Faced with the threat of withheld federal funds, the Rio Grande City Consolidated Independent School District agreed to pay back more than $20,000 for a 2012 violation of Federal Communications Commission rules.
In October 2019, Universal Service Administrative Co., an FCC-designated nonprofit that helps to provide internet services across the country, reached out to the school district seeking to recover $20,301.08 that the school board had paid to Starr Telecommunications, ETC in 2012 despite a conflict of interest.
USAC told the school district that then-board trustee Leonel J. Lopez Jr., who was a registered member of the company, should have recused himself from voting on whether to approve funding for the company, according to emails obtained by The Monitor through a public information request.
“After a thorough investigation, it has been determined that this funding commitment must be rescinded in full,” USAC wrote in an email on Oct. 23, 2019. “A member of the Rio Grande City School District board, Leonel Lopez, Jr., is associated with Starr Telecommunications, ETC, the service provider for the funding request. It was determined that Lopez Jr. failed to recuse himself when the award of service to Starr Telecommunications, ETC was presented to the board.”
“The applicant should not have a relationship with a service provider prior to the competitive bidding that would unfairly influence the outcome of a competition or allow it to unfairly compete in any way,” the nonprofit added. “Since the applicant engaged in an improper relationship with a selected service provider, which represents a conflict of interest and compromises the competitive bidding process, the commitment has been rescinded in full. USAC will seek recovery of any improperly disbursed funds from both the applicant and service provider.”
In Dec. 2019, USAC followed up with a Demand Payment Letter notifying the district that a payment was due by Jan. 25, 2020. They also stated that unless an appeal was pending, the school district would not receive any more funds from the FCC or from USAC until the debt was paid in accordance with the FCC’s Red Light Rule.
“In addition, if all or a portion of the Debt and any accrued charges remain after the Due Date, unless an appeal is pending or other satisfactory arrangements have been made, all RIO GRANDE CITY SCHOOL DIST applications and requests for benefits will be dismissed,” USAC stated.
The district did not meet the Jan. 25 deadline and then on Oct. 19, 2020, a representative with USAC emailed the district about it again.
“There has been no payment or any other action taken to this,” the representative wrote, “as a result all pending invoices or application have been placed on hold and will not be processed until this is cleared.”
Later that afternoon, the district’s director of technology, Eduardo Saenz, indicated to assistant superintendent of finance, Diana Robles-Méndez, that the district believed the telecommunications company would be paying the debt owed to USAC.
“Since he received payment, his company was going to pay this bill,” Saenz wrote. “Evidently, they have not paid it and therefore, all future awards for our district will be on hold until this item is taken care of.”
The school board’s attorney Baltazar Salazar told the board on Monday that the unpaid debt had caused approximately $279,000 to $290,000 in funding from USAC to be withheld from the district.
The board voted to pay the outstanding invoice which Salazar confirmed had been paid the following day.
During the meeting, the board also authorized Salazar to seek reimbursement from Starr Telecommunications, ETC or the company that has since acquired it.
Lopez died due to complications from cancer last month but his father, Leonel Lopez Sr. — who was the owner of Starr Telecom — denied the allegations that his late son did anything wrong.
“…my son was not part of the company anymore and he did not vote he refused to vote and what they are talking about never happened,” Lopez wrote in an email, alleging the board’s actions were retribution against Superintendent Vilma Garza who was the director of technology when the alleged conflict of interest occurred.
Lopez also questioned the timing, wondering why the board waited months to take action on this issue.
In response, School Board President Eduardo “Eddie” Ramirez issued a statement clarifying the investigation “was initiated and conducted solely by USAC and as required by FCC rules.”
“The findings of their investigation was brought to the Board of Trustee’s attention about 60 days ago,” he added. “RGCCISD did not take part in the investigation; yet, as a public entity, the district must abide by the findings and comply with payment so as not to jeopardize present and future funding to RGCCISD.”
In regards to the timing, Ramirez said “the presentment of this issue was completely out of the district’s control, but the matter became urgent and required immediate attention as future significant funding was being withheld until this issue was resolved.”
“The RGCCISD Board of Trustees has addressed the issue by paying the amount owed, and RGCCISD is now in good standing,” Ramirez said. “The district, through general counsel, will also be demanding reimbursement from the company deemed liable in USAC’s underlying investigation.”
