HARLINGEN — A private investigations firm has found no “criminal activity” behind the city’s financial investments.
On Thursday, Mayor Chris Boswell denied City Commissioner Richard Uribe’s claim the McAllen firm Safe Track, hired in December for $80,000, found the compliance review uncovered “inappropriate activity.”
“There’s nothing in there to indicate anything was done inappropriately,” Boswell said during an interview. “There were some recommendations about how maybe to improve things.”
Meanwhile, Commissioner Frank Puente, who pushed to hire the firm, said Safe Track recommended a city official oversee Finance Director Robert Rodriguez’s investment decisions.
“It came down to the finance director not giving the city rates more thought — shopping around for more banks,” Puente said during an interview. “Nowadays, the market changes every minute so the rates will fluctuate.”
During a meeting, Jorge Cisneros, Safe Track’s president who served 23 years with the FBI, presented his report to commissioners.
To come up with the report’s findings, he said he worked with a former U.S. Border Patrol agent who had also served with the FBI and a former Border Patrol agent who had worked with the Internal Revenue Service to conduct the review that included interviews with city employees along with bank employees at Plains Capital, Texas Regional Bank and Lone Star National Bank.
Meanwhile, the investigators also reviewed 5,000 finance department emails narrowed from 141,000 covering a period from September 1995 to the present, he told commissioners during Wednesday’s meeting.
In response to Commissioner Michael Mezmar’s question regarding whether the firm had found any “criminal activity,” Cisneros confirmed the review had found no criminal activity.
“And the city employees, the finance department did a pretty good job in shopping out the CD?” Mezmar asked, referring to a certificate of deposit.
“Yes, sir,” Cisneros replied.
“It seems to me we’ve got to tighten up a couple screws and a couple of nuts and bolts but other than that we’re doing a pretty good job?” Mezmar asked.
“Yes, sir,” Cisneros replied.
Uribe claimed the report shows the firm found “inappropriate activity.”
“There’s a difference between criminal activity and inappropriate activity,” Uribe told Mezmar.
“The way I read the report … there were some things that we’ve done inappropriately that we need to fix in the effort of transparency,” Uribe said, without disclosing details.
“I’d like to let the city respond,” he said. “I don’t want to have that long debate right now. It’s about are we following the best practices — are we doing what’s best for the city.”
Meanwhile, City Manager Gabriel Gonzalez told commissioners the city would respond to the report which commissioners are expected to approve during their next meeting.
In February, Uribe, Puente and Commissioner Frank Morales voted to hire Safe Track for $80,000 to conduct the financial review.
During a meeting, Uribe questioned Rodriguez’s decision to move $5 million into a certificate of deposit at Texas Regional Bank, arguing the city wasn’t getting the best return on the money that could have funded drainage projects, adding the Harlingen WaterWorks System had placed $9 million into a CD at the bank.
In response, Rodriguez presented commissioners with a five-year summary of the city’s cash and investments while explaining he moved $5 million into a CD at Texas Regional Bank because the bank offered a rate of 0.46 percent, far higher than other banks he contacted in 2020.
Meanwhile, Frost National Bank offered a rate of 0.0001, TexPool offered 0.147, BBVA Compass offered 0.20, Lone Star National Bank offered 0.3 percent and the U.S. Treasury offered 0.12 percent, he said.
Amid discussions, Commissioner Frank Morales said he wanted to review any connection between the city and Texas Regional Bank, which employs two airport board members.
While Uribe said Hilltop Securities, the national financial advisory firm that’s served the city for years, had limited its latest review of the city’s investment policy, Boswell said the company found the city’s investment policy, which commissioners had approved in April 2021, in compliance with Texas law.
During the meeting, Boswell and Mezmar argued Safe Track didn’t have the experience or staff of certified public accountants and attorneys to conduct a financial review.
While Commissioner Rene Perez stood behind the majority’s call for a compliance review of the investment policy, he joined Mezmar in voting against Safe Track, suggesting commissioners give the job to the international accounting firm of Ernst and Young, also arguing the private investigations firm didn’t have the expertise and staff to perform the review.
