Mary Suhm Signed a Secret Side Deal to Push for Drilling on Parkland as She Told Council It Would Be Banned

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Documents released yesterday evening by the city reveal that Dallas City Manager Mary Suhm signed a side deal with a gas-drilling company five years ago to help the company win drilling rights on city parkland, even though she had assured the City Council and park board that drilling on parkland would be banned.

That company, Trinity East Energy, comes before the city plan commission today to collect on the deal, which flies in the face of the express will of city elected officials. The deal came to light only yesterday after City Council member Scott Griggs won a long fight to gain access to public documents.

See also:
- Q&A with Trinity East Manager: Leases, Floodplains, and the Money Beneath Dallas

Some of the timing is breathtaking. Suhm signed the deal with Trinity East six months after her own staff had assured the council that "there will be no drilling on the surface of city of Dallas parkland." But the deal states Suhm and her staff were "reasonably confident" they would be able to get Trinity East the right to drill on parkland.

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Wanna bet?
The city's elected officials have acted on multiple occasions with the assumption a ban on park drilling was in place. Two months before Suhm signed her deal, the Dallas Park and Recreation Board passed resolution that said: "The city of Dallas is prohibiting surface level drilling and mineral production on parkland as part of the gas leases."

Five days after Suhm signed her deal with Trinity East, the City Council passed a resolution on subsurface drilling, assuming a ban on surface drilling on parkland. Why, Griggs asked yesterday, did no one stand up at that time to tell the council, "By the way, we signed an agreement five days ago" to help a drilling company achieve the opposite of what the council was voting to do?

Despite that resolution, the council next approved the city's drilling lease agreement with Trinity East, negotiated by Suhm and city lawyers in the same time frame with her side deal. That lease agreement expressly grants Trinity East surface drilling rights on the pieces of parkland coming before the plan commission today. Griggs and council member Angela Hunt said yesterday, however, that the way lease agreement described the places that could be drilled made it hard to tell where exactly the drilling sites might be located -- at least when it came to parkland. Other parcels covered by the lease were described precisely and geographically, but the two parkland parcels were referred to only by the equivalent of nicknames.

Hunt suggested yesterday that Trinity East needed both pieces -- a lease guaranteeing the right to drill on parkland but also Suhm's side-deal promise that staff would lobby for them to win additional "special use permits" to complete the deal. In other words, after the council and park board had voted to give them nothing on parkland, Suhm and city lawyers apparently gave them half of what they wanted and promised to deliver the rest later.

I sent Suhm a detailed email last night with a copy of her deal letter, asking for comment, but she hasn't responded yet.

Dallas Cothrum, executive vice president of Masterplan, a land-use and zoning consulting firm representing Trinity East at City Hall, told me this morning that Trinity East has based major trust and reliance on its side agreement with Suhm.

"I think that's one of the reasons that Trinity East was comfortable in handing over $19 million, that they had something in writing from the city manager," Cothrum said.

He said he thinks the letter should strongly influence today's outcome at the plan commission. "They [Trinity East] got a letter from the leader of that place [City Hall], and now all they are asking for is the benefit of that bargain."

Cothrum said he had not discussed litigation with his client but assumed it's the next step if the city fails to honor the agreement and grant the drilling permits Trinity East is seeking.

"Some people have said the city can just give back the money," he said. "It's not that simple. [Trinity East] hasn't said this -- they haven't told me and I haven't asked -- but they [the city] will get sued for hundreds and hundreds of millions of dollars."

He said the city should not assume Trinity East will behave like Exxon, whose subsidiary recently walked away from a drilling application with the city even though it had paid the city $20 million for the right to drill.

"Exxon just decided I think they were tired of looking bad at the country club," he said, "so they just flushed 20 million down the drain."

Trinity East, he said, is a relatively small independent company that can't afford to walk on its investment: "They've spent many millions more off-site (in surrounding suburbs) wrapping up leases around it."

