DALLAS — The Texas Department of Transportation's land transactions for the widening of Interstate 35E are the subject of a federal grand jury investigation into potential criminal activity, the Dallas Morning News reported Monday.
TxDOT confirmed the federal investigation in a letter sent last month to the state attorney general's office but would not discuss what prompted it, the newspaper said. TxDOT, the state's largest bond issuer, notified the attorney general because the agency wants to withhold copies of subpoenas regarding I-35E land acquisition. The News requested the subpoenas in February under the state's Public Information Act.
Two Dallas real estate men received millions of taxpayer dollars by buying right of way and then selling it to the state months later at a profit, according to the News. The TxDOT letter did not say whether those purchases are part of the criminal investigations. However, people with knowledge of the situation told the News they were approached by FBI agents about those highway deals.
According to the News, business partners Kevin Bollman, 46, and Wade Blackburn, 31, said they used public information about the highway projects to decide where and when to buy land along the highway corridor. The men later hired a former TxDOT official who had helped them coordinate the purchases of their land, the News reported.
Matthew Orwig, an attorney for Bollman, told the News last week that the FBI has not approached either of the men.
"TxDOT has transparent rules and procedures for its right-of-way acquisition projects," Orwig told the News. "Mr. Bollman and Mr. Blackburn are real estate professionals who followed TxDOT's guidelines in all of their business dealings."
Widening of I-35E in Denton County is expected to be one of the most expensive highway jobs in North Texas. The interstate crosses heavily populated northern suburbs of Dallas.
In its request to the attorney general's office to withhold subpoenas, TxDOT said the U.S. attorney's office objects to the documents' release because it would "interfere with and compromise their investigation and prosecution," the News said.
Bollman and Blackburn formed several business partnerships to buy properties along I-35E in Denton County and downtown Dallas since 2009. They then sold multiple parcels to TxDOT early in the state's right-of-way acquisition process. The News identified at least 19 acres, using available public records.
TxDOT paid Bollman and Blackburn at least $22.2 million over roughly a five-month period in 2011 for the Denton County parcels, according to records obtained by the News. The newspaper said the price the men paid for the land is not known because real estate sales prices do not have to be disclosed in Texas.
