Ken Kalthoff, NBC 5 News
Several sources confirm the FBI is investigating the same accusations that Dallas District Attorney Craig Watkins refused to answer about whether or not he brought a mortgage fraud case against Al Hill III as a favor to a campaign contributor.
A Wichita Falls judge was assigned Tuesday to hear the contempt case facing Dallas County District Attorney Craig Watkins.
State District Judge Robert Brotherton is expected to travel to Dallas for the hearing.
Dallas County Circuit Court Judge Lena Levario found Watkins in contempt Thursday when he refused to testify about misconduct accusations lodged against him in a mortgage fraud case.
Watkins said that attorney-client privilege precluded him from answering the questions, but the judge said Watkins' assistants testified about the same issues so he could not claim the privilege.
Lawyers for defendant Al Hill III said that Watkins brought the fraud case as a favor to attorney Lisa Blue, a big Watkins campaign contributor who also had a prior legal dispute with Hill.
Blue's attorney said the FBI is investigating the matter. She exercised her Fifth Amendment right against self-incrimination and declined to testify last week.
Because both Watkins and Blue did not testify, Levario dismissed the case against Hill.
Watkins had refused to even appear in court the first time the matter came up last month. His staff said he was in the office that day but too ill to appear in court.
Criminal defense attorney Bob Hinton attended the hearing after dealing with other past issues in the Hill family's financial feud.
"There were two agents there for both days of this hearing, and that's not because they don't have something else to do. They're in there because they're investigating this matter," he said.
The property in question was a Highland Park home that was connected to a family trust. Hill no longer lives in the home.
Prosecutors said Hill lied on mortgage applications seeking outside financing for the property.
But courtroom testimony indicated the bank received all of the money back and never asked the district attorney's office to file a case.
"I think there's a valid investigation that ought to [be] made as to why this happened this way," Hinton said.
Richard Roper, a former Dallas U.S. attorney, said people are entitled to use their Fifth Amendment right to avoid self-incrimination. It does not necessarily mean they have committed any crime, he said.
"I think really it's unfair to both the FBI and a potential person taking the Fifth to draw any inference, one way or the other," he said.
Roper said the FBI conducts many investigations that produce no criminal charges.
"We just really don't know what's up and may never know," he said. "It just could be the last you would ever hear about this, or it could result in charges. You just don't know."
Watkins was unavailable for comment Tuesday, but his people have strongly denied any misconduct was involved in the mortgage fraud case.
"You're talking about prosecutorial misconduct, and we take that very seriously," First Assistant District Attorney Heath Harris said Thursday. "It not only affects Mr. Watkins, it affects this entire office and, yeah, we're going to fight tooth and nail to try to get this vindicated."
Assistant District Attorney Russell Wilson said Thursday that the office also disagrees with the contempt charge now facing Watkins.
"We don't believe that it was a valid contempt, and we don't believe that an assertion of privilege is contemptible," he said.
A date for Watkins' contempt hearing had not been set as of late Tuesday.