He said the Dallas wells would be the biggest and the other peripheral sites will not be economic to drill if the Dallas deals fall through. "If they can't drill for the Dallas gas then those smaller eases around it are worthless, too, so there are hundreds of millions of dollars at risk."

"This is a business-killer for them. All these guys lose their jobs and are out of work if they can't drill for this gas."

Considering that Trinity East's side deal with Suhm is so vital to the company's existence, to the council's plans for protecting parkland and to the city taxpayers' pocketbook, one obvious question is why Suhm fought to keep it under wraps for so long, even though it was something of an open secret. Griggs and Hunt reminded me the Observer had reported the rumored existence of a mystery deal between City Hall and Trinity East last May.

"This is that deal," Griggs said.

In a May 15 Q&A piece on Unfair Park with D. Stephen Fort of Trinity East, Leslie Minora quoted Fort as alluding to a "discussion with the city" and certain "documentation that I can't discuss" that Fort said made it "clear that adding that as a permitted use would not be an issue." Fort declined to name the city official or officials with whom he had struck his bargain. On the August 15 deal letter unearthed yesterday by Griggs, the two signatures at the bottom of the page belong to Fort and Suhm.

On signing its lease, Trinity East paid the city more than $19 million for drilling rights and agreed to make additional valuable lease payments for the surface land it would occupy. Griggs pointed out yesterday that Suhm had already included the money in her budget for the next year when the lease was signed.

Suhm's deal letter with Trinity states, "The city staff has advised us that although they can make no guarantees, they are reasonably confident that Trinity East can be granted the right to use the 22-acre are tract referred to as the 'Radio Tower Tract ... as a drill site location.'"

That site is one of two on parkland to be presented to the plan commission today with a recommendation by city staff that Trinity East be granted the right to do surface drilling on both. Community groups and anti-fracking activists have complained bitterly that the staff's support of drilling on parkland is a betrayal of repeated promises to the public that the city would not allow drilling in parks.

But those promises were made by elected officials. Yesterday's revelation shows that staff at the same time was making explicit promises to undermine the will of those officials.

Griggs and Hunt said they had never been informed of the existence of Suhm's agreement. Griggs said the city secretary initially refused to release it to him and relented only when City Attorney Tom Perkins told her it was clearly a public document.
In her piece last May, Minora asked Fort point-blank for the name of the person with whom he had struck a deal at City Hall.

"I'm not gonna name names," he told her, "because I'd rather not do that."

Now he doesn't have to.

Letter to Mary Suhm by

Briefing by City Staff to Council by

Park Board Agenda Item by

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66 comments
Daft_Gadgets
Daft_Gadgets

Years ago when we told lies we would get punished with a time out.  Maybe we need something more severe for politicians

PerryMoore
PerryMoore

The City of Dallas pockets 19 million dollars in 2008 based on a letter of understanding signed by Ms. Suhm. The positive aspect of that understanding--that city staff would "assist" in placing the permit question before the City Council--is performed today. After the City Council votes no, Mary Suhm's letter of understanding will have profited the city 19 million dollars plus four years of interest or use, minus the expected court costs for a case that Trinity East will not win. Maybe you folks should thank her for suckering TE out of all that money.

parck
parck

What a great opportunity to send Mary Suhm packing. She should GO.

tbarker1
tbarker1

Good work, good reporting.  Not really surprized with this information release.  How often do these things happen?   The Save Winfrey folks are watching with interest.

rroyb
rroyb

Tell them what David Cossum told me "The mistake you made is you trusted the city"

Tom434
Tom434

City of Dallas will be lucky if all they have to do is reimburse Trinity East the 19m

drtz
drtz

Now the question is how much money changed hands to make this back-door deal happen.

mariogonzales147
mariogonzales147

Suhm and the Trinity East manager need to go to prison for RICO violations. Conspiring to convert a public property for private gain in a secret deal illegal by Open Meeting standards is surely a violation of some law.


