Caraway, pictured here in 2015, stands outside of Rudy's Chicken in South Dallas. (Photo by Elizabeth Lavin)

Local News

Federal Indictment Details Dwaine Caraway’s Involvement in $3.5 Million Bribery Scheme

The hard details of the scheme that brought Caraway down.

Mayor Pro Tem Dwaine Caraway pleaded guilty this morning to accepting about $450,000 in bribes and kickbacks, money that the feds say was distributed through sham entities masked as fake loans and sometimes given to him as checks made out to cash that the councilman negotiated at liquor stores and pawn shops.

Caraway is facing up to seven years in federal prison on the two counts to which he pled guilty: conspiracy to commit honest services wire fraud and another for tax evasion. The feds said that he masked those payments on his tax returns. He has resigned from the City Council and will pay up to $250,000 to the feds and $68,906 to the IRS. He is set to be sentenced on December 14.

“Over the past several weeks, through a lot of prayer and soul searching, I have decided that I must take responsibility for my actions,” wrote Caraway in his resignation letter. “I have dedicated much of my life to serving others, but have never claimed to be without sin. I am truly sorry that I must end my career as an elected official because I betrayed the public’s trust that I worked so very hard to earn.”

Pleading guilty alongside him was co-conspirator Robert Leonard, the founder of Louisiana-based Force Multiplier Solutions, which entered into a sizable contract with the defunct Dallas County Schools to provide cameras that could be placed on school bus stop-arms. The idea was to ticket drivers who sped by the school buses, kind of like a mobile red light camera, and reap the revenue windfall. But the program failed; most of the cameras wound up sitting unused in a warehouse.

The payments came to Caraway from Leonard and his colleague Slater Washburn Swartwood. Swartwood is accused of working with Caraway to set up sham companies to launder the payments. The vast majority—$390,000—came through these entities. The rest included payments for security cameras around Caraway’s home, luxury suits, a campaign bus, expenses for a funeral. Leonard and Swartwood also covered all expenses-paid trips to New Orleans, Las Vegas, and Austin. They even included money for gambling. Other payments got disguised as loans, complete with fake loan documents. Others came in as checks that Caraway cashed at pawn shops and liquor stores, the latter of which he once led an effort to keep out of southern Dallas. 

The indictment says the payments got Caraway to influence a City Council vote to OK the deal, which U.S. Attorney Erin Nealy Cox said sunk Dallas County Schools into “intolerable levels of debt.” Voters did away with DCS last November. The head of the agency, Rick Sorrells, pled guilty in April to a charge of wire fraud. These indictments say he was also paid about $3 million in bribes and kickbacks.

“This day is also hopefully about reconciliation, perhaps a starting point for returning to harmony after conflict,” Cox said in a news conference Thursday morning. “The citizens of Dallas deserve honest government and there is absolutely no level of acceptable public corruption.”

Eric Jackson, the special agent in charge of the Dallas FBI, said the feds launched an investigation after the dogged reporting of NBC Channel 5, which broke the news of the scandal last year. Caraway admitted to the station that he accepted money from Force Multiplier to help search for locations in southern Dallas to build affordable housing. The indictment says the money also went toward using “the Council Member’s official position if and when necessary to forward Leonard’s efforts to help develop low income housing.” He also told the station that he received $20,000 as a loan, which he never made any payments toward.

The second count, for tax evasion, pinned Caraway for leaving $97,000 off his tax returns from 2014 through 2016. The indictment identifies $3.5 million in total paid to “Dallas area officials,” money which helped Force Multiplier land $70 million in “contracts, agreements, orders, and other beneficial treatment” that “coconspirators concealed from DCS, its board, the Dallas City Council, and the citizens.”

Cox said the investigation into the scheme was ongoing, but declined to provide any details.

“The investigation continues; obviously there are a lot of parties implicated in this,” she said. “I can’t speak to anyone in particular.”

A spokesman for Mayor Mike Rawlings said his office would likely issue a statement later this afternoon. Rawlings told NBC 5 that he met twice with Leonard, in 2013 and 2016, and began second-guessing the latter meeting after he pitched building a new sports stadium in Dallas that would be bankrolled by a prince from the United Arab Emirates. Rawlings told the station that Caraway introduced him to Leonard at City Hall in 2013. Caraway was not present at Wednesday’s Council meeting. This was his fifth term around the horseshoe; he was term-limited out in 2015 and lost in a race for County Commissioner against John Wiley Price. He regained his seat the next year.

Council Member Tennell Atkins, who represents the district just south of Caraway’s, said he “didn’t see anything,” but had just gotten back into town and hadn’t read the indictment. “I heard about it but I haven’t read the paper. I don’t know. I haven’t talked to the attorneys, I haven’t talked to the city,” he said.

Councilwoman Jennifer Staubach Gates, who represents portions of North Dallas, told our Tim Rogers that she felt today was “a sad day for Dallas. It’s painful, and I think it reflects poorly on our city.” We have a huge responsibility to have the public’s trust; it’s a stain on our city.” She wasn’t exactly surprised.

