town.he a like you to beneve he’s just a normal East Dallas good old boy. The sad thing is, he’s probably right.
THE FIRST THING I NOTICE ABOUT THE PINK BRICK HOUSE AT 2440 Peavy Rd. when I pull into the circular drive on a recent Saturday morning is the “For Sale” sign planted in the yard. Dan Peavy, dressed in a golf shirt, shorts and ostrich loafers, ushers me inside a tastefully appointed living room, An old family Bible sits on a display stand in one window and a glossy baby grand piano dominates another window; old photographs of the Peavy clan line the walls. The grandson of Carver David Peavy, a prominent rancher who donated to the city much of what is now East Dallas, including what became Peavy Road and Buckner Boulevard, the 49-year-old Peavy has lived all his life in this neighborhood-most of it right here on Peavy Road. He had never imagined living anywhere else. But after the twin scandals that have changed his life, Peavy began thinking about moving, He finally put the family house up for sale in the spring. “I find it difficult to frequent any places around here without getting recognized,” he says.
In October 1995, Peavy resigned from the Dallas Independent School District Board after a tape recording of a telephone call, laced with racial slurs and profanity, was mailed to several minority board members and Dallas County Commissioner John Wiley Price. Then, last May, a federal grand jury indicted Peavy on 42 charges, accusing him of bribery, extortion, money laundering and tax fraud resulting from insurance sales to the district. He is scheduled to stand trial in November.
Even before his resignation, almost everyone in this East Dallas neighborhood knew Dan Peavy on sight. At 6 feet, 2 inches and more than 250 pounds, he’s hard to miss. But the attention is different now, he says. He can’t garden in his front yard without someone stopping and asking about the criminal charges against him. “People say, ’Oh, there’s Dan, 1 hadn’t seen him in a while. I thought he might be in Alcatraz.’ And then I’d have to go through the story again. You like to have a little time off from the story. It’s hard to do,” he says.
Peavy plans to move far north of Dallas, maybe to Frisco or McKinney. He’s not just selling the house to escape the negative attention, he says, but to help pay his mounting legal bills, On a recent morning, Peavy was anxious to leave to look at a used car for his wife-he’d already put an ad in the paper to sell her new Infiniti. And in his office one afternoon, Peavy’s hunting rifles and handguns were laid out on a couch with price tags on them. His prized baseball memorabilia, stacked in boxes and marked with prices, filled the back third of the office. ” I’d sell my last Le Baron suit to the fattest man in town to prove I’m innocent,” he says.
It seems Peavy can’t get far enough away from his reputation. The other day, a black man walked up to Peavy while he was eating lunch at a cafe in Fort Worth.
“What’s your last name?” the man asked.
“Peavy.”
“I just knew it was, ” said the man. He walked away without incident, but Peavy had a lump in his throat. “You never know how they’re going to be.”
The widely publicized tape of Peavy’s conversation with a top DISD official has left the former school board member and longtime teacher branded as a racist, a name he’ll not likely lose. “The tape thing has been an amazing, amazing thing,” Peavy says, removing his glasses and wiping tears from his eyes. It’s also the thing that most shames him. “I’ll have to live with the tape situation. With the tapes, there ain’t no proving innocent.”
FOR SEVEN YEARS DAN PEAVY REIGNED AS THE most outspoken and most colorful trustee of the Dallas Independent School District. With his slicked-back hair, brightly patterned shirts the size of small tents, gold necklaces and a large pavé diamond ring, Peavy looked more like a Mafia don from Florida than a school board trustee from Dallas. He seemed to have a new car every couple of months, and at one point was seen driving a black Rolls-Royce around town. Peavy’s fancy cars were in marked contrast to the modest vehicles many public school teachers drive, remembers Gene Batiste, who taught history and English in the DISD until 1990. “When I think of Dan Peavy, the word that comes to mind is juxtaposition,” Batiste says. “He was a teacher, but he had such an ostentatious manner about him,” Even so. Batiste says, Peavy had the support of the teachers’ union when he ran for the school board. “He was a strong teacher advocate when teachers were not being compensated well. He was usually on our side.”
Friends and foes alike knew that Peavy, a self-described bubba, found it hard to finish a sentence that didn’t have a cuss word in it. “Dan had some real hard language and that included the entire gamut of racial comments,” says DISD board president Bill Keever, who was tHrust into the center of another maelstrom of racial controversy after members of the New Black Panther Party threatened to bring weapons to an April school board meeting. But many people overlooked Peavy’s foul language because it was usually laced with humor. Former board president Sandy Kress remembers Peavy as “a gruff bubba” who was “always laughing at himself.” “There are not a lot of people that can use as many nasty words as I can and not offend that many people,” Peavy says.
