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Former Dallas City Council member Carolyn Davis has pleaded guilty to taking bribes from a real estate developer while she was chair of the council's Housing Committee.

In a federal plea unsealed Friday morning, prosecutors said sometime between November 2013 to June 2015, Davis took $40,000 from developer Ruel Hamilton to get an affordable housing project through the council.

The official charge against Davis — the latest former council member to wind up a target of federal prosecutors — is conspiracy to commit bribery concerning programs using federal funds. The offense carries a punishment of up to 5 years in prison, but Davis has an agreement with the government for no more than 3 years.

Hamilton, who was charged with two counts of bribery concerning a local government receiving federal benefits, is the chairman and founder of low-income housing developer AmeriSouth Realty Group. He and his family have actively been involved in local, state and national politics and have contributed thousands of dollars to the campaigns of Davis and other council members over the years.

The feds said Davis, who served four terms on the council from 2007-2015, took the money and a promise of future employment as a consultant in exchange for a real-estate deal worth more than $2.5 million in "City of Dallas funds and obligations."

Erin Nealy Cox, the U.S. attorney for the Northern District of Texas, said she hopes the case sends a strong message: "We'll dig as deep as we have to uncover the schemes," she said. "We've been here before."

Developer Ruel Hamilton talks about Good Haven Apartments, one of his properties, on Thursday, September 22, 2016 on High Hill Blvd. in Dallas. (Ashley Landis/The Dallas Morning News) (Ashley Landis / Staff Photographer)

Davis' attorney Scottie Allen said in a statement Friday night that Davis "has been a fierce advocate for her community [who] also made some bad judgments for which she has accepted full responsibility."

In a statement, Hamilton's attorney Abbe David Lowell said his client was the victim of a "set-up" staged by federal prosecutors to trap and charge the developer. Lowell is also the attorney for President Donald Trump's son-in-law Jared Kushner.

"Mr. Hamilton will plead not guilty because he is not guilty," said co-counsel Jim Burnham.

Burnham's statement only refers to "a misdirected trap that the government set in August 2018." It says nothing about the money allegedly paid to Davis in 2015.

Former TV news reporter and Congressional candidate Brett Shipp, who is handling media requests for Hamilton, said he did not have further comment.

Bribery allegations

Federal prosecutors allege that from November 2013 to August 2018, Hamilton "engaged in a scheme to corruptly influence public officials related to Hamilton's business interests within the City of Dallas and to further Hamilton's political objectives."

His indictment alleges that he paid Davis, who represented South Dallas, $40,000 and offered her future employment as a consultant in exchange for her "official actions."

The feds also allege that on Aug. 3, 2018, Hamilton paid a $7,000 bribe to someone identified only as Council Person A — "an individual known to the grand jury."

Council Person A is never identified in the indictment, but the U.S. Attorney's office said his council tenure ended Aug. 9, 2018 — the day Dwaine Caraway resigned after pleading guilty in the federal corruption scandal that took down bus agency Dallas County Schools.

Michael Payma, Caraway's attorney, said Friday he didn't know if Caraway wore a wire for the feds.

Davis' guilty plea says to hide the bribe, Hamilton — named only as Person A in her plea — wrote checks to someone identified as Person B or that person's nonprofit. Person B then cashed the checks and handed the money to Davis.

The indictments do not indicate the identity of Person B, who has not yet been charged. Nealy Cox said "you'll have to stay tuned" for that.

Dallas City Councilwoman Carolyn R. Davis of District 7 delivers her remarks during the grand opening and ribbon cutting of the Opportunity Center to benefit East and South Dallas, Thursday, November 6, 2014. (Tom Fox/The Dallas Morning News) (Tom Fox / Staff Photographer)

Davis received the cash on four separate occasions, from April through June 2015, according to the indictment.

Davis "actively sought out these bribes," Nealy Cox said.

The ballad of Royal Crest

Hamilton's indictment alleges that on Feb. 2, 2015, during a meeting of the Housing Committee, Davis, the committee's chair, voted to support Texas Department of Housing and Community Affairs tax-exempt bond and 9-percent tax credits for Hamilton's Royal Crest housing project across Interstate 45 from the Joppa community.

Hamilton's indictment also says Davis moved to authorize the Dallas Housing Finance Corporation to make a development loan to the Royal Crest project, which involved the rehabilitation of 168 affordable units, for upwards of $2.5 million.

Royal Crest is in Council District 4. At the time, its representative was Caraway, who was also on the Housing Committee then.

