As the government ties the final ribbons on its case against the Hotel Six this week, some nagging questions have survived the playing of the FBI's hottest audio- and videotapes.
How did former councilman Ben Reyes really spend the $50,000 he gratefully accepted from an FBI undercover agent at a westside apartment two and a half years ago? His lawyer claims Reyes used the money to buy distressed city properties at auction as part of a joint venture with government agents, but some expensive new wheels seem to have come Ben's way as well.
Why have the Hotel Six prosecutors seemingly ignored a packet purportedly containing $3,000 that Councilman John Castillo accepted from lobbyist Betti Maldonado in a hotel coffee shop and later gave to his former attorney for safekeeping after the federal sting operation went public? The answer involves a clever endgame whose results could determine whether Castillo escapes conviction.
Did the government indict hapless lobbyist Ross Allyn in a bizarre exercise of reverse affirmative action, just to get an Anglo face among two blacks and three Hispanics at the defense table? Allyn, who has played Reyes's straight man for nearly a decade, spent most of his court tape time boring the FBI's bogus Latin American businessmen with advice on how to do things legally. Allyn's future looks bright, if he can just get past the testimony of a high-powered federal witness.
And finally, there's the Jeopardy Daily Double question: At the end of the day, who among the six defendants gets to check out of Hotel Six and go home, and who gets stuck with an involuntary, extended vacation at a Club Fed? Only the Hotel Six jury panel can answer that last question decisively, but read on for our educated guesses.
Judging by one poll, the government began its bribery-conspiracy case against the six City Hall insiders in a highly favorable public-opinion environment. A survey of the developing mayor's race conducted by Rice political scientist Bob Stein and his University of Houston counterpart Richard Murray last fall posed the question to voters: "Some say minority political leaders were singled out by the FBI sting that produced the indictment. Others say that the individuals charged brought the trouble on themselves by their conduct. Which best reflects your opinion?"
Only 13 percent of respondents believed that the sting was racially motivated, while a whopping 62.5 percent thought the officials had brought it upon themselves.
The Spanish-language daily El Dia announced results of its own poll of readers last week. While the paper chose to highlight the relatively small percentage of those who thought Councilman Castillo and Maldonado were guilty [10 and 16 percent, respectively], a surprising 28 percent of Hispanics surveyed thought all the defendants were guilty. And leading the pack at 30 percent was Ben Torres Reyes.
The government has contended from the beginning that its sting operation aimed to catch Reyes, and that he hatched the bribery conspiracy against councilmembers Castillo, Peavy and Michael Yarbrough, with the assistance of Maldonado and Allyn. Reyes is the linchpin of the prosecution. If the jury finds him innocent, everybody walks. Conversely, if Reyes alone is convicted, at least one government source contends the prosecution will consider it a victory.
Ben Reyes's attorney Mike Ramsey has the hardest job in the trial. He must convince jurors that when they saw an FBI video of his client walking away with a bag jammed with packets of $50 bills, they were not witnessing a crime. Ramsey contends the money was seed capital for a joint venture between Reyes and the Cayman Group to buy city property at auction. Never mind that FBI agent Bob Dogium and undercover informant Julio Molineiro repeatedly told Reyes on tape the money was paying for his help in winning them a share of the hotel project contract.
Harris County Appraisal District records indicate Reyes did purchase nine parcels of vacant land. Reyes's girlfriend, engineer Rosalie Ortega Brockman, also bought two vacant lots at the auction, while Reyes's son Albert received title to four such properties. Among them, the Reyes group paid close to the total cash amount provided by the FBI.
But during the same period, Ben also plunked down $12,000 at Park Place Motors in Southeast Houston for a used Range Rover, which is displayed in several FBI surveillance photos of the former councilman at different meetings. And he claimed he made a cash payment out of his own pocket to Councilman John Castillo at a meeting at Ruggles when informant Molineiro forgot to bring an envelope of money for that purpose.
Reyes's best moments at the trial so far involved a transcript the defense managed to reconstruct from FBI audiotapes of meetings between the councilman and government agents during a trip to Florida in September 1995, when the sting operation was just beginning. While the government claimed the tapes were inaudible, the defense transcripts indicate Reyes repeatedly stated he would not make a penny off the hotel deal, and was looking to future deals with the Cayman Group after he left City Council to earn a dividend. Informant Molineiro testified that Reyes was simply putting out a smoke screen because an Anglo FBI agent he didn't trust was present at the meetings.
The prosecution's counter to the Florida tape is attorney Isaias Torres, a cooperating witness who provided testimony that Reyes indeed expected to benefit from the hotel project, and was in fact a silent partner with the investment group funded by the FBI and fronted by Torres.
Councilman Michael Yarbrough is in much the same sticky position as Reyes, having admitted on camera to taking $1,500 from Ben at Carrabba's restaurant and then accepting $1,500 more from the undercover agents. If jurors believe what they see and hear, the pair are the most likely Hotel Six residents to go to prison.
Former councilman John Peavy is in a marginally stronger position. Federal agents did not witness an alleged $2,500 payoff from Ben Reyes to the councilman in a urinal at the Warwick Hotel in early January 1996, and an agent's malfunctioning tape recorder did not capture Peavy's alleged admission during a dinner that he had received the money. Peavy was videotaped receiving an envelope with $2,500 and a box of cigars in a restaurant parking lot.
The former judge may have made the blunder of his life after the sting became public, and initially sought legal advice from attorney David Berg. Not content to keep the details of his predicament safely within the confidential confines of attorney-client discussions, Peavy then went to his campaign fundraiser, Sue Walden, and confirmed to her that he had taken $2,500 in cash from the feds. She is expected to testify to that effect this week. Had Peavy just kept his mouth shut, there would have been no independent confirmation he knew he had received and kept the illegal cash.