Still, Peavy earned a reputation early on as a racist. A state-appointed consultant who monitored the board’s interactions for a year and a half warned in 1992 that racial tensions were hampering the board’s effectiveness-and Peavy was often at the center of those disputes. The conflicts continued to escalate, and that same year, someone blasted the office door of Peavy’s construction company with a .357-cal-iber magnum-he was away at the time-and painted swastikas on a wail at his home. In 1993, a dozen black parents heckled Peavy during a board meeting because he and other white board members were seeking to put an end to the DISD’s 25-plus years of court-ordered desegregation, Black board members Kathlyn Gilliam and Yvonne Ewell walked out of another board meeting on the same topic, claiming Peavy and other white board members had not consulted them about the decision to move forward with unitary status. When D Magazine ran an illustration of Peavy dressed in a Ku Klux Klan robe in last years “Best and Worst” issue, Peavy handed out autographed photocopies to board members. A framed copy hangs on the wall in his office-not as a source of pride, he says, but as a way of thumbing his nose at his detractors.
John Wiley Price, who had demanded Peavy s resignation after the tape became public, was quick to note that the racial problems went far beyond Dan Peavy. “Peavy is just a tumor, a tip of the iceberg,” he told The Dallas Morning Hews in October, “We’re not Twilling to let them offer Peavy as a sacrificial pig.”
But Peavy says he has indeed beenmade a scapegoat by others who, although they do not use the same crude racial epithets, are guilty of under-the- table maneuverings to keep African- American board members from having power on the board. Assistant superin- tendent Joel Pittman was reassigned in June after Peavy identified him as the other person talking on the tape. The FBI has not officially identified Pittman as the other voice and Pittman has said that he is not. Peavy claims that other conversations make Pittman’s pale by comparison. Peavy’s attorney, Tom Mills, says 187 phone conversations-60 hours of tape-between Peavy and others were illegally recorded. In May, Charles Harman, a neighbor of Peavy’s involved in a bitter land dispute with him, admitted he intercepted some phone calls with a police scanner, though he has steadfastly denied that he recorded the tape that was sent last year to minority board members.
Those remaining tapes have many high-ranking officials within the DISD worried. “They are all sweating blood up there,” says Peavy, who declines to discuss specifics about the contents of the tapes or who else might be on them. He wilt say they include separate conversations with 35 different people-many of them current or former DISD officials. “I’m telling you, of the people that were on the tapes, all of them are one tape away from retiring from office if it were publicly displayed like mine.”
Bill Keever says he was so concerned about his own private conversations with Peavy that he phoned the U.S. Attorney’s Office months ago and asked il he had anything to worry about.
“I mean, I’m a Sunday school teacher,” Keever says. “I wouldn’t want to be on TV saying ’hell’ or ’damn,’ and have the kids hear that. But with 186 conversations on tape, you never know what might be on there.” Keever says the U.S. Attorney’s Office has assured him he has nothing to worry about. “I don’t talk like that anyway.”
In June, a secret intervenor in Peavy’s criminal case filed a motion to prevent any more of the tapes from being made public. The motion was filed by a lawyer at Akin, Gump, Strauss, Hauer & Feld, the law firm that employs former school board president Sandy Kress as a partner. Kress declined to discuss the matter for this story, but D Magazine has learned that Kress is indeed the secret intervener. Sources say Kress, who was chairman of the Dallas County Democratic Party from 1986 to 1990, is terribly worried that tapes of his conversations with Peavy will be made public.
FOR MORE THAN A CENTURY, THE PEAVY NAME HAS BEEN ONE OF the most respected in East Dallas. In the mid-1890s, Dan Peavy’s grandfather, Carver David Peavy, settled on land northeast of White Rock Lake. He married the daughter of a pioneer family, Laura Louise Chenault, and had three children, Katherine, Audrey and John. Carver Peavy prospered as a farmer and stockman, and by the turn of the century, owned one of the largest ranches in Dallas County. A trustee of the Richardson school district for 20 years, Peavy donated much of his land to the city to build roads, including Buclcner Boulevard, Ferguson Road, Peavy Road and Oates Drive. The neighborhood around their farm later became the Casa Linda section of East Dallas.
Ironically, Dan Peavy, inheritor of a name that was synonymous with East Dallas and civic duty, was adopted by John and Inez Peavy when he was an infant. And, contrary to what many have long thought, the family was not rich. Steve Scott, who went to Bryan Adams High School with Dan, says everyone believed the Peavys were wealthy, an assumption Dan enjoyed. “He didn’t discourage that,” remembers Scott. But by 1959 when Dan’s grandmother, Laura Peavy, died. Carver Peavy’s once-massive estate had dwindled to about S327.0O0, which was divided equally among her three children. The inheritance left them comfortable, but far from rich. When people asked Dan what it was like to grow up on a street named after his family, he gave them a modest response: “You can take my name and 75 cents and all it’ll get you is a cup of coffee at Denny’s.”