In June 2014, Dallas City Council member Dwaine Caraway presented a bouquet of flowers to fellow council member Carolyn Davis, whom he referred to as "his little fireball," and thanked her for her help getting an apartment complex project completed in his district. That was the Lancaster Urban Village. (Mona Reeder / Staff Photographer)

In Hamilton's indictment, federal prosecutors allege that out of the $40,000, he paid about $11,000 in cash directly to Davis.

It says that on the afternoon of April 13, 2015, Hamilton told Davis, "So, I know you wanted the rest of the cash, I have a ... probably half of it. I know I have over another thousand bucks or we could so it tomorrow, so ..."

"Well, it's up to you," Davis allegedly responded. "We can wait until tomorrow if you want to."

Ten days later, says the indictment, Davis told Hamilton she asked a city housing official — identified only as "Official X" — about the status of his Royal Crest project, which was competing with another housing project for the state's low-income housing tax credits. Davis allegedly told Hamilton to bring in an outside nonprofit to push Royal Crest over the edge in the city's scoring system, which council members use to support such projects.

According to the indictment, Hamilton told Davis he would be "disappointed" if his project didn't make the Texas Department of Housing and Community Affairs' list, and that he wanted her and Council Person A to lobby the state in support of Royal Crest. She said she would.

The state later rejected the project's application for tax credits.

Council Person A

Three years later, on Aug. 2, 2018, an item involving Hamilton was to go before the City Council that would have led to a November referendum, according to the federal court documents. The indictment says Hamilton told Council Person A, "I was told if there is anybody that could get the mayor to put it on the agenda for the 8th, that it was council member [A]."

It's unclear what that item could have been, as an item that could have triggered a referendum never appeared on the council's Aug. 8, 2018, voting agenda. But at the time, a group of activists and politicians — including some who took contributions from Hamilton — were trying to get paid sick leave on the November ballot. Among the most vocal supporters of the proposed referendum was lawyer Chris Hamilton, Ruel's son, who on May 24 of last year posted to Facebook, "I am asking for your help to get PAID SICK LEAVE on the ballot in Dallas for the November 2018 general election."

But Ruel Hamilton brought up other plans, too, according to the indictment.

Federal prosecutors allege that he "also sought future official action" by Council Person A in relation to another housing project he had hoped to build in Dallas.

"Before you leave office of whenever your last term is," Hamilton allegedly told Council Person A, "we're going to have stuff build down there on Eleventh Street. You just watch I need you for that. I'm saying is, I'm there, you know, and so if there is anything I can help you with, I mean, I hope you feel like you can reach out."

Eleventh Street was in Caraway's district.

The indictment says that Council Person A "agreed to facilitate and promote the agenda item, and to provide official assistance on the proposed housing project in return for money to cover his personal needs." The indictment alleges that Council Person A asked for $6,200; Hamilton offered him $6,500, according to prosecutors, which the council member accepted. Hamilton wound up writing a check for $7,000, according to the indictment.

The indictment says Hamilton told the council person he wasn't sure how to "characterize the purpose" of the check he'd just written.

"What should I put down just for posterity sake, down in here for, what should I say?" Hamilton said, according to the indictment. "All right. I just wrote something down there just so ... some ... somebody ever asks, I can come up with some kind of reference."

Powerful connections

Hamilton and his family have been actively involved in local politics for years. He has donated hundreds of thousands of dollars to Dallas ISD. In 2018, the League of Women Voters gave him their 2018 Susan B. Anthony Award for his "holistic approach to real estate endeavors."

And city campaign-finance records show that since 2011, Hamilton, his family members and his associates have contributed more than $85,000 to council candidates. Davis received about $2,000 of that, records show. Other recipients include Carolyn King Arnold, Tennell Atkins, Scott Griggs and Davis' successor Tiffinni Young, the data show.

Atkins, Arnold, Griggs and Young did not immediately respond to requests for comment. Nor did Casey Thomas and Philip Kingston, who also received such contributions.

Kevin Felder, who has reported about $6,000 in donations from the Hamiltons and their associates, thanked a reporter Friday "for informing me of this revelation," but declined to comment "at this time."

Hamilton's school-aged grandchildren were also listed among the contributors to City Council candidates. Such donations are legal if the children donate their own money, but aren't if the minors received the money for the purpose of making the donations.

Griggs, who is running for mayor, recently said he would return the minors' donations. Griggs did not respond to a request for comment Friday.

Since the start of 2014, Hamilton has contributed $416,920 to statewide political causes and candidates. Most of that money was aimed at helping the Texas Democratic Party. Hamilton contributed $51,660 to ActBlue Texas, the state Democratic political committee, $29,000 to the Dallas County Democratic PAC, and $25,000 to Wendy Davis' failed gubernatorial run.

