News from the Lone Star State

[TexasStooge]

Come on, drink: The water's fine

Dallas taps into ozone process that zaps algae's stench and bad taste

By GRETEL C. KOVACH / The Dallas Morning News

DALLAS, Texas - Ozone usually is a bad word during the hot summer months.

Now it's being used to pump away that musty smell and gagging taste left in Dallas' drinking water by the annual algae bloom.

North Texas still has summer smog and triple-digit heat. But a newly installed ozone-disinfection process at the largest water-treatment plant in the region is keeping tap water fresh while algae flourish in lakes and reservoirs.

"We don't want to declare a cure for it until we have a little more experience with ozonation," said Charlie Stringer, an assistant director at Dallas Water Utilities.

"But so far it appears that it's living up to its billing."

Dallas' water-treatment plant in Sunnyvale became one of the largest ozonating facilities in the country during the summer of 2004 after a $45 million upgrade. It serves about 50 percent of Dallas' 2.3 million customers. Those customers live in more than 20 cities, including Irving, Lewisville and The Colony.

The last of Dallas' three water-treatment plants should begin using ozonation next year.

Usually Dallas receives hundreds of complaints about the taste and odor of drinking water in July when the algae start blooming. This year, it received four.

Last summer, when temperatures were relatively low and it was rainy, algae were scarce in Lake Ray Hubbard and other sources of Dallas water.

Even with algae raging this summer, Dallas water doesn't seem to be affected. Anthracite coal, sand and traces of chlorine and ammonia are still used to clean the water, but Dallas' ozonators seem to have eliminated that funky tap taste that was long a summer rite in Dallas.

"We're really proud," said Ted Kilpatrick, head of the East Side Water Treatment Plant, beaming as the nine new generators rumbled in the background, zapping blue bolts of electricity through thousands of glass vials producing ozone.

Ozonation is the most common water-treatment process used in Europe, but it has become popular in America only in the last few years.

According to a 1998 survey of 500 of the largest water treatment plants in America, only 20 used ozone. Since then, the process has caught on.

"It's a popular technology. I think we're going to see more of it," said Alan Roberson, director of security and regulation for the American Water Works Association, which represents drinking-water providers and experts.

Ozone is a more efficient cleanser than chlorine, and it will also help Dallas meet stricter limitations on disinfection byproducts that the EPA is expected to roll out in 2006.

Fort Worth, Arlington and the regional water district serving Denton County also use ozonation.

The ozone generators are costly, but plant managers rave about the results, particularly with algae.

"Ozone blasts it. I like it!" said Michael Stone, director of Operations for the Upper Trinity Regional Water District, which serves about 200,000 people in Denton County and surrounding cities.

That district started using ozonation about three years ago.

"When it comes to taste and odor, ozone is pretty much unmatched," Mr. Stone said.

Fort Worth was the first in Texas to switch one of its plants to ozonation in 1992, and Arlington became the first to convert to 100 percent ozone-treated water in 1999.

"It was because of our taste and odor concerns we had been battling for years – algae and other critters," said Chuck Vokes, an assistant director over treatment at Arlington Water Utilities.

"We had the same problem, as did the majority of the cities in the area. And ozone is really good at treating it."

The second-largest drinking water supplier in the area, the North Texas Municipal Water District, is evaluating ozonation but now uses chlorine as its primary disinfection process.

Although algae make the water taste foul in many of the Collin County cities that draw from that system, it is not dangerous to drink.

"It happens every year at the end of July and August, depending on nature," said Denise Hickey, the district's public relations coordinator.

"We still have a minor bloom going on. But we want to emphasize that there are no health risks."

Algae counts spiked in early August but started to wane just before the latest heat wave.

The North Texas Municipal Water District received several complaints this month about taste and odor, Ms. Hickey said. The utility began adding potassium permanganate to subdue the effects of the offending algae.

But nothing does it like ozone, Mr. Stone said.

Although he works for Upper Trinity, he drinks North Texas Municipal water at home, or tries to.

"I live in Frisco, and I can hardly drink the water," he said. Ozonation "is expensive, but I can't wait until they get it."

[TexasStooge]

City Hall probe grows 'exponentially'

By BRETT SHIPP / WFAA ABC 8

DALLAS, Texas - News 8 has learned that the FBI's recent raids on records at Dallas City Hall are forcing federal agents to expand the focus of their investigation.

Sources close to the probe at said they had every reason to believe the feds were close to wrapping things up when they raided records at City Hall two weeks ago.

Information gleaned thus far from those records has—according to one source—expanded the investigation "exponentially."

The federal grand jury subpoena served at City Hall two weeks ago was extensive. The 21-page document requested all files memos, reports, records and other documents.

Dallas attorney Karl Rupp, who has handled public corruption cases in the past, said such a massive request for documents usually means one thing. "Given what I'm seeing in these subpoenas and given what I know about the investigation, no one should expect that this is going to be resolved within a matter of days, weeks months... it's going to be more like years from now," he said.

The original FBI investigation centered on possible violations involving City Council members Don Hill, James Fantroy, Leo Chaney and their Plan Commission appointees.

It also has zeroed in on low income housing developments that involve Brian Potashnik of Southwest Housing Development and Bill Fisher of Odyessy Residential Holdings.

But several other new names have surfaced, indicating the investigation has likely taken a turn—most notably in the direction of State Sen. Royce West, who has said he had limited dealings at City Hall.

State Rep. Terri Hodge declined comment about whether she has become a target of the federal probe. Records show Hodge officially recommended that the state approve tax credits for a Brian Potashnik apartment project.

Hodge now lives in that same complex, Rosemont at Arlington Park, and News 8 found her car parked there on Friday.

Another person named in the subpoena is Andrea Spencer. Her business card lists her with LCG Development Group. The address belongs to a rented mailbox at a UPS Store in Richardson.

When The Dallas Morning News tried to ask her questions recently, she ducked the reporter and the camera.

Spencer has been identified as a concrete contractor for one of Brian Potashnik's Southwest Housing projects.

Why are the records of Spencer and others named in the subpoena being confiscated? According to Rupp, the reason could be nothing more than than a reference point for the federal investigation.

"Not all of those actors are going to be criminally responsible or will have even done anything morally wrong," Rupp said. "But in order to present a picture to a jury of what took place, you have to be able to present evidence of not only what went wrong, but how something was supposed to have happened."

The FBI has also been poring over records from the Dallas Police and Fire Pension Fund, the Comprehensive Plan Committee, HUD Section 108 loans and Community Development Block Grant Funds.

[TexasStooge]

Drug bust near Tyler nets ton of marijuana

By LEE HANCOCK / The Dallas Morning News

TYLER, Texas – A routine traffic stop along Interstate 20 led to the county's largest drug bust in decades, netting more than a ton of marijuana and 20 kilograms of cocaine, investigators said Friday.

Melton McMorris Jr., 56, and Victor C. Thomas, 38, both of Jackson, Miss., were arrested after a traffic stop about 11:45 p.m. Thursday on I-20 about a mile east of State Highway 110 near Tyler.

They were being held Friday in the Smith County jail on charges of aggravated possession of a controlled substance, a first-degree felony, and possession of marijuana, a second-degree felony, Smith County Sheriff J.B. Smith said. Bail was set at $350,000 each, Sheriff Smith said.

A sheriff's deputy who stopped the truck discovered that the empty trailer of their 18-wheeler truck had a concealed compartment containing 2,620 pounds of marijuana wrapped in 50- to 65-pound bundles and 20 kilograms of cocaine.

The men also were carrying $3,500 cash, investigators said.

Sheriff Smith said the find was the biggest he'd seen in the county in his 35 years of area law enforcement work.

Deputy John Smith, an officer assigned to patrol I-20 with a drug dog for narcotics courier suspects, said he began following the truck after noticing that its driver was going 50 mph in a 65 mph zone.

He said the truck then slowed more and ran off the pavement, and he could smell the strong stench of raw marijuana when the driver and passenger opened its cab door.

Deputy Smith said he got his search dog, Max, out of his car, and Max was "probably 15 feet from the truck" when he began catching the odor from the hidden cache of drugs.

"He immediately started alerting on it," the deputy said.

The men told the officer that they were distant cousins, owned the truck together, and were returning to Mississippi from the Dallas-Fort Worth area.

Deputy Smith said they had driving logs dating to 2001, but none had been filled out, the truck had no insurance, and there were no bills of lading for any recent paid loads.

[TexasStooge]

Crawford braces for dueling war rallies

By ANGELA K. BROWN / Associated Press

CRAWFORD, Texas (WFAA ABC 8/AP) — This one-stoplight town of 700 residents near President Bush's ranch braced for thousands of visitors Saturday, most in a cross-country caravan for a pro-Bush rally and others to support Cindy Sheehan's anti-war demonstration.

More than 3,000 people were expected at the school football stadium for the culmination of the "You don't speak for me, Cindy!" tour that started last week in California.

It would be the largest counter-protest since Sheehan started camping out off the road leading to Bush's ranch Aug. 6. She vowed to remain unless he talked to her about the war with Iraq that claimed the life of her son Casey and more than 1,870 other U.S. soldiers.

The pro-Bush caravan was coordinated by Move America Forward, a group led by former California Assemblyman Howard Kaloogian and Republican strategist Sal Russo.

Meanwhile, hundreds were expected at Sheehan's camp for a somber Saturday ceremony honoring soldiers in Iraq. The protest, which has swelled from dozens on weekdays to about 1,000 the past two weekends, will end Wednesday.

Bush has said he appreciates Sheehan's right to protest and understands her anguish but will not meet with her. His vacation in Texas is to end Sept. 2.

Sheehan and other grieving families met with Bush about two months after her son died last year, before she became a vocal opponent of the war.

Crawford hasn't seen this big a crowd since the scathing documentary Fahrenheit 9/11 was shown last summer on a screen at the football field, drawing about 3,000 people. The screening was organized by the Crawford Peace House, which also is helping Sheehan. Earlier that night, more than 300 Bush supporters held a rally to counter the showing of the film.