Dan Peavy never tried to hide the fact that he was adopted-most of his friends knew it and he says he felt honored his parents chose him. “I always felt like a Peavy,” he says. Pudgy but not yet overweight, young Danny wore clunky black-framed glasses and played in the band. He also possessed a glorious baritone voice and sang in high school musicals. In 1965, his senior year, Dan would break into his favorite song, “Moon River,” at every assembly. After receiving a scholarship to study music at what was then North Texas State University, he performed with the Santa Fe Opera and even shared a stage with Beverly Sills in a Fort Worth Opera production of Lucia. After graduation, he spent a year as a soloist with the Fort Worth Symphony.
At the age of 22, Peavy married Jan Ellerd, a piano player he met in church. “I was a singer and she was a piano player. I thought, ’God, I’m gonna need to marry this girl or I’m not going to have anybody to play for me,’ ” Peavy says. In 1969, Peavy was hired to teach chorus at Thomas Edison Junior High School, a job he wasn’t convinced he’d like at first. To his surprise, he loved teaching. Their first child, Amy, was born in 1972 and a son, Adam, in 1974, Peavy dedicated himself to teaching chorus-to the exclusion, he admits, of his wife. He went back to school, earning a master’s in music in 1975, and in 1977 he became the choral director at Skyline High School. In 1980, after Peavy’s mother died, he moved his family into the homestead on Peavy Road, valued in 1980 at $90,000. Dallas County probate records show that Peavy inherited an estate worth about $140,000 from his mother.
But a month later, Jan filed for divorce, citing irreconcilable differences. In the divorce petition, Jan painted her husband as a man obsessed with the Peavy name and his inheritance: “The marriage failed because I was compelled to take second place at all times in order that my husband’s parents would think more of him; and he wanted it this way to protect his inheritance..,.I felt I was used during our marriage to insure his inheritance.. ..Once he had his inheritance, he became dictatorial to a degree that life was impossible.” She claims he gave her only enough money for food and necessities, and that anything outside of that she earned from playing the church organ on Sundays. “He made my life miserable and I was poor all the time, while he enjoyed a fortune from his inheritance.”
Peavy, who says that he married too young, acknowledges that his workaholic lifestyle played a part in the demise of the marriage, but denies that he was worried about his inheritance. “Being an only child, there was not anything for me to worry about,” he says.
Their divorce was final in December 1981. As a settlement, Peavy gave Jan $42,000 in cash, the wedding crystal and china and assorted furniture. According to divorce records, Peavy’s own estate in February 1981 was valued at about $200,000, including a Texaco station on the corner of Ferguson Road and Oates Drive, which he inherited from his father.
In 1983Dan Peavy remarried. Soon after his marriage to Sally Moore, a petite woman with shoulder-length dark hair and a bubbly Texas accent, Peavy’s two children moved in with the couple. In 1987, preparing to retire from teaching, Peavy started a contracting company, Z-Best Builders, which he later named Peavy Construction to take advantage of his name recognition. When he retired in 1988 after 19 years of teaching, Peavy worked with the construction company full time and dabbled in what would become a string of businesses over the years, including a limousine company and a landscaping business.
In 1988. at the urging of some Kiwanis Club of White Rock buddies who met on Saturday mornings for breakfast at Barbec’s, an East Dallas landmark on Garland Road, Peavy decided to run for a seat on the school board. Running on name recognition and $4,000 of his own money, he beat out First RcpublicBank vice president Merrie Spaeth for the District 3 seat, which represents Lakewood, the White Rock Lake area and parts of East Dallas. Spaeth, who was encouraged to run by the Dallas Breakfast Group, received backing from some of the city’s most powerful business leaders, including the late Johnny Johnson of the law firm Johnson and Swanson, former mayor Jack Evans and millionaire oilman Ray Hunt. “Dan had a terrible reputation for saying things about blacks, ” says Spaeth. “Johnny Johnson told me that [Peavy’s] statements and attitudes, if he won, would inflame Dallas.”
Including campaign donations and a line of credit with RepublicBank, Spaeth spent $40,000-more money than any previous DISD board candidate had spent. But she couldn’t overcome the strength of the Peavy name among East Dallas voters. Spaeth lost by a margin of almost 2,000 votes.
WHEN PEAVY JOINED THE SCHOOL BOARD, THE DISD’S BUSIness office was in shambles, says former trustee Ed Grant, who was elected to the board in 1990. The board’s operating account had $12 million in it, but the monthly bills ran about $40 million to $50 million, he says. Peavy and Grant urged superintendent Marvin Edwards to promote a bright young black man named Matthew Harden to manage the business office.
Though he still speaks fondly of Harden, it wasn’t long before Peavy ran afoul of the board’s black members. Hoping to build a coalition :hat could force dramatic change in the district, Ed Grant invited board members Peavy, Sandy Kress, Rene Castilla and Trini Garza to meet him at The Kettle restaurant on North Central Expressway [now Cafe Brazil]. Peavy was the only one who came. But Grant persisted and the five began to meet regularly for breakfast.