But his largest contributions to a single candidate, $120,000, were reserved for his son Chris, who unsuccessfully ran for the Dallas Democratic Party Chairman role in 2018. Incumbent Carol Donovan easily won the seat, 56 to 44 percent, with 107,320 votes cast.

'Shared sense of despair'

The charges against Hamilton and Davis' guilty plea shook City Hall. Davis, though she left the council in 2015, had still been a regular character at City Hall for the last few years. And she hinted last year she could try to return.

Jennifer Staubach Gates, who served on the council with Davis and Caraway, said the plea "just reflects poorly on the city."

"It's disheartening," Gates said.

Mayor Mike Rawlings said he joined his "fellow Dallas residents today in a shared sense of despair over a former councilmember's betrayal of the public trust."

"I'm also sick and tired of the vultures who lurk around City Hall in search of corruptible public officials," Rawlings said in a written statement. "There is no place in our government for those who cheat the good people of Dallas by offering bribes, just as there is no place for those who accept them."

Rawlings said he has asked City Manager T.C. Broadnax to initiate reviews of all housing projects connected to Davis' guilty plea and Hamilton's indictment.

Davis and Caraway both served on the council in 2009, when a federal jury convicted former Mayor Pro Tem Don Hill for his role in a corruption scandal involving affordable housing developers.

Nealy Cox said Dallas residents "should be able to trust that their elected officials act in the city's best interest."

"We know it doesn't always happen. And sadly, we've seen this conduct happen in Dallas too much."

Eric Jackson, special agent in charge of the FBI's Dallas office, said "the city of Dallas and the citizens of Dallas deserve better."

"They deserve public officials who come to work on their behalf and are not working to line their pockets," Jackson said.

Jackson said public corruption cases are a top priority for the FBI.

"If you're a public official, do your job," Jackson said. "If you're someone who is thinking of using your wealth and your financial influence to exploit them, think again."

Staff writers Holly K. Hacker, Sue Ambrose, Kevin Krause and Corbett Smith contributed to this report.

TIMELINE | Carolyn Davis corruption case

June 16, 2007: Carolyn Davis defeats Donald R. Parish in the run-off election to win her first of four two-year terms as a council member representing district 7. She replaced Leo Chaney, who once came under scrutiny from federal investigators in the sprawling City Hall investigation that took down former Mayor Pro Tem Don Hill.

Nov. 18, 2013: Dallas developer Ruel Hamilton gives Davis a $2,500 check, according to the federal indicment. Prosecutors allege this appears to be the first bribe given to Davis.

Jan. 1, 2015: The Dallas Housing Finance Corporation approves a request from Hamilton for a $2.52 million development funding loan as part of an application for a state tax-credit program. The loan is related to a proposed rehabilitation at the Royal Crest apartments in Oak Cliff.

Feb. 2, 2015: As chair of the city housing committee, Davis moves approval of the Royal Crest application for funding. She also recommended $168,000 in city funding for the program. The full council later gave its support for the plan as part of the state tax-credit application.

April 3, 2015: Federal court documents state at approximately 4:16 p.m., Hamilton told Davis: "So, I know you wanted the rest of the cash. I have a — probably half of it. I know I have over another thousands bucks or we could do it tomorrow, so -." Davis responded: "Well, it's up to you .... We can wait until tomorrow if you want to."

April 23, 2015: Hamilton is concerned about his project's financing chances after learning it is tied with another project in the scoring used by those who will award the financing, according to the court documents. Hamilton allegedly asks Davis and another, yet to be publicly identified council member to lobby the Texas Department of Housing and Community Affairs to approve his proposal. Davis agrees.

June 13, 2015: Hamilton met with Davis and gave her $3,000 cash, federal prosecutors say. By this time, Hamilton has paid Davis more than $40,000, prosecutors alleged. At times, Hamilton made payments to a non-profit. Prosecutors says someone from the non-profit knew the payments were for Davis and gave them to her.

Aug. 3, 2018: Hamilton made a $7,000 bribe payment to someone identified by federal prosecutors as "Council Person A." The payment was made in exchange for the council person's promise of official action favoring Hamilton. Federal prosecutors say "council person A" ended his tenure on the council on Aug. 9, 2018, which would mean it's Caraway, who resigned that day from his council seat and pleaded guilty to federal corruption charges.

Feb. 21, 2019: Hamilton is indicted under seal.

Wednesday: Davis enters a federal plea agreement related to bribery charges.

Friday: Davis' indictment Hamilton's attorney says he is not guilty of the crimes.

- Dave Boucher