DMN INVESTIGATES

The DMN didn't do much today with high-flying Dallas real estate agent Nicky Sheets' guilty plea in a big tax evasion case. So here's some help with the back story.

About a year ago, former DMN reporter Gretel Kovach did perhaps the definitive take on Sheets, his star Realtor wife, Eleanor Mowery Sheets (right), and their long history of financial troubles.

Among my favorite details in the D Magazine piece: The trustee in one of their bankruptcy cases details "what he considered the 'most notorious' example of a pattern of shifting assets to avoid payment: Nicky flew his lawyer in a twin engine plane owned by Nicky's JNS Investments to Odessa for a hearing, where he argued that he was just Eleanor's penniless underling." A creditor's lawyer heard about it and went after the plane, "but by the time he had tracked it from a recently vacated hangar at Dallas Love Field to the Addison airfield, it had been repossessed" by someone else.

Eleanor's Web site, before it was taken down, praised her hubby's tax acumen this way:

"Nicky creates the aggressive marketing strategies for our business with an enormous foresight into new trends and technologies. He has a great capacity for staying ahead of the industry and is the creator of many of the formative business transactions we do -- getting people together I'd never have thought of, doing land trades and arranging beneficial tax solutions for buyers and sellers."

The IRS recently tried unsuccessfully to auction the couple's North Dallas home. The "property appraisal and liquidation specialist" was listed as Mary Beth Justice. Her Austin workplace was targeted -- a day after the auction, coincidentally -- by suicide pilot Joe Stack.

As I read the court records today from State Rep. Terri Hodge's guilty plea on tax fraud, one sentence contained a detail that seemed new and intriguing.

Federal prosecutors noted that some of the $73,000 that went unreported on her tax returns was "campaign contributions made by various donors to Hodge, which she used for her own personal benefit ... ." But that's where they left it.

I re-read the 2007 indictment against Hodge, as well as a 2008 filing citing supplemental evidence that authorities had gathered. I didn't see anywhere allegations of her using campaign contributions for personal use.

Prosecutors say in today's plea agreement that they will present later a routine supplement. Perhaps that's the time and place when they will elaborate on the contributions. For now, they remained focused on the rent payments Hodge received -- and failed to report to the IRS -- from Dallas developers Brian and Cheryl Potashnik, whose low-income housing projects needed her support for millions in public subsidies.

Until we hear more from the prosecution, I'm left wondering who made these campaign contributions, were there any strings attached, and how did Hodge use them for her personal benefit?

Different types of concerns are on residents' minds in two different suburbs:

1. Arlington's mayor and council members have reaped free tickets and food at the city's luxury suite at publicly subsidized Cowboys Stadium, the Star-Telegram reports. The market value of the "perk of the office," as one leader called it, is around $400,000. Some observers fear this creates a conflict of interest.

2. In Frisco, residents living near a battery-recycling plant continue to worry that their health is at risk. The News' Valerie Wigglesworth and Matthew Haag cite study results from 15 years ago that found 45 children had "lead levels that today are linked to myriad health issues, from learning disabilities to behavior problems to brain damage."

Do you have thoughts or tips to share? Leave a comment or e-mail me.

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The reluctance of the Internal Revenue Service to discuss almost 1,000 suspicious claims filed by non-citizens from Texas for a first-time homebuyer tax credit leaves a lot of unanswered questions.

As I wrote today, IRS officials told Congress last fall that there are more than 160 active criminal investigations involving the homebuyer credit around the country. But where are those investigations? The IRS won't say.

Texas is disproportionately represented in the suspicious claims uncovered by the Treasury inspector general for tax administration? Why? Again, the IRS is mute.

IRS has made a point of saying that tax fraud is something they take seriously, and those who ignore the law will be held accountable. But so far, there has been only one prosecution and one civil lawsuit filed against tax preparers accused of filing fraudulent claims. Is that all there is?

Until the IRS talks, we're left wondering.

The federal government beat brought two interesting stories in the past 24 hours, as two of our top reporters tell us:

1. Two mortgage companies in Tarrant County were hit with subpoenas as part of a U.S. Housing and Urban Development investigation, The News' Dave Michaels reported from Washington. They were among 15 that the feds alleged had "significant" failure rates with federally insured loans.

2. One of the convicted defendants in last year's Dallas City Hall corruption trial is now accused of following around a juror, The News' Jason Trahan reported. The presiding judge said in a hearing Wednesday that she was "very concerned" by the allegations, which include ex-Plan Commissioner D'Angelo Lee approaching the juror in a movie theater to discuss the case.

