Trust Fund, Born of Dallas Segregation, Fights for Deseg — In the 'Burbs

Don’t tell Dallas it hasn’t done anything for racial desegregation. Since 2004 a $22 million trust fund that grew out of a Dallas housing desegregation case has been used to bankroll an aggressive campaign to push integrated housing into highly resistant affluent white majority areas.

Didn’t know that? Maybe you didn’t know where to look. Not so much in Dallas.

Look in suburban McKinney, instead. The Dallas Morning News did a feel-good story last year about a rare new affordable housing project opening there in spite of that community’s initially fierce resistance. The News didn’t mention — probably didn’t know —– that the lawsuit that forced McKinney to do that project was paid for by a trust fund that came out of Dallas’ protracted “Walker case,” a 19-year federal court battle over the Dallas Housing Authority’s infamous system of segregated public housing — in Dallas.

Money in a fund originally escrowed to improve public housing in Dallas — part of a federal judge’s sweeping desegregation decree — paid for the litigation that pushed an affordable, racially integrated apartment project into McKinney.

And suburban Frisco. At first Frisco refused even to talk to the Dallas-based deseg warriors, but, after getting a good look at other litigation the trust fund had mounted, Frisco threw in the towel. It is now the proud patron of North Court Villas, home to tenants who pay their rent with what are called housing choice vouchers, some from the Dallas Housing Authority.
And Sunnyvale. The trust fund kicked the horsey officials of that affluent pastoral community all around the pasture, beating them in court, proving later they were still failing to live up to a court order, eventually buffaloing them into sponsoring their own low-income housing.

In fact a dot-map of low-income subsidized housing in the greater Dallas metropolitan area depicts a somewhat counter-intuitive but distinct pattern of dispersal outside the Dallas city limits, a kind of faint northern suburban halo of housing to be credited to the Dallas-based trust fund’s diligence in fighting for desegregation there.

Given the initial and ferocious resistance of many of the northern suburban areas, it’s a virtual certainty those towns would not now be hosting even this relatively modest amount of subsidized housing without the sharp stick that the deseg fund has been wielding against them in the last decade.

But there is a hole in this doughnut, or, to be more accurate, a couple of holes. The biggest hole is North Dallas. Somehow the success of the deseg fund seems to have faltered at the imaginary borders of the Preston Hollow/Park Cities realm where Dallas’ own wealth and power are concentrated.
And then there is the strange case of downtown Dallas, where hundreds of millions of dollars in federal desegregation funds have been spent in the last couple of decades. In spite of this federal largess and the special obligation it carried to achieve desegregation, a five-year federal investigation came to the conclusion in 2013 that Dallas had failed to do anything at all for desegregation in its own downtown, until a couple of last-minute projects provided subsidized housing jammed into two isolated buildings just as the investigation was being completed.

Dallas has a great deal of subsidized housing on its southern side, but that housing can hardly be counted as a victory for deseg. Every new subsidized housing project or rental voucher used in already segregated southern Dallas only increases, rather than relieves, the level of segregation in the city.

The victories in the northern suburbs, on the other hand, are notable. Those efforts really did push integration into areas where it would not have occurred otherwise. The victories there, all the products of litigation, were not easy and did not come cheaply.

In 2004 at the end of the successful 19-year federal Walker case battle to break up segregated public housing in Dallas — just as U.S. District Judge Jerry Buchmeyer was about to close the case — Buchmeyer found there was $22 million remaining in an escrow created to carry out his orders.

Buchmeyer turned that money over to a new entity called the Walker Housing Fund Charitable Trust, chartered in New Jersey and headed by Elizabeth K. Julian, who had been one of the original lawyers for Debra Walker, the plaintiff in the Dallas housing deseg case.

As head of the trust, Julian appointed her own board, which included Craig Flournoy, a former Dallas Morning News reporter who, with former Morning News Managing Editor George Rodrigue, had won a Pulitzer Prize in 1986 for reporting on racial segregation — in East Texas.

Julian, with the explicit blessing of the court, created a nonprofit organization called Inclusive Communities Project or ICP. According to its mission statement, ICP “works for the creation and maintenance of thriving racially and economically inclusive communities.”