[TexasStooge]

Pursuit ends in death for DWI suspect

DALLAS, Texas (WFAA ABC 8) - A motorist died early Sunday after leading Dallas police on a high-speed chase and crashing his sport utility vehicle on Interstate 30.

Police said the pursuit started in Deep Ellum near downtown Dallas about 2:30 a.m.

The man—who officers suspected was intoxicated—drove away after they tried to question him outside a club.

The driver damaged several other cars as he headed east on I-30, leading police on a chase at speeds that approached 100 mph.

The driver plowed through a guardrail, was airborne for an estimated 75 feet, and crashed on the highway's service road at Winslow Ave.

He was pronounced dead at the scene, in front of a liquor store.

The Dallas County Medical Examiner's office identified the driver as a 26-year-old Dallas resident. His name was withheld pending notification of next of kin.

One officer received a slight injury to his hand.

WFAA-TV photojournalist Bryan Titsworth contributed to this report.

[TexasStooge]

12 injured in prison disturbance

MINERAL WELLS, Texas (WFAA ABC 8) - Law enforcement agencies were summoned to a disturbance at a privately-operated prison unit in Mineral Wells on Saturday night.

Officials said about two dozen offenders got into a fight about 8 p.m. in the recreation yard of the Corrections Corporation of America pre-parole transfer facility on Highway 180 in the Wolters Industrial Park.

There were at least 500 inmates in the yard at the time, said Texas Department of Criminal Justice spokesman Mike Diesca. He said at least 12 people received non life threatening injuries.

Some of the wounded were taken by helicopter ambulance to area hospitals; others were transported by ground.

Two staff members were treated for scratches.

Diesca said the situation was under control by 2 a.m. Sunday after tear gas was used to restore order. An investigation was under way into the cause.

Sheriff and police units from Parker County, Palo Pinto County, Mineral Wells and the Texas Department of Public Safety were called in to help quell the disturbance.

The Texas Department of Criminal Justice Web site said the facility was established in 1989 and can handle a maximum of 2,100 inmates.

WFAA-TV photojournalist Mike Zukerman contributed to this report.

[TexasStooge]

Gunman kills 4 in Fannin County

By CYNTHIA VEGA / WFAA ABC 8

SASH, Texas — At least four people—including a church leader—were shot and killed in a small Fannin County community Sunday night.

Sheriff's deputies and a SWAT team surrounded a house near the First Assembly of God Church in Sash, where a suspect held police at bay for nine hours before he was taken into custody early Monday.

Initial reports indicated the man had gone to the church around 8 p.m. Sunday and knocked on the door. When someone opened it, he allegedly shot and killed hit two people, including the pastor.

Officials said the fleeing gunman encountered two women in a car nearby and killed both of them.

Identities of the victims were not available.

The name and condition of the suspect was not released. He faces capital murder charges.

WFAA-TV photojournalist Mike Zukerman contributed to this report.

[TexasStooge]

Wall collapses, killing construction worker

MANSFIELD, Texas (The Dallas Morning News) - A construction worker was trapped and killed during a partial collapse of a building Sunday afternoon in Mansfield.

Police said a wall at the construction site for an addition to the city’s animal control facility collapsed and trapped Ezequiel Meza, 50, of Fort Worth at about 1:30 p.m. Sunday in the 400 block of Industrial Drive. Forest Hill and Arlington fire departments, which have equipment for heavy lifting, assisted the Mansfield Fire Department in the rescue attempt. Police spokesman Thad Penkala said the cause of the collapse was under investigation.

[TexasStooge]

Districts pulling online appraisal photos

By JAMES M. O'NEILL / The Dallas Morning News

DALLAS, Texas - Care to play nosy neighbor?

Act now. Time is running out.

Until Thursday, if you're so inclined, you can still go to the Web site of Dallas County's tax appraisal district, type in a name and call up a photo of that person's house.

Want to know what Dallas Mayor Laura Miller's home looks like? Judging by a photo on the Dallas Central Appraisal District Web site, it's rather charming. The photo lets you peek through the bars of an iron fence to see a sprawling manse on two acres that was appraised in 2004 at $3.5 million.

The two-story home, built in 1952 and finished in brick veneer, has five bedrooms, two fireplaces, a wet bar and a total living area of 8,170 square feet. There's also a detached servants quarters.

Or how about Dallas Mavericks owner Mark Cuban? In his case, the DCAD site photo is less revealing. But that just heightens the mystery that envelops the rich and famous.

The photo shows two majestic iron gates, supported by robust stone columns punctuated with ornate exterior lanterns, something you might pass along Bellevue Avenue in Newport, R.I., or Philadelphia's Main Line.

The wide apron at the foot of the driveway is slick with rain, and two large Christmas wreaths, big enough to collar the lions outside the New York Public Library, hang from the gates.

Just beyond, you can pick out the distant roofline of the house itself, which is tantalizingly obscured by well-positioned trees. The 23,676-square-foot house, less than a decade old and finished in stone veneer, sits on nearly seven acres.

The whole package was appraised at $14.3 million.

Privacy concerns

Some people think such photos are not the public's business.

Among them is state Sen. Kel Seliger of Amarillo, who shepherded a bill through the Texas Legislature that prohibits tax appraisal districts from posting the photos of private residences on their Web sites beginning Thursday.

Mr. Seliger, who was mayor of Amarillo for four terms and whose district spans 26 counties along the western edge of the Texas Panhandle, said the bill was born out of a philosophical discussion about privacy "and government entities only releasing what's necessary."

He readily concedes the detailed information that tax appraisal districts collect is necessary to make proper appraisals. "But to disseminate that information? No, it's not their role," he said.

"I was concerned about letting people know the configuration of residential homes and the ingress and egress," he said. "It's an invasion of privacy."

Ross Perot doesn't have anything to worry about. The photo of his $16 million estate on the DCAD Web site depicts ... well, actually it shows a solid front gate, shut tight.

And Texas Rangers owner Tom Hicks apparently lives in the trees, judging by the DCAD photo of his $26 million estate.

W. Kenneth Nolan, DCAD's executive director and chief appraiser, said he can count on one hand the number of complaints he has had since the photos of private homes went up on the Web site 2 ½ years ago. "But I can guarantee you we're going to get a lot more complaints when the photos come down," he said.

The photos are designed to give residents more information for when they challenge appraisals, he said.

Owners can show the board a picture of their home, along with photos of comparable homes in their neighborhood. "Homeowners typically come armed with our Web site data," Mr. Nolan said. "They've been tremendously helpful to people. I'd much rather have people come in for hearings prepared with information. It makes things go a lot smoother.

"It's all public information, part of the appraisal record," he said.

The Web site and photos are also routinely accessed by real estate agents, insurance companies and investors from outside Texas who are contemplating commercial acquisitions, Mr. Nolan said. A few companies have even purchased the entire set of photos from DCAD for $25,000.

DCAD paid $1.2 million to a Kansas City company, Mobile Video Services, to take the photos. They were intended as a resource for DCAD appraisers, but when the district improved its Web site a few years ago, the photos were added.

Emotional issue

"The arguments in favor of the bill were very emotional," Mr. Nolan said. "They were more emotional than logical, and it's hard to argue back with a 'So what.' " He said there were concerns about isolated homes being targeted by burglars or stalkers who would learn details about a home's layout.

The DCAD Web site shows only a house's footprint – not the interior layout, Mr. Nolan said.

Mr. Seliger said he has not looked at the information about his house on the appraisal district Web site for Potter County, joking that "it would be too depressing." In 2004 he paid $8,812 in taxes on his 4,700-square-foot Amarillo home, valued at $354,564.

Photos of his home are not posted on the Web site. In fact, the district's site has never posted photos.

Neither do the Web sites for the Tarrant and Collin tax appraisal districts.

Mr. Nolan said the DCAD photos will still be available to the public through the computer terminals at DCAD's customer service center 2949 N. Stemmons Freeway.

And until Thursday, they'll still be on the Web site. For the nosy neighbor in you, the Web address is http://www.dallascad.org.

[TexasStooge]

Rivalry spins into FBI probe

Exclusive: Developers vied for millions in tax subsidies

By SCOTT PARKS, REESE DUNKLIN and HOLLY K. HACKER / The Dallas Morning News

DALLAS, Texas - The FBI's increasingly complex probe of Dallas City Hall seems to have had a simple start: two bitter apartment developers battling over millions of dollars in controversial tax subsidies.

Some of the politicians named in recent subpoenas and search warrants blame the investigation on racism because many of the apparent targets are black.

But federal agents swept into City Hall after two white developers, Brian Potashnik and James R. "Bill" Fisher, became locked in a winner-take-all battle for City Council approval of their rival apartment projects in southern Dallas.

Their struggle links several spectacles that have become headline news or hot gossip among the city's political class, including:

• The FBI secretly taping one developer's effort to persuade a leading Dallas businessman to bribe Dallas' mayor pro tem.

• A council member successfully pushing approval for an apartment complex that city housing planners opposed – after the developer hired the council member's security company.

• Two city leaders enjoying the use of luxury autos they never paid for.

• Public officials steering a developer toward hiring their political associates as consultants and contractors on housing projects.

• A retired DISD principal getting named to the city's Plan Commission, then getting hired by one of the developers and then occasionally voting on matters affecting his employer.

• Several other apartment projects winning council approval, often over planners' objections, while developers collectively donated tens of thousands of dollars to political campaigns of black and white council members.

At one point last fall, the competition between Mr. Potashnik and Mr. Fisher reached a critical point with construction of more than $100 million worth of apartment projects hanging in the balance.

"It got to the point that you had Fisher on one side of the road and Potashnik on the other side of the road fighting about which one would get his deal done," Mayor Laura Miller recalled. "This is when everything went a little crazy."

Public records and interviews show that Mr. Potashnik and Mr. Fisher were pushing dueling projects in three different neighborhoods last year – six apartment complexes in all. The loser in each neighborhood would likely see his project evaporate because of a crucial new rule that banned City Council approval of similar projects located within a mile of each other during the same year.

