The public corruption scandal that toppled a 172-year-old Dallas bureaucracy and cost local taxpayers over $100 million dollars has brought down another crooked official.
Former Dallas County Schools board president Larry Duncan pleaded guilty Monday to one count of federal tax evasion and faces up to a year in prison. Four others involved in the now-shuttered school bus agency’s money-laundering conspiracy have already pleaded guilty and face prison time as well, including ex-Dallas Mayor Pro Tem Dwaine Caraway and former DCS Superintendent Rick Sorrells.
Duncan, who led the DCS board for 12 years, admitted he spent the “vast majority” of campaign contributions from an agency vendor “for his personal benefit.”
Between 2012 and 2016, Duncan received $245,000 in contributions directly or indirectly from Robert Leonard, head of Louisiana-based school-bus camera vendor Force Multiplier Solutions. During that time, DCS awarded Force Multiplier $70 million in camera-related contracts. Duncan also funneled contributions from Leonard to local candidates including some current Dallas City Council members.
Duncan told NBC 5 in early 2017 that every penny was “legal, honest, open, and ethical… and I will not stand for my reputation being questioned.”
Court documents filed October 22 show Duncan spent $185,000 of the money from Leonard on personal expenses, including cash withdrawals and transfers to himself and his wife, and failed to report it as personal income.
“It’s especially troubling when someone once entrusted with public office tries to pervert that system and leaves the citizens of Dallas to clean up the damage,” said U.S. Attorney Erin Nealy Cox at a press conference announcing Duncan’s guilty plea. “Perhaps Mr. Duncan underestimated our commitment to exposing his public corruption. Perhaps others have as well. But that would be a mistake.”
Duncan’s sentencing is set for March 8, 2019. The charge carries a penalty of up to five years in prison and a $250,000 fine. As part of his plea deal, Duncan agreed to serve up to one year in prison and reimburse the federal government for its tax loss.
Duncan, a Democrat, was first elected to the DCS board in 2003. The agency didn’t operate any schools but used its countywide taxing authority to subsidize school bus transportation services to some school districts in the county. Duncan presided over the board from 2005 until May 2017, when questions about the camera vendor’s contributions, along with financial and safety scandals swirling around the agency, forced him to step down as president. Duncan resigned from the board in October 2017, just before voters elected to abolish the agency.
Prior to joining DCS, Duncan served on Dallas City Council in the District 4 seat; this seat was later held by Caraway, also a Democrat, who confessed to accepting bribes from Leonard in the multi-year money laundering conspiracy involving DCS. Caraway pleaded guilty in August to federal corruption charges and resigned his city council seat.
Leonard pleaded guilty in August to paying $450,000 to Caraway and $3 million in bribes and kickbacks to former DCS Superintendent Rick Sorrells, in exchange for facilitating a school-bus camera ticketing scheme and $70 million in related contracts with Force Multiplier. The failed camera scheme brought DCS to the brink of financial collapse, leaving Dallas County taxpayers on the hook for over $100 million in debt.
Caraway and Leonard are scheduled to be sentenced December 14. Caraway faces up to seven years in federal prison; Leonard could serve up to 10 years.
Sorrells pleaded guilty in April to one federal conspiracy count in return for a maximum 10-year prison sentence and forfeiture of his ill-gotten gains. Like Duncan and Caraway, Sorrells continually lied to the public, claiming the agency was sound and he’d done nothing wrong. Duncan and the DCS board allowed Sorrells to retire last March rather than be forced out in disgrace.
Leonard associate and conspiracy middleman Slater Swartwood, Sr. was the first indicted on criminal charges in the DCS case. Swartwood pleaded guilty to one federal money laundering count in exchange for providing prosecutors information about his co-conspirators.
Dallas County residents voted last November to shut down the corrupt agency after State Sen. Don Huffines (R–Dallas) led the fight for legislation to abolish DCS. Huffines said in a statement celebrating the latest guilty plea that he worked hard to build bipartisan coalitions in the Texas Legislature and at home in Dallas to take down government corruption:
“Four years ago, I campaigned as a watchdog for taxpayers and an outsider who would take on politics as usual and stand against corrupt politicians and bureaucrats. I continue to deliver on that promise. This government corruption scandal is the largest in Dallas County history and it cost taxpayers millions. I shut it down, and the victory continues to ring today as more crooked politicians are brought to justice for ripping off taxpayers.”
DCS officially closed on July 31, but the dissolution committee tasked with winding down the agency and paying off its debt filed a civil racketeering lawsuit; the lawsuit seeks to recoup taxpayer money that was illegally siphoned to corrupt officials and others involved in the conspiracy. The lawsuit names Duncan, Caraway, Sorrells, Leonard, and Swartwood, along with Force Multiplier and other companies used to transfer money. Under federal racketeering statutes, plaintiffs can recover triple damages. The committee estimates racketeers bilked $125 million from DCS taxpayers.
Federal prosecutors aren’t done with the case either.
“The FBI remains committed to investigating anyone associated with the financial exploitation at Dallas County Schools,” said Eric K. Jackson, Special Agent-In-Charge of the FBI Dallas Division, in a press statement. Jackson said the FBI will continue to “protect and defend Dallas taxpayers from those who would exploit their position for personal gain.”
It will take time for Dallas County taxpayers to finish paying the financial price for this public corruption. Duncan and other crooked Dallas officials will pay with prison time.
