Sep 6, 2005 10:04 pm US/Central
By Sarah Dodd, City Hall Reporter, CBS-11 News
Dallas City Plan Commissioner D'Angelo Lee used his appointed City Hall position to solicit a loan for a private development deal in which he had a hidden financial interest, according to Mayor Laura Miller and Councilmember Mitchell Rasansky.
Lee, who resigned his position under pressure this week, was seeking a loan from JP Morgan Chase Bank to help his partners build a retail development project at Kiest Boulevard and Southerland Drive in which he was a secret partner. The partnership, with its undisclosed member on the Plan Commission, had already won city council approval for almost $1 million in taxpayer-funded bonds. Mayor Miller and Councilmember Mitch Rasansky said they learned of Lee's solicitation of the bank loan after making private inquiries following an exclusive CBS-11 News report revealing that Lee was part of the partnership.
Miller and Rasansky said a senior vice president of JP Morgan Chase Bank told them Lee presented himself as a Dallas Plan Commission member when seeking the loan for his project, and presented his city card along with a private business card.
"He was the lead person on it," said Mayor Miller, a former investigative journalist. "He had his other two partners, but he was in charge of it. He was the first person to walk up to her and give her his official city card and his business card."
Through his attorney, Lee said he does not remember having any conversation with JP Morgan bank officials but also said "Plan commissioners do these types of deals all the time; they just don't vote on them."
Miller and Rasansky said it was an inappropriate conflict of interest for Lee to use his city position for private gain. Three weeks ago, Miller and Rasansky lost a bid to have the full council remove Lee on grounds that media reports raising questions about his ethical conduct in other matters had placed the whole panel into disrepute. Miller and Rasansky brought forward their new allegation - that Lee had sought to use his stature as a plan commissioner for private gain - came just as the council was preparing to vote a second time to remove him.
"It's pretty obvious that he tried to use his position to solidify a loan," Rasansky said. "I think it is wrong and inappropriate."
Lee's resignation from the city commission came after CBS-11 reported about numerous potential ethics violations and first questions about two luxury cars he has been using, does not own, and were traced to another would-be developer also under FBI investigation.
The former commissioner, as well as the councilmember who appointed him, Don Hill, are under an FBI wiretap sting investigation for alleged bribery, extortion and money laundering related to their dealings in an affordable housing boom in southern Dallas. The FBI also has looked at private development schemes advocated by Lee and Hill, and has sought records from a host of other local and state public officials, housing developers, nonprofit organizations, and contractors, CBS-11 has reported.
When the Dallas Housing Department received the proposal for Lee's Kiest Boulevard LP, the only names that appeared on the plan were Denton Developer Ron Slovacek and Andrea Spencer, both of whom are under FBI scrutiny as part of the same wide-ranging federal investigation. As CBS-11 first reported, Lee shared office space with the pair at the Southside On Lamar apartments. The FBI has raided the office, which is where Slovacek, Spencer and Lee met with the bank official.
The real estate development deal fell through shortly after the FBI investigation became public with a series of search warrant raids at City Hall and across Dallas in June.
"It was a house of cards, a two-b it city official using the City of Dallas trying to get money to make something out of nothing. all the way around it was embarrassing," Miller said. "You just don't do that, try to profit from the City of Dallas using your position."
According to records, Lee and his partners were not putting any of their own money into the project but were expecting to make at least $800,000. Although it is unclear why, JP Morgan did not give the group a loan.
"The JP Morgan senior vice president told me in their first meeting that she said, 'how can you three do a housing project when you have no experience?'" Miller said. "So, would the City of Dallas staff recommend giving a million dollars when a bank wouldn't do it?"
In a news release produced by Don Hill's office, Lee said he was resigning because he wants to clear his name and develop his private business.
JP Morgan told CBS-11 the bank cannot comment about customer relationships.