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Dallas County Schools to Ask for Law Enforcement Investigation of Land Deal

Interim superintendent to ask for law enforcement investigation of $25 million land deal, as board secures bond refinancing to continue operations

DCS interim Superintendent Leatha Mullins says she will ask law enforcement to investigate a $25 million land deal exposed this week in an exclusive report by NBC 5 Investigates.

There are questions about who profited from that deal and about campaign donations made to the DCS board president, Larry Duncan, who announced Wednesday he's stepping down from that post after 14 years.

Duncan's term as president was up Wednesday, and he elected not to seek another term in that role but will remain on the board.

Longtime Dallas County Schools Board of Trustees President Larry Duncan was replaced Wednesday after announcing he was not seeking reelection as president amid ongoing investigations into a $42 million budget gap, the agency's controversial stop-arm camera program and a sale-leaseback land deal that will cost taxpayers millions.

In a hearing Tuesday for the Texas House Committee on Public Education, State Rep. Lance Gooden (R-Terrell) called on Mullins to contact law enforcement after Gooden read the report from NBC 5 Investigates.

"Because this article is very serious, I can't impress that enough," Gooden said.

NBC 5 Senior Investigative Reporter Scott Friedman asked Mullins on Wednesday if she would definitively call on law enforcement to investigate.

"I am. I am," Mullins said.

"Who will you call and what will you ask them to do?" Friedman asked.

"Now, I don't know who I am going to call. I am trying to get through our legal counsel and their opinion on who," Mullins said.

Texas lawmakers have tough questions for Dallas County Schools on the heels of an exclusive NBC 5 investigation into land deals by the bus agency.

NBC 5 Investigates reported Monday that DCS sold land to get quick cash, but the deal involved two men tied to a program that put DCS in financial trouble in the first place.

One profited from the land sale and both gave campaign donations to Duncan, who has said all donations were legal and ethical.

On Wednesday, Duncan stepped aside from his role as board president.

"It is clear to me now, that we have to make a full commitment to the future, because there's nothing we can do to repair the past. I love this organization with all my heart, but I have made a decision not to run for re-election as its president. There is a lot of work to do," Duncan said.

Duncan will remain as a board member, but now at-large trustee Gloria Levario is leading the board.

As Dallas County Schools began to sink into financial trouble, NBC 5 Investigates has learned the agency sold taxpayer-owned land to get fast cash. But in return, that land deal has obligated taxpayers to cover a huge long-term price tag.

Additionally, CW Whitaker, Precinct 3 Commissioner and trustee, was named Vice President and replaces outgoing VP Dr. Paul Freeman.

The board also announced Wednesday that it has secured bond refinancing that will allow the agency to continue operations.

Without that restructuring deal, DCS would have been out of cash to pay the bills by next week. But the restructuring plan comes with more years of bigger debt payments for taxpayers.

The embattled school bus agency is looking to restructure $44 million in debt; DCS' general obligation debt rating is now at Ba3, according to Moody's, a level that is below investment grade or what is considered “junk bond status.”

NBC 5 Investigates' Eva Parks contributed to this report.

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