And there were other complications. The city's own housing department experts declined to endorse any of the six projects because they feared the developers wouldn't be able to fill them with qualified tenants.

Moreover, some City Council members and neighborhood activists wanted a freeze on low-income apartments in southern Dallas in favor of more single-family homes.

"We've got enough apartments in our neighborhood for 20 years," said Ruth Steward, a former member of the Dallas Housing Finance Corp., an arm of city government that issues tax-exempt mortgage bonds to finance developer projects.

Affordable housing developers and their advocates say they want to spread government-subsidized apartments throughout a city and try to make them blend in with a neighborhood. In Dallas, as in many other cities, they tend to be clustered in lower-income neighborhoods. Despite the obstacles, the council approved two of Mr. Potashnik's projects and one of Mr. Fisher's.

FBI search warrants and subpoenas have touched on some of their development projects located in the city's southern sector. FBI agents served Mayor Pro Tem Don Hill and council member James Fantroy with search warrants when the public corruption investigation broke into public view on June 20. Mr. Hill and Mr. Fantroy are black.

And this month, another sweeping subpoena landed in City Hall. It seeks records on five Potashnik projects from several city departments and from council members Maxine Thornton-Reese and Leo Chaney, two other black council members.

The focus on black elected officials and economic development projects in heavily black southern Dallas has prompted allegations that the FBI investigation is racist. But Mr. Potashnik and Mr. Fisher, both white, also got caught up in the subpoenas and search warrants.

Mr. Potashnik's Southwest Housing Development Co. offices were searched in June. He declined to comment on the investigation but allowed The Dallas Morning News to interview his legal team.

Matt Yarbrough, a Southwest Housing lawyer, said neither Mr. Potashnik nor anyone else at the company has offered contracts, money or gifts in exchange for political support at City Hall. He said City Council approved company apartment projects on their own merit.

And he insisted that Southwest Housing had hired Melvin Traylor, a city plan commissioner, because he is an experienced educator who could help the company run tutoring programs for its tenants, not because he could do things for Southwest Housing at City Hall. Mr. Traylor was named in a FBI subpoena this month.

"I think there is a real sense from Southwest Housing that they are proud of what they've done and they want to go to bed feeling good about what they did," said Mr. Yarbrough, a former federal prosecutor. "That's very, very important to them."

Mr. Fisher, who operates under the name Odyssey Residential Holdings, declined to comment for this article. Several search warrants and subpoenas issued last month sought records related to his apartment projects.

Federal prosecutors have not filed charges against anyone, and a grand jury has not returned indictments.

"Large-scale and complex investigations usually take a considerable amount of time to conclude," said Special Agent Lori Bailey, an FBI spokeswoman.

The program

A federal tax program called Low-Income Housing Tax Credits fueled Southwest Housing's growth. The program encourages private developers to build affordable rental housing by giving them tax breaks worth millions of dollars.

Congress sets the annual amount of tax credits that each state will receive. In Texas, the regulatory agency in charge of the tax-credit program is the Texas Department of Housing and Community Affairs.

Let's say the state housing program awards a developer $10 million in tax credits over a 10-year period. The developer can sell the tax credits for 90 cents on the dollar to generate $9 million for upfront construction money.

Industry estimates are that the developer can use his tax credits to pay for $60,000 of the cost to build each apartment unit. This puts him way ahead of the private developer using conventional sources of financing.

In return, the developer who takes tax credits is required to participate in a social compact. He must provide below-market rental rates for tenants who fall within certain lower- and moderate-income guidelines. The developer repays creditors and makes his money by filling up the apartment complex with tenants as quickly as possible.

"It's a market he [Mr. Potashnik] mastered very well," said Deepak Sulakhe, currently a Southwest Housing vice president.

The private-sector developer who went to conventional sources for financing is under no constraints to keep rents low. He can charge hundreds of dollars more a month than the tax-credit developer.

A growing number of people have criticized affordable housing programs for creating future slums instead of bringing in single-family homes, shops and restaurants.

But Jeanne Talerico, director of the nonprofit Texas Association of Local Housing Finance Agencies, which helps local agencies provide affordable housing, said the tax-credit projects are high-quality, "lovely buildings."

"The truth is," she said, "if you drove by any of these developments, you would never know they were affordable housing."

The rivals

By late 2002, Southwest Housing had become one of Texas' largest builders of affordable apartment complexes. It was an impressive turnaround for Mr. Potashnik, a former securities broker.

About 15 years ago, Mr. Potashnik left California on a losing streak. He had built a Los Angeles nightclub from scratch and called it The Stock Exchange. It became a hangout for celebrities and fashionistas. But he lost his funding, and the doors slammed shut.

In Texas, he dove into a more profitable and sustainable line of work: low-income housing. He founded Southwest Housing Development Co. and is now its president.

Mr. Potashnik has become a prosperous Highland Park family man who likes to play high-stakes poker in Las Vegas.

Mr. Fisher, a Southwest Housing employee until a couple of years ago, took careful notes as he helped Mr. Potashnik make millions in the affordable housing business. He rose to become a vice president – one of Mr. Potashnik's right-hand men during the company's rapid growth in the late 1990s and early 2000s.

Those who know Mr. Fisher describe him as a large, gregarious man who could sell ice to Eskimos. At Southwest Housing, he scouted land ripe for development and used a gift for gab to get deals done.

Mr. Fisher, formerly in the banking business, also had hit bumps during his career. He and two associates were convicted of bank fraud in the 1990s. An indictment alleged they stole nearly $1 million from investors in a Florida bank. But they got a new trial in 1997 after an appeals court found that prosecutors had improperly withheld evidence. Finally, a new jury exonerated them of all charges. And Mr. Fisher landed at Southwest Housing.

Southwest Housing, meanwhile, was expanding its reach across the state – from Dallas and its suburbs to Austin, Houston and San Antonio.

The battle at City Hall

Mr. Fisher made a critical move in January 2003. After almost six years with Southwest Housing, he announced his departure. He wanted to do his own deals.

Mr. Fisher lined up formidable new partners who had worked with him at Southwest Housing. And Mr. Potashnik suspected that Mr. Fisher began scouting out land for his new venture while on the Southwest Housing clock.

"It was not a good parting," said one former employee who recalled the split. "Brian was very upset with Bill. Very upset."

Mr. Fisher knew the Southwest Housing system for developing properties. But he didn't have Mr. Potashnik's City Hall connections and track record.

So he set out to establish his own.

But just as he embarked upon his new business, Texas lawmakers began listening to constituents concerned that a glut of low-income apartment projects in urban areas might turn into slums – particularly in Dallas and Houston.

In response, the state housing department wrote rules increasing the amount of community support a developer needed to build a project.

The new rules produced some cutthroat practices.

For example, developers could get additional brownie points on their funding applications if they included statements of support from bona fide community organizations. Competing developers began investigating each other's community support to see whether it was real or bogus.

In Dallas, the new rules also required developers to get City Council endorsement as a prerequisite for getting state tax credits or low-interest bonds. Previously, City Council approval was necessary for only those affordable housing complexes financed through the Dallas Housing Finance Corp. In 2004, it became mandatory on all projects funded through the state housing agency.

The new state rule prohibiting City Council approval for two similar projects within a mile of each other posed a major problem for Mr. Potashnik and Mr. Fisher in 2004. It meant only one of them could emerge victorious on each of these three southern Dallas battlegrounds:

• Mr. Potashnik wanted to build Rosemont at Laureland on Camp Wisdom Road in southeast Oak Cliff. The project straddled Mr. Hill's and Mr. Fantroy's districts. Right across the street, entirely in Mr. Hill's district, Mr. Fisher planned to build Memorial Park Townhomes.

• Mr. Potashnik wanted to build Rosemont on Scyene Road in Pleasant Grove. Mr. Fisher wanted to build Dallas West Villas a little to the south on Bruton Road. Both were in Mr. Hill's district.

• Mr. Potashnik wanted to build Simpson Villas Apartments on Simpson Stuart Road near Bonnie View Road in southeast Oak Cliff. Again, just across the street, Mr. Fisher wanted to build a series of town homes called Homes of Pecan Grove. Both were in Mr. Fantroy's district.

The uproar

Mr. Potashnik and Mr. Fisher were trying to push their tax-credit projects through City Hall in a changing political environment. Everyone was reacting not only to their rivalry but to the new state rules.

The city's housing staff didn't help them any. After conducting market studies, the staff decided not to endorse any of the six projects, citing an abundance of low-income apartments and flat occupancy levels. The question was whether three more apartment complexes springing up at once in southern Dallas could find enough qualified tenants to be financially successful.

"My concern was with the timing of all these," said Jerry Killingsworth, the city's director of housing.

Mr. Fisher's Pecan Grove project faced an uphill battle because the property needed to be rezoned from single-family housing to the less desirable multi-family apartments.

He looked for allies and turned to a relationship he had established with Mr. Fantroy in 2003. Mr. Fisher already had used J.L. Security and Investigations, a Fantroy-owned firm, to guard construction sites as the new apartment complexes got built.

When the Pecan Grove zoning item came before the council on Sept. 22, 2004, he and Mr. Fantroy walked into the mayor's line of fire.

Mr. Fantroy, citing the financial connection between his security company and Mr. Fisher's company, announced that he wouldn't vote on the zoning change even though it pertained to property in his council district. He left the council table and asked his colleague, Ms. Thornton-Reese, to carry the zoning change to approval.

"He said he wanted me to pass it," Ms. Thornton-Reese said at the time. "And he asked me to carry it and I'm doing as he asked."

Ms. Miller was riled. She noted that Mr. Fantroy had been vocal in pushing for homes in southern Dallas, not more apartments. She accused him of violating the city's ethics code by asking for Ms. Thornton-Reese's help.

"It was very clear," the mayor said, "that he was calling the shots in a deal that he has a financial interest in. It's unethical."

