Just two months after Arturo “A.C.” Cuellar and Ricardo “Rick” Quintanilla were sentenced to lengthy prison terms for their roles in the Weslaco water plant bribery scheme, the city has amended its lawsuit against the project’s contractors to include facts from the criminal case.
On March 23, Weslaco filed a fifth amended petition in its attempt to recoup the millions it says it lost as a result of one of the largest public corruption scandals to rock Hidalgo County.
The lawsuit — which names a host of defendants, including Cuellar and Quintanilla — primarily focuses on Massachusetts-based CDM Smith, the firm that oversaw the rehabilitation and construction of new water and wastewater treatment plants between 2008 and 2017.
The amended complaint makes new allegations bolstered by facts that were revealed during the October 2022 criminal trial against the two men, whom a jury convicted of a combined 70 counts of bribery, money laundering and wire fraud.
The verdict forms against the two men have been included as one of the city’s updated evidence exhibits.
The 24-page petition also provides more clarity on the roles of two additional participants, former Weslaco Place 4 City Commissioner Gerardo “Jerry” Tafolla, and onetime Starr County powerbroker Leonel J. Lopez Jr.
Tafolla and Lopez’s cooperation with federal investigators proved crucial in the criminal case against Cuellar and Quintanilla. And though Lopez has since died, he remains a named defendant in the city’s updated pleadings.
Tafolla, however, is not listed as a defendant.
THE LAWSUIT
Weslaco originally filed a four-page suit against CDM Smith alone in January 2019 over a dispute regarding some $2.5 million. CDM Smith claimed Weslaco owed it that sum as payment above the $38.5 million guaranteed maximum price the city had agreed to pay.
CDM Smith said the extra cost was as a result of 239 days’ worth of construction delays due to rain over the course of 2014 and 2015.
Weslaco, in turn, argued that weather delays only entitled the company to more time — not more money — to complete the project.
However, the city’s claims have steadily evolved as facts began to trickle out from the criminal proceedings.
Now, the city is looking to recover the entirety of the $38.5 million it paid to CDM Smith and other contractors, any proceeds used to pay bribes or kickbacks, and punitive damages.
Weslaco is further asking the judge to declare all the contracts related to the water plant projects as void due to fraud.
As part of the fraud scheme, Weslaco claims that CDM Smith used one of its own wholly owned subsidiaries, CDM, as well as another company, San Antonio-based Briones Engineering and Consulting, to manufacture delays in order to drive up the project costs.
CDM Smith used the proceeds from the inflated costs to recoup the money it had spent on bribes, Weslaco alleges.
One of CDM Smith’s own employees, a woman named Mari Garza Bird, allegedly led the company’s involvement in the bribery conspiracy.
The city’s lawsuit reveals that Garza Bird and Rolando Briones, principal of Briones Consulting and Engineering, are two of the people federal prosecutors listed as uncharged co-conspirators — as “Person A” and “Person B,” respectively — in various charging documents.
Weslaco bolsters the claims that Garza Bird and Briones were willing participants via a statement from Leonel Lopez.
In the affidavit, dated July 17, 2019, Lopez swore that he regularly met with the pair — including a 2012 meeting at a San Antonio Starbucks where they told him he needed to further inflate the price of the project in order to cover the cost of the bribes.
“Bird instructed me that Briones’s contract… would need to be amended in order for me and the other co-conspirators to be paid. I was instructed to have John Cuellar and Gerardo Tafolla lead a vote to amend Briones’s contract to add $2,978,950…” Lopez stated.
In its own court filings, CDM denies that Garza Bird was part of the scheme, but says that even if she was, it was without their consent.
“Here, the City has not pleaded… any cognizable claim that Ms. Garza Bird’s alleged participation in any public corruption — which, again, the CDM Parties deny — was within her scope of authority by either express or implicit authorization from the CDM Parties to commit such crimes,” CDM states in a Feb. 21 motion to dismiss.
Neither Garza Bird nor Briones have been charged with a crime. Nor is Garza Bird named as a defendant in Weslaco’s lawsuit.
CDM SMITH
The city claims it’s not the only government entity to fall victim to a bribery scheme instigated by CDM Smith.
The lawsuit draws parallels to other instances of wrongdoing, including one that CDM admitted to in 2017 as part of a pilot program meant to forestall criminal charges.
In that instance, CDM admitted to violating the Foreign Corrupt Practices Act by bribing public officials in India to secure highway construction contracts.
The company self-disclosed that it had paid $1.18 million in bribes to Indian government officials and made more than $4 million in profit on the scheme — a sum it agreed to forfeit to the U.S. Department of Justice in exchange for the DOJ declining to press criminal charges.
In another instance, Weslaco points to a 2020 settlement CDM reached in Virginia federal court.
In that case, the company agreed to pay $5.6 million to settle allegations that it had defrauded the U.S. Navy by submitting inaccurate cost and labor estimates.
Weslaco has asked CDM to hand over documents related to the two cases, but the company pushed back, saying they’re irrelevant to the lawsuit at hand.
On Wednesday, state District Judge Bobby Flores denied CDM’s fourth attempt to dismiss the lawsuit. However, the judge has yet to decide whether the company must hand over records from the Virginia and India cases.