And if Trinity East thinks they will have to close up because there are no more drill sites in Texas, the USA, or Planet Earth, well, they're stupid enough to need to close. Same goes if they just think I'M stupid enough to believe it.

James080
James080 topcommenter

Jim, does the Corp of Engineers have any input regarding oil & gas drilling in the Trinity river flood plain?

OakParkStudio
OakParkStudio

OK, Jim. Now that we have the "TSK, TSK, TSK" out of the way and the appropriate golf claps for Hunt and Griggs, now what?

Where do we go from here? Implications? Connect-the-dots.

Got the smoke but where's the fire?

director21
director21

We always knew that Mary Suhm was the dirty dog behind this illegal "deal", and now the truth has been revealed. Yesterday, a formal criminal complaint was filed with County District Attorney Craig Watkins alleging that CPC Chairman Joe Alcantar illegally violated the Texas Open Meetings Act by having a 'daisy chain" quorum phone call discussion lobbying Commissioners to vote to "reconsider" their December 20, 2012, denials of three Trinity East SUPs, an act which violates the prohibition against secretly discussing public business out of the public eye.


Now, just a few hours later this "deal" document is finally revealed and we know it was Mary Suhm who signed it. She should be terminated immediately and then investigated for her own crimes in withholding public documents when major efforts to obtain them have been made for several years. This is the last straw, Now, perhaps people will finally awaken to what we have been saying for three years about this whole drilling in Dallas mess and start getting involved.


You CAN fight City Hall, and you CAN win!

nammer
nammer

Dude...she's so fired...and hopefully they can find something to send her to the pen over...what a lying sack of shit she is!

Katarina
Katarina

Today, February 7, Dallas City Hall 1:30.  Be there to support the anti-frackers.

Dallas Observer
Dallas Observer

It was signed five years ago, Jon, and never revealed to the public. It's not a secret deal now, but it sure was then.

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

Thank you for your efforts on this.  Exposing the duplicity and mendacity regularly practiced by City Hall is much appreciated.


This article points out to me how important open and transparent dealings by our City government are so important.


Peasants, it is time to gather our pitchforks and scythes; and, storm the castle on the hill to kill the monster.

Jane Shelton Hoffman
Jane Shelton Hoffman

Write or call your city council person and the mayor. Maybe it can be stopped.

schermbeck
schermbeck

Thanks to the Council members who finally unearthed this smoking gun and to the DO for publishing it. I think Trinity East should sue the City Manager herself and leave the rest of us out of it, since the public was never consulted about this side deal. Dallas Cothrum may think this document represents a guarantee of success for his permits, but in fact, it represents the final nail in the coffin for their demise.

schermbeck
schermbeck

@PerryMoore Except that the majority of the Council is poised to approve these gas permits - all of them. At least up until Thursday.

CitizenKane
CitizenKane

@PerryMoore 


If that is the final legal outcome; then so be it...but it doesn't excuse Mary Suhm from her wrong behavior of hiding secret agreements from the City Council...


Btw, how is it that a City Manager has the authority to enter into a complex legal and financial arrangement that obligates the city AND to keep the agreement secret.  Seems to me if she didn't have the authority to sign, then TE is SOL...

heart_and_soul
heart_and_soul

@PerryMoore That's like saying I should thank the guy that stole my car because after I recover it from the fence he sold it to I get to keep the gas they put in it.

director21
director21

@rroyb Likewise, you cannot trust what David Cossum tells you either. During the CPC tour of the three Trinity East SUP sites last week we were standing at the golf course site when one of the Commissioners asked how drilling on the golf course site could be done without disrupting play on the course.


David Cossum replied that it would be up to the drillers to work out timing for their activities during "off hours" so as to minimize disruption of golf course activities. Generally speaking, "off hours" at our public golf courses would be between dark and dawn since many golfers use the course from dawn until dark.