The city's code of ethics says the official who develops a conflict of interest must "immediately refrain from further participation in the matter, including discussions with any persons likely to consider the matter."

Penalties for violating the ethics code range from a "letter of notification" for minor and unintentional violations to removal from office for serious or repeated violations.

Mr. Fantroy said he had asked Ms. Thornton-Reese to handle the zoning change in his district because "the community" wanted the Pecan Grove project. He said his company ended up not providing security services at the Pecan Grove construction site.

"We've had a contract with Fisher but not in Dallas," he said. "We've worked for him on projects in Arlington, Houston and one in Fort Worth. And we don't do anything with him now."

Campaign finance reports showed that Mr. Fantroy received $5,000 in the names of Mr. Fisher, his business partner and their relatives a few weeks before the zoning vote.

Mr. Fantroy said he did nothing illegal by asking for Ms. Thornton-Reese's help: "If I'm not allowed to do that, everyone here is making the same mistake."

The zoning change passed easily. Tradition and diplomacy usually dictate that council members don't fight something a colleague wants for his district. Mr. Fantroy said the community wanted the zoning change. So he got it.

The Developers Score

The Pecan Grove project had more hurdles to clear.

At an Oct. 27, 2004, council meeting, the housing staff raised questions about the financial condition of Mr. Fisher's development company. Ms. Miller joined in.

"They're way over-extended on their projects, and I just cannot support their work," she said.

The City Council postponed approval of Pecan Grove.

Mr. Potashnik's Rosemont at Laureland and Rosemont at Scyene projects – backed by Mr. Hill – sailed unopposed through the council at the same meeting.

Despite her earlier misgivings about an apartment glut in southern Dallas, Ms. Miller said she changed her mind. She voted for Laureland, she said, because Mr. Potashnik had not tried to crowd too many units onto the 46-acre property. His final plan called for reducing apartment density from 1,000 units to 250 to satisfy critics.

Ms. Miller also voted for Rosemont at Scyene.

Score: Potashnik 2 and Fisher 0.

Both Ms. Miller and Mr. Hill have gotten Potashnik campaign donations. He and his family have given the mayor $25,000 since 2002. They gave Mr. Hill $3,000 in June 2004.

Both denied that those contributions affected their official actions on affordable housing.

When Mr. Fisher's Pecan Grove reappeared on the Nov. 10 council agenda, nine people spoke in favor of the project.

Ron Ferguson, who identified himself as a DeSoto construction contractor, praised Mr. Fisher while acknowledging that he had been chosen to work on Homes at Pecan Grove as a minority contractor.

Darren Reagan, who heads a nonprofit community development group called Black State Employees Association of Texas, applauded Mr. Fisher for including some retail space in his development. Just two months earlier, Mr. Reagan had written City Hall to protest more apartment construction. In the letter, he had called for a six-month moratorium on such projects, including Mr. Fisher's Pecan Grove.

A federal subpoena issued to Mr. Reagan and his group in June asked for records of any work completed by Black State Employees Association on Homes of Pecan Grove. The subpoena also asked for any records that might tie him and his group to Mr. Fisher.

The council finally voted in favor of Pecan Grove, with Mr. Fantroy abstaining. Ms. Miller, Mitchell Rasansky and Elba Garcia voted "no."

Final score: Potashnik 2, Fisher 1.

Some southern Dallas residents insisted that their community doesn't support more low-income apartments despite City Council approvals.

"We don't want it, and we seemingly have no way of really combating what's going on," said Lionel Churchill, an officer with the Southeast Dallas Civic Association. He lives about a mile from the Pecan Grove project. "It seems our representatives of this area are for them, and we've not really been asked whether we want them or not."

The investigation unfolds

Once the two Potashnik and one Fisher housing proposals cleared the City Council, the state agreed to provide the tax credits a few months later. Construction then began at the three sites. Controversy at City Hall subsided, or so it seemed.

Behind the scenes, the FBI was conducting its public corruption investigation of an array of characters involved with affordable housing deals.

The inquiry became public in June when dozens of FBI agents raided locations throughout the Dallas area – most notably, the City Hall office of Mr. Hill and the security firm of Mr. Fantroy.

Agents hit Mr. Potashnik's Southwest Housing offices on Central Expressway over a two-day period. The search warrants produced a barrage of public attention. And they transformed Mr. Potashnik's City Hall connections into a public relations dilemma.

The feds also aimed search warrants at D'Angelo Lee, Mr. Hill's appointee to the powerful city Plan Commission, and Sheila Farrington, a political consultant. Both are close associates of Mr. Hill and both also had connections to Southwest Housing.

Campaign records show financial ties between Mr. Hill and Ms. Farrington and Mr. Lee.

Mr. Hill has paid Ms. Farrington more than $15,000 in consulting work and other fees since 2002. Records also show that Ms. Farrington donated $1,000 to Mr. Hill's campaign on March 15 this year.

On the same day, Mr. Hill received $1,000 each from Mr. Lee and his wife, Toska Medlock Lee. Earlier in March, Mr. Hill paid Ms. Lee $500 for consulting work. She, too, was recently named in a FBI subpoena.

Mr. Yarbrough, the Potashnik lawyer, said Mr. Hill recommended Ms. Farrington to Southwest Housing executives as a consultant before the council discussed whether to endorse the Rosemont deals last fall. He said Southwest Housing hired her about five days after the approval vote, and her duties included lining up and negotiating with minority contractors and meeting with neighborhood groups.

Southwest Housing hired Ms. Farrington because it typically needs a local consultant to help navigate a project to completion and not because it wanted to curry favor with Mr. Hill, Mr. Yarbrough said. He likened her work to that of a "lobbyist down in Austin."

Ms. Farrington could not be reached for comment. And Mr. Yarbrough declined to specify how much Southwest Housing has paid Ms. Farrington.

In June, Mr. Lee told The News that he helped get Dallas' public housing authority involved in Southwest Housing's two Rosemont projects. That public-private partnership meant Southwest Housing didn't have to pay property taxes, which could save the company hundreds of thousands of dollars over the life of the project.

As a city plan commissioner, Mr. Lee voted on zoning matters important to Southwest Housing and many other developers. So his involvement with Southwest Housing and the Dallas housing authority appeared questionable to Ms. Miller and other critics.

But Mr. Lee said Southwest Housing didn't pay him for intervening with the housing authority on its behalf. Mr. Yarbrough said Southwest Housing has never paid Mr. Lee for his services and said the company had not even asked for his assistance with the housing authority.

And then there was a story surrounding Mr. Lee and the Urban League of Greater Dallas, a predominantly black civil rights group.

Affordable housing developers in South Dallas are under pressure to use minority contractors to build their apartment complexes. So, they try to hire nonprofit groups, such as the Urban League, to provide social services for tenants.

Mr. Yarbrough said the Urban League was among the community organizations that Mr. Hill recommended as subcontractors at Southwest Housing apartment complexes. That came after the mayor pro tem had pressed the developer to hire a higher number of minority contractors than the state requires for its tax-credit projects, the lawyer said.

Mr. Lee stood to receive a fee from the Urban League if its services were used. Southwest Housing executives told The News they had no knowledge of the fee. An Urban League official declined to discuss the amount in a written response to questions.

Mr. Lee, as a member of the Plan Commission, also voted to approve construction of a community center at Rosemont at Laureland – a move that would have helped guarantee his fee because it would give the Urban League a place to house its services for tenants. Mr. Lee, through his attorneys, declined to comment

According to Mr. Yarbrough, Southwest Housing didn't know about the financial and personal connections between Mr. Hill, Ms. Farrington and Mr. Lee. He said the company thought Mr. Hill wanted them and local minority contractors involved "for the benefit of the community."

"We were told that, as a North Dallas developer who has been successful, that if we were going to continue doing business in South Dallas, we had to hire more people from the community," Mr. Yarbrough said.

When the FBI executed search warrants in June, agents combed through Mr. Hill's 1998 silver BMW 740i and Mr. Lee's 2000 black Mercedes Benz S500. Neither man owned the car he was driving. They refused to talk about ownership, and public records did not make it clear who owned the cars.

One of the vehicles Mr. Lee has been using recently, a red 1999 Land Rover, is listed to businessman Rick Robertson. Southwest Housing's lawyer said Mr. Lee had urged the company to use Mr. Robertson as a subcontractor but he never submitted a bid for construction work.

Mr. Robertson and his companies have been named in FBI subpoenas. He declined to discuss Mr. Lee's recommendation and why Mr. Lee is driving the Land Rover.

Southwest Housing's lawyer said Mr. Hill and Mr. Lee also urged the company to hire Andrea Spencer, a businesswoman who had won construction contracts to pour concrete. She once shared a Dallas office with Mr. Lee and Ms. Farrington.

Mr. Yarbrough, the Southwest Housing lawyer, also said Mr. Hill and Mr. Lee had urged the company to hire a nonprofit community group called Bright III, which was given $25,000 to provide social services at the Rosemont at Scyene apartment complex.

Ms. Farrington told Southwest Housing that she helped start Bright III, which has a southern Dallas postal box as its registered office. It is run by the family of James M. Fulbright of DeSoto, who would not respond to requests for comment. Nor has Ms. Spencer.

During the flurry of subpoenas and search warrants, one figure was conspicuously out of the spotlight – Mr. Fisher. In brief public statements, he said agents hadn't served him subpoenas for records or searched his home or office.

But agents did raid some people connected with his projects, including Mr. Fantroy.

One puzzling development in the investigation came to light in July when Comer Cottrell, a prominent businessman, accused Mr. Fisher of offering him $250,000 to buy Mr. Hill's support for one of his housing projects.

Mr. Cottrell said he refused the money and told Mr. Fisher he would not try to bribe Mr. Hill. Mr. Cottrell said the FBI told him that Mr. Fisher was wearing a recording device for investigators.

Mr. Fisher refused to confirm or deny that he is working with the FBI. And agents are not talking about their strategy.

Now, some developers and low-income housing advocates worry about the investigation's impact on the tax-credit world in Dallas.

