IN THE FALL OF 1997, RUMORS SWIRLED THAT MATTHEW Harden’s expensive home in DeSoto had been built with brick that matched that of Townview High School. Trustee Lois Parrott says she confronted Harden about that allegation and others after a board meeting. “That’s just a coincidence,” Harden told her, according to Parrott.
Documents obtained from the homebuilder do not indicate any wrongdoing regarding the brick but do raise questions of how Harden financed the many “upgrades” he demanded.
On the same day in March 1994, Harden and his best friend, Michael Henderson, began building massive houses next-door to each other. For $75,000, they bought three lots on a street called Place Louie in Thomtree Estates, split the plot of land into two larger lots, and signed contracts with Aspen Homes to build their dream homes.
Henderson sold his first home on Shady Hollow to an employee in the maintenance department named Lonnie Wiggins. Harden says this is the first home he ever owned.
Henderson’s new home was 4,385 square feet and cost $271,320. Harden’s was even larger, with 5,191 square feet, two fireplaces, and three-and-a-half baths. He signed a deal to build a $356,352 house, but later, upgrades totaling $3 i ,236-including the addition of a safe, a bonus room, skylights, prewired stereo speakers, a bookcase in the study-brought the cost to $387,588.
Harden obtained a mortgage for $348,000-a hefty debt for his salary at the time, which was $90,000 a year. He was paying about $500 a month on his 1987 Mercedes. Harden says he had no debt and got a favorable variable mortgage; his mortgage payments began at $ 1.800 a month and are now $2,400, (Despite his reputation as a stickler for rules, in papers to obtain a mortgage. Harden stated that he had no dependents and made no support payments.)
The numerous change orders, plus Harden’s procrastination on making decisions, dragged construction out for more than 15 months. Harden exchanged terse letters with builder Rich Farrell about the delays. Farrell responded that he needed payment for S20.000 in change orders before he could complete certain work.
On Oct. 4, 1994, Harden gave Farrell $9,900 in cash. The next day. Harden paid him another $9,900 in cash. A week later, Harden gave the builder the final $200 in cash. The builder deposited the cash and documented it. According to a source close to the investigation, after hearing about Harden on the news in fall of 1996, the builder went to the FBI, concerned that the unusual cash payments were structured to skirt 1RS rules requiring that cash transactions larger than $10,000 be reported.
There’s nothing illegal about paying cash, but the 1RS rules were implemented to catch drug dealers and others who deal in large sums of cash. (Cash is often used to buy what federal agents call “bolt-ons,” additions and upgrades to homes, such as security systems and media rooms.) Harden claims he didn’t know about the reporting laws-hard to believe from the CFO of DISD-and has offered various explanations. On Dec. 31, Harden said the cash was a loan from a relative, whom he declined to name. Harden later said one payment wasn’t cash, but a cashier’s check bought with money from his checking account. (The builder told a reporter the money was in $100 bills.)
People at district headquarters knew Harden and Henderson were building houses next-door to each other. Peavy says that during 1994 and 1995,Harden didn’t seem to be in his office very much. When Peavy asked Harden’s secretary, she would usually say he was at the house.
On Jan. 30, 1997, both Harden and Henderson were sued by the Dallas County Tax Assessor for unpaid property taxes from 1995-including their DISD taxes-on their DeSoto houses. Harden says that he assumed the builder had paid the taxes, which with penalties and interest had mounted to $6,109.67. The taxes were paid and the suits dismissed on Aug. 4, 1997, only days before Gonzalez put a tracking device on Harden’s car.