Drill down into the Trinity East lawsuit against the City of Dallas, and it tells one hell of a story about how Dallas City Hall really operates. The question is whether or not to believe it.
That story started in 2007 when the city was facing a $90 million budget shortfall in an operating budget of about $1.8 billion. Dallas City Manager Mary Suhm was looking for cash, and she got it -- $19 million from Trinity East alone -- by selling gas drilling rights on city-owned land to several companies.
The City Council said there could be no "surface drilling" in parks, meaning no drilling rigs standing on parkland. She could sell somebody the right to put a rig on some other kind of city land and drill sideways under a park, but there could be no rigs on the park itself.
Suhm said she got it. But then she went ahead and signed a contract with Trinity East explicitly including parkland, and she signed a letter of agreement with them saying she was "reasonably confident" she could win them the right to put up rigs and to surface drill on those park sites. At that point Trinity East wrote the city the check for $19 million.[jump]
But in August 2013, Suhm failed to get the votes she needed at council, and Trinity East was effectively denied the right to drill on those park sites. So Trinity is now suing the city for violating its contract but also for fraud, basically painting the whole deal as a scam.
And here is where it gets squirrelier and squirrelier. The only reason anybody even knew Suhm was trying to sell surface drilling rights in park land was that council members Scott Griggs and Angela Hunt basically whacked the information out of the city secretary with pickaxes and dynamite. Suhm was doing everything she could to keep the deal quiet, and it sure looked like Trinity East was too.
The leases the city signed with Trinity East gave specific locational descriptions for all of the drilling sites that were not on parkland but referred to the two parkland drilling sites only by vague nicknames. Weird, eh? Wouldn't you think Trinity East would want to see those sites nailed down better in the contract? They nailed everything else down. Why refer to the two park sites only by code names?
In a May 15, 2013, interview with a Dallas Observer reporter, the president of Trinity East referred coyly to "certain documentation" he held dealing with "a discussion with the city" that led him to believe he was entitled to drill the way he wanted. OK, but if Trinity East had a written agreement with the city, why did that have to be a closely guarded secret?
Dallas council member Philip Kingston has suggested that both parties, Trinity East and Suhm, kept the deal secret because they knew their entire agreement was "ultra vires," a legal principle meaning they all knew Suhm, now retired, was doing something outside and beyond her authority as city manager. Kingston thinks the city should at least consider that as a defense. The city would tell Trinity East, in effect, "You did a secret deal with Suhm that she and you knew was dirty when you did it. If you don't like what you got, sue her, not us."
He knows he won't get very far with that idea because most of the council is cowed by the staff, and the staff's main loyalty is to itself. No way are they ever going to betray Suhm.
I don't know from ultra vires. It's over my head. But if I put myself in Trinity East's position, I feel a certain sympathy. They come into this big organization called Dallas City Hall to do a deal with the CEO. Of course they're going to take the CEO's word for how her organization works. If she says the deal has to be secret, they'll either not do the deal or do it and keep it secret.
If she says she can take care of the board and they give her a check for $19 million based on that assertion, they must believe she can take care of the board. If she says later, "Oops, it wasn't supposed to be a secret, and I couldn't take care of the board, and your $19 million is bye-bye," then they feel they have been screwed.
Whether that makes them right in the lawsuit, I do not know. I can only draw one principle out of it for sure. City Hall is like an old-fashioned washing machine: No matter what else, keep your appendages far from the wringer.