Ms. Miller already has put a moratorium on tax credits for low-income housing complexes in Dallas. And the state housing agency has postponed the award of tax credits for one of Mr. Potashnik's housing projects pending outcome of the investigation.

No matter what happens, Ms. Miller says she believes the boom in government-subsidized apartment complexes will have been a bad thing for Dallas.

"We are dealing today with the results of overbuilding low-income housing," she said.

[TexasStooge]

Rivalry spins into FBI probe

Exclusive: Developers vied for millions in tax subsidies

By SCOTT PARKS, REESE DUNKLIN and HOLLY K. HACKER / The Dallas Morning News

DALLAS, Texas - The FBI's increasingly complex probe of Dallas City Hall seems to have had a simple start: two bitter apartment developers battling over millions of dollars in controversial tax subsidies.

Some of the politicians named in recent subpoenas and search warrants blame the investigation on racism because many of the apparent targets are black.

But federal agents swept into City Hall after two white developers, Brian Potashnik and James R. "Bill" Fisher, became locked in a winner-take-all battle for City Council approval of their rival apartment projects in southern Dallas.

Their struggle links several spectacles that have become headline news or hot gossip among the city's political class, including:

• The FBI secretly taping one developer's effort to persuade a leading Dallas businessman to bribe Dallas' mayor pro tem.

• A council member successfully pushing approval for an apartment complex that city housing planners opposed – after the developer hired the council member's security company.

• Two city leaders enjoying the use of luxury autos they never paid for.

• Public officials steering a developer toward hiring their political associates as consultants and contractors on housing projects.

• A retired DISD principal getting named to the city's Plan Commission, then getting hired by one of the developers and then occasionally voting on matters affecting his employer.

• Several other apartment projects winning council approval, often over planners' objections, while developers collectively donated tens of thousands of dollars to political campaigns of black and white council members.

At one point last fall, the competition between Mr. Potashnik and Mr. Fisher reached a critical point with construction of more than $100 million worth of apartment projects hanging in the balance.

"It got to the point that you had Fisher on one side of the road and Potashnik on the other side of the road fighting about which one would get his deal done," Mayor Laura Miller recalled. "This is when everything went a little crazy."

Public records and interviews show that Mr. Potashnik and Mr. Fisher were pushing dueling projects in three different neighborhoods last year – six apartment complexes in all. The loser in each neighborhood would likely see his project evaporate because of a crucial new rule that banned City Council approval of similar projects located within a mile of each other during the same year.

And there were other complications. The city's own housing department experts declined to endorse any of the six projects because they feared the developers wouldn't be able to fill them with qualified tenants.

Moreover, some City Council members and neighborhood activists wanted a freeze on low-income apartments in southern Dallas in favor of more single-family homes.

"We've got enough apartments in our neighborhood for 20 years," said Ruth Steward, a former member of the Dallas Housing Finance Corp., an arm of city government that issues tax-exempt mortgage bonds to finance developer projects.

Affordable housing developers and their advocates say they want to spread government-subsidized apartments throughout a city and try to make them blend in with a neighborhood. In Dallas, as in many other cities, they tend to be clustered in lower-income neighborhoods. Despite the obstacles, the council approved two of Mr. Potashnik's projects and one of Mr. Fisher's.

FBI search warrants and subpoenas have touched on some of their development projects located in the city's southern sector. FBI agents served Mayor Pro Tem Don Hill and council member James Fantroy with search warrants when the public corruption investigation broke into public view on June 20. Mr. Hill and Mr. Fantroy are black.

And this month, another sweeping subpoena landed in City Hall. It seeks records on five Potashnik projects from several city departments and from council members Maxine Thornton-Reese and Leo Chaney, two other black council members.

The focus on black elected officials and economic development projects in heavily black southern Dallas has prompted allegations that the FBI investigation is racist. But Mr. Potashnik and Mr. Fisher, both white, also got caught up in the subpoenas and search warrants.

Mr. Potashnik's Southwest Housing Development Co. offices were searched in June. He declined to comment on the investigation but allowed The Dallas Morning News to interview his legal team.

Matt Yarbrough, a Southwest Housing lawyer, said neither Mr. Potashnik nor anyone else at the company has offered contracts, money or gifts in exchange for political support at City Hall. He said City Council approved company apartment projects on their own merit.

And he insisted that Southwest Housing had hired Melvin Traylor, a city plan commissioner, because he is an experienced educator who could help the company run tutoring programs for its tenants, not because he could do things for Southwest Housing at City Hall. Mr. Traylor was named in a FBI subpoena this month.

"I think there is a real sense from Southwest Housing that they are proud of what they've done and they want to go to bed feeling good about what they did," said Mr. Yarbrough, a former federal prosecutor. "That's very, very important to them."

Mr. Fisher, who operates under the name Odyssey Residential Holdings, declined to comment for this article. Several search warrants and subpoenas issued last month sought records related to his apartment projects.

Federal prosecutors have not filed charges against anyone, and a grand jury has not returned indictments.

"Large-scale and complex investigations usually take a considerable amount of time to conclude," said Special Agent Lori Bailey, an FBI spokeswoman.

The program

A federal tax program called Low-Income Housing Tax Credits fueled Southwest Housing's growth. The program encourages private developers to build affordable rental housing by giving them tax breaks worth millions of dollars.

Congress sets the annual amount of tax credits that each state will receive. In Texas, the regulatory agency in charge of the tax-credit program is the Texas Department of Housing and Community Affairs.

Let's say the state housing program awards a developer $10 million in tax credits over a 10-year period. The developer can sell the tax credits for 90 cents on the dollar to generate $9 million for upfront construction money.

Industry estimates are that the developer can use his tax credits to pay for $60,000 of the cost to build each apartment unit. This puts him way ahead of the private developer using conventional sources of financing.

In return, the developer who takes tax credits is required to participate in a social compact. He must provide below-market rental rates for tenants who fall within certain lower- and moderate-income guidelines. The developer repays creditors and makes his money by filling up the apartment complex with tenants as quickly as possible.

"It's a market he [Mr. Potashnik] mastered very well," said Deepak Sulakhe, currently a Southwest Housing vice president.

The private-sector developer who went to conventional sources for financing is under no constraints to keep rents low. He can charge hundreds of dollars more a month than the tax-credit developer.

A growing number of people have criticized affordable housing programs for creating future slums instead of bringing in single-family homes, shops and restaurants.

But Jeanne Talerico, director of the nonprofit Texas Association of Local Housing Finance Agencies, which helps local agencies provide affordable housing, said the tax-credit projects are high-quality, "lovely buildings."

"The truth is," she said, "if you drove by any of these developments, you would never know they were affordable housing."

The rivals

By late 2002, Southwest Housing had become one of Texas' largest builders of affordable apartment complexes. It was an impressive turnaround for Mr. Potashnik, a former securities broker.

About 15 years ago, Mr. Potashnik left California on a losing streak. He had built a Los Angeles nightclub from scratch and called it The Stock Exchange. It became a hangout for celebrities and fashionistas. But he lost his funding, and the doors slammed shut.

In Texas, he dove into a more profitable and sustainable line of work: low-income housing. He founded Southwest Housing Development Co. and is now its president.

Mr. Potashnik has become a prosperous Highland Park family man who likes to play high-stakes poker in Las Vegas.

Mr. Fisher, a Southwest Housing employee until a couple of years ago, took careful notes as he helped Mr. Potashnik make millions in the affordable housing business. He rose to become a vice president – one of Mr. Potashnik's right-hand men during the company's rapid growth in the late 1990s and early 2000s.

Those who know Mr. Fisher describe him as a large, gregarious man who could sell ice to Eskimos. At Southwest Housing, he scouted land ripe for development and used a gift for gab to get deals done.

Mr. Fisher, formerly in the banking business, also had hit bumps during his career. He and two associates were convicted of bank fraud in the 1990s. An indictment alleged they stole nearly $1 million from investors in a Florida bank. But they got a new trial in 1997 after an appeals court found that prosecutors had improperly withheld evidence. Finally, a new jury exonerated them of all charges. And Mr. Fisher landed at Southwest Housing.

Southwest Housing, meanwhile, was expanding its reach across the state – from Dallas and its suburbs to Austin, Houston and San Antonio.

The battle at City Hall

Mr. Fisher made a critical move in January 2003. After almost six years with Southwest Housing, he announced his departure. He wanted to do his own deals.

Mr. Fisher lined up formidable new partners who had worked with him at Southwest Housing. And Mr. Potashnik suspected that Mr. Fisher began scouting out land for his new venture while on the Southwest Housing clock.

"It was not a good parting," said one former employee who recalled the split. "Brian was very upset with Bill. Very upset."

Mr. Fisher knew the Southwest Housing system for developing properties. But he didn't have Mr. Potashnik's City Hall connections and track record.

So he set out to establish his own.

But just as he embarked upon his new business, Texas lawmakers began listening to constituents concerned that a glut of low-income apartment projects in urban areas might turn into slums – particularly in Dallas and Houston.

In response, the state housing department wrote rules increasing the amount of community support a developer needed to build a project.

The new rules produced some cutthroat practices.

For example, developers could get additional brownie points on their funding applications if they included statements of support from bona fide community organizations. Competing developers began investigating each other's community support to see whether it was real or bogus.

In Dallas, the new rules also required developers to get City Council endorsement as a prerequisite for getting state tax credits or low-interest bonds. Previously, City Council approval was necessary for only those affordable housing complexes financed through the Dallas Housing Finance Corp. In 2004, it became mandatory on all projects funded through the state housing agency.

The new state rule prohibiting City Council approval for two similar projects within a mile of each other posed a major problem for Mr. Potashnik and Mr. Fisher in 2004. It meant only one of them could emerge victorious on each of these three southern Dallas battlegrounds:

• Mr. Potashnik wanted to build Rosemont at Laureland on Camp Wisdom Road in southeast Oak Cliff. The project straddled Mr. Hill's and Mr. Fantroy's districts. Right across the street, entirely in Mr. Hill's district, Mr. Fisher planned to build Memorial Park Townhomes.

