Documents reveal new details about Agua SUD investigation

After the Agua Special Utility District spent nearly $500,000 on severance payments, sparking a political firestorm, the Texas Rangers weighed a first-degree felony charge against former Executive Director Oscar Cancino.

Records released April 20 by the Department of Public Safety reveal the Texas Rangers investigated whether or not Cancino committed abuse of official capacity. Based on the amount of money involved, the charge would become a first-degree felony.

20161003 AguaSudMeeting 4677“Everything that Mr. Cancino did while he was executive director was well within the law,” said attorney Richard D. Gonzalez, who represents him.

The investigation remains open, according to Lt. Johnny Hernandez, a spokesman for the Department of Public Safety. Cancino hasn’t been charged with any crime.

More than 15,000 customers in Hidalgo County rely on the Agua Special Utility District for water and sewer service.

Cancino accepted the executive director position during October 2016, taking responsibility for more than 60 employees and an approximately $10 million budget.

If the new position had a honeymoon period, it didn’t last long.

Cancino quickly became embroiled in a dispute between the utility district and state Sen. Juan “Chuy” Hinojosa.

Concerned the utility district had become a pawn in western Hidalgo County politics, Hinojosa authored Senate Bill 814. The bill essentially blocked elected officials from hiring each other.

Four members of the utility board worked for the La Joya Independent School District — and two members of the school board worked for the utility district. If the bill passed, they would be forced to choose between elected positions and public employment.

Cancino lobbied against the employment restrictions, but lawmakers passed the bill anyway.

The utility district, though, apparently had a contingency plan.

Before lawmakers passed bill, Cancino signed five-year contracts with school board President Oscar “Coach” Salinas, the utility’s community relations coordinator, and school board Vice President Armin Garza, a project manager for the utility.

They hired an attorney, who warned the utility district against terminating the contracts. Faced with a potential lawsuit, the utility board called a special meeting on July 7.

The board authorized Cancino “to resolve any potential dispute with employees who will be affected by Senate Bill 814.”

Cancino worked with attorney Javier Peña to negotiate severance agreements. Less than two weeks later, the utility district paid $221,000 to Salinas and $268,000 to Garza.

“I, personally, don’t think it’s criminal because of the fact the guy was told ‘Go negotiate it,’” said former Hidalgo County District Attorney Rene Guerra.

Boards normally authorize an administrator to negotiate within certain parameters and bring back the deal for approval, Guerra said. Unlimited authority to negotiate deals and make payments is highly unusual.

“It’s not their money,” Guerra said. “That’s why it’s so easy.”

Cancino resigned in September 2017. The District Attorney’s Office started reviewing the severance payments in November.

Prosecutors subpoenaed documents from the utility district and the school district. They also requested help from the Texas Rangers.

Documents released by the Department of Public Safety show the Texas Rangers opened the case on Feb. 15.

Texas Ranger Reid Rackley “began a criminal investigation regarding the Agua Special Utility District and former Executive Director Oscar Cancino for Abuse of Official Capacity,” according to the 19-page report.

The prosecutor assigned to the case “explained to me that there had been two large payouts to two former employees of Agua SUD which were possibly improper or unauthorized,” according to the report.

Whether or not Cancino cooperated with the investigation or agreed to speak with prosecutors remains unclear.

“I’m really not at liberty to discuss too much of what is going on,” said Gonzales, the attorney who represents Cancino. “Because it is an ongoing criminal investigation.”

The case is a stretch, Guerra said, adding that he didn’t think prosecutors would bring the allegations before a grand jury.

“I don’t see it as criminal. And I don’t see it as abuse of official capacity,” Guerra said. “What I see is really bad management. I think a higher authority ought to remove everybody and put it under some kind of state oversight.”

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