Hillary Kicked Ass, but Will Julian Castro Wind Up Biting Her There?

HUD Secretary Julian Castro
HUD Secretary Julian Castro
Gage Skidmore

I get that Hillary kicked ass in that Benghazi hearing, but in national politics I’m strictly a peanut gallery guy. I know that The Christian Science Monitor asked recently if it’s already inevitable that Hillary Clinton’s running mate will be Julian Castro, HUD secretary and former San Antonio mayor, and he’s a guy I have written about a little because of his connection to the Dallas/HUD matter.

So what? Maybe nothing what. As I just said, what do I know? But here’s something else: If Julian Castro is Clinton’s running mate, then at some point during the campaign the Lockey and MacKenzie matter will come up, simply because of the timing of the litigation, the timing of the campaign and the fact that the Dallas HUD case is such a great narrative about insider politics.

Here’s another question. Why would an insider politics story be especially important? I don’t know. I just know that the guy with the clown haircut who wants to build a wall across the continent is being challenged in Republican polls by the guy who says evolution is a theory invented by Satan. For people to be torn between the haircut guy and the satanic evolution guy, I have to think the voters really want someone from way outside the loop. Waaay outside. But that’s a two-bit theory.

The Lockey and MacKenzie litigation was in the legal mill almost four years before President Obama nominated Castro to his cabinet and Castro was vetted by the Senate and then sworn in. He’s 41 years old.

MacKenzie wants to depose some big shots, Texas Senator John Cornyn included.
MacKenzie wants to depose some big shots, Texas Senator John Cornyn included.
Dallas Police Department

He was in office barely two months when he met with Dallas Mayor Mike Rawlings, a Democrat, and then pulled the plug on a four-year HUD investigation that had found Dallas in violation of the law in how it spent hundreds of millions of dollars in HUD grant money.  Rawlings declared victory at that point and publicly thanked Castro for his help, but it’s fair to ask in retrospect exactly what kind of victory it was for a self-respecting Democrat.

Curtis Lockey and Craig MacKenzie, developers in a heavily subsidized deal to convert an old downtown office tower to apartments, had complained to HUD that Dallas chopped them off at the knees when the city found out their project would include some lower-cost housing as required by federal law. The pair and their big-name Washington law firm inundated HUD with evidence that Dallas had pursued a de facto policy of deliberate racial segregation downtown for a decade and used HUD money to do it.

HUD investigators spent years retracing Lockey's and MacKenzie’s steps. Two years ago their finding was that the developers were telling the truth and Dallas was guilty as charged. Enter Castro. The plug is pulled. Dallas walks. The mayor celebrates.

But, again, celebrates what? Getting away with racial segregation? And why would one of the new Democratic HUD secretary's first acts be to enable the bad behavior that HUD’s own investigators had already found?

Since the pulling of the plug, Dallas City Attorney Warren Ernst has insisted that the HUD case is gone, dead, beat down and dumped, and that Dallas has nothing more to worry about from Lockey and MacKenzie. But Lockey and MacKenzie have been back in court with new litigation, and developments in the last week in one of those cases have been especially interesting.

MacKenzie is in federal court now suing HUD under the Administrative Procedures Act, a law designed to allow the courts to review the actions of federal executive branch agencies. MacKenzie is claiming that the investigation of Dallas found clear violations of the federal Fair Housing Act (FHA).

He says the FHA allows HUD to do one of two things when it looks at allegations of FHA violations. It can find there was no violation. Or, if it finds violations, it can bring an action insisting on remedies at pain of a cut-off of federal funds.

The law, MacKenzie argues, does not allow HUD to find FHA violations and then do nothing about them. So he is asking the court to order HUD to obey the law and come up with a real remedy for Dallas’ transgressions.

I told you a month ago that HUD was trying to get out of answering questions that MacKenzie wants to ask them under oath in the process called discovery. The Justice Department, which represents HUD in court, asked the judge to give HUD 60 more days past their deadline for answering the questions, because they said the father of a HUD lawyer had died.

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The judge gave them 45 days. Then MacKenzie sent them the full list of people he wants to depose. HUD took a look at the list, and then Justice Department lawyers went back to the judge and said HUD had decided it didn’t want any of the people on the list to be deposed, ever.

Justice Department lawyers asked for a blanket protective order limiting evidence to the already public “administrative record” — all the stuff they have already announced publicly.

Wow. Must be a good list. I took a look at it last week, and it’s pretty intriguing. The list includes relatively small-fry names like minor HUD functionaries who worked on the case against Dallas, resigned from HUD, then went to work for the city of Dallas as consultants on how to beat the case.

The list includes middle-fry names like Castro and Rawlings. But then it includes big-fry names like U.S. Senator John Cornyn of Texas, Congresswoman Eddie Bernice Johnson of Dallas and some others in that range.

MacKenzie took my call last week but wouldn’t discuss the discovery process in — wouldn’t tell me specifically what he wants to ask these people and why — because he said he didn’t want to “try the case in the press.” I hate that, because I think the press is the best place to try a case. But I understand.

Just by looking at the list, however, I think I can connect a few dots. MacKenzie is arguing to the court that HUD broke the law by not enforcing the law as required by the law. He has to offer a persuasive theory of what happened instead.

Judging by that list of people he wants to depose, he’s going to argue something like improper congressional influence. On the one hand, there is such a thing as legitimate lobbying. Mayor Rawlings had every right to go to Washington and plead for mercy.

But there’s a point at which lobbying can cross the line into the offering of a quid pro quo — the offering or actual trading of something of value in return for something else of value. I have no idea what the quid pro might have been or could have been or if there was one in this case. But I can say with certainty that this whole mater doesn’t go away without a discussion of quid pro quo.

HUD may succeed in shutting down MacKenzie’s demands for sworn statements as part of discovery. Or not. But that will make little difference from Castro’s point of view politically. If the judge grants HUD’s request and the legal process of discovery is stopped, then I don’t think I’ll have to count much beyond four before all of the allegations spill out into the street as a public amusement.

That’s what I mean about the timing. One way or another, Castro either does or does not become the running mate, and that question will be resolved at least by next July when the Democrats meet in Philadelphia. HUD may be able to stall on answering the questions MacKenzie wants to ask but only for a matter of months, and all that does is push the issue closer to July.

Is it an issue? I’m just here in the peanut gallery. Bunch of Democrats selling desegregation down the river for some sleazy inside deal: How can that not be an issue? I don’t know. You tell me.


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