Although African-American board members charged that the breakfasts violated the Texas Open Meetings Act, the five men kept meeting anyway, unchecked by DISD administrators. “They were more [gatherings] of a mutual admiration society,” than substantive meetings, Grant says. But Grant admits chat he and Peavy wanted to make radical changes in the way school district finances were handled, and the breakfasts were a way to assure they had a voting bloc. Grant says the first step in accomplishing their goals included electing Castilla, who had been on the board since 1987, as board president. But when the time came to cast votes in 1990, Peavy voted for board member Mary Rutledge and Castilla lost. Grant says he never really trusted Peavy after that.
The following year, Castilla was elected president and the white and Hispanic men quickly became a powerful voting bloc. According to Grant, Castilla, like others in the group, was unhappy with the way Edwards ran the district. “I liked the guy, but he was a typical administrator,” Grant says. “They’ve got their own agenda.” The district had gone through a succession of tax increases under Edwards and administrators were wasting money, Grant says. ” If I had to point a finger at who was responsible, I would point it at the administrators, at Edwards,” Grant says.
The final straw for Edwards, says Grant, came at the end of the 1992 fiscal year when the superintendent arrived at a budget meeting with a plan for the following year that included laying off some teachers and raising taxes-two things the board had specifically ordered him not to do. Peavy, Castilla, Kress and Grant met periodically throughout the ’92-’93 school year and discussed the problems with Edwards. “It was an ongoing topic,” says Grant. Then, sometime in late spring of ’93, Castilla met privately with Edwards and gave him an ultimatum- resign or the board would fire him. Edwards resigned that summer to become superintendent of a small Illinois school district. The public was never the wiser, says Grant.
Peavy won’t discuss Edwards’ departure, other than to say he liked the man and to acknowledge that he was in the meeting where it was decided Edwards would be told to leave. There was no outcry from black administrators, Grant says, because it appeared that the superintendent had decided on his own to leave. “You have to understand,” says Grant, “the way it was handled-he found another job-no one knew, until now, that he was asked to leave.”
Bolstered by their victory, Peavy, Kress, Castilia. Garza and Grant met shortly after Edwards’ résignation at Jericho’s Restaurant & Sports Pub on Central Expressway. It was there that Peavy coined the term “Slam Dunk Gang” for the group-a cocky moniker that presaged their domination of the board. That afternoon, Peavy had five brown plastic tie tacks made with the acronym “SDG” embossed in gold letters on them.
Bene Castilla knew that Dan Peavy owned his own con-trading firm and appeared to have the kind of business acumen the board needed, so he appointed Peavy chairman of the board’s Business Committee in 1992. Besides, since Peavy gave the appearance of being wealthy, they assumed he would have enough time for the job. According to Peavy, he quickly made himself indispensable; Peavy says that Matthew Harden, executive manager over budget, finance and planning, consulted him on almost every contract and land purchase the district made until Peavy’s resignation last year. Harden did not return phone calls from D Magazine seeking comment.
Castilla says Peavy was tough when it came to getting the best deal tor the district, whether the issue was purchasing land or buying milk. “Dan wanted to see the school district be more aggressive. He was not an advocate of raising taxes. ” The district was wasting millions of dollars when Peavy joined the board, says Castilla, but Peavy put a stop to it. “He asked tough questions. He did his homework.” Peavy encouraged the board to switch from Schepps Dairy, which had sold milk to the district’s schools lor years, to a smaller distributor that said it could provide the same quantity of milk at a cheaper price. It was a bold move on Peavy’s part, because Schepps had long been a major sponsor of school programs. He also demanded the district quit paying premium prices for carpeting and furniture for the administration.
In the end, the vendors knew they had to deal with Peavy, says board secretary Bob Johnston.
“Dan played an important role from the standpoint of what we call Peavyizing contracts,” says Johnston. “It became a verb.” First, he says, administrative staff worked with prospective vendors for the district on contracts for services or the purchase of property. Then Peavy would be called in. “[Administration] would take it as far as it could go, then Dan would come in and join the negotiations. He’d come in and kick the shit out of them. That’s what we call
Peavyizing,” Johnston says.
At times, Peavy would even meet with vendors alone when other representatives from the school district failed to show up for a meeting. Was Peavy crossing some legal or ethical line? The Texas Education Code defines the role of a trustee as a policy maker, not a contract negotiator, but the laws are so vague that no one ever challenged Peavy. According to Chapter 11 of die code, board members do not have the authority, acting as individuals, to close deals for the district, but Johnston says vendors knew Peavy had the backing of the “Slam Dunk Gang.”
