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Rival developer blew whistle

Rival developer blew whistle

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Published by Reese Dunklin
Rival developer blew whistle When City Hall turned down his projects, he became FBI informant
Rival developer blew whistle When City Hall turned down his projects, he became FBI informant

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Published by: Reese Dunklin on Feb 21, 2014
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10/18/2014

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DOCUMENTS
DallasNews com
THE DALLAS MORNING NEWS October 7, 2007 Simday FIRST EDITION
Rival developer blew whistle When City Hall turned down his projects, he became FBI informant
BYLINE:
 REESE DUNKLIN, Staff Writer rdimHin@dallasnews.com 
SECTION:
 NEWS; Pg. 1A
LENGTH:
 2559 words Developer Bill Fisher couldn't believe the e-mail. He forwarded it to his lawyer for a second opinion. "Yeah," the lawyer replied, "it looks like you're being shaken down." An associate of Dallas Mayor Pro Tem Don Hill wanted money. A City Hall meeting on whether Mr. Fisher would get millions in economic incentives to build his low-income apartment complexes loomed, and Mr. Hill's vote would be instrumental. The lawyer advised Mr. Fisher not to respond. But the approaches continued. Hire this person or that, Mr. Fisher was told, and Mr. Hill's political support would follow. He continued to do nothing. When the meeting finally arrived in fall 2004, Mr. Fisher's projects were rejected. "We hadn't appreciated the magnitude of not cooperating until then," his lawyer, John Shackelford, recalled. So Mr. Fisher went to the FBI and became an informant. His cooperation set in motion the bribery and extortion investigation that rocked Dallas politics and led to last week's 166-page criminal indictment. The first outward signs of the investigation had been the sweeping raids at City Hall and beyond in summer 2005. Authorities won't say publicly when they got involved, but it's clear that most of the indictment's blow-by-blow specifics date to the time shortly after Mr. Fisher began his secret role. Through Mr. Fisher, investigators were able to spend months before the raids collecting evidence of the pay-for-votes scheme they say Mr. Hill directed. During that time, the indictment alleges, Mr. Hill and his associates demanded and received about $225,000 in contracts and fees from the developer. Mr. Fisher's assistance enabled the Justice Department to build criminal cases against at least 11 of the 16 people charged, including Mr. Hill, who's since left office, and his friends. It also led them to other alleged insider deals. 1 of 12 2/21/2014 11:57 AM
 
Among the others indicted was Mr. Fisher's former boss. Southwest Housing Development Co.'s Brian Potashnik. Fhe two had dueling low-income housing proposals on the agenda in fall 2004, and only one of them could win approval because of state rules. Mr. Hill endorsed Mr. Potashnik because the developer, the indictment alleges, paid bribes similar to the ones Mr. Fisher refused. Most of the people charged have pleaded not guilty, including Mr. Hill, Mr. Potashnik and state Rep. Ferri Hodge, the only sitting official indicted. A few have yet to enter pleas. A Justice Department official acknowledged that Mr. Fisher's cooperation was voluntary and not because he was a target of an investigation. Neither his home nor the offices of his company Odyssey Residential Holdings, have been searched. Special Agent Mark White, an FBI spokesman, would not comment. Nor would U.S. attorney's office spokeswoman Kathy Colvin, other than to say: "Fhe indictment, all 166 pages of it, speaks for itself." Mr. Fisher is also saying little. When questioned, he mostly refers to the indictment, which calls him simply an "affordable housing developer known to the grand jury." "I think it speaks for itself," he told Fhe Dallas Morning News, borrowing a phrase from Ms. Colvin. Mr. Fisher's lawyer said his client was trying to handle the improper solicitations "in the right way." He added that Mr. Fisher didn't know at the time whether Mr. Potashnik had paid Mr. Hill. "He just wanted to be able to do business and have it be a level playing field," said Mr. Shackelford, who represents Mr. Fisher's real estate interests. "Fhat was his motivation." Mr. Potashnik's high-profile Washington, D.C., defense lawyer, Abbe Fowell, declined to comment on Mr. Fisher's involvement. He did say that prosecutors mistake routine dealings with public officials for efforts "to improperly influence them." Matt Orwig, the former U.S. attorney for the eastern part of Fexas, said he's read the indictment and is impressed. Having an informant cooperate early to help collect the kind of evidence that Mr. Fisher did is "tremendously important." "That's a huge, huge asset," said Mr. Orwig, who is now in private practice. "Those people give you seeds for everything else." Troubled past with feds James R. "Bill" Fisher, despite all his cooperation now, has had a stormy relationship with federal authorities. Back in the 1990s, they accused him of conspiring to bilk investors - including lawyers and professional athletes, such as former Dallas Cowboys quarterback Gary Hogeboom - of about $900,000 in a Florida thrift he and associates ran. Mr. Fisher was found guilty at trial in 1995, sentenced to more than seven years in prison and ordered to repay the money. One of the associates cut a plea bargain for a short prison term and helped the government. Another was acquitted. Mr. Fisher challenged the ruling and, more than a year into his prison sentence, successfully overturned the conviction in 1997. The 5th U.S. Circuit Court of Appeals found that prosecutors had withheld evidence of contradictions in a key witness's testimony at trial, hi addition, defense attorneys were improperly barred from showing he had won many of his disputes with investors in civil arbitration. Prosecutors, however, took him to trial again later that year. Mr. Fisher's new criminal defense attorney James M. Murphy said his client was targeted unfairly because he had sued federal regulators for breach of contract after they broke promises to the thrift. He eventually lost that suit. 2 of 12 2/21/2014 11:57 AM
 
