Between the lines of a recently released FBI affidavit, we can spy the shape of a criminal complaint likely to come within the next two months in the Dallas County federal corruption case.
The affidavit, made public May 29 when it was filed in a civil action against Dallas County Commissioner John Wiley Price, clearly suggests that one of many charges the government likely will bring against the county's most powerful elected official will involve alleged collusion to sabotage the gigantic Inland Port project.
The Inland Port was a shipping and warehousing development that promised 30,000 new jobs to Price's own job-starved African-American and Hispanic precincts in the city's southern half.
But, according to Ross Perot Jr., chairman of the development company Hillwood and member of the powerful Dallas family that controls the competing Alliance Airport logistics center in Fort Worth, the Dallas development was a "direct threat" to the Perot family's interests.
Price should have been the lead warrior for the Inland Port. Instead, he appeared on the field carrying a bucket of Perot water. Why?
Consider these dates:
On August 27, 2006, The Dallas Morning News reports that a California firm called Allen and Co. has acquired 6,000 acres of land in southern Dallas where it intends to build one of the world's biggest logistics centers.
Two months later, at a Fort Worth Chamber of Commerce luncheon, Perot calls Dallas' Inland Port development a "direct threat" to Alliance.
In the days after that luncheon, Hillwood executives tell Fort Worth Star-Telegram reporter Mitchell Schnurman they are especially worried about public infrastructure money that might go to the Inland Port at the expense of Alliance. Mike Berry, president of Hillwood Properties, a division of Hillwood, says Alliance needs an infusion of $80 million to $100 million in public money for internal improvements, and several billion dollars for improvements to three highways: Interstate 35, Loop 820 and Texas 183.
Berry also expresses alarm over a land purchase option agreement signed in the Inland Port area by Burlington Northern Santa Fe railroad, the primary rail carrier to Alliance. He says he is worried that public dollars spent on the Inland Port might encourage BNSF to shift some operations there.
"Why give them any reason to expand elsewhere?" Berry asks Schnurman.
On April 14, 2007, ground is broken in southern Dallas.
On May 1, 2007, according to the affidavit, Price's main political operative, political consultant Kathy Nealy, deposits in her business bank account two checks totaling $2,500 from Hillwood. Nealy then writes a check for that amount, with a notation on the memo line saying "furniture," and deposits it into a business account belonging to Price.
On that same day, Price insists that his fellow Dallas County commissioners delay an action to seek foreign-trade-zone status for the Inland Port. Price says it would be unfair to win foreign-trade-zone status for the Inland Port and not include other property in southern Dallas owned by Hillwood. A free-trade zone allows companies to manufacture and process goods with imported materials without paying excise taxes until the finished goods arrive where they will be sold.
The proposal to delay threatens the whole trade zone deal, according to angry Dallas city officials. An onerous federal application process that has already taken years will have to begin again from zero.
The proposal from Price is a major blow for Allen and Co., which has potential clients ready to ink deals, but only if the trade zone deal doesn't hang up.
Bill Blaydes, then a Dallas City Council member working to promote the Inland Port, last week remembered a meeting with Price about the deal at the time. Blaydes says he thought he and the commissioner were about to come to blows at one point.
"Things got into a shouting match," Blaydes says. "We were just both sitting across the table and going after one another. He called me that fat politician from North Dallas. He said I wasn't going to tell him how to run things in his area."
On May 2, 2007, the Dallas County Commissioners Court defies Price and approves the application for a trade zone without the Perot properties. Eventually, Hillwood gains entry into the zone.
On May 7, 2007, according to the affidavit, Nealy deposits another check for $2,500 from a "Hillwood entity." On May 19, 2007, Price deposits a check from Nealy payable to him in the amount of $4,000. Price took back $3,000 in cash.
On May 24, 2007, Price deposits a check from Nealy's company payable to Lakeside Bank in the amount of $9,700 in his personal accounts. He takes back $1,700.
On May 9, 2007, the Morning News reveals that Price, who had treated newly elected Democratic county Judge Jim Foster as a sort of personal protégé, is openly hostile to him after Foster defied him on the free-trade-zone issue. "Mr. Price kept his famous temper in check for Tuesday morning's meeting," the story says. "But he could not conceal his ire. ...
On September 9, 2007, the Morning News publishes a story in which a Hillwood executive says bluntly that the attempt to delay the free-trade zone was a move in favor of Hillwood:
"When it happens in South Dallas, personally, I would rather see that at Alliance," said Steve Boecking, a vice president with Alliance developer Hillwood Properties. "We're in business. We don't like to lose any deals."
The foreign-trade-zone episode was only one of many attempts by Price to slow down the Inland Port. Later, by joining forces with the North Central Texas Council of Governments and the Morning News, Price squeezed off key revenue and infrastructure for the Inland Port, in part by accusing Allen and Co. of racism.
The Inland Port situation is one of many cited in the affidavit in which Nealy and others passed money to Price. It looks as if all of these instances will be woven together in what used to be called a "net worth" IRS case. The government totes up all of the money that flows into and out of Price's hands, comes up with a number for his cash flow, then compares that with his declared income. The payments cited from Hillwood are part of $2 million the FBI says Nealy collected from clients with business before the county commissioners.
Knowledgeable sources, whose information is supported by the affidavit, tell me that Nealy often delivered cash to Price. When FBI people raided his home safe last year, they found some of that cash still wrapped in time-and-date-stamped paper bands that link the cash directly to Nealy's original bank transactions.
The affidavit quoted here was filed in a federal civil action aimed at allowing the government to keep possession of $229,590 in cash seized from Price's safe and another $230,763 seized from a real estate transaction. In about two months from now, defense lawyers will be able to file demands for information from the government about its civil case. The government will not want to answer those interrogatories.
The assumption among people I talk to is that the indictments are now less than two months away. Once those come down, the civil case will be put on hold.
Allen and Co. eventually emerged from federal bankruptcy proceedings. The Inland Port project in Dallas is still under way, and backers hope it will regain momentum as the economy improves.
Meanwhile, the billions of dollars in public infrastructure that Hillwood hoped to steer its way are already on the ground.
Why was such a vast operation ever worried about a bunch of scrubby land in southern Dallas in 2007? The confluence of highways and rail lines, the tides of international trade and the economy came together in May 2007 to give southern Dallas its one perfect moment to strike.
That chance is gone forever. The federal government will argue that it went into John Wiley Price's pocket.