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Prosecution Hands Over Key Witness to Defense Without Proving Don Hill's Guilt, Bolsters Case Against D'Angelo Lee

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The second full day of testimony from affordable housing developer Brian Potashnik strengthened the prosecution's case against former city plan commissioner D'Angelo Lee in the City Hall corruption case, but federal prosecutor Marcus Busch concluded his direct examination of Potashnik Thursday without directly linking former Mayor Pro Tem Don Hill to Lee's alleged criminal activity.

In fact, one of the wiretaps played by Busch included Hill advising Lee to avoid financially benefiting from projects he'd be voting on the plan commission, which could be construed by the jury as exculpatory evidence, especially since Hill was unaware that his conversations were being intercepted by the FBI.

Ray Jackson, Don Hill's attorney, dodged questions from Unfair Park regarding whether the evidence against Lee is damning, but he stressed that Hill received no compensation and had no involvement in Lee's subcontracting deals with Potashnik.

"The prosecution is attempting to attach them at the hip, but what you'll see in my cross-examination is that I'll start to do the surgery and try to separate the two," he says of Hill and Lee. "So far, the prosecution is opposed to showing how Mr. Hill is guilty -- they're trying to do it by association."

Potashnik and Busch chatted in front of an empty jury box Thursday morning, and the defense huddled outside the courtroom shortly before U.S. District Judge Barbara Lynn met with both legal teams to discuss the absence of two of the 16 jurors. Lynn eventually dismissed them both -- one because of illness and one for personal reasons -- leaving only two alternates for a trial expected to take months, with all four black jurors remaining.

"I'm very concerned about losing two so early," says Victor Vital, attorney for Sheila Hill. "It's safe to say the defense wanted to keep the jury intact."

The remaining 14 jurors watched Busch outline Lee's involvement in pushing Potashnik to hire LCG Development Group for concrete subcontracting work. Andrea Spencer, who has already pleaded guilty in the case, and Ron Slovacek, who has separate trial pending, received payments from Potashnik and then paid approximately 10 percent of the proceeds from Millennium Land Development, a company set up by Slovacek, to Sheila Hill through her consulting company, Farrington and Associates, according to bank records.

Potashnik balked at awarding LCG two other subcontracting jobs when its bids came in at $250,000 more than the next highest bid in each case, even though Potashnik admitted that he gave Lee the other bids to allow him to be competitive. Lee and Slovacek refer to this $250,000 as a "tax" in wiretaps, with Slovacek claiming he could have submitted a bid at or below the highest bid. Lee rebuffed a suggestion to lower the "tax" to $50,000 on each project.

"That's kibbles and bits over six month's period," Lee said in a wiretap.

Lee's recommendation of LCG was "offensive," Potashnik said, and even though he felt it could become a problem, he continued to try to work with Lee to rectify it. "I was basically in a state of denial," he said. "I looked the other way, put my head in the sand and didn't ask the right questions."

Potashnik used the concrete contract negotiations to his advantage, asking for Lee to convince Hill to make a motion at a city council meeting regarding the implementation date of the Walker Consent Decree, an affordable housing initiative that would have saved Potashnik approximately $1 million had it been retroactively taken off the books. However, Hill seemed out of the loop when he admitted in a wiretap to not understanding what Potashnik was hoping to achieve after the vote had taken place, with Hill voting according to the city staff's recommendation and against Potashnik's wishes.

"This was wrong, and what I was doing was wrong," Potashnik recalled of leaning on Lee and Hill to assist with the Walker Consent Decree.

Potashnik eventually hired another minority company instead of LCG, because Lee insisted on lowering the "tax" to 10 percent, while Potashnik was only willing to pay 2 percent -- because "when someone starts looking up my skirt with a microscope, which is inevitable, I can justify it," as he said in a wiretap conversation with Lee.

At one point, Judge Lynn expressed her frustration with Busch as he played wiretaps, paused them, read them into the record, and then asked Potashnik if what he read was what he'd just heard. "We're not making sufficient progress to satisfy me," Lynn said.

Busch and Potashnik maintained that Sheila Hill didn't perform any duties for the consulting contract she signed with Potashnik's company, Southwest Housing, as Potashnik told Lee in a wiretap that he needed more than just one-page invoices from her and said, "I want her to start doing things."

Victor Vital dismissed his client's invoices as reason for concern by showing jurors a similar consulting contract that Potashnik signed for a project in San Antonio with David Marquez, who also submitted one-page invoices.

Vital also probed Potashnik about an apparent discussion he had with Sheila Hill at the pretrial conference, which Potashnik denied. Hill's account of her meeting with Potashnik and wife Cheryl was provided to Unfair Park by Vital, who witnessed the conversations but didn't hear them.

Brian said that he was ready to fight and that everything would be OK. He said that he had his gloves on.

She was very friendly. She expressed that the government's case was bogus and that they were going to fight. She appeared to be brave and ready to fight ahead.

Sheila encouraged her spiritually, and Cheryl was receptive. Sheila encouraged her to read and watch Joel Osteen's televised program.

As expected, Vital attacked Potashnik's plea agreement with the prosecution, noting that if he provides "substantial assistance" to the feds, they could make a motion to further reduce his sentence, and he's also excused from paying financial restitution. Surprisingly, Potashnik denied that he knew about either issue, claiming Judge Lynn has sole discretion regarding his sentence. He was also unable to tell jurors how much he profited from the projects involved in the case.

"I think it's fairly obvious that possibly there was some evasion going on," Vital tells Unfair Park.

Vital mentioned Potashnik's hiring of big-time law firm Fish & Richardson to interview other defendants in the case, including Sheila Hill. When Busch objected to the relevance of Vital's line of questioning, Judge Lynn called for a recess. Vital revealed that he wanted to establish that Fish & Richardson suspended Potashnik's contract with Hill for two months while they investigated it -- which Potashnik denied before the recess -- but then determined it was legitimate. Lynn didn't allow the jury to hear that Fish & Richardson legitimized the contract, listening to concerns from Busch that law firms shouldn't be allowed to make such judgments.

Potashnik's contributions of $10,000 to former Mayor Laura Miller one day before a vote on one of his projects was discussed, but Potashnik said he didn't remember the vote. And Vital, who faced the jury often as he spoke to Potashnik, pointed out that Potashnik testified Wednesday that had he known Sheila was Don's mistress, he wouldn't have signed a contract with her, yet he saw no problems with inking a security contract with former council member James Fantroy's son.

Jurors were only given a small taste of cross-examination, as Vital began at approximately 3:35 p.m. Today's a scheduled day off, so he'll finish up with Potashnik Monday before yielding to the rest of the defense team, and then redirect and re-cross will inevitably follow. Which means Potashnik's time in the spotlight is likely last into the first week in August since next week is a short one -- Tuesday ends at 3 p.m., and Wednesday through Friday are also scheduled days off.

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