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FBI Target Gave to Chaney, Projects

FBI Target Gave to Chaney, Projects

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Published by Reese Dunklin
A developer targeted in the FBI investigation of possible City Hall corruption contributed $64,000 to council member Leo Chaney and several programs he supports after state law was changed to require public backing for low-income housing projects, a Dallas Morning News review found.
A developer targeted in the FBI investigation of possible City Hall corruption contributed $64,000 to council member Leo Chaney and several programs he supports after state law was changed to require public backing for low-income housing projects, a Dallas Morning News review found.

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Published by: Reese Dunklin on Feb 21, 2014
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DallasNews com
THE DALLAS MORNING NEWS October 7, 2005 Friday SECOND EDITION
FBI target gave to Chaney, projects Council member says he wasn t swayed by developer s donations
BYLINE:
 REESE DUNKLIN and GROMER JEFFERS JR., Staff Writers
SECTION:
 NEWS; Pg. 1A
LENGTH:
 2167 words A developer targeted in the FBI investigation of possible City Hall corruption contributed $64,000 to council member Leo Chaney and several programs he supports after state law was changed to require public backing for low-income housing projects, a Dallas Morning News review found. Southwest Housing Development Co. also hired Mr. Chaney's appointee to the city's Plan Commission, which oversees zoning and development issues, and reportedly pledged to share profits from two Chaney-backed developments with a community group affiliated with the politician. During the same period and with the endorsement of Mr. Chaney and the community group, the developer won more than $30 million in public aid for deals located in the council member's district. By contrast, Mr. Chaney received $4,000 in donations from employees of Southwest Housing from mid-2001 until June 2003, when the law was passed. Lhe company won approval to build three complexes in Mr. Chaney's district during that period. Mr. Chaney said contributions from Brian Potashnik and his businesses did not influence his votes and noted the developer contributed before the new law was passed. Let me be clear, Mr. Chaney said. My votes are based on the desire of the people of my district, not political contributions. Mr. Chaney also defended Southwest Housing's sponsorship of events he supported. What they've done is not any different than any other public-private partnership, Mr. Chaney said, adding he had asked several companies for support. Lhey responded. Lhey stepped up to the plate. I don't see anything wrong with that. A lawyer for Southwest Housing also defended the company's contributions. 1 of 5 2/21/2014 11:51 AM
 
https://w3.nexisxoiiVnew/delivery/PrintDoc.do?lromCartFullDoc=false&fileSize=5000&diildFi... The owners of Southwest Housing make legal campaign contributions to candidates they support, said Matt Yarbrough. They also contribute to worthwhile charitable causes and community groups and plan to continue doing so. It would be unfair to suggest that contributing to a campaign or supporting a charitable cause is somehow wrong. Southwest Housing emerged last summer as a key figure in the public corruption investigation, which has focused on how developers of subsidized housing won approval for their projects. FBI agents raided the company's offices in June and demanded city records of its deals. Mr. Chaney initially was not among city leaders named in the FBI inquiry. He, and several other officials, surfaced in a second, wider-ranging subpoena served at City Hall in early August. Giving accelerates Southwest Housing's financial relationship with Mr. Chaney began blossoming about two years ago, just as Texas' aftordable housing landscape changed. State legislators heeded constituents' concerns that a high number of low-income apartments in their neighborhoods might become future slums and in June 2003 passed a law requiring developers to show public approval in order to receive economic incentives. The new rules meant that developers wanting to build in cities with twice the state average of subsidized housing units, such as Dallas, needed a formal endorsement of the deal from their city council. And they needed support letters from residents' groups affected by the proposed developments. Without those approvals, developers would miss out on millions of dollars in tax-exempt or low-interest municipal bonds and federal tax credits, awarded by the state, that could be sold for upfront construction capital. Since the changes took
 effect,
 contributions from Mr. Potashnik and his companies have included: *At least $40,000 to Tulisoma: South Dallas Book Fair & Arts Festival, which Mr. Chaney founded and launched in August 2003 to highlight award-winning black authors. Southwest Housing has been Tulisoma's leading sponsor. (Two city employees, who worked on the book fair and said they were familiar with its funding, said Southwest's giving totaled $50,000. Mr. Chaney said Southwest Housing's donations totaled $40,000 and that many other companies contributed to the event.) *More than $11,000 in donations to the Ferguson Road Initiative, the neighborhood organization led by Mr. Chaney's campaign treasurer, Vikki Martin. Mr. Chaney is a nonvoting member of the board. *A
 