• Mr. Potashnik wanted to build Rosemont on Scyene Road in Pleasant Grove. Mr. Fisher wanted to build Dallas West Villas a little to the south on Bruton Road. Both were in Mr. Hill's district.

• Mr. Potashnik wanted to build Simpson Villas Apartments on Simpson Stuart Road near Bonnie View Road in southeast Oak Cliff. Again, just across the street, Mr. Fisher wanted to build a series of town homes called Homes of Pecan Grove. Both were in Mr. Fantroy's district.

The uproar

Mr. Potashnik and Mr. Fisher were trying to push their tax-credit projects through City Hall in a changing political environment. Everyone was reacting not only to their rivalry but to the new state rules.

The city's housing staff didn't help them any. After conducting market studies, the staff decided not to endorse any of the six projects, citing an abundance of low-income apartments and flat occupancy levels. The question was whether three more apartment complexes springing up at once in southern Dallas could find enough qualified tenants to be financially successful.

"My concern was with the timing of all these," said Jerry Killingsworth, the city's director of housing.

Mr. Fisher's Pecan Grove project faced an uphill battle because the property needed to be rezoned from single-family housing to the less desirable multi-family apartments.

He looked for allies and turned to a relationship he had established with Mr. Fantroy in 2003. Mr. Fisher already had used J.L. Security and Investigations, a Fantroy-owned firm, to guard construction sites as the new apartment complexes got built.

When the Pecan Grove zoning item came before the council on Sept. 22, 2004, he and Mr. Fantroy walked into the mayor's line of fire.

Mr. Fantroy, citing the financial connection between his security company and Mr. Fisher's company, announced that he wouldn't vote on the zoning change even though it pertained to property in his council district. He left the council table and asked his colleague, Ms. Thornton-Reese, to carry the zoning change to approval.

"He said he wanted me to pass it," Ms. Thornton-Reese said at the time. "And he asked me to carry it and I'm doing as he asked."

Ms. Miller was riled. She noted that Mr. Fantroy had been vocal in pushing for homes in southern Dallas, not more apartments. She accused him of violating the city's ethics code by asking for Ms. Thornton-Reese's help.

"It was very clear," the mayor said, "that he was calling the shots in a deal that he has a financial interest in. It's unethical."

The city's code of ethics says the official who develops a conflict of interest must "immediately refrain from further participation in the matter, including discussions with any persons likely to consider the matter."

Penalties for violating the ethics code range from a "letter of notification" for minor and unintentional violations to removal from office for serious or repeated violations.

Mr. Fantroy said he had asked Ms. Thornton-Reese to handle the zoning change in his district because "the community" wanted the Pecan Grove project. He said his company ended up not providing security services at the Pecan Grove construction site.

"We've had a contract with Fisher but not in Dallas," he said. "We've worked for him on projects in Arlington, Houston and one in Fort Worth. And we don't do anything with him now."

Campaign finance reports showed that Mr. Fantroy received $5,000 in the names of Mr. Fisher, his business partner and their relatives a few weeks before the zoning vote.

Mr. Fantroy said he did nothing illegal by asking for Ms. Thornton-Reese's help: "If I'm not allowed to do that, everyone here is making the same mistake."

The zoning change passed easily. Tradition and diplomacy usually dictate that council members don't fight something a colleague wants for his district. Mr. Fantroy said the community wanted the zoning change. So he got it.

The Developers Score

The Pecan Grove project had more hurdles to clear.

At an Oct. 27, 2004, council meeting, the housing staff raised questions about the financial condition of Mr. Fisher's development company. Ms. Miller joined in.

"They're way over-extended on their projects, and I just cannot support their work," she said.

The City Council postponed approval of Pecan Grove.

Mr. Potashnik's Rosemont at Laureland and Rosemont at Scyene projects – backed by Mr. Hill – sailed unopposed through the council at the same meeting.

Despite her earlier misgivings about an apartment glut in southern Dallas, Ms. Miller said she changed her mind. She voted for Laureland, she said, because Mr. Potashnik had not tried to crowd too many units onto the 46-acre property. His final plan called for reducing apartment density from 1,000 units to 250 to satisfy critics.

Ms. Miller also voted for Rosemont at Scyene.

Score: Potashnik 2 and Fisher 0.

Both Ms. Miller and Mr. Hill have gotten Potashnik campaign donations. He and his family have given the mayor $25,000 since 2002. They gave Mr. Hill $3,000 in June 2004.

Both denied that those contributions affected their official actions on affordable housing.

When Mr. Fisher's Pecan Grove reappeared on the Nov. 10 council agenda, nine people spoke in favor of the project.

Ron Ferguson, who identified himself as a DeSoto construction contractor, praised Mr. Fisher while acknowledging that he had been chosen to work on Homes at Pecan Grove as a minority contractor.

Darren Reagan, who heads a nonprofit community development group called Black State Employees Association of Texas, applauded Mr. Fisher for including some retail space in his development. Just two months earlier, Mr. Reagan had written City Hall to protest more apartment construction. In the letter, he had called for a six-month moratorium on such projects, including Mr. Fisher's Pecan Grove.

A federal subpoena issued to Mr. Reagan and his group in June asked for records of any work completed by Black State Employees Association on Homes of Pecan Grove. The subpoena also asked for any records that might tie him and his group to Mr. Fisher.

The council finally voted in favor of Pecan Grove, with Mr. Fantroy abstaining. Ms. Miller, Mitchell Rasansky and Elba Garcia voted "no."

Final score: Potashnik 2, Fisher 1.

Some southern Dallas residents insisted that their community doesn't support more low-income apartments despite City Council approvals.

"We don't want it, and we seemingly have no way of really combating what's going on," said Lionel Churchill, an officer with the Southeast Dallas Civic Association. He lives about a mile from the Pecan Grove project. "It seems our representatives of this area are for them, and we've not really been asked whether we want them or not."

The investigation unfolds

Once the two Potashnik and one Fisher housing proposals cleared the City Council, the state agreed to provide the tax credits a few months later. Construction then began at the three sites. Controversy at City Hall subsided, or so it seemed.

Behind the scenes, the FBI was conducting its public corruption investigation of an array of characters involved with affordable housing deals.

The inquiry became public in June when dozens of FBI agents raided locations throughout the Dallas area – most notably, the City Hall office of Mr. Hill and the security firm of Mr. Fantroy.

Agents hit Mr. Potashnik's Southwest Housing offices on Central Expressway over a two-day period. The search warrants produced a barrage of public attention. And they transformed Mr. Potashnik's City Hall connections into a public relations dilemma.

The feds also aimed search warrants at D'Angelo Lee, Mr. Hill's appointee to the powerful city Plan Commission, and Sheila Farrington, a political consultant. Both are close associates of Mr. Hill and both also had connections to Southwest Housing.

Campaign records show financial ties between Mr. Hill and Ms. Farrington and Mr. Lee.

Mr. Hill has paid Ms. Farrington more than $15,000 in consulting work and other fees since 2002. Records also show that Ms. Farrington donated $1,000 to Mr. Hill's campaign on March 15 this year.

On the same day, Mr. Hill received $1,000 each from Mr. Lee and his wife, Toska Medlock Lee. Earlier in March, Mr. Hill paid Ms. Lee $500 for consulting work. She, too, was recently named in a FBI subpoena.

Mr. Yarbrough, the Potashnik lawyer, said Mr. Hill recommended Ms. Farrington to Southwest Housing executives as a consultant before the council discussed whether to endorse the Rosemont deals last fall. He said Southwest Housing hired her about five days after the approval vote, and her duties included lining up and negotiating with minority contractors and meeting with neighborhood groups.

Southwest Housing hired Ms. Farrington because it typically needs a local consultant to help navigate a project to completion and not because it wanted to curry favor with Mr. Hill, Mr. Yarbrough said. He likened her work to that of a "lobbyist down in Austin."

Ms. Farrington could not be reached for comment. And Mr. Yarbrough declined to specify how much Southwest Housing has paid Ms. Farrington.

In June, Mr. Lee told The News that he helped get Dallas' public housing authority involved in Southwest Housing's two Rosemont projects. That public-private partnership meant Southwest Housing didn't have to pay property taxes, which could save the company hundreds of thousands of dollars over the life of the project.

As a city plan commissioner, Mr. Lee voted on zoning matters important to Southwest Housing and many other developers. So his involvement with Southwest Housing and the Dallas housing authority appeared questionable to Ms. Miller and other critics.

But Mr. Lee said Southwest Housing didn't pay him for intervening with the housing authority on its behalf. Mr. Yarbrough said Southwest Housing has never paid Mr. Lee for his services and said the company had not even asked for his assistance with the housing authority.

And then there was a story surrounding Mr. Lee and the Urban League of Greater Dallas, a predominantly black civil rights group.

Affordable housing developers in South Dallas are under pressure to use minority contractors to build their apartment complexes. So, they try to hire nonprofit groups, such as the Urban League, to provide social services for tenants.

Mr. Yarbrough said the Urban League was among the community organizations that Mr. Hill recommended as subcontractors at Southwest Housing apartment complexes. That came after the mayor pro tem had pressed the developer to hire a higher number of minority contractors than the state requires for its tax-credit projects, the lawyer said.

Mr. Lee stood to receive a fee from the Urban League if its services were used. Southwest Housing executives told The News they had no knowledge of the fee. An Urban League official declined to discuss the amount in a written response to questions.

Mr. Lee, as a member of the Plan Commission, also voted to approve construction of a community center at Rosemont at Laureland – a move that would have helped guarantee his fee because it would give the Urban League a place to house its services for tenants. Mr. Lee, through his attorneys, declined to comment

According to Mr. Yarbrough, Southwest Housing didn't know about the financial and personal connections between Mr. Hill, Ms. Farrington and Mr. Lee. He said the company thought Mr. Hill wanted them and local minority contractors involved "for the benefit of the community."

