During a court hearing Tuesday over the city of Mission’s contract with an energy savings company, City Manager Randy Perez acknowledged the identity of city officials that were involved in a federal investigation that has already led multiple officials from western Hidalgo County to plead guilty to bribery.
Perez was called to testify during an injunction hearing held Tuesday in state district court in the ongoing lawsuit filed by former Mission Mayor Norberto “Beto” Salinas against the city of Mission over an energy savings contract they awarded to Performance Services Inc., or PSI.
In his lawsuit, initially filed in August 2021, Salinas argued the city violated state law by allegedly not following the proper procurement process in awarding the contract to PSI.
THE FEDERAL CASE
PSI is also at the center of a federal investigation that has resulted in at least three officials from western Hidalgo County pleading guilty to participating in a bribery scheme.
Among those officials was Armin Garza, a board trustee for the La Joya school district.
Earlier this month, Garza confessed to accepting about a quarter of a million dollars in bribes as part of a kickback scheme with an employee of PSI.
As a member of the school board, Garza confessed to voting in favor of granting a contract to PSI through La Joya ISD and confessed to using his influence as a board trustee over school district employees who were also elected officials at other government entities — such as the cities of Mission and Penitas, and the Agua Special Utility District — so that those individuals would vote to award a contract to PSI through those entities.
In return, Garza would receive bribes and kickback payments from subcontractors facilitated by the employee from PSI.
He influenced those school district employees with promotions or pay raises, and he admitted he received at least $234,500 in bribes from the company and their subcontractors.
The criminal information, a report filed in federal court that described the allegations against Garza, listed several unnamed entities and public officials who were allegedly involved in the scheme.
Last week, two officials with the city of Peñitas — chief of staff Andres Morales and Place 1 Councilman Alex “Payo” Guarjardo — pleaded guilty to participating in the scheme.
PEREZ’S TESTIMONY
Ricardo “Rick” Salinas, son and attorney of former Mayor Beto Salinas, questioned Perez, the city manager, on Tuesday over the city’s approval of the PSI contract in order to clearly tie the city and city officials to the claims listed in the criminal information for Garza.
One part of the criminal information stated that, “On or about June 22, 2020, Company D was awarded a Guaranteed Energy Savings Performance Agreement by Government Entity B after Persons H, I, and J voted in favor of the agreement over the objection of Government Entity B’s City Manager.”
Under questioning from Salinas, Perez confirmed that the Mission city council voted three to two to award a contract to PSI even though he and his staff had recommended denying the contract. Those who voted to approve the agreement with PSI were Mayor Armando O’Caña and council members Jessica Ortega Ochoa and Alberto “Beto” Vela.
O’Caña was employed with the La Joya school district, where Armin Garza served on the school board, until he retired in 2019. Ortega Ochoa, O’Cana’s niece, is still employed at the school district.
Council members Ruben Plata and Norie Gonzalez Garza voted against the contract.
STATUS OF THE STATE CASE
Currently, the city of Mission is temporarily enjoined from making payments to PSI after the state District Judge Noe Gonzalez ordered the city to stop making further payments to the company and for PSI’s work to stop.
The issue of whether the payments and the work can continue are yet to be decided and will be addressed in another hearing to be held next week.
However, the case might not even be able to proceed much further if it turns out the court does not have jurisdiction to hear the case as attorneys for PSI are now arguing.
Jane M. N. Webre, an attorney for PSI, denied any criminal actions or wrongdoing on the part of PSI and said they were conducting an internal investigation.
Still, she argued that even if the contract was approved in an illegal manner, the city retains discretion to void the contract or not. Though the contract would be voidable, it is not void and therefore any payments made as part of the contract are still legal.
“The fact of a conflict or a bribe or a conspiracy … the fact is that Texas law in the Texas Local Government Code, Chapter 171 and Chapter 176, and the Mission city ordinances say that it’s to the city to decide what to do with a contract like that,” Webre said.
The judge appeared appalled that this may be the case.
“What you’re telling me is, if the entire city council and the mayor take a bribe to enter into a contract that then the city — being the mayor and the commissioners — can later on say ‘well, we took a bribe but we still think it’s a good thing for the city so, the city is going to be bound to pay it’ … that sounds ridiculous, Ms. Webre,” Gonzalez said.
Despite his clear distaste for the law, Gonzalez said he would have no choice but to abide by it if he reached the same conclusion in his own review of the law.
“I’m going to review it and if that’s what it says, that’s what it says, Mr. Salinas,” the judge said. “As odd as it seems and as ridiculous as it sounds, the laws that pertain to this type of case and the city of Mission may bind this court’s … it would bind my hands and so I would not be able to grant that type of relief if I have no jurisdiction over it.”
The next hearing in the state case is scheduled for Feb. 1.