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We're back after an extended break during the holidays. Let's ease into our familiar routines with a look at some of the interesting public-interest stories from the weekend:

1. If you're catching up on the recent rise in terror threats, The News published a nice takeout by The Washington Post exploring Al-Qaeda's re-emergence in Yemen. Yemen is the base of the imam who advised the Army psychiatrist behind the Fort Hood killings, as my colleague Brooks Egerton has blogged, and has apparent ties to the Nigerian who tried to blow up a plane bound for Detroit.

2. Much has been written about the economic wonders of the new Cowboys Stadium. The News' Jeff Mosier reminds us that in one instance what Jerry giveth Arlington, he taketh from Dallas. Fair Park had a "hollow feeling" as the annual Cotton Bowl football game was played out west for the first time Saturday. Makes you wonder what the economic losses were for Dallas?

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A recent Dallas Morning News article about missing-in-action real estate mogul/arts philanthropist Eric Brauss noted that he and his wife owned three German luxury cars worth over $300,000 each.

That was "an unfair depiction of a couple who lived modestly compared to their wealth," says Sara Marotto of Denton in a letter to the editor published today.

In that light, check out this video tour of Eric's home in Addison (right), which is now for sale. The original list price of $2.9 million has been cut to a cool $2,495,000.

Eric is listed as a million-dollar donor to the new performing arts center in Dallas and as associate producer of a low-budget slasher flick, The Dead Don't Scream (right).

Courts are now trying to sort out what went wrong with and what will become of the Brausses' real-estate empire, as The News' Gary Jacobson reported recently.

Dallas Morning News archives drip with references to Dallas real estate mogul Eric Brauss' wealth.

In 2004, he and wife Christine (right) were described as owners of three Maybachs -- German luxury cars worth over $300,000 each. Eric was also named as the owner of a $160,000 watch.

In 2007, they made the list of million-dollar donors to the new performing arts center downtown. And they gave $50,000 that year for a Dallas Opera gala.

Now comes word from News reporter Steve Brown that Eric is nowhere to be found. And the Far North Dallas headquarters of his Today Realty Advisors is shut down.

Late last month, a Dallas court granted investors a temporary order that bars the Brausses from spending or transferring millions held by real estate partnerships.

Local real estate execs told Steve they don't know whether Brauss is still in the country. He's from Germany and also has lived in Canada, where Today Realty has another office.

Do you have a tip about Eric Brauss? Send me an e-mail and let me know. Or join the conversation by commenting below.

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The air near a North Texas natural gas drilling operation had over five times more benzene than the state considers safe for short-term exposure, the Fort Worth Star-Telegram reports today.

A Texas Commission on Environmental Quality official told the paper that the level "is the equivalent of a person sniffing a can of gasoline." Benzene can cause leukemia and other disorders.

The air sample was taken near a tank that collects drilling byproducts. The tank was described as being seven miles west of the tiny Denton County town of DISH (right) -- near the Denton-Wise county line, in other words, and a few miles north of the Tarrant County border.

DISH commissioned its own tests and posted results on its Web site.

TCEQ says it doesn't know how widespread the problem is and wants to do more tests. Drilling has become quite common in the Barnett Shale gas field, sometimes very near homes.

Drilling companies say they support more testing. Some have questioned whether their wells emit hydrocarbon vapors.

Do you have a tip about drilling? Send me an e-mail and let me know. Or join the conversation by commenting below.

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I'm starting to sound repetitive. Because once again, stories over the weekend remind me of my colleagues' State of Neglect series, which exposed how Texas' network of government agencies and regulators often operate with industry insiders first in mind.

1. Back in 2002, The News' Doug J. Swanson told you how Texas lets doctors keep licenses despite criminal behavior and other misconduct. The state pledged reforms after the stories, et cetera et cetera. Fast forward seven years. Enter another News reporter, Brooks Egerton. And you can guess where I'm headed. My question this morning: Is anyone in a position of power dialing the Texas Medical Board to ask why it let these doctors remain active?

2. A Boston firm seeking a billion-dollar contract from the Texas State Board of Education has given gifts to two key members who then failed to disclose them, News freelance writer Jeff Horwitz writes. Explanation from one of the two: He thought he had received the gifts out of friendship, not because he served on the board. The other member declined comment, which was probably a smarter move.

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FBI agents today arrested former Dallas Cowboys linebacker Eugene Lockhart (right) on mortgage fraud charges.

The so-called Hitting Machine played for America's Team from 1984-90 and, according to a federal indictment, went on to work in businesses that played off his former employer's name. They allegedly included America's Team Mortgage, America's Team Realty, America's Team Funding Group, Cowboys Realty and Cowboys Mortgage.

Lockhart, of Carrollton, and eight others are accused of running a scheme from 2001 to 2005 that generated "approximately $20.5 million in fraudulent loans" in the Dallas area, federal prosecutors said.

