By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
By Angelica Leicht
Ballis's plea-bargain agreement had protected him from prosecution in the Departent of Justice's Southern District of Texas, which includes Houston. But Ballis's crimes had occurred in both Houston and Liberty -- and Liberty is in the Eastern District.
In a later hearing, Smith would testify that Lansden intended to pull a fast one. By not including the Eastern District in the agreement, Smith suggested that Lansden was leaving himself an out if he wanted to indict Ballis later, despite the grant of immunity. "Lansden did tell me that his plan was to kind of trick Royce about the Eastern District," swore Smith, "and to do the conversation so that the Eastern District would not be included [in the deal]." Smith testified that he warned Lansden the plan might not be ethical.
Lansden denies having done anything devious, saying that Ballis has only himself to blame. Government prosecutors decided that Ballis had nullified his plea bargain because, they claimed, he lied during his debriefing: He did not reveal how the $300,000 withdrawal from the First State Bank of Liberty had been concealed; nor did he tell them about the additional $200,000 he had given Dailey. In 1992, Ballis was indicted in both the Southern and Eastern districts. That September, in the Southern District, Ballis was convicted of bank fraud. U.S. District Judge Kenneth Hoyt sentenced him to 12 and a half years in prison, and also ordered him to pay a $500,000 fine and $4.26 million in restitution to the FDIC.
Hoyt later ruled that Lansden's alleged trickery didn't expose Ballis to double jeopardy. The judge characterized Smith's testimony against his fellow federal attorney as "treasonous."
But Judge Lynn Hughes -- the judge who originally sentenced Ballis to probation -- takes a different view of the matter. In October 1994, Hughes wrote a letter to President Clinton, asking that Ballis be granted clemency. In his letter to Clinton, Hughes described Ballis as a "crook" and a "dumb-to-venal guy." But despite those moral shortcomings, Hughes maintained that Ballis had been wronged: His plea bargain should have covered the crimes with which he was later charged and for which he had already served probationary sentence.
"All of this is bureaucratic manipulation," wrote Hughes. "Ballis is being ground to pieces by a system that wants statistics rather than actual solutions for fraud losses. There is no social utility in continuing to prosecute Ballis. The only value he has is as a statistic for a 'savings and loan case successfully prosecuted.' "
Ruthlessness by the prosecution, the judge concluded, is not justice. "It merely spreads fear of government and destroys the individual."
Judge Hughes isn't alone in petitioning Clinton on Ballis's behalf. Before his retirement, Harris County Attorney Mike Driscoll sent not one but two letters explaining that Ballis had been instrumental to the county attorney's investigation of alleged corruption among members of the Harris County Commissioners Court. (It probably didn't hurt Driscoll's opinion of Ballis that, over the years, the developer and his father-in-law had contributed at least $55,000 to Driscoll's campaign funds.) He also complained that the U.S. Attorney's Office had been given the same information but had failed to act on it.
Besides writing the letter, Driscoll apparently tried to help Ballis obtain a form of alternative sentencing. According to O'Rourke, before Judge Hoyt sentenced Ballis to federal prison, Ballis's friend Hakeem Olajuwon wrote a letter to the judge, offering to purchase an abandoned hotel in downtown Houston. Olajuwon proposed that during the day, Ballis could oversee the conversion of the hotel into a halfway house; at night, he'd sleep in jail. The county attorney's office agreed to coordinate the project.
The Houston Rockets' media relations office did not return phone calls to confirm the relationship between Olajuwon and Ballis. But according to Ballis, aside from his third and current wife of eight years, Joni, Olajuwon is the best friend he has. Ballis says he met the basketball legend several years ago, when Olajuwon was about to build a house similar to the one Ballis had built in Acapulco. Ballis invited Olajuwon to Mexico, and the two struck up a friendship. According to Ballis, Olajuwon was even at the hospital for the birth of one of Ballis's children, and Ballis and Joni have spent each of Ballis's five furloughs from prison at Olajuwon's home. Ballis also hints that Olajuwon has helped with his continuing legal expenses. "Hakeem," he says, "has been great."
O'Rourke says he's been impressed by Olajuwon's willingness to stand by Ballis. Obviously, says O'Rourke, Olajuwon must see something good in the man.
O'Rourke's view of Ballis is significantly more clouded. "I saw him when he was basically mainlining whiskey," say O'Rourke. "His view of the government was just bribery: If you want something from the government, you've got to bribe it."
Even so, says O'Rourke, the Justice Department went too far in its pursuit of the S&L cheat: "I'm an ex-prosecutor. And I still believe that you have to do things right. I really believe the government went beyond the rules of ethical conduct in their prosecution of Ballis. They ought to cut him loose."