As head of the Walker Trust Fund since 2004, Julian has been making annual contributions from the fund to ICP in the range of $1 million to $3 million per year. Except for some earnings from investments, the Walker Trust Fund contributions have been ICP’s sole source of income, all of which was foreseen and intended by the court.

At or soon after its formation, ICP under Julian’s direction contracted with Julian’s former law partner, Mike Daniel, to take on the expensive task of suing horsey suburbs. Daniel declined to discuss the size of his fees with me. There may be some kind of attorney-client thing going on there. He didn’t say.

When ICP was still submitting its annual budgets to the court for approval, the fees budgeted for Daniel and Beshara were in the $480,000-a-year range. In 2008 Daniel prepared an order for the court to sign saying, “No further orders of this Court are necessary for the Trust and its agents to provide the funding for ICP’s activities …”

The judge signed it. In ICP’s most recent available IRS documents, Daniel’s firm’s fees have been reported in the $760,000 to $800,000 a year range.

It’s not just Daniel doing the suing. His law partner Laura Beshara is part of the deal, as is their staff. And Daniel and Beshara are undisputed national stars in the field of public advocacy civil rights law — winners a year ago, with Julian as their client, of an important U.S. Supreme Court victory on a doctrine called “disparate impact” at the heart of most of the nation’s discrimination case law. There is no reason why their work would come cheap.

Julian argues that that ICP has been aggressively active, anyway, with Daniel and Beshara as their spear-carriers, in forcing both state and federal agencies in recent years to change rules that govern access to affordable housing in Dallas. She also points to a recently opened low-income housing development on Merit Drive near LBJ and Coit as evidence that ICP has not given North Dallas a pass.

And of course a case can be made that pushing racial integration into McKinney, Plano and Sunnyvale ought to be worth as much as pushing it into Preston Hollow might have been. Or even the Park Cities? Who knows?

The tougher issue — the more unmistakable miss, I would argue — was downtown. There, a five-year federal investigation found that Dallas, in sworn statements to the U.S. Department of Housing and Urban Development, had consistently misrepresented its use of federal deseg dollars. Developers Curtis Lockey and Craig MacKenzie gave evidence to HUD showing that that city’s behavior downtown was so egregious as to cause the overall level of segregation in Dallas to increase citywide in a 10-year period.

I asked Julian in an email this week: “How did ICP miss downtown? How did all that HUD money get spent downtown and not achieve a dime's worth of deseg and ICP wasn't on the case? And why is Preston Hollow/Park Cities so untouched? If you can push it into Sunnyvale, why not rich, powerful, resistant Dallas?”

This is a topic she and I have discussed before. In answering me this time, she referred to Lockey and MacKenzie as “your guys,” I assume because I have written a lot about them and their fight with the city over a downtown project that collapsed over the question of whether to include affordable housing. Perhaps she thinks I am biased in their behalf. I do confess I have been consistently puzzled by ICP’s reluctance to join Lockey and MacKenzie in their protracted battle with the Dallas City Hall, if for no reason other than that their case offers the best documented and most pointed evidence of a deliberate City Hall conspiracy to promote racial segregation within the Dallas city limits.

Julian answered my email with an email: “Jim, I just don’t think it is productive to continue to argue about whether ICP should have different organizational priorities, or should have stopped what we were doing when your guys called us to demand that we take up their cause regarding their downtown housing development.”

She said, “ … even with good resources we can’t be everywhere at all times, so for this past decade our focus is opening up access for our clients and other low income families to the many high opportunity areas in the broader metro area which was what the Walker Housing Fund was all about.”

The Dallas City Council, meanwhile, is under great pressure to push more integrated affordable housing into so-called “areas of opportunity,” meaning white areas, because of the Lockey and MacKenzie litigation. The council’s housing committee, struggling to come up with a policy to cover all this by June 1, has been engaged in close talks with ICP, The Real Estate Council, the Urban Land Institute, Habitat for Humanity and other interested parties.

In their presentations to the committee, all but Habitat have harped on the importance of “regional cooperation” in achieving desegregation. I’m not saying regional cooperation is a bad thing. But I do wonder why Dallas, with such a demonstrably terrible record of desegregating itself, should be the one to roust the suburbs into line.