“While it is not appropriate for him to be doing that sort of thing,”
admits Johnston, “he did it when the vendor came to the table because [the vendor] knew [Peavy] had four other votes behind him.”
Peavy negotiated hundreds of contracts, sometimes without the involvement of any DISD administrators-contracts Peavy says saved the distria millions of dollars. “I had a major amount of power,” he says. Ed Grant says he and Rene Castilla also met with vendors and negotiated contracts. “We saw so much ineptness on the part of administration that we developed the attitude that, well, if you can’t do it, we will,” Grant says. Castilla denies that he negotiated any contracts.
The increasingly brazen tactics of die Slam Dunk Gang angered critics. Castilla says he remembers one board meeting when black board member Thomas Jones stood up to argue his side of an issue. ” I know this is a slam-dunk deal, but..,,” the man began. Before he could finish, Peavy made a motion with his hands like he was sinking a basketball into a net.
As the Slam Dunk Gang continued its housecleaning, the members focused their attention on the district’s insurance policies. Premiums for life and disability insurance, which for 30 years had been provided by Great American Reserve Insurance Company, were too high, says Rene Castilla. “We had employees who didn’t have insurance at ail. We needed to do something.” Castilla told Peavy to look into the matter and appointed him the chairman of an ad hoc insurance committee which included trustees Grant and Yvonne Ewell. Ed Grant says he warned Castilla early on about allowing Peavy to negotiate insurance contracts. “I was uncomfortable with the way things were proceeding,” Grant says. “I didn’t feel like any vendor should have an inside track to DISD business,” Grant says he did not have any specific knowledge of conflicts of interest between Peavy and any insurance companies, but says he “went on his sixth sense” that something was wrong. When Castilla ignored his concerns, Grant says, he refused to attend insurance committee meetings.
Tacitly, at least, DISD administrators allowed Peavy free rein when it came to handling the insurance matter for the district-with disastrous consequences. According to the federal indictment handed down in May, Peavy received $459,000 in kickbacks from an insurance consultant, Gene Oliver, who sold disability and term life insurance policies to the school district in 1993. Peavy says the money was paid as a consulting fee by Oliver, who had hired him to drum up business. According to the indictment, Peavy gave Oliver a letter in December 1992, identifying Oliver as official agent of record for the district. In January, Peavy and Oliver met with a representative of Washington National Life Insurance Company; Oliver later provided the insurance company with a computer disk containing census data on DISD employees, information that hadn’t yet been released to the public and allegedly gave Oliver an advantage over competing insurance agents.
In court documents pertaining to a civil suit Peavy filed last September against Great American, John Crook, a representative of the company, testified that when he learned in early March 1993 that the DISD would not be renewing its contract with Great American, he wrote a letter to Matthew Harden objecting to the decision. Crook claimed that another consultant Peavy had hired, Jerry Guy of Tyler, had misrepresented the company’s rates and caused them to lose the DISD contract.
On March 9, Crook attended the board’s insurance committee hearing, hoping to make his objections public. According to Crook’s testimony, board secretary Bob Johnston attempted to let Castilla know four times that Crook needed to address the board, but Crook says Castilla refused to acknowledge him. At a full board meeting held later that night, Crook was finally allowed to speak, to no avail. Based on Peavy’s recommendations, the board unanimously voted to go with Washington National Life Insurance Company for long-term disability and Blue Cross and Blue Shield of Texas on a contract for term life insurance.
Castilla defends Peavy’s handling of the insurance bids. “From what I saw. the [Washington National] policy was the best we ever had.” Castilla says there were ample checks and balances in place to prevent Peavy from benefiting from the insurance award and insists that no trustee, including Peavy, had the power to negotiate contracts. Bids are ought by the administration, he says, then brought in a package to the trustees, who discuss and vote on it.
Crook testified in a deposition taken in the case that he never received i response to his letter to DISD’s Harden, but received a letter from Jerry Guy, denying any bias, two weeks after the district awarded the 3id. In September 1994, an attorney for Great American Reserve, 3eorge Katosic, sent Sandy Kress a letter revealing that Oliver was a convicted felon, who had served prison time for being an accomplice to commit murder with malice (a charge later overturned on a technicality. ) Katosic wanted to know why Peavy handled the insurance matter when h was the responsibility of the administration. And in a foreshadowing of things to come, he also questioned whether Peavy had a business relationship with Guy and Oliver. Kress, through DISD attorney Dennis Eichelbaum, fired off a letter to the insurance agent threatening him with a libel suit and dismissing the allegations.
“I was not hiding a thing,” Peavy tells me. “That [insurance] plan saved the taxpayers $6 million and saved the teachers 22 percent on their insurance.”
Peavy has maintained his innocence all along, and says he will be exonerated when he goes to trial in November.