Testimony is reaching a critical stage in the Dallas City Hall bribery trial. Jurors will earn their $40-a-day pay after times like Wednesday.

1. Federal prosecutors, in the meat of their case, scored as developer-turned-informant James R. "Bill" Fisher testified about paying a load of money to Don Hill's associates and finally winning his vote. However, in a boost to Hill's defense, Fisher acknowledged Hill never asked for cash and Fisher never paid him directly. (Trial is recessed until Monday, fyi.)

2. We know Rick Perry is the longest serving governor the state's had. And we know before then, he toiled in Austin as well. So why was he also claiming a home in College Station to get a tax exemption? He dropped it after the Associated Press broke the story this week.

3. Now for a little media talk: The Texas House is apparently blocking a Houston-based online news organization from covering an upcoming session. I know this news org, Texas Watchdog, is a competitor to The News. But c'mon, House. We Texans need more -- not fewer -- journalists covering Austin. Give them access.

Do you have thoughts or tips to share? Leave a comment or e-mail me.

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Three very different stories. But they all come back to money: how to get it, or how to keep it.

1. One of the feds' star witnesses in the Dallas City Hall bribery trial, Southwest Housing Development's Brian Potashnik, finished four days of testimony yesterday. Some observers and blog commenters thought Potashnik stumbled at times to show Don Hill personally benefited from contracts given to associates. But Unfair Park's Jim Schutze had a different take.

2. Speaking of the Dallas City Council, some of its members are reluctant to trim their own office budgets amid a $190 million shortfall, The News' Rudy Bush reports. I'm sure city workers and residents will sympathize.

3. College sports' umbrella organization, NCAA, is facing lawsuits from former athletes who accuse it of cashing in on their likenesses in video games without sharing the proceeds. A ranking member of a Congressional panel has questioned why the NCAA still receives tax-free status as a nonprofit when it acts more like a commercial enterprise.

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The builder at the heart of the Dallas City Hall corruption trial, Southwest Housing Development's Brian Potashnik, was grilled yesterday about payouts he made to others whose political support he needed and received. The defense is trying to show that contracts Potashnik gave to Don Hill & Co. were no more unusual or improper than those, which he described as anything but bribes. Here are some highlights:

1. Potashnik was questioned about $5,000 he paid to sponsor a birthday party for state Sen. Royce West. He corrected the defense, saying the event was "for the education of underserved youth" in South Dallas. (You may recall West's son also had a paid job at Southwest Housing through an internship program that the senator sponsored, according to a 2005 story that Gromer Jeffers Jr. and I wrote.)

2. Potashnik gave at least $40,000 to a community book fair that former council member Leo Chaney Jr. founded to highlight black authors. When asked why in court, Potashnik testified that, "This is a charity we believed in." (Potashnik also hired Chaney's appointee to the city plan commission, Melvin Traylor.)

3. Remember my post last week about Potashnik giving money to a local church whose neighborhood support he needed? The amount could have been as much as $50,000, he testified. Was it a bribe, he was asked under oath. Potashnik replied no: "We were making an investment in the community, and we wanted money to be used to refurbish the church."

Are those transactions smart business? Is the defense onto something? Tell me in an e-mail or leave me a comment.

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Developer Brian Potashnik, who has pleaded guilty in the Dallas City Hall bribery trial, has testified he donated $25,000 to a local church to gain support for his low-income housing projects.

The News' Jason Trahan mentioned the item during his live-blogging from the federal courthouse today.

I e-mailed Jason during the trial's lunch break to get a few more details. He told me that Potashnik (shown at right) didn't name the church and identified the pastor only as a Rev. Johnson, who has since died.

We may learn more specifics when prosecutors enter exhibits into the record, Jason tells me. For now, I'm left wondering:

Did someone instruct Potashnik to pay the church? Does this happen often with churches in Dallas?

If any of you know other examples, post a comment or send me a private e-mail.

So will this be the day that the Justice Department's bribery case against former Dallas Mayor Pro-Tem Don Hill (shown at right) falls apart?

Or will it be the day that his smiling demeanor changes?

We're about to find out, as questioning of the low-income housing developer who has pleaded guilty to bribing Hill begins this morning. The News' Jason Trahan is stationed at the federal courthouse and live-blogging the developments.

In a News interview four years ago, lawyers for developer Brian Potashnik explained his role for the first time, framing him as a victim of opportunistic city officials.

