Lencho Rendon: link to these companies constituted "self-dealing" and raised serious questions about how forthright Jones had been with the board

Thursday, April 24, 2008

INNOCENT AS CHARGED

By JMontoya
Now that Cameron County District Attorney Armando Villalobos has issued a mass pardon for every elected official and public administrator involved with the pilferage of the $21 million in bond money issued for the construction of the port rail/truck bridge, it appears that the powers that be want us to forgive and forget.
Except for the companies or individuals named in the unsealed indictment, apparently no local officials will have to answer for their part in the fiasco, even though we all know that many of them had their hands in the till and enriched themselves - directly and indirectly - from the public's money.
The port sued Dannebaum engineering, of Houston, for $9.2 million of the $15.5 million the firm was paid for performing engineering and consulting work on the bridge. Investigators determined that only $4.5 million of that amount was justified by the work product delivered by the firm. Despite the failure of the firm and its Mexican subcontractors to attain a diplomatic note from the Mexican government to construct the bridge, they invoiced - and were paid - more than $2 million as "success" bonuses.
Villalobos's recovery of $1 million of "success" bonuses will be shared by the DA's office and the port, although no numbers are yet available on the split. The DA indicated some of these bonuses were paid "imprudently." For many months, many have questioned why commissioner Roy De Los Santos signed the bonus checks - and more importantly - why local banks such as IBC, approved payments with only one commissioner's signature, against BND policy.
De Los Santos opted not to run for reelection for his position at the last minute, leaving Sergio "Tito" Lopez without an opponent.
U.S. Congressman Solomon Ortiz and his former chief of staff (now a Washington lobbyist) Florencio "Lencho" Rendon not only wined and dined at posh restaurants and hotels here and in Mexico City, Washington, and Monterrey at port expense, but also played a direct hand in guiding port boards and administrators on which contractors to hire, according to previous testimony by former board members.
Although Rendon sought to distance himself and the congressman from the fiasco, past port commissioners told investigator Charles Willette that Rendon often recommended who Dannebaum Engineering should hire in Mexico.
Former commissioner Sidney Lassaigne told the local daily that Rendon was directly involved in telling port officials who to hire in Mexico, including a firm called Construcciones Mantenimiento y Comercializacion RODA, S.A. Willette noted in his report that Dannenbaum officials told him that they contracted RODA without formal port approval on Rendon's recommendation.
"He (Rendon)...brought numerous other subcontractors and potential subcontractors to BND and was often trying to influence how BND was run," Lassaigne told Emma Perez-Trevino, of the Brownsville Herald.
BND's consultant in Monterrey, Esther Rodriguez Silva, receives $4,000 a month. She was hired at Rendon's recommendation. There is no documentation indicating her professional specialty, other than that she is a close friend of the congressman's chief of staff.
At one point, Rendon's insistence on how to run the port's business reportedly prompted the late Raul Besteiro, BND's executive director, to throw up his hands and tell Rendon that he could be the port director if he wanted.
It should be noted that James Dannenbaum and his company's manager Louis Jones have contributed heavily to Ortiz's reelection campaigns every two years.
And it was Ortiz's office that recommended that the port hire Randy DeLay and then Glenn B. LeMunyon (former majority leader Tom DeLay's former chief of staff, Randy's brother) to lobby for the port on the bridge and other pojects. In six short years (1998-2004), DeLay received $1.9 million in fees. LeMunyon received $525,178 from the year 2000 to 2004.
And still, no bridge.
The fiasco started in earnest in 1997, when Texas State Senator Eddie Lucio Jr.- moonlighting as a consultant - introduced Dannenbaum Engineering to the port. The board then hired the firm and terminated its bridge contract with Brown and Root. Lucio, who acknowledged receiving $140,000 from the firm from 1997 to 2001, also acknowledged he received a yearly $30,000 from the company in the years since, including two $10,000 bonuses. Lucio denied he received any bridge money, but refuses to specify what work he does for the firm on other projects.
At the local level, former commissioner Lassaigne received $6,000 from Dannenabum officials as political contributions as did former commissioner "Captain" Eddie Rendon, who received $2,000 in contributions from them. De Los Santos received $6,000 from the firm officials contributing as individuals. It is against Texas law to accept contributions from corporations.
A port spread sheet show that even the BND's contract lawyers Rentfro and Rentfro, received money from the bridge bond funds. The spread sheet indicates that from 1995 to 2004, the Rentfros billed - and got paid - $22,781 for their work on the bridge project.
Dan Rentrfo Jr., who investigated in 1999 whether $304,152 paid to a local attorney and consultants in Mexico were legal, determined that no state or federal laws were violated in the transaction. He determined this even through local attorney Dennis Sanchez paid Alma Guerrero-Miller $40,000 for consulting work and later for a pictorial history of the port, even though she was a Tamaulipas state employee at the time.
Rentfro also saw nothing wrong with the $240,000 sent to a Mexican firm - Malpaso Corp. - through wire transfers to a bank in the Bahamas. Willette noted in his report that it was not Rentfro's determination to make.
Many at the port speculate that the unnamed indictees would include Dannenbaum manger Jones, who told Willette he had no role in the formation or operation of the firms in Mexico that received millions in port funds. Willette found that Jones not only knew of the companies, but was also the major stockholder in three of them - COBINA, Homeframes de Mexico, and Sistemas. He reported that $9.2 million went to the three companies linked to Jones, and that little or no work product existed to justify the payments.
Willette's report stated that Jones' link to these companies constituted "self-dealing" and raised serious questions about how forthright Jones had been with the board. Payments to the three firms were made through wire transfers at the same time through the same money exchange houses in Mexico, Willette's report noted.
There was no comment in Villalobos's statement announcing the grand jury's finding and indictments, on whether the board had erred in accepting a settlement with Dannenbaum that gave the port no money, and which did not specify what or when $2.9 million in promised engineering work would be delivered.
It should be noted that Carlos Masso, an assistant DA in the White Crimes Unit, was one of the BND members voting for the settlement. Villalobos has stated in the past that Masso had no role in his investigation or the presentation to the grand jury.