Bribery and Extortion in Dallas, TX – Allen J. McGill Pleads Guilty! The Cards Seem To Be Stacked Against Don Hill Former Dallas City Councilman!

In a widely publicized case of extortion, corruption and bribery involving public officials, the first piece of the case fell into place today when Allen J. McGill, age 64, plead guilty to conspiracy to commit extortion. He could face up to 5 years in prison.

McGill was the former president and vice chairman of the Black State Employees Association of Texas (BSEAT) and the BSEAT Community Development Corporation (BSEAT CDC). McGill admitted that he knowingly and willfully combined, conspired, confederated, and agreed with Donald W. Hill (an attorney and elected official who represented District 5 on the Dallas City Council), Darren L. Reagan (chairman and chief executive officer of BSEAT) and others to wrongfully obtain and attempt to wrongfully obtain, property from another person with that person’s consent, induced by wrongful use and threat of use of economic harm and under the color of official right.

Don Hill

Don Hill Ex-Mayor Pro Tem

According to the US Attorney’s news release:

In August 2004, developers James R. “Bill” Fisher and Brian Potashnik sought local and state approval to construct multifamily affordable housing developments in South Dallas using federal tax credits and tax-exempt bonds. Reagan and McGill, seeing an opportunity to further their own financial interests, agreed to use the BSEAT entities to profit personally from the developments. Reagan met with Hill, who agreed to direct affordable housing developers to BSEAT. The developer would then have to get BSEAT’s approval, which was contingent on the developer agreeing to terms financially beneficial to Reagan and McGill, and through them, ultimately beneficial to Hill himself, before Hill would support the project at the Dallas City Council.

Reagan and McGill continued to make it clear to Fisher that Fisher had to work with BSEAT to get Hill’s support of Fisher’s affordable housing developments that were pending Dallas City Council approval and Fisher indicated he was willing to work with BSEAT. On September 21, 2004, McGill sent an email to Fisher in which he stated: “I am particularly encouraged to hear your reaction to my proposal to broaden your company’s involvement with Black State Employees Association of Texas and its recommended business partners.” McGill admitted that the “recommended business partners” to which he referred were subcontractors who would kick back a portion of their fees to Reagan and McGill.

Other key defendants include state Rep. Terri Hodge, former Mayor Pro Tem Donald W. Hill and real-estate developer Brian L. Potashnik.

According to a CBS News 11 report, “Southern Methodist University law professor Fred Moss, a former federal prosecutor, said the guilty plea sends a message to the other defendants. “It’s the old strategy of the prosecutors telling the defendants the train is leaving the station, and they better get on or else they’ll be left behind,” said Moss.”

Every choice has a consequence. McGill’s choices will likely result in a prison sentence unless he has worked a deal for a substantial downward departure – which I doubt. Having spent time in federal prison (not something I am proud of), many who cooperate with the government find that an early guilty plea and cooperation will substantially reduce their time behind bars. Today, I speak nationwide on (1) fraud in business, (2) how to avoid fraud in your company and (3) how business ethics can improve your financial performance.

One thing is for sure – You do reap what you sow! McGill and others will come to learn that soon. Since he’s scheduled to be sentenced on June 27th, 2008 we’ll soon get an understanding of what the others face.

If you know Allen McGill and have any comments feel free to jump in!


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