DALLAS Dallas political consultant Kathy Nealy was indicted last week alongside Dallas County Commissioner John Wiley Price on public corruption charges. She pleaded not guilty and will get her day in court.
She will do so, though, at taxpayer expense. Because she says she's broke, the government has agreed to pay for her attorney.
But, News 8 has learned while Nealy is asking for legal assistance, she also claims to be a top performer in a national wealth building enterprise.
In June of 2011, federal agents served search warrants on Price, and at Nealy's condo at The Terrace in the 2300 block of North Houston Street near Victory Park. The FBI seized records and property, anything that might help prove allegations that she and Commissioner Price conspired to bilk nearly a million dollars from businesses seeking contracts with Dallas County.
Last week, after her indictment was unsealed and she was arrested, Nealy asked a federal judge for taxpayer assistance. She filled out a one-page form attesting she is financially unable to retain her own attorney. According to federal law, not only might Nealy qualify for up to $9,800 in federal assistance, if the case is deemed to be complex, her attorney could be compensated hundreds of thousands of dollars.
Remember the corruption case against Dallas City Council Member Don Hill five years ago? Five defendants' attorneys in that case were reimbursed more than $1 million.
Attorney Vic Sasso, of Dallas, represented one of the co-conspirators, Jibreel Rashad, who was convicted of conspiracy to commit extortion. Sasso, who was appointed to represent an indigent Rashad, received more than $180,000. That's on the low end of what other defense attorneys billed the government in the case.
- Click here for a breakdown of taxpayer-supported defense attorneys' fees in the Don Hill/Dallas City Hall corruption case.
Sasso says the money represents a fraction of the true cost of defending a complex case.
'Even if they were to work full time on these cases at $126 an hour, which is the reimbursement rate, that only comes out to a small fraction of what the government is spending,' Sasso said.
On Friday, hours after she was arrested, Nealy asked U.S. Magistrate Paul Stickney to have her lawyer, Cheryl Wattley, who is also a law professor, appointed to represent her at taxpayer expense. Stickney asked Nealy to fill out a financial affidavit, which requires her to provide information about her employer, income and debts. On Tuesday, the judge agreed Nealy was unable to pay for an attorney and approved her application.
Financial affidavits are sealed by the courts and aren't public record, so it's unclear what Nealy claimed as income. But on social media, Nealy is open about the work she's doing nowadays.
Last September, Nealy was celebrated as the newest senior vice president of 5Linx, a national, multi-level marketing company she joined in 2010.
Nealy got there, in part, by becoming a top recruiter and producer of the technology products and services sold by 5Linx.
A Facebook photo shows Nealy posing with an over-sized $10,000 check she received in 2010 just after joining the group.
A YouTube video shows Nealy's promotion to senior vice president before a crowd of cheering admirers. There's also a picture on Facebook of a new BMW Nealy supposedly received with her promotion.
In other images publicly posted online, Nealy can be seen traveling the country with 5Linx colleagues enjoying the fruits of their status. Nealy is also billed as a featured speaker at 5Linx wealth building seminars.
News 8 asked Nealy's attorney, Cheryl Wattley, for comment about Nealy's lifestyle.
'We respect the judicial process and we will be presenting our information to the judge and jury at the appropriate time,' Wattley wrote News 8 in an email. 'Other than to repeat that Ms. Nealy has not engaged in any criminal wrongdoing, we have no comment.'
Attorney Sasso says the feds are thorough in their work and would never pay for legal assistance if a defendant didn't absolutely qualify for it. But, if for some reason they missed something, said Sasso, 'I would think they would know exactly what to do and when to do it.'
As for that high-rise condo that Nealy was forced to sell last year? News 8 confirmed Thursday, and deed papers show, that Nealy has retaken possession of that condo. In fact, the paperwork was signed in January and was notarized by none other than Nealy's co-defendant John Wiley Price. Tax records show the condo is valued at $287,000.