The Insider

Summer Reservations at the ReBates Hotel
The federal grand jury that has been eyeing the FBI's City Hall sting finally cleared its decks after last week's climactic session, and those long-awaited indictments are now scheduled to come down in early August. The roster of witnesses who appeared for the panel's July 1 gathering offered a few tantalizing clues about the final shape of the Justice Department probe, which is expected to result in charges against two incumbent councilmembers, two former councilmembers and two lobbyist types. Swirling in the alphabet soup are the letters C, R, A, M, P and Y.

The star witness at the July 1 session was none other than Dan Morales. The state attorney general was quizzed on his contacts with then-Councilman Ben Reyes in December of 1995, when the city was awaiting an opinion from Morales's office on whether developer Wayne Duddlesten's proposal for the taxpayer-subsidized convention center hotel was eligible for tax rebates under the state legislation designed to facilitate financing of such a facility.

At that time, Reyes -- a vigorous backer of Duddlesten's bid -- was preparing to hand over his Council seat to successor John Castillo and was anxious to participate in the Council vote determining who would get the hotel contract -- Duddlesten or competitor JMB/Urban Development.

Reyes had already entered into a relationship with two FBI agents disguised as bogus Latin American investors of the Cayman Group and had been paid a hefty sum to help secure the contract for Duddlesten. Reyes leaned on Morales to speed up the issuance of his opinion, but when a ruling favorable to Duddlesten finally arrived in mid-December, there was only one Council meeting remaining before Reyes relinquished his post. Alas, the ordinance awarding the contract was tagged, pushing the awarding of the deal on into 1996 and ultimately involving Castillo.

Also appearing before the grand jury was state Representative Dawnna Dukes of Austin, who does consulting work for minority-owned businesses. Reyes introduced Dukes to the Cayman Group imposters in late 1995, but the state lawmaker demanded totally aboveboard behavior from the "investors"and at one point upbraided them for acting like drug dealers. Through her testimony, prosecutors attempted to demonstrate for the jurors how ethical elected officials should behave when confronted by stingsters.

Perhaps most intriguing was the appearance of Councilman Felix Fraga, who had initially been a target of the investigation for accepting illegal cash contributions to his losing congressional campaign from the undercover agents. Fraga voluntarily testified for about an hour, an indication that he is now cooperating with the feds in exchange for assurances he is no longer on the hit list.

That's bad news for former port commissioner Betti Maldonado and her lawyer Dick DeGuerin, because Fraga's testimony likely will be used to firm up government claims that Maldonado was trying to buy Council votes for the Duddlesten deal by arranging meetings between the phony Cayman Group investors and councilmembers such as Fraga.

"Betti invited me to this meeting, gave me the donations, and I didn't know [it was illegal]," Fraga told The Insider, summarizing his grand jury testimony. "[I thought] it was just like any other donation."

Fraga said he hopes the government is "happy with what I told them and my presentation" and expressed relief that the federal twister seems to have bypassed his barn. He added that he's given up waiting for the indictments to come down.

"I don't know why it's taken this long," he said, "and I have stopped trying to figure out what's going to happen."

In his case, the answer is apparently nothing.

Dan the Man
It's been a busy summer for Dan Morales: In addition to his appearance before the Houston grand jury, the 41-year-old bachelor is engaged and scheduled to be joined in matrimony shortly to one Christi Glenn, a 28-year-old mother of two from Abilene whom Dan-o ran into at a luncheon in that city only three months ago.

When a high-profile but non-married male politician gets ready to jump the broom, you can bet that he and his handlers want the public to know about it. But Morales's flack wants you to know things you probably don't even want to know about the attorney general's intended -- right down to the navel ring she's said to sport.

Danny Boy's unlikely betrothal to Ms. Glenn was the subject of a recent fawning profile in Morales's hometown paper, the San Antonio Express-News. Headlined "Attorney General, fiancee in fairy-tale romance," reporter Susan Yerkes's article reveals that, among other things, Glenn is a former topless dancer and victim of pre-Dan spousal abuse. Ron Dusek, Morales's press secretary at the AG's office, apparently was so enamored of the article that he's been faxing copies to news outlets across the state while explaining that the AG and his beloved are declining further interviews.

In addition to that pierced navel, Christi has a real hard-luck story, according to Yerkes: As a youth, she was farmed out by her family to an orphanage, her first husband abused her and she had to take that job dancing in an Abilene topless club to make ends meet for her two young children (hand us a hankie, please). By contrast, writes Yerkes, Morales grew up in a "Beaver Cleaver" household, went to Harvard and has the reputation of a "choirboy."

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