City Hall

Lawsuit Accuses Dallas City Council Member of Some Pretty Bad Corruption

A lawsuit filed last week accuses Dallas City Council Member Dwaine Caraway of helping defraud a school district of $125 million.
A lawsuit filed last week accuses Dallas City Council Member Dwaine Caraway of helping defraud a school district of $125 million. Stephen Young
Anybody can claim anything in any lawsuit, but the suit filed last week ( see below) accusing Dallas City Council Member Dwaine Caraway of corruption is not just any lawsuit.

If Caraway can’t quickly pony up some persuasive public responses to these charges, he can forget about running for mayor in 2019 — an announcement he probably planned on making next week. In fact, if he doesn’t meet this accusation head-on in a public forum — if he just waits for the suit to settle out — he shouldn’t even be able to remain on the city council.

These are credible charges to which he has already partially confessed in public statements. It’s hard to see how the rest of the council and the mayor can just let this lie.

The accusations in the suit against Caraway and other defendants are based on findings of an FBI investigation and on two federal plea bargain agreements by major players in an egregious years-long bribery conspiracy at the Dallas County School District. That’s the district the voters extinguished last year in a referendum.

No one in law enforcement has charged Caraway with any illegal act in this matter.

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Think about it. We’ve seen multiple examples here of voters demanding reform where corruption has been found in local government. But have you ever seen a case before this one where the voters basically said, no, forget about reform? Just abolish the whole thing and salt the earth where it once stood.

DCS was over 170 years old. It’s the one that was no longer a real school district but supplied buses and drivers to a number of large public school districts in the region. DCS got itself into a fraudulent affair with a Louisiana company that was going to put traffic cameras on all the buses.

The idea was that the cameras would collect evidence school districts could then use to collect traffic ticket money from motorists who didn’t stop when they were supposed to. There needs to be a new term for stuff like that — entrepreneurial law enforcement or for-profit surveillance, something like that.

Anyway, the venture was a bust from the beginning. The camera evidence wouldn’t work in many local courts. But worse, most school districts probably didn’t want the cameras on their buses because they didn’t want to be hated any more than they already were.

Meanwhile, according to the plea bargain agreement and confession signed by Ricky Dale Sorrells, who was superintendent of DCS, the camera company was paying Sorrells what eventually came to $3 million in bribes. Sorrells, like not too many school superintendents I ever heard of, was driving both a Porsche and a Maserati and had purchased (for some lucky somebody) an enormous, gaudy diamond necklace.

DCS was supposed to be the public face and sales arm for the camera deal. The plan was for DCS to talk other school districts all over Texas into putting the cameras on their buses. Then DCS would get a royalty from all the ticket money the districts collected.

So by the time it was obvious the bus camera thing, called “Stop-Arm,” was a total bust as a business venture, Sorrells was already into the Louisiana guys for millions of dollars, the Porsche, the Maserati and the necklace. Meanwhile, former Dallas City Council Member Larry Duncan, also named in this lawsuit, who was the elected president of the board of trustees of DCS, also was into the Louisiana bunch for a couple hundred thousand dollars in campaign contributions.

Needless to say, neither Sorrells nor Duncan was in a good position to kill the Stop-Arm camera deal. So the Louisiana guys just kept shipping more cameras to Dallas, stuffing warehouses with them, effectively cramming them down the throat of DCS until DCS was in debt to them for $70 million.

But, you know, guys like this always have the next even worse idea. The new idea here was that DCS would effectively give away most of its real estate — the places where it stored its buses — to the Louisiana guys to pay off its debt for the useless cameras.

In a complicated flimflam, DCS eventually did just that. And I guess there’s some point in the history of a relationship like this where you figure it’s better to lose most of your real estate than most of your fingers.

So now, with fanfare and flourish … ta-da! … we bring sitting Dallas City Council Member Dwaine Caraway onstage and into the opera. Caraway, as it turns out, served the Louisianans during this period as an expert consultant on real estate issues. He has stated in interviews that he was helping the Louisiana people “look for land.”

I know that Christopher Columbus had a guy who did that for him, too. I wonder if Caraway used the same phrase, which, if memory serves, was “Land, ho!”

