Had David Newsom known that Kathy Nealy was making payments to John Wiley Price, he told the jury Tuesday, he would’ve immediately terminated his employer’s relationship with her. It didn’t matter what the payments between Nealy and Price were for, said the ex-chief counsel of Ross Perot Jr.’s real estate company, Hillwood.
“It’s something we wouldn’t want to be associated with,” Newsom testified, adding that he was “shocked” that any of the money his company paid Nealy for her political consulting services might have been funneled to the Dallas County commissioner.
Price is accused of taking nearly a $1 million in cash and other considerations in exchange for influence and confidential information about bids on city contracts. Much of that money, according to federal prosecutors, came to Price from Nealy.
During cross-examination, Price’s lead attorney, Shirley Baccus-Lobel, poked fun at Newsom’s seeming naivete.
"Let’s talk about your shock,” Baccus-Lobel said. “You OK?”
She pressed Newsom on the work Nealy did for Hillwood, including the access she had to community leaders like Price and Dallas ISD superintendent Michael Hinojosa. The benefits to Hillwood from the audience with Price, Baccus-Lobel has said, were innocuous and part of his job as commissioner.
Hillwood hired Nealy in hopes that it would be included in a proposed foreign trade zone in southern Dallas County. Foreign trade zones are federally designated areas where foreign goods can be stored tax-free before they’re are shipped to another part of the United States. The company initially lobbied against the zone’s creation, but changed its tune when the vote appeared to be going the other way.
According to Newsom, Nealy got Hillwood officials a meeting with Price the day before a commissioner’s court vote to create the trade zone. The next day, Price delayed the vote so that Hillwood could submit an application to have its property in DeSoto included inside the trade zone.
In 2007, despite heavy pushback from former Dallas City Council member Bill Blaydes — Newsom said that the company considered dropping the project, but Nealy pushed Hillwood to stay in the game — Hillwood was included in the foreign trade zone.
After the vote went through, Newsom wrote Nealy a letter praising her “power, influence and savvy.”
Baccus-Lobel asked Newsom whether Hillwood typically looked into the personal lives of its consultants. Newsom said the company didn’t, and Price’s attorney pointed out that Newsom couldn’t have known that Price knew Nealy.
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Nealy, a 25-year-old single mother of three, had few resources at the time and Price helped her as a friend, Baccus-Lobel said. This reinforced the theme that the defense is presenting — that payments made from Nealy to Price were merely repayments of loans. They are accusing federal investigators of not taking loans made before 2005 into account and misconstruing these payments as bribes.
Later Tuesday, Hinojosa briefly took the stand to tell the jury about his confusion with regard to Price’s foreign trade zone lobbying. Hinojosa said that he assumed Price would be strongly in support of the project because it would be an economic boon to southern Dallas County.
Instead, Hinojosa said, Price sent him a letter supporting district tax abatements for Hillwood. Hinojosa said that he opposed giving Hillwood the tax breaks because they would “only benefit people in suits.”
Baccus-Lobel declined to cross-examine Hinojosa, only thanking him for his service to Dallas ISD.