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One of Julian Castro's first acts as Secretary of HUD under President Barack Obama was to cut the legs from under the Lockey and MacKenzie litigation in Dallas.
One of Julian Castro's first acts as Secretary of HUD under President Barack Obama was to cut the legs from under the Lockey and MacKenzie litigation in Dallas.
Michael Reynolds/EPAnews.com

Lockey Lawsuit Back from the Grave, This Time in Southern California

Dallas takes a certain pride in being contrarian. At a time when the terms collusion and obstruction of justice are frequently associated with news about the Trump White House and Republicans, one of Dallas’ oldest, most stubbornly impacted legal battles rears its head again, now hurling those terms, obstruction and collusion, against Democrats and the Obama White House, along with a new accusation of criminality.

The Lockey and MacKenzie fair housing litigation, now in its ninth year, was sent packing finally last year by the federal bench in North Texas, but it is struggling now for a rebirth in federal court in California. This new version, filed in San Diego because that’s where real estate developer Curtis Lockey lives, includes new allegations of a criminal conspiracy running all the way from Dallas City Hall to the Obama cabinet.

Filed a week ago, Lockey’s new lawsuit will have to wait months for an answer from the accused federal agencies, then more months for a federal judge to decide whether to let the suit proceed. The argument against allowing this new version to take root will be based on the principle of res judicata, a been-there-done-that rule that says a plaintiff who has already been kicked out of court can’t simply refile the same lawsuit in another court.

Therefore, this new lawsuit is replete with new issues, including criminal allegations of collusion and obstruction reaching into the Obama White House. And lest that sound just wackadoodle, I should tell you that a raft of attachments offering a lot of detailed evidence accompanies the lawsuit.

To cut to the chase, however, the allegations of conspiracy spin from only a few overt acts, some of which Dallas media covered when they occurred. The main one, which we have reported on several times, was a political deal cut three years ago by Dallas Mayor Mike Rawlings and Obama cabinet member and former San Antonio Mayor Julian Castro, reported at the time by The Dallas Morning News under an effusive headline, “Rawlings praises Castro, former fellow Texas mayor, for help in resolving HUD case.”

Lockey and fellow apartment developer Craig MacKenzie weren’t feeling very effusive when they read that, because they felt the Rawlings-Castro sidebar deal subverted the law and did them out of tens of millions of dollars in damages — maybe much more. They believed they had been making slow but sure progress in a years-long multifaceted campaign of lawsuits and administrative complaints. But when the White House shook hands with City Hall, it was game over.

But it’s never game over with the Lockey and MacKenzie litigation. Their cause is Dallas’ own Bleak House saga — the case that refuses to die. Even beyond the grim determination of the litigants to keep it alive, there is another much deeper mystery that keeps the case coming back from every grave into which the courts, the city and even the White House have tried to kick it. The Lockey and MacKenzie litigation, no matter whose side you take, is about Dallas’ deepest, darkest, most tightly held secret — racial segregation.

The original complaint that Lockey and MacKenzie filed in 2009 with the Fort Worth regional office of the U.S. Department of Housing and Urban Development was an accusation about segregation. In their complaint, they argued that Dallas for years had been taking hundreds of millions of dollars in HUD money intended to achieve racial desegregation, using it instead to deliberately increase racial segregation in the city.

Lockey and MacKenzie have claimed since 2008 that Dallas pulled the rug from under a downtown Dallas tower renovation they were developing because City Hall got cold feet when it saw how many minorities might wind up living there. Dallas, they said, had adopted a downtown redevelopment plan that included deliberate policies and measures to discourage minorities from living downtown. The two claimed they and their investors lost millions of dollars when the city arbitrarily sank their deal because it would have opened the door for too many minorities.

But a much bigger allegation against the city came a few years later when the two developers filed a false claims allegation against the city. The federal False Claims Act, signed into law by Abraham Lincoln, was designed to control fraud by contractors supplying the Union Army during the Civil War. The act rewards a citizen who reports a fraud against the federal government by paying him a cut of the total amount of the fraud.

