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Good News -- Really -- From the City Hall Corruption Trial

Brian Potashnik walks the walk and talks the talk. For that, he may get a couple of years in the pen.
Sam Merten

Believe it or not—and I'm actually trying to talk myself into it—there may be a way to look at this terribly depressing City Hall corruption trial now under way in federal court and come away feeling optimistic. And I'm not talking about watching the trial while drunk.

There's sort of a golden thread here. Maybe. But you need a magnifying glass.

As you know, the federal government has accused 14 defendants, including a former Dallas City Council member and a former member of the city plan commission, of extorting bribes from real estate developers. The defense has not yet presented its case. The prosecution's presentation of evidence is now in its seventh week.

Some months ago I was writing a lot about the unrelated political bullying of a railroad and trucking developer in southern Dallas County. Richard Allen is the main private player in what is called the southern Dallas inland port. Local officials were jacking him around after he had declined to hand over a slice of his family-owned company to a group of local political "consultants."

While those stories were running, I got a few calls from old-line downtown establishment types—such people do talk to me sometimes, even if they wouldn't want their children to know—mainly to express their empathy for Allen. He is by all appearances a straight-up businessman trying to bring a huge number of new, well-paid jobs to southern Dallas, a community that hasn't really been fully engaged with the national economy or culture since Reconstruction.

You'd think the business establishment would like him. And I think they do. Sort of. But the ones who called me had a caveat.

"Obviously," as one man put it, "Allen got terrible advice on how to proceed politically, or he wouldn't have had all these problems."

So last week I'm sitting in the federal courthouse downtown watching the testimony of one Brian Potashnik, who, like Allen, is a real estate developer, and who, like Allen, came here from California, and who, like Allen, was hit on to hire certain favored "consultants"—in Potashnik's case the mistress and now wife of a sitting city council member with life and death sway over his projects.

But Potashnik, unlike Allen, said yes.

According to the standards of the people who called me about Allen, Potashnik knew how to play ball. I'm sure the solons of the city sat down at dinner parties and told Potashnik the very same thing Allen has told me they told him at dinner parties: That's just how it has always been done here. You have to expect it and accept it. It's how things are.

So now I see Potashnik before me on the stand, a ruined man. Potashnik and his wife, Cheryl, have pleaded guilty to federal bribery charges. His elderly father, Jack Potashnik, has pleaded guilty to tax evasion.

If the judge sticks to the plea deal, which she is not required to do, Potashnik could get two years and four months in the pen, and his wife could get a year and four months. Potashnik's father, who is 72, faced up to five years in prison and a $100,000 fine, although he's probably not looking at jail time now.

I'm sitting here in a small courtroom a floor above the big courtroom where the trial is actually taking place. We're up here because the judge allows us to use cell phones and laptops while we watch on closed circuit.

At this moment, the defense lawyers are giving Brian Potashnik a hard time about his money: Isn't it true, they want to know, that he gets to keep some of his millions in return for ratting out their clients?

I understand the legal strategy. They need to undermine his credibility with the jury. The lawyers need to plant doubt in the minds of the jurors. He's just testifying against their clients, they suggest, to save his own money.

But from a strictly human-interest point of view, so what if he keeps some money? Who gives a shit? He had X many millions of dollars. Now he's going to have X minus Y millions. But this man is still going to the pen. His wife may be going to the pen. His father has already been through the kind of mental ass-whipping that can kill old people.

Do you not think that this man would gladly have paid whatever he has left—times 20—if it would have kept his wife out of prison and spared his father from ever having had to go through this?

It's not really my intention to twist the knife, but I do want to point something out: Brian Potashnik is the man, according to all the downtown dinner party wisdom, who knew how to play ball in Dallas. And where is he right now? This is the one who got the really uptown, high-dollar, in-the-know political advice.

 

Allen, meanwhile—the one who just didn't know how to play, who just didn't know how it's done here in Dallas, the one The Dallas Morning News sneered at in editorials for being an obstructionist—is not in the dock. He's downtown.

Last time I heard, his business was pretty much going and blowing, even in this down economy. Every week I get another press release from The Allen Group about some new major tenant or land-buyer they've signed for the inland port. If you haven't driven the stretch of Interstate 20 from Hutchins to Duncanville where it's all happening, you need to. It will lift your spirits. It's one long blaze of cranes and construction—everything from massive warehouses to retail to residential.

I made calls last week to some real consultants who work for real developers—not sham extortionists working for bribe-payers—to ask what they thought the outcome of this trial will be for development in southern Dallas. Will it scare everybody away?

Even if the top defendant and target of the government, former city council member Don Hill, is acquitted, Brian Potashnik goes to prison. So what is the lesson there for the next developer who spots an opportunity in southern Dallas? Heads they win, tails you lose?

All the people I talked to said the effect of the trial could be bad. "I've been reading the stories," one said. "They read bad."

But southern Dallas has been undergoing major redevelopment in recent years in some corridors, and not because somebody wanted to help southern Dallas. The new level of interest in southern Dallas is driven by opportunity—cheap land, often vacant, at a nexus of freeways and rail lines, with local government entities willing to build all the roads and bridges and water lines they can afford. And a plentiful workforce, close at hand.

Trial or no trial, southern Dallas is still a place where somebody can make a whole lot of money. That doesn't go away.

The worst message from the trial is that you cannot go to southern Dallas to make your money and think you're not going to have to deal with a very tough culture. Some people in southern Dallas, including some who are elected officials, believe there is a special unwritten southern Dallas tax on people who come there to make money. A big tax.

The defendants in this trial demanded hundreds of thousands of dollars in payment for little to no work, as a sort of tribute paid for the right to do business there. In the wiretaps, they even call it a tax.

More incredibly, this notion gets tacit support from the old white power elite, bending over backward, apparently, to atone for the city's racist past. In an April 16 editorial about the inland port, The Dallas Morning News suggested that, instead of being praised for bringing jobs and investment, companies going into southern Dallas should expect to cough up.

"Suspicions run high," the paper said, "among many in southern Dallas that outside investors, particularly from white-owned companies, only want to exploit workers and reap big profits without giving something back to the community."

Obviously giving back does not include creating jobs. And now, from this trial, we know what it does mean. I'm sitting here staring at Brian Potashnik, thinking about what it means. Ouch.

So if that were the only message people got about southern Dallas—they're going to hit you, it's going to be pay-to-play, and you are going to eat all the downside—then that might be enough to offset the enormous economic promise of southern Dallas. Maybe it's enough to queer the deal.

But it's not the only message. Richard Allen is the other message. There is a way to say no.

It's not hell no. Allen's minority participation, both within his own firm and in subcontracting, is usually around 25 to 30 percent, well above levels attained by old-line Dallas development and construction firms. I cross Allen's traces all the time, so I know he maintains a high level of involvement and outreach to local communities.

I just mean no, I'm not going to give you 15 percent of my company for the asking. No, I'm not going to hire individuals whose names you dictate to me. No, I'm not going to transact business with a little mafia of chosen subcontractors and so-called consultants.

No to that.

And Allen's going great guns. He's not the guy I'm looking at right now. He's not sitting where that guy's sitting. Allen, I assume, is sitting at his desk.

That means the people at the downtown dinner parties are wrong. The Morning News is wrong. It may be the case that things have always been done a certain way here in the past. But that does not mean you have to do them that way in the future.

 

And that's the best news southern Dallas could hope for.


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