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Men's clubs, dog tracks and casinos: FBI payments to Dwaine Caraway questioned in corruption case

Developer's defense lawyers government payments to disgraced Dallas city councilman helped prop up his candidacy.
Credit: WFAA
Dwaine Caraway after he was sentenced on April 5, 2019.

DALLAS — Undercover FBI agents posing as developers gave disgraced former Dallas City Councilman Dwaine Caraway thousands of dollars before and after he was elected in 2017, according to new court document filed Friday in an ongoing public corruption case.

The filing was by lawyers for Dallas developer Ruel Hamilton, who is accused of paying bribes to Caraway and the late Councilwoman Carolyn Davis. Hamilton has pleaded not guilty. His trial is scheduled for July.

Abbe Lowell, lawyer for Hamilton, argues that the money the government paid to Caraway helped get him elected, and that after he was in office, he eventually began helping prosecutors in their investigation of Hamilton.

“While the government was encouraging Caraway’s candidacy and giving him money, it did nothing to inform Caraway’s opponent or the citizens of Dallas that Caraway was provably corrupt, being supported and paid for by the federal government, and being put in place so he could continue to solicit or demand funds for taking official actions,” Lowell wrote. “This has to be unprecedented over-involvement by the government.”

The U.S. Attorney for the Northern District of Texas declined to comment in detail, citing the ongoing case, but issued this statement: “The indictment speaks for itself. The U.S. Attorney’s Office will continue to aggressively pursue the case against Mr. Hamilton – and anyone else who engages in public corruption in Dallas.”

It's not unusual for undercover federal agents to pay “bribes” in corruption investigations, or fund narcotics transactions in drug cases or otherwise spend money directly or through informants to gather evidence.

According to Lowell’s filing, undercover FBI agents, pretending to be developers, began paying Caraway in February 2016. The money was passed to him in cigar boxes, Lowell said. Agents gave Caraway $8,000 at his campaign announcement party; another $5,000 the night in May 2017 he defeated Carolyn Arnold for the District 4 City Council seat; and another $10,000 in August 2017 in exchange for his support of a development the undercover agents said they were seeking.

During the campaign, Lowell writes, agents “routinely took Caraway to dog racing tracks and so-called ‘men’s clubs’” and gambling at WinStar Casino in Oklahoma “to celebrate his victory.”

Caraway has never been charged with any of that activity.

Caraway, however, is serving more than four years in prison time for taking $450,000 in bribes between 2011 and 2017 in another corruption case, involving a school bus stop-arm camera scheme that toppled the former Dallas County Schools taxing entity.

Although he is not charged directly in the case, prosecutors say in 2018 Caraway also took money from Hamilton and in return, offered political backing for his development projects and other matters. Caraway is expected to testify about his dealings with Hamilton for the government.

Lowell says that Hamilton only gave money to Caraway and Councilwoman Davis to support charitable and other legitimate activities. Lowell says that Caraway lured Hamilton into an unfair sting, which included recorded meetings and phone calls.

“Mr. Hamilton’s actions in dealing with Caraway could only be characterized as ‘passive,’” Lowell wrote. “It was the government that played the ‘active’ role, facilitating a corrupt candidate to public office, and then using him to set up innocent citizens looking for help from their elected representative.”

In October, prosecutors responding to similar allegations that they entrapped Hamilton in phone calls with Caraway, wrote this about Hamilton’s activities:

“There is nothing in the conversation between Hamilton and Caraway that suggests Hamilton, who, by August 2018, was a well-seasoned payer of bribes, needed even slight encouragement to commit his crime,” prosecutors wrote. “As his actions with Davis show, Hamilton was a ‘predisposed active participant’ in the bribe-paying scheme in which Hamilton involved Caraway in 2018.”

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