Federal Indictment Names 16 In Dallas City Hall Bribery And Extortion Case

Monday, October 1st 2007, 8:27 pm

By: News On 6

DALLAS (AP) _ Federal authorities unsealed indictments Monday alleging a bribery and extortion scheme within city hall involving a state representative, numerous past and present city officials, and a prominent real estate developer.

The indictments charge 14 defendants with illegal dealings with contractors who were building publicly funded affordable-housing developments in Dallas.

A 15th defendant was indicted on allegations of tax fraud and a 16th was indicted on a count of embezzlement.

Among the figures named in the main 31-count indictment are former Mayor Pro Tem and one-time mayoral candidate Don Hill; Democratic state Rep. Terri Hodge of Dallas; and real-estate developer Brian Potashnik. Jack Potashnik, Brian Potashnik's father, is named in a separate indictment that alleges tax fraud.

At the heart of the indictments is the allegation that public officials accepted bribes and kickbacks to help Brian Potashnik's company, Southwest Housing, receive construction contracts.

In a statement, Brian Potashnik said the charges were ``unfair and cruel.''

``As we begin this fight to prove our innocence, we ask for people to wait for the facts and give us the benefit of the doubt we have worked so hard to earn,'' Potashnik said.

The indictments stem from an FBI investigation that became public more than two years ago when agents raided city offices.

Former City Council member James Fantroy is named in another indictment alleging he embezzled at least $5,000 from Paul Quinn College, a historically black college in Dallas. Fantroy was the school's treasurer and served on the board of directors. He declined to comment at the courthouse.

Hodge was charged with various counts of bribery and conspiracy to commit bribery, among other charges. Hodge declined to comment Monday. She has represented Dallas in the Legislature since winning election in 1996.

Hill faces various counts of bribery, extortion, and conspiracy to commit money laundering, among other charges. Hill told reporters outside the courthouse that he and his wife ``are not guilty of any of the things alleged here.''

All of the defendants were expected to surrender to federal officials within the next two days, U.S. Attorney Richard Roper said. Several turned themselves in Monday morning. Roper called it the most detailed and difficult of his career.

``I haven't seen anything this complex,'' Roper said. ``We used every legal means we could to investigate this case.''

Dallas Mayor Tom Leppert, who took office in June, said he hoped for a ``just and honorable resolution.''

``This is a sad day for Dallas,'' Leppert said, ``but every one of us on this City Council is focused on the future and determined to address the challenges and opportunities ahead.''