10,000 sponsorship for an American Cancer Society fundraiser in Fair Park. Mr. Chaney listed securing the money as one of his civic accomplishments in an online Dallas Morning News voter's guide last spring. *Donations of $3,000 to Mr. Chaney's political campaign last spring in the names of Mr. Potashnik; his wife, Cheryl; and his father. Jack. hi October 2003, Southwest Housing also hired Melvin Traylor, Mr. Chaney's appointee to the city Plan Commission. Mr. Traylor, a retired DISI) principal, coordinates after-school tutoring programs at Southwest Housing apartments for an undisclosed salary. Both Mr. Traylor and the company have said the hire was not intended to buy favor on the commission, and Mr. Chaney recently pledged to appoint Mr. Traylor to a different city board. State and city ethics laws permit such an arrangement as long as Mr. Traylor discloses his conflict of interest and abstains from voting. Ferguson Road Initiative Southwest Housing's development proposals received the much-needed public endorsements often as Mr. Potashnik's family or companies donated to Mr. Chaney, his favored events or the Ferguson Road Initiative, records show. 2 of 5 2/21/2014 11:51 AM
 
https://w3.nexisxoiiVnew/delivery/PrintDoc.do?lromCartFullDoc=false&fileSize=5000&diildFi... Two, in particular, illustrate the connections the company cultivated as it pursued economic incentives. hi February 2004, Mr. Chaney brokered a meeting between Mr. Potashnik and the Ferguson Road Initiative to hear Southwest Housing's sales pitch for a senior citizen housing complex called Primrose at Highland. (Mr. Chaney denied arranging the meeting but acknowledged attending.) The initiative began in 1998 as a nonprofit organization funded by U.S. Justice Department weed and seed grants to help light crime and revitalize downtrodden areas around Ferguson Road, just north of hiterstate 30 in East Dallas. Its membership includes several area homeowners associations and crime-watch groups. hi a memo posted on the Ferguson Road Initiative's Web site, the group noted that Mr. Chaney had worked positively with the developer elsewhere in his district and said the company needed community support for federal tax credits, which were necessary to make Primrose at Highland financially feasible. The alternative, the Feb. 12 memo said, was that Southwest Housing might not buy the property and the out-of-state landowner instead might build a larger apartment complex. The organization saw such apartments as a potential source of crime and a drain on local schools and city services, the memo noted. Councilman Chaney is strongly encouraging us [to] coordinate with SWH if we want to have any control on what is being built in our neighborhood, the memo said. Its last page also noted that Southwest Housing had pledged to become a major sponsor of an economic development conference the Ferguson Road hiitiative had planned. During a Feb. 28 town hall meeting, Ferguson Road hiitiative members voted overwhelmingly to support Southwest Housing's Primrose at Highland project. Throughout March, Ms. Martin and representatives from several of the organization's affiliated groups sent the state letters praising the Southwest Housing proposal. None mentioned the company's promise of financial sponsorship. The community was impressed by the very high quality and broad range of social services programs that will be offered at the Primrose at Highland, and they feel this project will improve the surrounding neighborhood and community Ms. Martin wrote. On March 17, two days after the first letters of support went out, Southwest Housing made a $5,000 donation to the group's development conference, according to a copy of the check obtained by The News. The state eventually awarded Southwest Housing tax credits worth about $9 million for Primrose at Highland, and city officials said construction is about to begin. The $5,000 was one of the largest contributions the Ferguson Road hiitiative had ever received, said Kerry Goodwin, who oversees the organization's weed and seed program and is its only paid full-time staffer. Mr. Goodwin said the decision to favor the Southwest Housing project came down to community revitalization. A group of members had toured the company's complexes in other parts of Dallas and felt Highland would be a welcome upgrade, he said. What do you want to live next door to? Mr. Goodwin asked. Somebody who gave you $5,000 or a strip joint? hi addition, many of the organization's members did not know about Southwest Housing's contribution when they voted and, therefore, couldn't have been influenced by it, he said. If we were playing games, we could extort people on that basis, Mr. Goodwin said. We're not in that business. Ms. Martin is usually the group's representative on corporate sponsorships and donations, he added. When asked for an interview, Ms. Martin said she did not have time before the weekend and declined to talk by phone. Conflict concerns 3 of 5 2/21/2014 11:51 AM

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