Political consultant probe could impact Dallas mayor, others

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by BRETT SHIPP

WFAA

Posted on July 7, 2011 at 1:07 AM

Updated Thursday, Jul 7 at 1:31 AM

NEWS 8 INVESTIGATES

DALLAS — Dallas Mayor Mike Rawlings has hired former Dallas County District Attorney Bill Hill to advise him in the FBI's investigation involving his campaign consultant, Kathy Nealy.

Nealy has long been considered to be the most politically-connected campaign professional in South Dallas.

It was the FBI raid on the home and offices of County Commissioner John Wiley Price last week that grabbed most of the headlines, but it's what federal agents carried out of Nealy's home and office that could have politicians and power-brokers all over Dallas on edge.

For two decades, Nealy has been the consultant of choice of the power-brokers in North Dallas to help get South Dallas voters to the polls on issues such as the Trinity River Project and the American Airlines Center bond election.

So valuable were her services during the AAC bond election that she was given her own suite at the sports arena.

Two years ago, questions were raised about Nealy's operations during the Dallas City Hall corruption scandal. Nealy reportedly avoided prosecution by working a deal to testify against former Dallas Mayor Pro-Tem Don Hill.

Yet Democratic Party Chair Darlene Ewing says Nealy's experience is invaluable. "There's other people out there doing it, and we hire other people to do stuff," Ewing said. "Kathy's been around long enough that she knows so many people that it's hard to beat her contacts and experience and knowledge of the community."

Nealy helped get former Dallas Mayor Ron Kirk get elected in the 90s, and — most recently — new Mayor Mike Rawlings paid Nealy $270,000 to help run his campaign in South Dallas.

But now that federal agents have seized records from her office, the mayor says he cannot answer questions as to how his quarter of a million dollars was spent.

"The FBI asked me not to comment, so I'm not going to comment," Mayor Rawlings said.

The Rawlings campaign paid Nealy $15,000 per month as a consulting fee, making her arguably the highest-paid consultant in the city.

That's $15,000 in fees over four months adding up to $60,000. How was the other $210,000 spent?

Rawlings' campaign has since provided News 8 with a summary showing the rest of the money funded phone banks, precinct-walkers and on something it calls "Community and Religious outreach," which includes "setting up meetings with and securing endorsements" of pastors and community leaders.

Betty Culbreath, a civic leader and outspoken critic of Price and Nealy, says she's heard rumors about money being paid to secure religious endorsements, but this is the first time she's seen it documented.

"I don't know what kind of religious outreach you do when the law says the religious and politics are not supposed to come together," Culbreath said. "I'm surprised that was written on paper."

Numerous sources tell News 8 that Nealy's true power lies not with her network of South Dallas pastors, nor with her phone bank operation, but in her close connection with — and access to — John Wiley Price.

"I think that when you hire Kathy, you expect to get the results you are looking for by any means necessary," Culbreath said.

The Dallas Morning News is now reporting that Nealy owes nearly half a million dollars to the IRS in back taxes, and that she is being sued for non-payment of a licensing fee on her suite at the American Airlines Center.

Neither Nealy nor Price has responded to our requests for comment. Neither person is accused of committing a crime.

E-mail bshipp@wfaa.com

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