Let's catch up on a couple of mind-bending education stories that you probably missed over the holiday weekend:

1. George Orwell would have appreciated this: Some students who failed the TAKS test are counted as passing for purposes of new school accountability rankings, Dallas Morning News reporters Holly Hacker and Jeffrey Weiss showed. Why? A formula predicts that these failers are likely to pass the next time. What if the prediction is wrong? No problem. The schools' rankings don't drop.

2. Charter schools are privately run, but we taxpayers finance them. So the government exercises fiscal oversight, right? Wrong, reports The Dallas Morning News' Matthew Haag. Onto that stage steps Imagine Schools, a nationwide charter school management company with a real estate program that some officials say hurts students. It's planning to expand into McKinney next year. State officials OK'd the move despite concerns that Imagine lacked non-profit status.

Do you have a tip about school testing? Charter schools? Another subject? Send me an e-mail and let me know. Or join the conversation by commenting below.

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Here's a look at public-interest stories in The Dallas Morning News and around the Web-o-sphere that had me asking some questions over morning coffee:

1. Will we never know where $15,000 in missing ticket revenue in Mesquite ISD's athletic department went? A secretary responsible for depositing it quit after questioning, and the internal auditor said costs to dig deeper were twice as much, The News' Matthew Haag reports. It's the latest financial scandal for Mesquite sports.

2. Why did Cheryl Potashnik miss a pretrial conference Monday in which all defendants charged in the FBI's Dallas City Hall public corruption case were present or had written excuses? Speculation is the co-owner of Southwest Housing Development Co., who along with husband Brian is accused of bribing public officials, may have struck a plea deal, The News' Jason Trahan tell us.

3. How will Texans vote on a proposal to limit eminent domain powers of government? Protect property owner rights? Or leave government with its ability to seize land and give it to private developers?

Did I miss a good story? Or do you have a tip? Send me an e-mail and let me know.

Let's catch up on a couple of public-interest stories in The Dallas Morning News and around the Web-o-sphere:

1. Judges must not hear cases involving major campaign contributors, the U.S. Supreme Court has ruled. So what do we do in Texas with litigation involving billionaire home builder Bob Perry, who has given big bucks to all nine justices on the state's highest court?

2. Many new details of the tainted-syringe scandal are emerging in a ProPublica/Chicago Tribune report. It paints a chilling picture of problems at the Food and Drug Administration. Among the four people who've died is a Texas toddler.

Did I miss a good story? Or do you have a tip? Send me an e-mail and let me know.

We start today with questions, as we look at some of the public-interest stories in The Dallas Morning News and around the Web-o-sphere:

1. What's leading to all the fatal wrong-way crashes on the Dallas North Tollway? Overnight we had yet another one. Police say alcohol may be a factor in what The News' Scott Goldstein counts as the fifth such crash since October.

2. Are some homeowners' associations getting a little overzealous? One in Lake Highlands threatened to tow the vehicle of a Vietnam vet if he didn't remove military decals that he had displayed on his ride, News columnist James Ragland tell us. The HOA likened it to advertising.

Did I miss a good story? Or do you have a tip? Send me an e-mail and let me know.

Here are a few public-interest stories catching our eye in The Dallas Morning News and around the Web-o-sphere:

1. OK, the good news first: No one has been hurt since stadium lighting poles (like the one pictured here) started falling at Texas high schools. But the rest of this investigative report from Cox Newspapers is terrifying. Denton, Tarrant and Ellis counties are among those where tragedy nearly has struck. The steel poles have a common -- and unregulated -- manufacturing lineage.

2. Bedford resident Jan Tidwell, a reader of this blog, sent us a frantic post yesterday. The local power company wanted to chop down her old oak trees. Dallas Morning News reporter Sherry Jacobson and videographer Nathan Hunsinger hustled to craft these balanced looks at the situation. Is Oncor overzealous in cutting trees near power lines? Or are homeowners like Jan putting shade ahead of safety?

3. We've been trying to avoid the White House puppy story, reasoning that there were too many other reporters covering this trivia. But Dallas Morning News reporter Jeffrey Weiss changed our mind today with a look at the risks associated with the Obamas' North Texas-bred pooch.

Word that the Tom Hicks (right) company that owns the Texas Rangers and Dallas Stars is in financial trouble made me think about other sports-business headlines over the last eight months.

Victory, the development anchored by the American Airlines Center, is struggling to draw in people and keep shops open. Its developer, Ross Perot Jr.'s Hillwood company, is also in a financial pinch.

In Arlington, Jerry Jones' behemoth new Cowboys Stadium has yet to spur new construction in its neighborhood. That's been a similar story for Rangers Ballpark in Arlington.

All three projects have one thing in common: public subsidies. Combined, the three received more than $600 million in assistance for construction and ancillary infrastructure.

And so these recent headlines raise a fair question: Have taxpayers gotten a good return on their investments?