DISD Superintendent Testifies Against John Wiley Price

By Jack Douglas Jr. | CBSDFW.COM

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DALLAS (CBSDFW.COM) – Dallas School Superintendent Michael Hinojosa testified today he was “surprised” at County Commissioner John Wiley Price’s “negative response” to a development that would be an economic engine for the county’s economically depressed south side.

Hinojosa, on the witness stand for no more than five minutes, told the jury in Price’s federal corruption trial that he was pleased with a proposal ten years ago that would create a large trading and distribution hub for overseas goods, known as a “Foreign Trade Zone” or FTZ.

Instead, the superintendent said, Price sent him a letter, followed by several conversations, asking that the school district abate taxes for Hillwood, a company owned by billionaire Ross Perot Jr., which first opposed the FTZ deal, then lobbied to be a part of it.

Hinojosa told the jury he was opposed to Price’s tax abatement because “it only benefits the people in suits.”

The school chief, whose testimony was long anticipated, was only on the witness stand for several minutes, and was never questioned by defense lawyers. Price’s lead attorney, Shirley Baccus Lobel, only thanked him for his work, noting she was a graduate of Dallas public schools.

In other testimoney, the former lead lawyer for Hillwood, David Newsom, said he was shocked, and feels “terrible,” about what the FBI contends – that bribes were “funneled” to Price on behalf of the company.

Newsom, who is retired but still works part time for Hillwood, said he was unaware when he hired lobbyist Kathy Nealy a decade ago that she would direct thousands of dollars into Price’s bank accounts as he cast votes and made calls to forward Hillwood’s interest in the FTZ project in south Dallas County.

“It’s something we wouldn’t want to be associated with,” Newsom said.

At the beginning of cross-examination, Price’s lead defense lawyer, Shirley Baccus Lobel, took a swing at Newsom’s earlier testimony that he was unaware of the payments.

“Let’s talk about your shock,” Lobel began. “You okay?”

She also got Newsom to repeatedly say Nealy was a trusted employee in providing Hillwood access to powerful leaders in Dallas, including Price and Dallas School Superintendent Michael Hinojosa.

Then Lobel told him, “You’re seemingly wanting to disown her now.”

In their corruption case against Price and Nealy, the government says Nealy would be retained — at a high salary — by companies wanting to do business with the county, and that she would then funnel bribes to her friend, Price, for his influence on the Commissioners Court.

In the case of Hillwood, the FBI says Nealy put thousands of dollars into Price’s bank accounts in exchange for him voting first to stall the distribution hub in his district, and then to push to include Hillwood in the project.

As well as using his influence on the Commissioners Court, jurors were told Price reached out to other powerful leaders in Dallas and surrounding areas, promoting the interests of corporations that were paying Nealy to be their lobbyist.

Price and his executive assistant, Dapheny Fain, are on trial, both charged with bribery and tax evasion. Nealy faces the same charges and his scheduled for trial at a later date.

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