Riddle: What does the city of Dallas have in common with Westchester County, New York? This is a hard one.
They're a county. We're a city. They're Yankees. We're not. Their median home value is $559,800, according to the census. Ours is $128,800. Getting tired of this? OK, I'll tell you.
We just got hit by exactly the same kind of lawsuit Westchester County got hit with in 2006 alleging they had lied more than 1,000 times to the federal government in order to fraudulently collect hundreds of millions of dollars in federal housing money. In 2009, after a federal judge agreed the county had made false claims, Westchester settled the suit for $62.5 million.
Jen Sorensen
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Our situation is different in one compelling aspect. We're on the line for a ton more money. The lawyers bringing the suit are Kohn, Kohn and Colapinto of Washington, D.C., recognized as one of the nation's top firms, maybe the top one, in fact, in the representation of whistle-blowers in and out of government.
And that's what this is — a whistle-blower suit alleging that the city of Dallas made multiple false claims between 2000 and the present in order to collect major amounts of money from the Department of Housing and Urban Development.
The suit alleges that Dallas City Hall falsely portrayed itself as using federal money to combat segregation when in fact it was using it to further segregation.
That's not exactly why the suit says Dallas broke the law. Dallas broke the law, according to the lawsuit, because it lied in violation of the False Claims Act.
The False Claims Act can be enforced criminally (off to the calaboose) or civilly (write a big check). On the civil side, it can be enforced by ordinary citizens or whistle-blowers. Qui tam, lawyers call that.
Let's say your neighbor owns a small business that has a contract with the post office to shred and dispose of unclaimed mail in an environmentally responsible manner. You know he's dumping the stuff in the river. You can bring a lawsuit against him on behalf of the post office.
If you can prove he's doing it, and if you can prove that nobody would ever have found out if it hadn't been for you, you can demand a cut of whatever settlement or jury award he winds up having to pay to the post office.
In our case, the whistle-blowers are two developers, Curtis Lockey and Craig MacKenzie, who have claimed they lost $30 million in 2007 when the city squelched their major renovation project at 1600 Pacific Ave. downtown. They say the city got mad at them because they wanted to obey federal law and put affordable or low-rent apartments in their project. The project was to be paid for in part by federal money that's supposed to go for affordable housing.
In fact, Lockey and MacKenzie claim they discovered a major kink at City Hall. They say the city was desperate to pump up downtown living by converting empty office towers to apartments, but the city wanted downtown to be fancy and affluent, not modest and diverse.
Lockey and MacKenzie say they had conversations and even saw paper in which the city was offering developers federal affordable housing money but requiring them to break the law by not providing the required amount of affordable housing.
Do they have a grudge? Yeah, they have a $30 million grudge. Most of us couldn't afford to have a grudge a 10th that size. You see a guy with a $30 million grudge coming at you down the street, get out the way.
They took their complaint about their own deal to the U.S. Department of Housing and Urban Development a year ago. They're still waiting to hear what HUD has to say about it.
Now, in a totally separate matter, they have emerged as the qui tam whistle-blowers in this lawsuit, unsealed just last week by a federal judge. The suit is based on issues far beyond their personal situation and paints a portrait of Dallas that should make us all very uncomfortable.
Here is a city that describes itself without the least hint of a blush as divided into North Dallas and South Dallas. White and black.
The city's only daily newspaper proudly publishes a series of articles on its editorial page about the need to spruce up southern Dallas. City Hall brags about how much affordable housing it has steered into southern Dallas.
Maybe even more troubling, the city's African-American leadership demands that city resources be divvied up better north and south. Black leadership sabotages and tries to run off major economic development in southern Dallas because the developers are white and belong in North Dallas. Must have gotten lost.
OK, just in case you and I are getting lost, too, allow me to pause and point out what's wrong with this picture, according to the federal officials who hand out housing money.
There's not supposed to be a North Dallas.
You know what's even more shocking? There's not supposed to be a South Dallas, either. That's called segregation.
I'm not even talking about social policy here. I'm talking about the dictionary. Line down the middle. White folks over here. Black folks over there. Segregation. A bad thing. Not a good thing. They don't give you money to promote segregation. They give you money to promote desegregation. Can you believe we still have these conversations?
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