In exchange for the land-ho gig, Caraway received a number of “loans” from the Louisiana people in denominations of $10,000 and $20,000, on none of which did he ever make a single payment, according to the suit. Caraway has publicly admitted receiving this money, which he described as “loans,” and also has admitted never paying any of it back or even being asked to pay it back, which I think is described as “not loans.”

The suit calls the money “payments.” The suit says Caraway went to bat for the Stop-Arm program when it came up for a key vote on the Dallas City Council. The suit claims Caraway “passionately convinced the rest of City Council to grant DCS a 25-year extension of the Stop-Arm program in 2015 in exchange for payments.”

The lawsuit was brought by an entity called the Dissolution Committee for the Former Board of Trustees of Dallas County Schools. The committee was set up by the Legislature kind of like the executor of an estate to go collect as much money as possible from the people who robbed DCS. The committee is run by Alan King, who was chief auditor at the Dallas Independent (real) School District, where he earned a reputation for unflinching honesty.

Between the original camera scam and the subsequent real estate shenanigans, King says corruption at DCS cost taxpayers $125 million. The lawsuit is his attempt to claw back as much of that money as he can get his hands on.

I made multiple attempts through various channels to reach both Caraway and Duncan for comment for this story. Caraway did not respond, and Duncan’s attorney told me he would advise Duncan not to respond.
click to enlarge Caraway has been an able steward of the interests of his constituents. - DALLASCITYHALL.COM
Caraway has been an able steward of the interests of his constituents.
Duncan’s position in public statements so far has been that there was nothing illegal in the campaign contributions he accepted. That could be. They smell terrible, but odor is not the law.

The Caraway case is not quite the same. It is a matter of public record and videotape that Caraway lobbied the Dallas City Council to act in favor of the Stop-Arm program, establishing what the bribery laws call a quid pro quo.

But one significant factor operates in Caraway’s behalf: No one in law enforcement has charged Caraway with any illegal act in this matter. The lawsuit is civil, not criminal. It’s a collection effort, not a prosecution.

Of those people accused of stealing money from DCS, Caraway is the only one who is a sitting elected official. Elected officials are held to a higher standard, both in the law and in the court of public opinion. The oaths they swear on taking office are legally binding contracts. They are sworn not to use their office for their own good at the expense of the people.

“They have been very gracious.”— Dwaine Caraway

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Caraway is a popular, charismatic figure who has done a lot of good for his constituents. He has shown courage and ingenuity in prosecuting the interests of his district. Taking him to task in this matter might seem like a thankless job to his peers on the council. He will be vigorously, even angrily, defended from the public pews in the City Council chamber.

But I also can’t believe that any other member of the City Council could have this kind of public stain on his name and not be called out for some kind of serious review by the rest of the council. The lawsuit claims that he took large amounts of cash from crooks whose fraudulent scheme cost taxpayers $125 million and resulted in the extinction of a 170-year-old school district. That is not an everyday accusation.

Yes, anybody can claim anything in a lawsuit, but this isn’t any lawsuit.

In an interview with Scott Friedman, the NBC5-KXAS reporter whose brilliant and dogged work exposed this scandal, Caraway explained his getting all of this money and not being asked to pay any of it back with a remark from a parallel universe. He said, speaking of the people who gave him the money, “They have been very gracious.”

The average person knows gracious has nothing to do with this. No one simply gives away tens of thousands of dollars to people who are not their blood kin. One person gives another person $10,000 in exchange for something presumed to be worth $10,000 or, in this case, many tens of thousands of dollars.

“Land, ho!” doesn’t sound like it. The help on the City Council does. Even though no one has brought formal criminal charges against Caraway, it would be absurd for the rest of the council and mayor to behave as if these charges weren’t just right there in everybody’s face. Or should I say it would be “very gracious of them?”

Dallas Bribery by Jim Schutze on Scribd

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Jim Schutze has been the city columnist for the Dallas Observer since 1998. He has been a recipient of the Association of Alternative Newsweeklies’ national award for best commentary and Lincoln University’s national Unity Award for writing on civil rights and racial issues. In 2011 he was admitted to the Texas Institute of Letters.
Contact: Jim Schutze