Dishonest Politician

Dallas City Councilman Dwaine Caraway pleads guilty to corruption and resigns

City Councilman Dwaine Caraway pleads guilty to corruption and resigns

Dwaine Caraway
Dwaine Caraway is out. Dwaine Caraway/Facebook

Dallas City Council member Dwaine Caraway pleaded guilty to federal corruption and has resigned from the council, effective immediately. He'll be sentenced in December.

A special election to replace him will be held on November 6, pending approval from the City Council.

The charges against Caraway and fellow conspirator Robert Leonard were outlined at a press conference on August 9 by U.S. Attorney Erin Nealy Cox, who called it "a major victory in the battle against public corruption."

Caraway pleaded guilty to two charges: one of conspiracy to commit honest services wire fraud, and the other for tax evasion. Leonard, president and owner of Force Multiplier Solutions, pleaded guilty to conspiracy to commit honest services wire fraud.

According to Cox, Caraway accepted more than $450,000 in "bribes, kickbacks, and other benefits" from Leonard to help secure a contract for Leonard's company. Their actions ultimately bankrupted the Dallas County School District.

The payoffs to Caraway included the installation of security cameras at his home, personal loans to his father, expenditures for luxury clothing, and trips to Las Vegas and New Orleans.

The money also paid for funeral expenses for Caraway's family members, a campaign bus, casino chips, and funds for gambling at the horse track.

Giving it a particularly seedy vibe, Caraway would take the checks and cash them at liquor stores and pawn shops.

In exchange, he helped score Leonard's company hundreds of purchase orders for camera equipment — some of which was never used — a $340,000 servicing agreement, and a $25 million licensing agreement.

"Caraway voted on ordinances needed to promote [Leonard's] stop arm program in 2012, and promising to use his position on the Council to further Leonard's interest in real estate developments," Cox said. "Most importantly, in 2015, to promote the stop arm camera program, Caraway gave a speech in support of renewing motion for a vote and never disclosed the money or benefits he received."

His plea on tax evasion included failing to report on the benefits and payments he received; failing to disclose that income in 2014; and knowingly filing a false and fraudulent tax return for that year.

Cox described "honor services fraud" as someone using deceit to deprive the public of their right to honest and fair representation by public officials.

"Dallas County Schools paid Force Multiplier more than $70 million for a stop-arm camera system that generated little revenue in return and put Dallas County Schools in a position where they incurred intolerable levels of debt," Cox said.

It left the system bankrupt. "An entire public entity relied on by parents and schoolchildren alike was destroyed in the wake of this scandal," she said.

Cox said that the investigation took longer than anticipated because Caraway and company tried to conceal their bribes. Leonard frequently did not make payments directly but went through shell companies and bogus consulting firms. She also said that the investigation continues.

A judge will decide on December 14 how long the two parties will serve time, but both could go to jail for 10 years. The recommended sentencing for Caraway is seven years.

Caraway was on the City Council from 2007-2015, then returned as a representative for District 4 after a two-year hiatus upon reaching his term limit.