the time more than HUD. So that all sounds really good, right?

In the Diane Ragsdale People's Ministry of Property Seizure matter, Gonzalez tells the council, "City Staff strongly disagreed with HUD's finding on this item. However, funds were repaid to settle the disagreement and close the matter."

Oh, "city staff" disagreed with HUD about it? Oh, I see. City staff disagreed. Now, did that include the sex extorter? Was he consulted? How about Ms. Pit Bull? No, I guess they were just involved in stealing HUD money from people who get out of prison with HIV. Probably a whole different type of "city staff," a much higher class of folk were involved in deciding HUD was wrong about the Ragsdale money.

Another key point here: bigbexarddaay only told us that hundreds of thousands had been repaid. We only found out it was true and how much it was exactly because City Council member Philip Kingston saw bigbexardaddy's comment and fired off a memo to "city staff" asking about it.

First of all, what does it tell us that the damn City Council has to depend on random comments from bigbexarddaddy to find out this stuff in the first place? Secondly, when "city staff" did respond to Kingston and did tell him it was true they were having to pay back over $800 thousand, they never said why.

So this week I spend all my time asking why. Typically, right before I get my answer, the official cover story goes out in a memo to the council and to The Dallas Morning News, and the News has a piece inside the paper this morning with the official version.

Did I mention the theatrical summer camp for poor kids? Isn't that a great thing to do? Doesn't it tug at your heart strings? Fifty-eight grand paid back on that one. Appears the funds were not spent on a theatrical summer camp for poor kids. You know what: I am literally afraid to ask what they did spend it on. I see myself going down there with a baseball bat and getting chucked in the brig longer than the sex extorter.

Try this on for size as a story in the private sector. You're the CEO. You call down to the COO. "Hey, did we have to pay back the feds $800,000 this year? Oh. But why did we have to give it back? They were using it to extort sex. Well what did our division head do about it? Indicted? Oh. Don't worry about it? You say if we wait long enough we can get all the money back and do it all over again? Oh. Would you please come directly to my office right now and bring all of your personal possessions with you in a box."

But not at City Hall. At City Hall, everything is going according to plan and there is nothing for you to worry your silly heads about. No red flags here, everything coming up roses.

As for HUD and its role, years ago there was a guy the city fired from the city auditor's office, an accountant who was canned basically for being too honest. I talked to him after he left. One thing he said to me has always stuck in my head. He said in public accounting if you put money in a drawer and then announce to everyone that you are never ever going to count that drawer, you must enter those funds into the books as "already stolen." Because that's where it goes. And that seems to be how the HUD money at City Hall works.

Thank you, bigbexardaddy. Thank you, Philip Kingston. It's always better for us to know the truth. I guess.

Council Memo - 14.07.23 - HUD Repayments by Schutze

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