Typically, drilling a gas well requires 100-150 trucks in, and the same number back out, for about 20-40 consecutive days. Considering that each well site could have up to 20 wells, that means, in effect, the golf course would become a heavy industrial site unsuitable for playing golf for at least two years assuming the wells were all drilled immediately back-to-back.


The taxpaying citizens of Dallas just spent $3.5 million renovating that golf course only to see its normal revenue stream disrupted and its property destroyed by all that very heavy truck traffic on roads designed for pickups and passenger cars.

director21
director21

@Tom434 Have you actually studied any law other than watching Perry Mason or Law and Order? I didn't think so. I only hope that Trinity East sues Dallas, but they will not because it would only compound what they are already going to lose. 

My best guess is that Trinity East might get sued by the investors whose money they threw away trying to work their illegal deal behind closed doors.

heart_and_soul
heart_and_soul

@Tom434 Trinity East won't get a dime. What will they say to a judge. Gee Judge we made this illegal deal based on some illegal promises from a person that we knew couldn't legally make them and we want our money back?

WylieH
WylieH

@mariogonzales147 unfortunately, RICO doesn't apply to municipalities.

dallasdrilling.wordpress.com
dallasdrilling.wordpress.com

@James080 I've tried. They won't say. And Dallas City Hall is blocking my attempts to get that conversation on record by going through the State Attorney Greg Abbott arguing that it's priviliged. Abbott told them to give it to me. Mary won't budge.........yet.

director21
director21

@Scott W. Hatfield Well then, so much for the credibility of UNT.


Al Capone started the Better Business Bureau as a ruse, also.

heart_and_soul
heart_and_soul

@schermbeck Cothrum is a lying idiot. If anyone has a winning lawsuit here it is the people of Dallas. This agreement is illegal and while Mary and her staff agree to illegally whore and lobby for his clients it doesn't promise that it will work.  

WylieH
WylieH

@CitizenKane The City Attorney vouched for her.  When you look at culpability, you need to include the City Attorney's office.

WCGasette
WCGasette

@director21 @rroyb They have rarely been drilled back-to-back. 20 wells means this area will be an industrial mess forever.  It's heavy, industrial mining.  The original idea was that shale gas drilling could be "compatible" with multi uses and inside our neighborhoods.  This is the travesty part of it. Travesty because they are still selling it that way because the Reservoir R Us.

WylieH
WylieH

@darrd2010 @James080 That's Queen Mary! She tells the State AG to kiss off, just like she ignores the City Auditor.

director21
director21

@ThePosterFormerlyKnownasPaul @schermbeck The only problem for Mary Suhm is that she has no legal authority to promise that the elected City Council would change city ordinances to allow an activity that is prohibited by law.


If you believe differently, then come on down today and argue your point. It is an open public meeting.

WCGasette
WCGasette

@ThePosterFormerlyKnownasPaul @director21 @darrd2010  You are correct. Most people do not realize any of it. Except the part about the money. When these leases were signed in 2008, it was ALL about the $$$. That's all it has ever been about. Regarding that "definable" term you've mentioned... Sitting ducks in a FRAC pond come to mind. Industry landmen are experienced in applying just the right kind of pressure to get what they want. They don't care about the rest of the story.

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

@director21@ThePosterFormerlyKnownasPaul@darrd2010

I have been in oil and gas my entire life.  I have worked as an independent as well as for majors and large independents.  I have also spent a lot of time advising land and mineral owners on how to craft a lease to protect their interests.  I have also worked as consultant on land remediation where oil and gas production occurred.

I also own mineral fee interests

It is likely that I could be your next door neighbor.

If someone is contemplating signing an oil and gas lease and they do not understand the basic leasing concepts, they should not sign, nor should they attempt to negotiate a lease until they do.

I usually stay out of these discussions because they tend to be very non productive.  I am most concerned about the lack of transparency by City Hall.  I will abide by many things in government, among these are stupidity, sloth, incompetence, and, waste; however, I will not countenance corruption, evasion, graft; and, deliberate malfeasance.