Ill his second trial, the jury acquitted Mr. Fisher on the criminal charges. He later tried unsuccessfully to sue the government, in part, over the prosecutorial misconduct. "He has no love lost for the FBI, the IRS or the United States government," Mr. Murphy said of his former client. "He's not doing this to be pals with these guys." Mr. Fisher declined to discuss his prosecution. "I have had extraordinary opportunity and experiences in my life," he said. "I have little to complain about." Housing duel starts The year he was acquitted, Mr. Fisher began working for Southwest Housing and Mr. Potaslinik. Southwest Housing was then a small Dallas operation that had mostly fixed up a couple of dilapidated apartment complexes. But the company was on the rise and, over the next several years, Mr. Fisher helped it become one of the biggest, most successful low-income housing developers in Texas. Former colleagues described Mr. Fisher as the large, happy-go-lucky lieutenant to Mr. Potaslinik, a former nightclub owner and stockbroker who loved poker and was reputed to be short-tempered. Mr. Fisher had a sharp mind for finance and accounting, which he studied at SMU, and frequently served as the public face of Southwest Housing at City Council and neighborhood meetings. The partnership ended by early 2003, when Mr. Fisher left to start a company constructing the same sort of complexes that made Southwest Housing a powerhouse. The split was acrimonious, colleagues said, with Mr. Potaslinik accusing Mr. Fisher of scouting for land of his own while finishing out his time with Southwest Housing. Some of Mr. Fisher's new proposals were virtually next door to Mr. Potaslinik's. If the bad blood weren't enough, the rules governing the sort of projects the two built changed. The state limited the number of the complexes within a close range to prevent a glut in the real estate market, meaning just one developer would get the deal. The state further required that elected officials representing those neighborhoods lend their support before developers could tap into lucrative federal tax credits worth millions of dollars. The credits helped lower construction costs significantly more than if a developer were to use conventional financing. The rule changes created a winner-take-all environment leading up to the pivotal Oct. 27, 2004, City Council meeting that would decide whether Mr. Potaslinik or Mr. Fisher would build in South Dallas. That became the backdrop, the federal indictment alleges, for Mr. Hill and his associates to begin peddling their influence. 'Not playing ball' Mr. Hill represented the district where Mr. Fisher and Mr. Potaslinik had rival projects. Because of City Council etiquette, his colleagues deferred to him. Mr. Fisher received a couple of requests for money from people close to Mr. Hill. But the most consistent solicitation, the indictment says, was for a share of any business Mr. Fisher got from the city. Mr. Hill steered him toward hiring people close to him, Darren Reagan and Allen McGill of the Black State Employees Association of Texas. That group didn't actually have any members. Yet Mr. Reagan and Mr. McGill used the influential sounding name to lend credibility to what federal agents say was a "sham" opposition campaign against low-income 3 of 12 2/21/2014 11:57 AM

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