"We were told that, as a North Dallas developer who has been successful, that if we were going to continue doing business in South Dallas, we had to hire more people from the community," Mr. Yarbrough said.

When the FBI executed search warrants in June, agents combed through Mr. Hill's 1998 silver BMW 740i and Mr. Lee's 2000 black Mercedes Benz S500. Neither man owned the car he was driving. They refused to talk about ownership, and public records did not make it clear who owned the cars.

One of the vehicles Mr. Lee has been using recently, a red 1999 Land Rover, is listed to businessman Rick Robertson. Southwest Housing's lawyer said Mr. Lee had urged the company to use Mr. Robertson as a subcontractor but he never submitted a bid for construction work.

Mr. Robertson and his companies have been named in FBI subpoenas. He declined to discuss Mr. Lee's recommendation and why Mr. Lee is driving the Land Rover.

Southwest Housing's lawyer said Mr. Hill and Mr. Lee also urged the company to hire Andrea Spencer, a businesswoman who had won construction contracts to pour concrete. She once shared a Dallas office with Mr. Lee and Ms. Farrington.

Mr. Yarbrough, the Southwest Housing lawyer, also said Mr. Hill and Mr. Lee had urged the company to hire a nonprofit community group called Bright III, which was given $25,000 to provide social services at the Rosemont at Scyene apartment complex.

Ms. Farrington told Southwest Housing that she helped start Bright III, which has a southern Dallas postal box as its registered office. It is run by the family of James M. Fulbright of DeSoto, who would not respond to requests for comment. Nor has Ms. Spencer.

During the flurry of subpoenas and search warrants, one figure was conspicuously out of the spotlight – Mr. Fisher. In brief public statements, he said agents hadn't served him subpoenas for records or searched his home or office.

But agents did raid some people connected with his projects, including Mr. Fantroy.

One puzzling development in the investigation came to light in July when Comer Cottrell, a prominent businessman, accused Mr. Fisher of offering him $250,000 to buy Mr. Hill's support for one of his housing projects.

Mr. Cottrell said he refused the money and told Mr. Fisher he would not try to bribe Mr. Hill. Mr. Cottrell said the FBI told him that Mr. Fisher was wearing a recording device for investigators.

Mr. Fisher refused to confirm or deny that he is working with the FBI. And agents are not talking about their strategy.

Now, some developers and low-income housing advocates worry about the investigation's impact on the tax-credit world in Dallas.

Ms. Miller already has put a moratorium on tax credits for low-income housing complexes in Dallas. And the state housing agency has postponed the award of tax credits for one of Mr. Potashnik's housing projects pending outcome of the investigation.

No matter what happens, Ms. Miller says she believes the boom in government-subsidized apartment complexes will have been a bad thing for Dallas.

"We are dealing today with the results of overbuilding low-income housing," she said.

[TexasStooge]

Legislature's actions could mean death penalty for doctors

AUSTIN, Texas (WFAA ABC 8/AP) - A prosecutors group says Texas doctors who do abortions without parental approval or after the third trimester could face capital murder charges.

The Texas District and County Attorneys Association has outlined that scenario in its new book updating the Texas penal code.

The group says such charges could occur under the new law, which takes effect Thursday, because of the 2003 fetal protection law. But key legislators said Monday that wasn't their intent.

-- State Senator Jane Nelson of Lewisville says her measure was strictly limited to giving parents the right to consent when a minor is considering an abortion and to preventing late-term abortions.

-- Representative Ray Allen of Grand Prairie, who sponsored the 2003 bill defining an embryo or fetus as an "individual," says the law may need clearing up in a future legislative session.

-- Supporters say the fetal protection bill was designed to allow for prosecution of a person who harms or kills an embryo or fetus. Exceptions were made for legal drug use, action taken by the mother or a "lawful medical procedure."

But legislators this year defined doing an abortion on an unmarried girl under 18 without proper consent or doing an abortion in the third trimester that isn't covered by certain exceptions -- as a "prohibited practice" in medicine.

-- Elizabeth Graham with Texas Right to Life says the legislative intent clearly was not to incarcerate doctors or execute doctors who are performing abortions.

-- The Texas Medical Association opposes any legislation with the stated purpose of subjecting doctors to capital murder charges.

[TexasStooge]

Gunman kills 4, self in Fannin County

SASH, Texas (WFAA ABC 8/AP) - A shooting rampage outside a rural church near the Texas-Oklahoma border left five dead, included the suspected shooter who turned the gun on himself Monday after a nine-hour standoff with police, authorities said.

Witnesses told police that A.P. Crenshaw, who lived across the street from the Sash Assembly of God church, exchanged words in the church parking lot Sunday night with church member Wes Brown, who asked Crenshaw to leave.

Crenshaw went back to his house but soon returned and shot Brown, 61, at close range, and then shot pastor James Armstrong, 42, the witnesses said. Deputies found both men dead in a grassy area next to the church parking lot, and it didn't appear they were shot inside the church, Fannin County Sheriff Kenneth Moore said.

Crenshaw then went back to his house, got in his truck and drove down the road. A truck pulling a horse trailer was stopped at a nearby intersection and Crenshaw began firing at the truck, witnesses told police.

Two women inside the truck tried to flee out the passenger side, but Crenshaw got out of his truck, went behind the horse trailer where the women were hiding and shot them, witnesses said.

"The witnesses said they could hear the women screaming," Moore said.

Police have identified one of the women as Holly Love Brown, 50. She is not related to Wes Brown, Moore said.

"We believe it was just random," Moore said of the women's slayings. "They were just in the wrong place at the wrong time." Police believe Crenshaw then circled back toward the church, fired at a home and cafe near the church without harming anyone, then went home.

Deputies arrived after receiving a 911 call from one of the church members, and the long standoff began. A 10-member SWAT team made two attempts to go into house, but Crenshaw fired at them so the officers retreated, Moore said.

Police finally made their way into the house about 6 a.m., after firing tear gas into the home. Crenshaw was found in a bedroom with a gunshot wound to head, Moore said. Police believe Crenshaw shot himself about an hour earlier.

A pistol, revolver and shotgun, along with ammunition, were found in the home, Moore said. They appeared to match the weapons used in the shootings, he said. Police found 12 spent rounds from a 9mm semi-automatic pistol outside the horse trailer where the women were shot. The pastor and church member were shot with a .38-revolver, Moore said.

Moore said the shootings have obviously shaken the 300 residents in Sash, a tiny community about 120 miles north of Dallas where the biggest crimes are usually stolen property or drug arrests.

"This has been a very tragic night for the community of Sash and for all the law enforcement officers that were involved," Moore said.

Moore said the motive for the shootings was under investigation.

The Associated Press, WFAA-TV reporter Cynthia Vega and photojournalist Mike Zukerman contributed to this report.

[TexasStooge]

Austin readies for smoking ban

AUSTIN, Texas (The Dallas Morning News/AP) - Austin bars, bowling alleys and pool halls prepare this week for a new smoking ban while protesters make plans to light up at City Hall and challenge the law once the first person is fined.

Austin voters narrowly approved the new law, which will take effect at 12:01 a.m. Thursday for about 225 establishments. Current law limits smoking to bars and restaurants that make most of their revenue from alcohol or have separate smoking sections.

But bowling alleys, pool halls and 219 establishments with smoking permits were exempt.

The new ban, which passed in May with 51.8 percent of the vote, extends the restrictions. Generally, the only smoking establishments allowed will be fraternal organizations or bingo halls.

In response a group of protesters plan to light up on the steps of City Hall and leave Mayor Will Wynn or City Manager Toby Futrell facing a smoking complaint.

"We are going to do our best to obey the spirit of the law," said Joseph Tait, the owner of Lovejoy's Tap Room and Brewery, a downtown bar.

Tait said he won't join the protest but, as a member of Keep Austin Free, he opposes the ban.

"And we're going to pray. We're hoping that all of the folks who voted for this thing follow through on their word and come downtown," he said.

Tait is preparing for the new law by posting no-smoking signs and removing ashtrays.

He said Keep Austin Free plans to seek injunctive relief and establish a defense fund for the first person who gets fined.

Just outside the city limits in Wells Branch, Rack Daddy's pool hall joins other establishments on the outskirts in welcoming smokers. A pool hall sign reads, "Don't worry! Rack Daddy's will not be affected by the smoking ban! So go ahead and smoke up!"

Most studies say smoking bans cause little, if any, negative impact to business.

For example, the Texas Department of Health compared sales and mixed-beverage tax before and after El Paso's 2002 ban and found no significant changes in restaurant and bar revenue.

But the National Restaurant Association, in a 2004 study partly funded by the Philip Morris company, found that restaurant sales decline significantly when counties implement 100 percent smoking bans in dining and bar areas.

[TexasStooge]

City Council finalizes Mercantile deal

By DAVE LEVINTHAL / The Dallas Morning News

DALLAS, Texas - The Dallas City Council this morning unanimously approved a final development with Cleveland-based Forest City Enterprises to redevelop nine vacant or near-vacant city office towers, including the Mercantile Bank complex.

Forest City plans to purchase the property in October or November and begin environmental remediation early next year, said David Levey, Forest City's executive vice president.

Implosion of three of the four Mercantile Bank buidings — the 33-story tower on Main Street will be preserved and converted into apartments — should commence in the autumn of 2006, with construction to begin shortly afterward, Mr. Levey said.

Simultaneously, Forest City plans to convert the nearby Continental building into condominiums and a four-building complex Atmos Energy is donating to the city into apartments.

Mayor Laura Miller said: "The amount of work undertaken to get here today is enormous. I'm delighted."

The city will subsidize the quarter-billion-dollar project with about $70 million in public incentives, including tax abatements and funds generated from a tax increment finance district that includes sections of Uptown and downtown Dallas.

Tax increment finance districts use property tax revenue generated from new developments to improve infrastructure and building facades among other projects within the district's boundaries.

