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Mayor, Kin Held in ‘Pay to Play’ Scheme

Friday, August 30, 2013

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“It’s the barter system .... You know, my back is itching. Scratch it.”

Thus did the mayor of Progreso, TX, advise his attorney on how public contracts were dispensed in the town that he, his brother and their father ruled for years, according to a federal corruption indictment of the three unsealed this week.

The 10-count indictment accuses three members of the Vela family, of Progreso, of a nine-year "pay to play" scheme involving kickbacks and bribes for municipal and school construction contracts.

Charged are Progreso Mayor Omar Leonel Vela, 35; his brother Michael "Mikey" Vela, 29, president of the Progreso school board; and their father Jose Guadalupe "Lupe" Vela Jr., 64, who is the school district's maintenance and transportation supervisor.

Omar Vela Michael Vela
Facebook (left) / Progreso ISD

Progreso, TX, Mayor Omar Leonel Vela (left) and his brother, Progreso school board president Michael "Mikey" Vela, gave their father a free hand in awarding municipal and school contracts, authorities say.

All three have been arrested on charges of conspiracy, mail fraud, violations of the Travel Act, theft, and bribery, the FBI announced Wednesday (Aug. 28).

Contractors, Architect Implicated

The sealed indictment, returned Aug. 21 in Houston, was unsealed after the three were taken into custody. They were to appear Thursday (Aug. 29) before U.S. Magistrate Judge Dorina Ramos in McAllen, TX.

The indictment also implicates, but does not identify, an architectural firm, a construction company, a lawyer and a plumbing and electrical supply company as providers of bribes and kickbacks to the Velas in return for work on multiple projects, including construction of a new elementary school, a school gymnasium, and a municipal park.

The Progreso Independent School District receives more than $1 million per year from the U.S. Department of Education.

Pay to Play

The indictment paints a picture of a town ruled since 2004 by one family. It says that Jose Vela ran the city and doled out contracts through his sons, the mayor and the school board president.

By recruiting and funding selected individuals, Jose Vela was able to maintain a willing majority on the seven-member school board, the charges say. He maintained loyalty by rewarding favorable school-board votes with bribe money and retaliating against opponents.

"Using his influence over local government, Jose Vela would and did dictate who was awarded contracts on public projects in Progreso," the indictment says. "Jose Vela and his sons Omar Vela and Michael Vela would and did extract bribes and kickbacks from those who sought contracts on public projects, creating a 'pay to play' contracting scheme in Progreso."

Progreso, located in the southern tip of Texas, has about 6,000 residents and borders the Mexican town of Nuevo Progreso.

Trips and a Mistress

The indictment details dozens of bribes paid to all three men over several years. Omar Vela alone raked in about $85,000 just from the construction company between 2004 and 2006, the charges say.

Progreso map Progreso Port of Entry
bestplacestolive (left); Wikimedia (right)

Bordering the Mexican town of Nuevo Progreso, Progreso, TX, is a U.S. port of entry with about 6,000 residents. Authorities say the town has been ruled by the defendants for years.

Some of the payments were cash in envelopes marked with individual names. One payment went toward a hunting trip for the Velas, authorities say; another, toward a weekend getaway for Jose Vela and his mistress.

At a meeting in December 2008, the indictment says, Omar Vela explained to the unidentified lawyer the need for parties to pay in order to get work in Progreso.

"It's the barter system....," the document quotes Omar Vela as saying. "You know, my back is itching. Scratch it."

When the lawyer replied that they would have to be careful, Jose Vela allegedly said he had "never had a problem with" that system.

Legal Services and Phantom Supplies

At a meeting in January 2009, the indictment says, Jose Vela instructed the lawyer to increase his legal services bill to the school district from $6,000 to $8,000, but to give Jose Vela the additional funds in cash.

The document also details nearly $10,000 in payments that the attorney allegedly made to the Velas before and after receiving a contract from the school district for legal services, as well as Jose Vela's assurances to the attorney about the job in recorded telephone calls.

The indictment also describes multiple invoices totaling thousands of dollars from the unidentified supply company to the mayor for various products that were never delivered.

When the invoices were paid, the money—more than $14,000 from 2009 to 2012—went back to the mayor, the charges say.

Decades of Prison Time

If convicted, each defendant faces up to 20 years in prison for mail fraud, five years for the conspiracy, 10 years for each of the bribery and theft involving federal programs, and five years for each of the six counts of violations of the travel act. All charges also carry a possible maximum fine of $250,000.



Tagged categories: Construction; Contractors; Contracts; Enforcement; Good Technical Practice; Government contracts; Laws and litigation; Schools

Comment from Paul Braun, (9/3/2013, 10:34 AM)

another family business destroyed by intrusive regulations

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