PS: I do not have any horns, a third eye in the middle of my forehead, nor do I eat little babies .... 8-D

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

@director21 @ThePosterFormerlyKnownasPaul @darrd2010

Please go work on your reading comprehension.  I said "developed in a manner compatible with surrounding uses"  This clearly means that the ordinance prohibition against oil and gas development in parkland or floodplains continues to stand.

One of the important facts, and basic concepts, about oil and gas development in Texas is that when the mineral owner provides a lease to lessee, there is an easement created that burdens the surface fee.  If this were to not occur then the mineral estate would be worthless and could not be developed.


This is such a basic tenet of oil and gas leasing, that Ms. Suhm and her attorneys need to be run out of town on a rail for ignoring this.


It could be possible that the City could buy a surface fee tract outside of the parkland or floodplain for the purpose of a well pad site.


Finally,  I do not and will not practice your philosophy of "If you are not with us then you are against us."  Such a philosophy precludes any rational discussion of the subject.


The City Manager, City Staff and City Council need to be thrown out for making such basic error in an oil and gas leasing matter.


Most people do not realize, but when you lease oil and gas mineral rights in Texas, you are transferring a real property right to another person for a definable term with a reverter.

director21
director21

@ThePosterFormerlyKnownasPaul @darrd2010 Unless you oppose obeying the law you have no choice BUT to oppose developing those gas resources because the current city code, in existence at the time those leases were signed, specifically prohibits drilling in floodplains and on city-owned park land.

director21
director21

@ThePosterFormerlyKnownasPaul @darrd2010 @director21 @schermbeck Actually, no! The "agreement" between Trinity East and Suhm may be considered a mitigating circumstance to some effect, but the actual lease and the actual existing ordinances at the time of the lease would be the prevailing documents upon which a judge relied to make a decision in such a case. And, since Suhm had no legal authority, as she herself has stated yesterday, to make any promises that changes would be made, she is probably not liable to Trinity East, though she would be the closest one to City Hall who could be liable to TE.


Both the lease and the ordinances specifically state that drilling on park land and in the floodplain is prohibited. Therefore, a judge would have no choice BUT to dismiss a Trinity East suit on the grounds that the lease they signed, supported by existing ordidnances, made it clear that they could NOT drill in parks and in the floodplain.


Law is about facts, not emotions. Trinity East had an obligation to understand what they were signing when the lease agreement was made. Relying upon what somebody MAY do after the fact to allow something that was illegal at the time of the agreement will not hold any water in a court of law, and I guarantee you Trinity East attorneys know and understand that fact.

director21
director21

@ThePosterFormerlyKnownasPaul @darrd2010 @director21 @schermbeck So, Mary Suhm was acting as a lobbyist for a corporation leasing land and mineral rights from the city. That may well violate all sorts of criminal laws pertaining to conflicts of interest, violations of fiduciary responsibility, illegal lobbying, pandering and other violations of public trust.


For a fact, one or more people are, and have been, lying through their teeth about this issue for several years and the cat is finally out of the bag.

JimSX
JimSX topcommenter

@ThePosterFormerlyKnownasPaul @darrd2010 @director21 @schermbeck 

All good points. I find myself looking at it from the perspective of council members and park board members, for whom I am not normally in the habit of feeling sorry, but who do look at this moment like the proverbial old lady who has just had her hoop skirt pulled up over her head by a wiley urchin.

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

@darrd2010 @director21 @ThePosterFormerlyKnownasPaul @schermbeck  

Go back and read the letter again.  She did not promise to have it changed, she stated that she would use "reasonable efforts to have it changed".  Trinity East is relying on this as a good faith representation.

It will be a matter for the jury as to whether or not:

1) Ms. Suhm did make "reasonable efforts"

2) Was this statement by Suhm an inducement to Trinity East?

3) Did Trinity East have a reasonable expectation that this change would be made?

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