Lockey and Mackenzie claimed that Dallas’s misuse of federal desegregation money over a 10-year period came to a theoretical sum of hundreds of millions of dollars. And they weren’t just jotting it down on an envelope. Guided by a major Washington law firm that specialized in false claims litigation, Lockey and MacKenzie were able to amass hard evidence to support their allegation.

Professor Andrew Beveridge of Queens College in New York, a nationally recognized expert on measuring racial segregation, carried out a study of Dallas and wrote a report saying that segregation here had been decreasing — the city had been on a path toward greater racial integration — until the downtown redevelopment plan went into effect. From then on, Dallas reversed field and began to grow more segregated again.

The Beveridge report and other evidence gathered in the course of the Lockey and MacKenzie litigation provide an ironic backdrop for a lot of the angst and dialogue going on now in the city concerning racial segregation and economic inequality. Even the most sincere and well-intended discussion of segregation in the city now tends to treat it either as a consequence of ancient history or as the outcome of some unfortunate act of nature. But the evidence that Lockey and MacKenzie took to court with them tells a very different story.

Ben Carson, President Trump's appointee as HUD secretary, is a defendant named in the new Lockey lawsuit, but the acts alleged in the suit all date from the Obama administration.EXPAND
Ben Carson, President Trump's appointee as HUD secretary, is a defendant named in the new Lockey lawsuit, but the acts alleged in the suit all date from the Obama administration.
Gage Skidmore

Running throughout almost a decade of testimony and evidence gathering is a consistent theme: Racial segregation in Dallas is not the consequence of ancient history. It’s alive today, going on right under our noses, hidden in a thousand obscure votes by boards of arcane special tax districts that most people don’t even know exist, buried in zoning decisions, hidden in departmental policies but plain to see if we simply look at the largest outcome: segregation up, desegregation down.

Slowly over nine years, the federal courts in the Northern District of Texas have poured out the last of the Lockey and MacKenzie litigation. The deal between the mayor of Dallas and Castro, the former HUD Secretary, cut off hopes for an administrative finding that might have buttressed their case. Now, Lockey has removed the last of his litigation from Texas and taken his cause to Southern California, where he lives.

The new lawsuit recently filed by Lockey alone in the federal Southern District of California does not include Dallas as a defendant. Instead, the defendants are HUD and the U.S. Department of Justice. The main allegations involve two terms bandied about frequently in the news of the day in a very different context — collusion and obstruction. Rather than involving today’s White House, these allegations of collusion and obstruction all go to the tenure of President Barack Obama.

The core allegation of the suit is that HUD and DOJ broke the law and colluded in a political deal to stop the clock on the Lockey and MacKenzie litigation. The deal that Rawlings celebrated publicly when he came home after meeting with Castro, Lockey claims, was a conspiracy between fellow Democrats to violate federal law.

There are two possibilities. One is that Lockey is wrong and his accusation unfair. Why would Democrats conspire to protect policies of racial segregation in a major American city? The very suggestion seems to fly in the face of history and reason.

The other possibility is that Lockey is right and his accusation true. In that case, what a puzzle we would all have to work.

What if racial segregation in this city — and presumably in the country — is not the work of white Republican conservatives fighting against the champions of justice on the liberal side of the aisle? What if the champions are in on it, too?

One of things exposed by the Lockey and MacKenzie battle over the years is that a vast ecosystem has grown up around racial justice in the last half-century at the local, state and national levels. In that system are real estate developers like Lockey and Mackenzie whose work developing affordable housing is funded by federal grants. Consultants win million-dollar contracts to advise people how to move to a new home. And, of course, government agencies hand out and receive billions of tax dollars every year to make the nation less segregated.

I’ve always thought the deepest and darkest secret buried at the bottom of all that money may be simply that somewhere along the way, we got lost. Too many people and too many organizations got too dependent on the cash flow. Nobody was keeping track of the mission.

Now we can’t tell the forest from the trees, but much worse — on this score, anyway — we can’t even tell one White House from the next. Whether Lockey and MacKenzie were ever right or always wrong, it still feels like a time to stop.

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