Contract Corruption Puts Kin in Prison


The Texas mayor who once boasted about the "barter system" for his town's contract awards (“You know, my back is itching. Scratch it.”) is headed to prison, along with his father and brothers, who all held public positions.

The sentences appear to end the corrupt, 10-year reign of the Vela family—father Jose Guadalupe ("Lupe") Vela Jr., 65; and brothers Michael, 30; Omar, 36; and Orlando, 34—over the U.S. border town of Progreso, TX.

Omar was the mayor of Progreso; Michael was president of the Progreso Independent School District Board (PISD) of Trustees; Orlando was employed by PISD as a risk manager; and Jose was PISD’s director of maintenance and transportation.

It was Omar Vela who once made the "barter system" boast to his attorney, in a conversation that later became part of the FBI's case against the family.

'Pay to Play'

All four Velas have admitted participating in a "pay to play" public contracting system that involved federally funded construction of school and municipal buildings. A local architect, Jesus Bustos, was also charged in the scheme, which began in June 2004.

Indicted a year ago, the Velas have all pleaded guilty to conspiracy and bribery concerning programs receiving federal funds, while Bustos, 58, has pleaded guilty to conspiracy. In a separate, but related case, Orlando Vela was convicted of theft from a program receiving federal funds.

On Monday (Aug. 11), U.S. District Judge David Hittner:

  • Sentenced Jose Vela to 151 months in federal prison (120 months for the bribery and a consecutive 31 months for the conspiracy), fined him $10,000, and ordered him to forfeit $300,000;
  • Sentenced Omar Vela to 121 months in prison and ordered him to forfeit $314,000;
  • Sentenced Michael Vela to 71 months in prison and ordered him to forfeit $300,000; and
  • Sentenced Orlando Vela to 10 months in prison and ordered him to pay $12,874.42 in restitution.

Bustos will be sentenced Aug. 27.

How it Worked

From 2004 through 2013, authorities said, the Progreso school district received more than $1 million per year in U.S. Department of Education program grants and funds. Contractors were required to pay bribes to obtain contracts from the city or school district.

Progreso school construction
Progreso school construction

The IDEA Group gained more than $20 million in public construction contracts in Progreso, TX, from 2004 to 2013. Architect Jesus Bustos has pleaded guilty to bribery and kickbacks.

"The Velas were able to extract bribes from contractors as a result of their political control of Progreso and PISD," said the FBI, which investigated the case.

Michael and Omar were government officials, while Jose controlled the school board "by rewarding board members who voted as he directed with bribe money," authorities said.

Omar and Michael worked with their father "by gathering bribe payments from contractors and delivering the payments to him," according to the FBI. "They were then given a portion of those monies."

In total, Jose, Omar and Michael took more than $300,000 in bribes, authorities said.

Meanwhile, Bustos admitted paying bribes and kickbacks to the Velas from 2004 through 2013 to obtain architectural contracts for his firm IDEA Group LLC.

Other Cases

In another case involving the family, authorities said, Omar Vela instructed the owner of a plumbing and electrical supply company to provide fraudulent invoices to the school district and city for products the company did not provide.

Progreso TX
bestplacestolive (left); Wikimedia (right)

The Vela family ruled the border town of Progreso, TX, for about 10 years, according to the FBI.

When the invoices were paid, the owner returned the funds to Vela, resulting in more than $14,000 in kickbacks. That scheme ran from April 2009 to December 2012.

In yet another related case in May 2012, Orlando Vela formed a company called Borderline Office Supplies that claimed to be in the business of supplying office and janitorial products to school districts. At the time, Orlando Vela was responsible for directing and managing the school district’s risk management, loss control and safety programs.

Between May 2012 and March 2013, Orlando Vela submitted invoices to the school district for products that Borderline did not actually supply. The $12,874.42 in payments on the fraudulent invoices were approved by Orlando Vela's wife, who was the school district's business manager. She was not identified or charged.

All of the defendants are in custody.


Tagged categories: Architects; Construction; Contract awards; Good Technical Practice; Government; Government contracts; Laws and litigation; Schools

Join the Conversation:

Sign in to our community to add your comments.