“I’ve been following this story and the filings for the civil case recently,” she said. “It’s not like you’re shocked. But you don’t expect this.”

Gates was the lone council member to vote against the camera deal. She said she couldn’t believe that such a large contract had bypassed the Public Safety Committee and landed on the consent agenda.

“My colleagues felt comfortable, for whatever reason, and passed it,” she said.

City Attorney Larry Casto sent a memo to Council on Thursday that details next steps. The city must order a special election by August 20 in order to get the District 4 race on the ballot in time for the mid-terms on November 6. The City Council will vote on establishing the election on August 15. Candidates then have until August 23 to file to run.

In a statement Thursday afternoon, Mayor Mike Rawlings said he had “not yet reviewed the the public details of the case,” but, “as we all now know, the corruption at Dallas County Schools extended beyond the confines of that now shuttered organization.” The statement continues:

As your mayor, I am saddened by what we learned today about the actions of one of my former colleagues. I am sad for the city, especially the citizens of District 4, and for Mr. Caraway’s friends, family and supporters. Mr. Caraway championed much good in his time in public service, particularly for the youth of our city. I appreciate that he is admitting his crimes and sparing the city what could have been a drawn out legal battle. 

More than 12,000 people work for the City of Dallas. Almost every one of them serves honorably and ethically — and never make the news. This city is so much bigger than any one politician who lost his way.

The indictment and Caraway’s resignation letter are below.

Resignation of Mr. Dwaine R. Caraway by goodmoine on Scribd

Caraway Indictment by goodmoine on Scribd

 

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Comments

  • Ed Huff

    Didn’t Dallas Morning News (staff writer Ayala) do everything it could to tarnish the reputation and motives of Don Huffines who introduced the 2016 legislation to end the corruption of Dallas county Schools and their school bus camera rip off scheme?

    • bmslaw

      I don’t know, did it? If you are going to throw an accusation into the world wide web, show us the factual source of your accusation, or we might think you just made it up.

      • Ed Huff

        hmmmm–so are you saying that DMN did everything it could to investigate the DCS bus camera scandal and of course supported Mr. Huffines’ 2016 legislation to end the tax payer hemorrhage of money into the pockets of corrupt officials? I notice that Mr. Huffines gets no citations here for his efforts on behalf of Dallas tax payers…..Since when did reader’s questions become “accusations”? Are you feeling guilty about something? ..Paranoid?

        • bmslaw

          Nope. Not feeling guilty, or paranoid. The words you used sure sounded like an accusation, or why would you have asked the “question” in the first place? And I am not saying anything about what the DMN (or anyone else) did or did not do. My comment was a question to you pointing out that your failure to source your comment negatively impacted the credibility of your comment.

    • Mavdog

      No, the DMN did not “do everything it could to tarnish the reputation and motives of Don Huffines”. In fact, the DMN printed the stories from the KXAS investigation which exposed the DCS scandal. The DMN editorial staff supported voting to shut down DCS.
      Why would you have thought it did?

      • Happy Bennett

        The DMN has curious lack of interest and ambition in developing investigative journalism regarding their sacred cows in city government. I would say that public interest journalism takes second place to an entrenched political agenda, IMO.

        Of course once the scandal is widespread public knowledge which DMN etc cannot ignore either the “spin machine” or some mild tacit in print hand wringing occurs–too little too late, IMO.

        • Mavdog

          It seems your complaint is the DMN does not support your “political agenda” and therefore they “lack interest and ambition” towards your targets.
          The DCS scandal was publicized due to the DMN efforts, not in spite of their efforts. The public became aware mostly from the DMN stories.

  • Happy Bennett

    No I have to agree with EH below, the DMN and its subsidiaries (spin off publications) as well as the independent press (Dallas Observer) have failed to be inquisitive, vigilant and unbiased on behalf of the public welfare in advance when it comes to the city council follies, and south or north Dallas scandals except if someone else has developed the scoop or as a criminal post mortem.

    The press in this town can only be counted upon to make snarky or vicious unfavorable comments about common sense public advocacy or to go on silly crusades such as those to remove historic public statues at tax payer expense. ( There must be a “Curse of the Robert E Lee Equestrian Mounument”, BTW since at least 2 of the most vociferous advocates for tax payer funded removal “gestures” in the local press or on the council have had their careers shortened).–(Ms. Floyd and Mr. Caraway eg)

    • JamieT

      The media in Dallas, all of it, has never been anything but extensions of the gears in the political machine. To switch metaphors, they present the common event horizon beyond which no meaningful discussion threatening to the machine can ever escape into public discourse.

      Crusades against statuary, crusades for bikes and scooters, penetrating emotional dives into this or that tearpot guaranteed to prompt a phone call from The New Yorker or The Washington Post, but never, ever, for example, any crusades to make Dallas property appraisal and taxation equitable or anything similar.

      After all, can’t bite the hands that feed, can one.

      • @zaccrain

        guys ………… thank you

    • @zaccrain

      you’re saying jackie floyd lost her job over that really? hm

  • Randy Zimmerman

    Will Dwaine be sharing a prison cell with Arthur and Archie?