Questions About Price’s Girlfriends Anger Judge, Scolds Prosecutor

By Jack Douglas Jr. | CBS11 Investigative Producer

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DALLAS (CBSDFW.COM) – An angry judge today halted a prosecutor’s questions about the love life of Dallas County Commissioner John Wiley Price, saying, “it’s completely improper” to discuss in his political corruption trial.

Fireworks erupted just before the lunch break, while Regina Watts, an AT&T executive, was on the witness stand, where she told the jury she was in an exclusive romantic relationship with Price for the past 15 years.

Prosecutor Katherine Miller first asked Watts about Price’s cars and his home, but then popped the explosive question – had she ever asked the commissioner about whether he’d dated Karen Manning, owner of an art gallery where the government says Price sold pieces of his African art collection?

“It was business,” answered Watt’s, just before Price’s lead defense attorney jumped up and complained that the commissioner’s dating habits were irrelevant to the FBI’s corruption case.

That’s when U.S. District Judge Barbara Lynn dismissed the jury for lunch, then turned her attention to Miller.

“What’s that have to do with anything,” Lynn asked.

Miller responded by saying there was relevance because the government believes Price made money at Manning’s gallery, through the sale of his art collection, but did not report the profits to the Internal Revene Service.

The judge quickly disagreed.

“You are not going there,” she told Miller. “It’s completely improper.”

It was the highlight of morning testimony, which began with the government working to prove Price purchased property in Van Zandt County, east of Dallas, but used his friend, lobbyist Kathy Nealy, as a straw buyer to hide the property from the IRS.

“He was a good neighbor,” said Mike Redden, the first witness on the stand in Price’s federal corruption trial. He said the commissioner bought the property next to his home him in Wills Point, a small community near Canton. Dressed in jeans, with a thick country accent, Redden was a big change from the line of witnesses before him, mostly accountants, analysts and FBI agents.

There were some snickers in the courtroom when, after being asked how long he’d lived in Wills Point, Redden said: “Well, I married that lady twelve years ago.”

Asked to identify Price in the courtroom, the witness drawled, “Well, I haven’t looked. There he is. Good morning Mr. Price.”

In another break in the routine, trial was disrupted, and the jury escorted out, with the eruption of a high-pitched static noise coming from microphones in the court. The problem was eventually solved, but not before Judge Lynn described her courtroom as a “jury torture room.”

In their case against Price, the FBI says he took bribes, with help from Nealy and his executive assistant Dapheny Fain, and hid hundreds of thousands of dollars – in real estate, cars and cash – from the IRS.

Redden told the jury Price bought the property next to him about twelve years ago, and that he did maintenance work for the commissioner.

“He liked to keep the place clean,” said Redden. “He’s always been nice.”

In other testimony, real estate agent Denise White said she sent in writing an offer to Price to buy another property in Van Zandt County, and that he wanted his name taken off the offer.

“He wanted to change it to Kathy Nealy. He said all his real estate is in her name,” White said.

The jury also heard from Maurine Jones, owner of Tootsie’s Braiding Gallery, south of downtown Dallas, where Price is a regular customer.

Jones said she initially wrote monthly rental checks of $1,200 to Nealy, owner of the property, but then “accidentally” wrote Price’s name on a couple of the checks.

When pressed by prosecutor Walt Junker, she acknowledged it may have been more than a couple of checks. And Jones didn’t object when Junker said rental checks in Price’s name actually totaled more than $9,000.

She also changed her testimony about accidently writing checks to the commissioner, later saying she wrote the checks to him because he was “the manager” of the property.

In cross-examination, Shirley Baccus Lobel, Price’s defense attorney, questioned why authorities thought it was “worthy” to call the commissioner’s hair stylist to a federal grand jury, and noted other prominent people questioned in the case were not asked about who did their hair.

Raising her voice to make her point, Lobel asked: “Was H. Ross Perot Jr. asked about his hair stylist?”

The government has said Perot’s company, Hillwood, has in the past hired Nealy as a lobbyist and consultant in investment ventures, but had no knowledge she was paying bribes to Price.

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