ABOUT THE TIME HE WAS NEGOTIATING THE MULTIMILLION-DOL-lar insurance deal for the DISD, Peavy had fallen deeply into debt. Between 1991 and 1992, Peavy owed four judgments totalling more than $117,000 against him and his company. Byron Lee, who worked for Peavy selling remodeling contracts on commission between 1989 and 1991, quit after Peavy began to have trouble paying his bills. In May 1991, Peavy, who said he was short of cash, borrowed $ 10,000 from Lee, Lee filed suit against Peavy in June 1992, when Peavy allegedly failed to pay him back the money as well as thousands of dollars in commissions. According to the agreed judgment filed in the case, Peavy agreed to pay $39,380 in damages, attorneys fees, court costs and interest. As of August, Lee said, he had not been paid any of the money.
Other financial problems stemmed from complaints about the quality of work Peavy’s company performed. Larry Nichter says the work Peavy did on his roof in 1989 was so bad that it leaked and caused $5,000 worth of damage. Nichter sued, and Peavy agreed to pay the damages in $200-per-month installments. But when Peavy failed to pay the first installment, Nichter filed suit again, this time winning a $20,000 judgment against Peavy in December 1991. Nichter, too, says he has never received any of the money awarded him.
And Comerica Bank-Texas won a summary judgment against Peavy in October 1991, dissolving a trust that Peavy had set up under his son Adam’s name. In its motion for summary judgment, Comerica alleged that Peavy committed fraud by hiding his assets in a trust he created a few months after the bank filed suit to collect on a $46,942 note. In court documents, Peavy explained the transfer of assets this way: “During 1990,1 had gained an enormous amount of weight. I got up to I85 pounds. The doctor warned me of the weight problem and said for me to get and keep my affairs in order. I felt it best at that time to set up a trust in order to perpetuate the family name through my only son. The Peavy name is important to me.”
During this time, longtime DISD critic Don Venable, who had sued the district in the fall of 1991, claiming it had misused bond money from a 1985 construction program, was desperately trying to find out Peavy’s assets, since he was a defendant in the case. In part because of his fancy cars-everything from a cream-colored Jaguar to a $30,000 truck, Venable says, many assumed Peavy was loaded. In fact, says Sandy Kress, Peavy was earning money by buying and selling cars.
“Dan said he’d go to jail before he’d disclose [his assets],” Venable remembers. “Looking back, I can see it was a signal that something was wrong. Now I wonder if he was afraid people would find out he was broke.”
In July 1995, Channel 8 investigative reporter Robert Riggs broke a story about Peavy’s business connections to Gene Oliver, the insurance consultant. In a taped interview, Peavy denied being in business with Oliver, but in a separate interview, Oliver admitted that Peavy was acting as a consultant for him. When I asked Peavy about this apparent lie, he argued that Riggs simply hadn’t asked him the right question. “I had a consulting company that did business with Oliver, but, no, technically, I wasn’t in business with him.”
Six days after the Channel 8 reports, Peavy filed a disclosure with the school district, saying “there has been no formal relationship to date between myself and Mr. Oliver. I believe, in the future, there may be, I may work as a consultant with Mr, Oliver’s company. “
Peavy tells me he had already informed both Sandy Kress and Bill Keever about his consulting work with Oliver. Kress says Channel 8 s inquiries into the insurance deal, which had begun in early 1995, caused him to advise Peavy to disclose any business dealings he might have with anyone who did business with the district.
“I didn’t even know about Oliver then,” Kress says. “[Peavy] kept indicating to me that he did not have any” conflicts of interest. Then in June 1995, spurred by the questions that Channel 8 was asking, the district hired outside attorneys Ted Steinke and Royce West to conduct an internal investigation into the matter. In August, the FBI and U.S. Attorney’s Office launched another criminal investigation.
The internal investigation, released in October 1995, found that Guy had double-billed the district for more than $5,000, but unearthed no evidence that Peavy had anything but a friendly relationship with Oliver-exactly what Peavy needed to declare himself innocent. Steinke and West, however, expressed concern about Peavy’s assertion in his July 1995 “Disclosure Statement” that “there was no business relationship between the two, [when] he and Oliver in fact had a documented business relationship dating back to Feb. 1, 1994….The fact that he would urge the award of the contract without disclosing the existence of the consulting agreement is a matter which we believe needs to be more fully examined by an outside agency.”
In May 1996, a federal grand jury indicted Peavy on 42 counts of bribery, extortion, money laundering and tax fraud stemming from insurance sales to the district. The indictment says Oliver made 90 payments to Peavy between November 1993 and December 1995, totaling more than $459,000. The indictment alleges Oliver made the payments to a company he owned, which in turn made payments to a company Peavy owned. Peavy says Oliver was simply repaying a loan to a business acquaintance and that Oliver and the businessman also rented property from Peavy. The payments to Peavy were money the men owed him for rent, Peavy says. Court documents show that Peavy passed a privately-administered polygraph in April with flying colors, which Peavy says proves his innocence.
