Dallas

New Records Detail Immunity Claims by John Wiley Price Co-Defendant

Former U.S. Attorney says government rules were not followed

Newly unsealed records in the corruption case against Dallas County Commissioner John Wiley Price detail the immunity claims that helped get co-defendant Kathy Nealy separated from the Price trial.

Nealy was a government witness in the 2009 corruption trial of Dallas City Councilman Don Hill and his wife Shelia Farrington Hill. Two lawyers connected with that trial said they recall how U.S. District Judge Barbara Lynn repeatedly asked prosecutors if Nealy had a deal for immunity. The newly unsealed records detail prosecutors responses that Nealy did have a deal but that it was an oral agreement that was not put in writing.

Matthew Orwig, a former U.S. Attorney who was a defense lawyer in the 2009 Hill trial, said government rules require immunity deals to be in writing so there is no dispute about what is covered later.

"Everything is controlled by the U.S. Attorney's manual, and it appears that clearly that was not followed in this case," Orwig said. "An agreement that's going to affect someone's liberty going forward, that's something that you can't cut corners on."

Lynn is now handling the Price case, where prosecutors claim Nealy's immunity was narrowly limited to the Hill case and did not include the current accusation that Nealy funneled bribes to Price.

"Judge Lynn is not convinced, and in her order of severance, which she did on her own motion, she said it appears that this thing is broad," said Criminal Defense Attorney Victor Vital.

Vital was Shelia Hill's attorney in the 2009 trial. He was in the room for all the statements by prosecutors about Nealy's immunity.

"When I'm cross-examining her as a government witness, I did not know and appreciate that she was actually a suspect," Vital said.

The newly unsealed records also detail 20 interviews Nealy agreed to with FBI agents from 2006 to 2009.

"She's cooperating with the government, giving the government anything they want to know in response to questions, without knowing that she's doing so at her own peril," Vital said.

Lynn granted Nealy the separate trial, while considering her defense lawyers' request to drop the charges.

"It has to be very troubling to the government. If there were a Latin term for 'hell of a mess,' I would use it, but this is a 'hell of a mess' from the government's standpoint," said Orwig.

Price and Nealy were indicted in 2014 after raids in 2010 on their homes and offices.

Both lawyers said the new developments complicate the government case against Price, which is set for trial Feb. 21.

"It's finally coming to trial, and this is something that throws a wrench in that at a very late point," Orwig said. "They're going to have to be scrambling and thinking about how are we going to approach this trial differently."

Orwig said the long public corruption investigation and indictments would have required approval and oversight from the highest levels of the U.S. Department of Justice.

"I'm sure it's receiving some scrutiny at this point," Orwig said.

Vital said he thinks it is extremely unlikely that Nealy could be persuaded to testify against Price as she did against Hill.

"I don't think the government needs Kathy Nealy to convict John Wiley Price," Vital said "I think it would have been helpful if she rolled, but I don't see that happening either."

Records indicate the government evidence is extensive and the Price trial could last months.

If Price is convicted, Vital said the new revelations cast doubt on the entire investigation.

"If the process to get John stunk, then do we respect the convictions?" Vital asked.

Price and Nealy have both pleaded not guilty.

Nealy Legal Documents:

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