CBS-11 EXCLUSIVE: State Rep. Terri Hodge, named in FBI subpoena, maintained closed ties to developer at center of FBI probe; State legislator, who owns $200,000 home, rents in affordable housing project she supported

Aug 24, 2005 8:31 pm US/Central By Todd Bensman and Robert Riggs, The Investigators, CBS-11 News

Dallas-area state Rep. Terri Hodge was among a new crop of names that has, according to a sweeping federal subpoena of City Hall records, attracted the interest of FBI corruption investigators. Her name and State Sen. Royce West's are only the latest well-known political names to emerge in an ongoing federal bribery, extortion and money laundering probe centering on dealings between monied affordable housing developers and city council members, non-profit organizations and contractors.

In a fresh subpoena this month, the FBI demanded that city officials hand over any materials showing whether Rep. Hodge was ever involved in decisions on affordable housing projects involving developer Brian Potashnik's Southwest Housing Development Company. The city apparently had nothing to give the FBI, city records obtained Wednesday show.

But CBS-11 has learned that the bureau's interest in Rep. Hodge did not arise in a vaccum. The state legislator has maintained close ties to Potashnik for years, including this one: Rep. Hodge, the owner of a $200,000 Dallas home, has lived in one of Potashnik's affordable housing rental units since at least 2002. Her 29-year-old son now lives in the home she owns.

The northwest Dallas-area Rosemont at Arlington Park, completed several years ago to serve predeominately lower income families, is one of a half dozen Potashnik developments that has been a subject of the same FBI subpoena of city records that included Hodge's legal name, Gladys Evelyn Hodge.

CBS-11 News has learned that Hodge has often used her position as a legislator to write politically crucial letters of support for Potashnik's government tax-credit supported housing projects and has spoken passionately in favor of them at various public hearings.

But questions about Rep. Hodge's rental arrangement could not be answered this week, and it also remained unknown whether the state legislator lives in a market rate apartment or in one financed by government incentives to provide low rent. About 25 of the 100-unit development are rented to individuals at regular market rates, while the others are reserved for struggling families who must qualify by demonstrating their limited incomes.

Rep. Hodge is a retired operator from Southwestern Bell, and as a state legislator earns $7m200 a year, plus $128 a day when in session or on official business.

Mike Androvette, a legal spokesman for Potashnik, said the company will not disclose Rep. Hodge's rental terms, nor would the company say whether Rep. Hodge is living in a rent-controlled unit that would require her to qualify. Rents for the project's 100 units range from about $700 a month for a one bedroom to $1,000 a month for a three-bedroom apartment.

Hodge could not be found at her apartment Wednesday, although her red Audi was parked outside in the parking lot. She also could not be found at her Swiss Avenue offices and did not return phone messages seeking comment.

CBS-11 News also has learned that her apartment and political efforts are not Rep. Hodge's only ties to Potashnik. Until recently, Rep. Hodge served on the board of a non-profit social services organization seeded by Potashnik's company. Subsidy rules for tax-credit projects require that developers provide a social services component to future tenants.

The solution for Potashnik's company was to create a non-profit called Housing Services of Texas, which provides programs for children and seniors at 35 Potashnik properties, including the one she lives in. Rep. Hodge served on the non-profit's board of directors through 2004.

Marty Mascari, executive director for Housing Services of Texas, said the legislator left the board recently because she was too busy to serve.

"She basically was a representative over one of the areas at the time that was being developed. I was looking for people that could help bring about?what you need for the organization," Mascari said. "We had to do fundraising and different things and you know?"

Mascari said the FBI has no executed search warrants on his offices, nor sought to interview him or any member of his non-profit organization.