And when hard times hit the real estate market last year, several of Walsh's former friends and partners sued him, claiming that he showed favoritism to other partners.

In an affidavit, one of the plaintiffs in the case, Dennis M. Cargill, accused Walsh of using his power to aid his personal business interests.

"Cambridge is known to be a difficult place to do real estate development because constituents are basically 'anti-development,'" the affidavit said. "Walsh exuded a cocky self-confidence based on his legal/political clout and believed that he could do most anything [in his business deals]."

In his affidavit Cargill also stated Walsh's real estate transactions "had serious conflicts of interest."

City Ethics Legislation

Last month, possible conflicts of interest prompted the city council to amend its ethics legislation, which now requires the city's elected and appointed officials to publicly disclose financial holdings and the names of all business partners.

But despite the move, which made Cambridge's ethics law "the toughest local ethics law in the country," according to Cyr, Walsh and other councillors recognize that reporting business partners will not definitively cap dealings between colleagues.

In defense of his financial ties to Russell, Connarton and other city employees, Walsh says no law can prohibit him from selling his house to the city manager, just as no law can prevent him from conducting business with his colleagues.

"Involving other elected officials in business dealings is not an illegal act," Cyr says.

Cyr says the law was designed to emphasize the separation of the public and private interests of city officials.

But other council members say the legislation is unnecessary because of the umbrella effect of the Massachusetts ethics legislation and because of the integrity of Cambridge's councillors.

"I don't think [the ethics legislation] was necessary," Russell says. "This makes it look like people think we're crooked. No one on the council is crooked."

Walsh's Opposition to Rent Control

But not everyone agrees. In the past, many Cantabrigians have criticized Walsh's conduct. And much of the criticism centered around his vehement opposition to rent control legislation. Along with Russell, Walsh has consistently voted against rent control bills and in favor of developer interests.

"He was always a representative of the real estate industry," Cyr said. "People vote for him knowing that that's what he does."

But many of Walsh's property investments are in rent control developments, and some Cambridge rent control activists question whether some of these properties were illegally changed into uncontrolled condominiums.

"What's been a concern to us is the way in which permits have been removed where his [Walsh's] office has been involved," says Michael H. Turk of the Cambridge Tennants Union (CTU). "There is a question as to whether there have been illegal removals as well as legal."

But the allegations against Walsh put up by Cambridge residents and the Justice Department will probably not be fully answered until-federal authorities complete their inquiry. And, while investigators probe his financial past, business will go on as usual. According to Wolf, Walsh's council term will continue and if Walsh is found guilty of the allegations, the public will decide his political future.

Of course the speculation continues.

"Was Billy Walsh acting criminally?" Cyr asks. "Who the hell knows?"