[TexasStooge]

Dallas ISD ordered to turn over records

Federal subpoenas seek details of deal with consortium of vendors

By PETE SLOVER and TAWNELL D. HOBBS / The Dallas Morning News

DALLAS, Texas - The FBI formally sought records Monday on technology contracts from the Dallas public schools, the first public sign that federal authorities are investigating the relationship between a lead vendor and a district official.

Federal subpoenas ordered the district to turn over the documents to a grand jury by Sept. 20 in Dallas, according to two people who are familiar with the FBI inquiry.

Among the records being sought: details of a federally financed contract that DISD awarded in December 2003 to a consortium of vendors led by Houston-based Micro System Enterprises.

Dallas Independent School District spokesman Donald Claxton declined to comment on the matter Monday. So did Dallas FBI spokeswoman Lori Bailey.

The vendors' consortium deal, worth up to $125 million to help wire school campuses, came under intense scrutiny by DISD and federal authorities last month after reports in The Dallas Morning News.

The News found that Micro System executives had for years given district technology chief Ruben Bohuchot the frequent, free use of a 59-foot boat that he picked out and helped name.

Micro System president Frankie Wong and Mr. Bohuchot – an associate superintendent whose duties included negotiating the consortium contract – have said the boat did not influence the contract award.

Mr. Bohuchot was suspended with pay a month ago while DISD authorities investigate his activities. Last week, the federal agency that administers funding for the consortium's contract froze payments to the vendor, citing concerns about the boat and other benefits Micro System gave to district officials.

Dallas Superintendent Michael Hinojosa and Jack Elrod, DISD's attorney, declined to comment Monday. But Dr. Hinojosa did address the issues in the case indirectly.

While not mentioning Mr. Bohuchot by name, the new superintendent issued an ethics memo to the more than 19,000 DISD employees, which Mr. Claxton described as "simply a polite reminder."

The memo placed special emphasis on employees who influence buying decisions.

Some of the highlighted rules: Employees can accept no gifts or favors, other than an advertising novelty with a value of $25 or less; dinners with suppliers and vendors are almost always prohibited; and employees are required to report any real or potential conflict of interest.

The precise value of the consortium's deal depends on how much work the vendors submit under the federal E-rate program before a Sept. 30 deadline. The E-rate program makes $2.25 billion a year available nationally for school and library technology, funded by taxes on Americans' phone bills.

The subpoenas filed with DISD are not limited to materials concerning the E-rate contract, but also cover other contracts between the district and vendors in the consortium. The FBI has wide jurisdiction over public corruption matters – not just those with an obvious connection to federal funds.

The issuance of grand jury subpoenas does not suggest that DISD is uncooperative, as "friendly" subpoenas are often used to get information from cooperative agencies and witnesses.

An order from a federal grand jury allows the district to turn over more complete information than it could if law enforcement requested it under state open records laws.

DISD trustee Lew Blackburn said Monday that he was not aware of the FBI subpoena. He said the district needs to wrap up its investigation of Mr. Bohuchot.

"This is embarrassing," Dr. Blackburn said. "We need to complete our investigation no matter what. If he violated our policy, then we need to take appropriate action."

The FBI activity marks the agency's return to DISD. In 2001, the agency concluded a broad, four-year fraud probe that began with allegations of widespread corruption brought by then-superintendent Yvonne Gonzalez.

In the end, Ms. Gonzalez was among a small group of people actually prosecuted. She went to prison for stealing $16,000 in district money to buy personal furniture.

Across the country, the E-rate program has been plagued by fraud and mismanagement, and criminal cases have been filed by a U.S. Justice Department task force against vendors and school officials who allegedly have rigged E-rate bidding.

A department spokesman said he could not comment on whether the E-rate task force is involved in the Dallas investigation.

[TexasStooge]

Elderly woman dies in Dallas fire

DALLAS, Texas (WFAA ABC 8) - An early morning house fire in Northwest Dallas claimed the life of an elderly resident.

The fire started around 6 a.m. Tuesday in the garage of a home in the 4100 block of Valley Ridge Road.

An 85-year-old woman suffered smoke inhalation and died on the way to the hospital.

Two others in the house were rescued and not injured.

[TexasStooge]

Texas SAT scores trail national average

AUSTIN, Texas (WFAA ABC 8/AP) - Texas students lagged significantly behind national gains, with SAT math scores remaining stagnant over the past decade.

Meanwhile, college-bound high school students across the nation scored higher than ever on the math portion of the test.

The Texas class of 2005 scored an average of 502 on the math portion of the college entrance exam, compared to the 520 national average. The math and verbal sections of the SAT are each graded on a 200- to 800-point scale.

For the past decade, Texas SAT math scores have teetered around the 500 mark, while the national average improved consistently. Nationally, this year's math scores are the highest ever on the test that's been in use since the 1940s.

Meanwhile, SAT verbal scores also lagged in Texas at an average of 493. The national average is 508. The average verbal score in Texas didn't change in the past year, but it did fall slightly from the average of 495 a decade ago.

[TexasStooge]

A/C problems send students home early

COLLEYVILLE, Texas (WFAA ABC 8/WFAA.com) - Colleyville Heritage High School students got an unexpected free pass Tuesday afternoon when air conditioning problems forced administrators to cancel remaining classes.

An automated telephone system was used to alert parents and guardians of the noon release.

Officials said the problem affected two main chillers on the campus. While the units were repaired Tuesday morning, it was not soon enough so that the buildings could cool down before the warmest part of the day.

Temperatures reached 83 degrees in some rooms.

Students had the option of remaining beyond noon to eat lunch before leaving campus.

All scheduled afternoon and evening activities at Colleyville Heritage were to continue as planned except for a girls volleyball game that was moved to Irving High School.

Regular classes will resume on Wednesday.

[TexasStooge]

Deaths put spin on bike stats

Heightened interest in sport raises questions about safety

By PAULA LAVIGNE / The Dallas Morning News

DALLAS, Texas - In the past four years, at least 22 people have died in bicycle accidents in the Dallas metro area – including the head-on cycling collision that recently killed an Allen man.

The accidents have garnered attention both in the news and in cycling forums, sparking concern that such accidents are on the rise.

But a Dallas Morning News analysis of bike fatality and injury data shows the opposite is true.

Deaths and injuries are down nationwide, and bicycle-related deaths in Texas have held steady for more than two decades.

•In 1981, there were 961 bike fatalities nationwide. That fell to 767 in 2002. Fifty-five Texas cyclists died in 1981, compared with 57 in 2002, with an average of 58 per year during that time period.

To put that into perspective, in both 1985 and 2002, there was one cycling fatality for every 50,000 cyclists nationwide.

•Recently, cycling injuries nationwide have also declined, dropping by one-third from 662,474 in 2000 to 492,900 in 2003, according to numbers from the National Center for Injury Prevention and Control.

•And few injuries – less than 4 percent – require hospitalization, according to an analysis of about 7 million injuries from 1990 to 2002.

The accident in Plano that killed 52-year-old Michael Mahoney and injured Jordan Muller, 37, of Richardson baffled cyclists and noncyclists alike because it rarely happens.

Out of about 2,700 bike fatalities from 1990 to 2002 nationwide, only about 20 were identified as collisions between two bicycles, according to a Dallas Morning News analysis of data from the Consumer Product Safety Commission. Most involved a motor vehicle.

Increase in interest

A greater interest in cycling could explain the assumption that accidents are up, said Craig Raborn, program manager with the Pedestrian and Bicycle Information Center in Chapel Hill, N.C.

An average 315,000 viewers tuned in to Outdoor Life Network's coverage of the Tour de France to watch Texan Lance Armstrong win his seventh-straight title, according to Nielsen Media Research.

Bike trails and bike lanes are growing in popularity nationwide, and bicycle advocacy groups are active in state and national politics.

"When you participate in an activity, and you hear about someone killed ... it sticks in your mind," Mr. Raborn said, adding that news of the Plano fatality had already reached him in North Carolina.

Elizabeth Preston, spokeswoman for the League of American Bicyclists, agreed: "Crashes are what people talk about."

"If they did a front-page story of every person who died in a car accident and talked about the tragic ways people died ... and how the accident could have been prevented, they would be a lot more afraid to drive," she said.

Despite this growing awareness, there are actually fewer Americans cycling today than there were several years ago, according to reports by two trade associations that study outdoor recreation.

The National Sporting Goods Association estimates ridership at 40 million in 2004, down from about 51 million in 1985, according to a survey of cycling participation. There were 2.8 million cyclists in Texas in 2004 – the same as almost 20 years ago – even though the state's population grew by about 41 percent over that time period.

The Outdoor Industry Association reported an almost 5 percent decrease in cycling participants from 1998 to 2004.

Bicycle sales have also been fairly flat, said Mike Baker, spokesman for the National Bicycle Dealers Association. About 13 million bikes were sold in 2004.

"There is much more competition for people's attention and a lot more opportunities for exercise," Mr. Baker said. "Everything from PlayStation to snowboarding to computers to television is capitalizing people's time."

'Becoming more careful'

There are several other reasons fatalities are on the decline, Mr. Raborn and Ms. Preston said. Increased attention is likely among the biggest.

"Cyclists are becoming more careful, and cars are becoming more aware," Ms. Preston said. "People are communicating more, and we believe there's better information out there. ... [Cycling] is an inherently safe activity as long as you're riding defensively."

Mr. Raborn said the federal government has increased its funding – from $22.9 million in 1992 to $422.7 million in 2003 – for bicycle-friendly highway improvements, such as making wider bike lanes and adjusting the height of railings on bridges.

"Better facilities make it easier for more people to ride and, at the same time, reduce the number of crashes that occur as a result of road hazards," he said.

Helmets have become more common, he said, and more cities have passed mandatory helmet laws. More organizations are offering bicycle safety classes as well, he said.

One example is the Texas Bicycle Coalition in Austin, which has provided training for about 400,000 children statewide in bike safety, said executive director Robin Stallings.

"A recent bike industry study said that people who cycle as children are more likely to be cyclists as adults," he said. "If they learn how to do it properly as children, they're probably not going to forget how to do it properly [as adults]."