ON SEPT. 28, ABOUT AN HOUR and a half before the monthly school board meeting was to begin, Peavy got a call at borne from BobJohnston.Johnston’s voice was troubled. Three minority board members- Kathlyn Gilliam, Yvonne Ewell and Jose Plata-had received audio tapes by UPS earlier that afternoon containing phone conversations between Peavy and an unidentified man.
“I don’t think I’d come down here if I were you,” Johnston warned. Johnston, who had known Peavy for 20 years, had just seen a transcript of the tape and read parts of it to him. It was so bad that even Peavy was horrified. He had not only insulted several board members by name, calling Bill Keever a “f-g kid,” but had called black school children “mother-f-g ignorant god-damned little niggers” with “chicken shit parents.” Understandably, Peavy skipped the board meeting that night.
While it was no secret around DISD headquarters that Peavy often used profanity, his plain talk and direct manner had made many blacks, both on and outside of the board, feel they could trust him, even if they didn’t always like him. But few, if any, blacks in the district had ever heard Peavy make racist comments. Until now. At the board meeting that night, after some board business had been done and the Maurine F. Bailey Choir from Lincoln High School finished singing, trustee Yvonne Ewell began reading a transcript of the tape to a stunned audience. Board president Sandy Kress, who could have stopped the reading, did not.
“Had I known those were illegally obtained conversations, I would have stopped it. But had I tried to stop them, I suspect that would have caused a disruption in the room. I’m sorry that Dan is hurt by the reading.”
Peavy learned at 10 o’clock that night that the whole ugly mess had been read into the record. He was humiliated. “I didn’t like what I heard on the tapes either,” he says. But Peavy maintains his comments weren’t racist because they were made in private. “I wasn’t really calling anybody particularly a nigger. I was talking about some niggers here and some niggers there. I wasn’t using the term to anybody’s face-it was a private conversation. It should have never been for public consumption.”
By the next day, Peavy was under siege: Reporters and photographers were waiting for him in his yard; news helicopters circled above his house; Peavy got calls about his taped comments from papers all over the country. School board trustees and community leaders such as Dallas County Commissioner John Wiley Price, the Rev. Zan Holmes, the Jewish Community Relations Council, the Anti-Defamation League and the Dallas Gay and Lesbian Alliance, called for Peavy’s resignation.
Literally overnight, Dan Peavy had become a symbol for racism in Dallas.
The Peavy tape immediately reignited a smoldering race war on the board. Bill Keever, then a trustee, was quoted in The Dallas Morning News accusing black board members and the federal court system of creating a racist environment, that has caused standards at the DISD to be lowered. He cited racial guidelines that he said dictated racial quotas for children who are placed in gifted education programs. John Wiley Price told The News that Peavy was only the most obvious example of widespread racism in the school district.
Two days after the tape was made public, a grim-faced Dan Peavy apologized to the public, his voice quavering. “It’s hard for Bubba to say this. I grew up in a different era and people said things then that are not acceptable today,” When the conference ended, Peavy walked to a back room and collapsed into uncontrollable sobs, says a DISD employee. Although Peavy had at first vowed not to resign, a week later he faxed his resignation to the school district.
While no current minority board members would discuss their feelings about Peavy, Rene Castilla says he doesn’t think Peavy is a racist. “He’s been portrayed as a vile man. He’s not. He’s a good man. The outrage is not what Dan Peavy said, but how it was obtained,” Castilla says. “Peavy s language [on the tape] was obtained illegally and that’s what people should be outraged about.”
DAN PEAVY WAS IN THE HABIT OF RETURNING VOICE MAIL MESsages every night after work from the portable phone in his bedroom. Unknown to Peavy at the time, a neighbor, Charles Barman, was busy listening to many of those conversations on a police scanner. Harman taped more than 60 hours of Peavy s conversations in 1995. According to sources who have heard the tapes, at least one of those conversations confirms that . J) Sandy Kress, as board president, continued the Slam Dunk Gang’s exclusion of the African-American board members. “It’s not the kind of talk meant to be published,” says a DISD official who has spoken with Kress about the tapes and requested anonymity. “He’s very worried.”
Who sent the tapes that undid Dan Peavy? The mystery may not be explained until Peavy s trial, if then. Peavy’s lawyer, Tom Mills, says he and Peavy believe that Charles Harman made the racially charged tape and worked with two other people to make it public. But Harman, who has admitted taping several months of Peavy’s calls, has repeatedly denied making the tape laced with racial slurs that became public, After months of concern that he might be prosecuted for the felony charge of wiretapping, Harman pled guilty in August to unlawfully intercepting only one of Peavy’s cellular calls-an infraction that is less serious than a misdemeanor and carries a maximum flne of $5,000. The plea agreement prevents Harman from being further prosecuted and requires him to cooperate with the government in their criminal case against Peavy.
