Dallas Tax Credit Corruption Case Continues

The Dallas Morning News reports State Rep. Terri Hodge plead guilty to not paying taxes on payments which were allegedly bribes for support of Low-Income Housing Tax credit deals in her district.

As part of her deal plea deal, finalized late Tuesday, Hodge did not admit the bribery conspiracy, which alleges that she wrote letters to the state advocating that the Potashniks’ company, Southwest Housing, receive lucrative tax credits to build low-income housing in her Dallas district in return for the bribes. Such support from public officials was crucial for developers getting the tax credits.

This is another page in the ongoing corruption investigations in the Dallas area:

Last year, a jury convicted former Dallas Mayor Pro Tem Don Hill of leading a massive conspiracy to sell his vote in favor of the Potashniks’ tax credit deals in exchange for hundreds of thousands of dollars in kickbacks. He was also convicted of extorting money from another developer, James R. “Bill” Fisher, who turned out to be an FBI informant.

This debacle was behind comments TxLIHIS filed last fall with the Texas Department of Housing and Community Affairs regarding the local official support requirement in the Low Income Housing Tax Credit Program:

The Dallas public corruption case offers ample evidence that relying upon a single elected official to make a determination as to whether a tax credit development gets the points it needs to move forward opens the door for abuse, bribery and extortion. Local elected official input for purposes of awarding points to a tax credit development should only be considered if the local governing body as a whole provides the input.

TDHCA should develop objective standards that would form the basis of the request for elected official input. Presuming that a truly independent market analysis is put in place, the need for the housing should not be one of the requested areas for elected official input.

Rather, local elected officials should be invited to submit any community revitalization plans, HOME plans, etc. developed by their community and indicate how the proposed development meets or fails to meet their community guidelines.  TDHCA should request that all written comments address how the official’s recommendation advances or does not advance the state and local government obligation to affirmatively further fair housing.

Our comments were not incorporated in the 2010 Low Income Housing Tax Credit Program rules, but the need for change remains.  We will continue to push for the elimination of the invitation for corruption inherent in the current local official input process.

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