In the order of vulnerability, Councilman John Castillo ranks fourth, and his fate could be determined by the contents of a manila envelope that has sat undisturbed for nearly two years.
Castillo is accused of accepting cash from Ben Reyes in the bar at Ruggles in January of 1996, and later $3,000 from Betti Maldonado in the Hyatt Regency coffee shop in late April, shortly before the sting became public. Since the first transaction involved cash allegedly ponied up by Reyes when the federal agent forgot to bring the money, the Hyatt payoff is the only incident involving Castillo where the feds can prove he took their money.
Castillo claims he was unaware that the envelope given him by Maldonado contained cash until later, after the federal investigation went public. He says he then gave the money to his attorney Frumencio Reyes (no relation to Ben), who put it in a safe at his office.
The alleged bribe remained in Frumencio Reyes's office safe until last Friday, when Bennett's representatives reclaimed the money and a box containing several documents related to the case.
Interviewed shortly before he turned over the money, Frumencio Reyes would only say he had accepted the cash from Castillo for safekeeping. Since that time the attorney says he's received no inquiries from the government or the defense about reclaiming the money, or even about examining the bills to see if serial numbers matched the packet of money Maldonado passed to the councilman.
The lawyer says the advice he initially gave Castillo is no different than what he routinely gives to other clients accused of a crime. "In essence, if the state or the government has something against you," says Frumencio Reyes, "let them prove it."
Frumencio Reyes recalls Castillo telling him that the cash in the envelope was the same money that Betti passed to him at the hotel. "I took his word for what he told me," says the lawyer, who did not say whether the money in the envelope entrusted to him for safekeeping totaled $3,000.
Asked why the government had made no attempt to reclaim the cash during nearly two years of pretrial maneuvering, prosecutor Mike Attanasio refused to comment, claiming the answer "would come out in trial." Councilman Castillo figures the government just didn't care, because "they've got a lot of money."
Maldonado's attorney, Dick DeGuerin, claims the government ignored the packet of cash because it undermines their case. "They want to create a suggestion that Castillo pocketed the money or spent it," says DeGuerin, "and don't want any proof he did the right thing and turned it over to his lawyer."
A government source has a different spin. According to this scenario, the feds waited until the defense claimed the packet of cash, in the belief that the serial numbers on the bills will not match the original cash given Castillo, and the amount of money will not total $3,000. The defense would be bound to disclose that fact, says this source, providing a damaging piece of evidence against Castillo late in the trial.
"It could make the case against Castillo," says one trial source, "or it could bury it."
With so much riding on the outcome, it's easy to understand why both sides decided to let that hot little packet of cash slumber in Frumencio's safe all these months. As we went to press, there was no word on whether the dollars are lining up for Castillo or against him.
If Ben Reyes and Michael Yarbrough are the most likely Hotel Six residents to see bars in their future, and John Castillo and John Peavy are in the middle range of possibilities, then Betti Maldonado and Ross Allyn have to be considered the most likely to go free. Maldonado's fate could hinge on Judge David Hittner's final instructions to the jury.
The former port commissioner's attorney, Dick DeGuerin, has repeatedly claimed his client was entrapped into committing acts she never would have contemplated on her own. In his cross-examination of FBI agent Bob Dogium last week, DeGuerin drew repeated admissions that Maldonado had been initially employed by the Cayman Group in a public-relations capacity, and believed until late in the game that the operation was legitimate and aboveboard.
Maldonado's taped conversations show that by late April she clearly knew that illegal cash payments were being made to councilmembers and that she was prepared to try to make some herself. But she also repeatedly stated she had never engaged in that kind of behavior before she became involved with the Cayman Group. DeGuerin argues that proves she was illegally entrapped by the federal agents into behavior she was not predisposed to commit.
If Hittner's definition of entrapment to the jury matches DeGuerin's, Maldonado's chances are good. If he takes a stricter line, as suggested by a prosecution source, and defines entrapment in a way that excludes Betti's knowing willingness to engage in illegal acts, then her prospects dim.
Judging by the actions of the other defendants, Ross Allyn's presence in the dock hardly makes any sense at all. Through the first five weeks of the trial, the government has produced no instance where Allyn offered a bribe or took a bribe, and there is only scanty evidence that he was aware illegal payments were being made to councilmembers. As late as April 3, 1996, less than a month before the end of the sting, Allyn exclaimed "My God" and "Jesus" when told by FBI operatives that the Cayman Group had made large cash payments to Reyes, Yarbrough, Peavy and Castillo.
Early in the trial, Reyes's attorney Ramsey provoked angry objections from the prosecution when he described Allyn's presence at the defense table as that of "a token" designed to put a white face on the sting. So far, the government evidence has done little to disprove that accusation.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
The prosecution's last shot at the lobbyist comes this week through developer Wayne Duddlesten, Allyn's former employer. The prosecution will try to use Duddlesten's testimony to prove Allyn was a knowing conspirator in Reyes's alleged bribery of councilmembers.
If the lobbyist can just get past that last witness unscathed, they may have to rename the place Hotel Five.
Contact Tim Fleck at tim_fleck@houstonpress. com.
Editor's note: While Tim Fleck has been covering the Hotel Six trial, he has been unable to maintain his beloved regular column, "Insider." Your calls, e-mail and letters requesting its return have certainly meant a lot to Tim, at the very least in regard to job security. The Insider will return soon.