Meanwhile, Peavy is busy with a number of civil lawsuits. Last February, Peavy sued the Dallas Observer for reprinting a transcript of the tape that led to his resignation, which was obtained by the weekly paper under the Texas Open Records Act. But Peavy charges that the tape was obtained illegally and the paper violated his privacy by reprinting it. In May, Peavy filed a lawsuit against Charles and Wilma Harman, also claiming invasion of privacy. Peavy’s wife Sally filed a lawsuit of her own in July against the Harmans, because she is embarrassed they taped her private conversations with friends that ended up in the hands of the FBI. The suits are still pending.
AT HOME ONE SATURDAY MORNING, SALLY PEAVY LUGS IN TWO big scrapbooks filled with news clippings about her husband. The books make a solid thud when she places them on the grand piano. She’s been collecting stories about Dan ever since he entered public office. Unfortunately, she says, most of the stories are about the scandal. “This has cast a shadow over our lives,” she says. Peavy’s son Adam, a senior at SMU, is thinking about entering law school, he says, because of the legal troubles his father has had. Daughter Amy Peavy, who lives with her mother in Addison, stands behind her father. “He’s got his faults and he’s a big talker-he says things he shouldn’t say-but I wouldn’t trade him for the world.”
“I’ve learned a lot from this,” Peavy told me. “There are some mistakes that I made-and we’re all making them, we just don’t realize it. I’ve noticed since I left the board things haven’t quieted down any, so I guess all the problems weren’t mine. There is a big problem here, but nobody my color wants to admit it.”
Even Bubba can change, he says. “I don’t think anybody that would have lived in my moccasins for 49 years wouldn’t have some bit of racism. Bu 11 understand it a lot more because of what I’ve gone through in the last year and how people treat me as a result,” People used to call him all the time when he was on the board, he says, asking his advice or asking for favors. Few people call him at all now, even old friends. Peavy removes his glasses and wipes away tears. “It’s made me redefine the word friendship.”
Peavy says he tried to call Matthew Harden several times after the tape became public, but Harden never called him back. “Matthew is probably the one that hurt me the most. We had a mutual respect for each other. I hated to see that go in one tape.” Peavy says he has not talked to Sandy Kress either since the tapes became public. He says Kress left a message at his home around Christmas, but Peavy didn’t return the call. “I didn’t know what to say.”
He knows there will always be people who believe he’s a racist. ” Some people might say if Dan can call someone a nigger, he’s racist. For those that want to look at it from that perspective, then they’re just going to have to believe that I’m a racist.”
Peavy says if he had it to do all over again, he wouldn’t have joined forces with the Slam Dunk Gang, which excluded black trustees, in order to assure that votes went his way. “I really thought we needed to bloc-vote in order to move a particular agenda or reform. But if reform is going to move, it’s going to have to take the volunteer efforts of all the people, not just the few that want to vote it in.”
Peavy now says it was a mistake to resign under a cloud. “I wish I hadn’t resigned now,” he says. “I did the right thing for my family, hut it was the wrong thing for the community. ” He wishes he had gutted it up, stayed on the board, and worked through things, he says. Peavy says he got dozens of letters from white leaders urging him to step down for the good of the city. “I’m not real damn sure it was the best thing for the city. I noticed this-since I left, I haven’t noticed things quieting down any.”
Nor is Peavy the only one who has fallen victim to racial tensions on the board. In August, superintendent Chad Woolery abruptly resigned just days before school was to begin, to go to work for a private company. Woolery declined to comment for this story, but Bill Keever says race problems within the district and the city drove Woolery out. “Chad left because he said, ’to hell with this, folks, I’ve had enough.’ ” Keever, who has a three-year term to finish, says his own days are numbered on the board. (See related story in Inside Dallas on page 9.)
For Dan Peavy, the events of the last year have been humbling. Some chance for redemption may finally come at his trial in November, if he is found innocent of the charges against him. Until then, somesay Peavy is savoring the power he thinks he lords over Sandy Kress and other officials whose voices are on the infamous tapes. According to one DISD official, Peavy resents the fact that Kress and others trusted him to do business negotiations for the district and, now that he’s in trouble, have abandoned him. “Kress never came to his rescue. He’s bitter about that. “
To make ends meet, Peavy has gone back into the contracting business, buying up run-down houses in poor neighborhoods, renovating them, and selling them for a profit. Ironically, he points out, most of the houses he buys are in black neighborhoods. He works well with most of the blacks in the area, he says, and suggests I talk with one of them, Robert Page, a 70-year-old man who lives near several of the homes Peavy’s company has renovated.
“I like him just fine,” Page says.
Has he heard about the racist comments Peavy made on the tape?
“Oh yeah. I know what he said. That does not bother me.”
When I ask him why not, Page laughs good-naturedly.
“I figure they’re all like that. They just haven’t been caught yet.”
