The city of Peñitas received a federal grand jury subpoena in May for information on mayors, judges and other politicians from western Hidalgo County.
FBI agents hand-delivered the subpoena to Peñitas City Hall on May 20.
The subpoena requested information on La Joya school board President Oscar “Coach” Salinas, Mission Mayor Armando “Doc” O’caña, Mission City Councilman Jose Alberto “Beto” Vela, Peñitas Mayor Rodrigo “Rigo” Lopez, Peñitas City Manager Omar Romero, Peñitas Chief of Staff Andres “Andy” Morales, Sullivan City Councilman Julian Peña, Sullivan City Manager Ana Mercado, Hidalgo County Court-at-Law #9 Judge Patricia “Patty” O’Caña-Olivarez, Hidalgo County Justice of the Peace Sonia Treviño, Agua Special Utility District General Manager Jose E. “Eddie” Saenz or corporations affiliated with them.
“In this context, a grand jury subpoena means an investigation is underway,” said former Starr County District Attorney Omar Escobar.
The La Joya Independent School District, Agua SUD, and the city of Mission also received subpoenas in May. They came with identical warnings.
“You are not to disclose the existence of this directive,” according to the subpoenas, which directed anyone with questions to call the FBI. “Any such disclosure would impede the investigation being conducted and thereby interfere with the enforcement of the law.”
The Progress Times requested the subpoenas on May 21.
Agua SUD released its subpoena after consulting with the FBI. Peñitas didn’t.
Attorney Monica M. Galvan, who represents Peñitas, claimed the Federal Rules of Criminal Procedure made the subpoena confidential. The Texas Attorney General’s Office disagreed.
On Aug. 20 — three months after FBI agents served Peñitas with the subpoena — the city released a copy.
A grand jury subpoena isn’t an allegation of wrongdoing or proof that a crime was committed. A subpoena directs the recipient to provide the government with documents or testify before a grand jury.
Investigations don’t normally start with subpoenas, Escobar said, but they may be issued at any point during the process.
“Usually you’re trying to corroborate what other information or intel is coming in,” said Escobar, who left the Starr County District Attorney’s Office in January and opened a law office in Rio Grande City.
The subpoenas, along with other information obtained by the Progress Times, suggest the FBI and federal prosecutors are investigating public corruption in western Hidalgo County.
La Joya ISD, Agua SUD and Mission all received subpoenas for information on Performance Services Inc., an Indiana-based company that specializes in “energy savings” contracts.
When the investigation started remains unclear.
The investigation may be linked to the money laundering case against Jose Luis Trejo, a McAllen businessman the FBI arrested in October 2020. Rumors about the investigation started circulating at roughly the same time.
Speculation about the investigation and potential targets intensified during May, when the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives arrested Peñitas Chief of Staff Andy Morales on weapons charges.
During a hearing after his arrest, Assistant U.S. Attorney Roberto “Bobby” Lopez Jr. said the ATF found $30,000 to $40,000 in cash at Morales’ house.
The subpoenas arrived less than two weeks later.
The City of Peñitas
Peñitas is a political powerhouse in western Hidalgo County.
The political organization that runs Peñitas City Hall coalesced in 2015, when voters elected Mayor Rodrigo “Rigo” Lopez.
After the election, Peñitas hired City Manager Omar Romero and created a chief of staff position for Andy Morales, who became a key player in political campaigns.
Lloya Loya, the son of Peñitas City Councilman Ramiro Loya, replaced Lopez on the Agua SUD board. Peñitas City Councilman Armin Garza, meanwhile, resigned to run for the La Joya school board. The City Council replaced Garza with his father-in-law, Felipe Quintanilla.
Along with politicians from Palmview, La Joya and Sullivan City, they became part of Team L1berty, a local political party that dominated western Hidalgo County politics for the next two years.
Team L1berty fractured in 2018, when members couldn’t agree on candidates for school board.
The Peñitas faction emerged stronger.
“They were a group that came in very aggressive and they pushed their influence on law enforcement by controlling most of the police departments,” said former La Joya school board President Arnold Ochoa, who ran against Garza in the May 2015 Peñitas City Council election. “They pushed their influence on jobs at La Joya ISD. And, eventually, it came to an end. Their methods were unethical and, in some cases, probably illegal. And this is where they’re at now.”
Ochoa said the situation in Peñitas reminded him of something former state Rep. Ismael “Kino” Flores Sr. — a legend in western Hidalgo County politics — would say.
“Kino told me this many years back,” Ochoa said. “There’s two ways a politician exits. It’s either as a hero or as a villain.”
The Peñitas faction generated political goodwill by offering positions to influential people.
Peñitas made Sonia Treviño, a chiropractor who served on the Mission school board, an alternate municipal judge. Patricia “Patty” O’Caña-Olivarez, an attorney who served on the Mission school board and later became a Hidalgo County court-at-law judge, represented the city’s economic development corporations.
Mission Mayor Armando “Doc” O’caña was the city’s public safety director. Agua SUD General Manager Jose E. “Eddie” Saenz was the city engineer. La Joya school board President Oscar “Coach” Salinas handled public relations for Peñitas. And the city offered Sullivan City Councilman Julian Peña the opportunity to become a building inspector.
The subpoena asked for information on all of them.
The Grand Jury Subpoena
The subpoena requested contracts, invoices, payment records and other documents on:
La Joya ISD Board President Oscar “Coach” Salinas and Maya’s de Oro LLC
Oscar “Coach” Salinas is the president of the La Joya ISD board of trustees. His wife, Alma, is the mayor of Sullivan City.
Salinas created Maya’s de Oro LLC in March 2017, according to documents filed with the Texas Secretary of State’s Office. Sullivan City approved a business permit for the company, which planned to open a drive-thru convenience store and restaurant called Herradores Stop & Go, five months later.
Herradores Stop & Go shut down in April 2020 amid the pandemic.
Salinas also conducted other business through Maya’s de Oro LLC, which became a catch-all corporation for his business interests.
Salinas listed Maya’s de Oro LLC on a contract with Mercedes-based L&G Consulting Engineers, which agreed to pay him $8,000 per month to “engage in Professional Services associated with sales,” according to a copy of the contract filed in a lawsuit against La Joya ISD.
Peñitas contracted with Maya’s de Oro LLC for public relations work, Salinas said, adding that he emceed countless events, including Christmas toy drives, Spring Break safety campaigns and the annual White Wing Festival.
The city paid about $83,000 to Maya’s De Oro LLC from January 2017 to May 2021, according to documents released under the Public Information Act. Peñitas also paid nearly $23,000 to Salinas himself.
Salinas said Maya’s de Oro never did business with La Joya ISD.
“I have nothing to hide,” Salinas said. “All I want to do is what every American can do, which is just work and provide for the family.”
Mission Mayor Armando “Doc” O’caña; the Red White and Blue Foundation Inc.; Mission Vision and Hope Foundation Inc.; and Mission Heroes Inc.
Mission Mayor Armando “Doc” O’caña worked for the city of Peñitas from 2016 to 2019.
The job — public safety director — paid about $33,000 a year, according to salary data released under the Public Information Act. O’caña retired in May 2019.
O’caña created the Red White and Blue Foundation in 2018 and the Mission Vision and Hope Foundation in 2019, according to documents filed with the Secretary of State’s Office. He’s also on the board of Mission Heroes Inc.
“None of the foundations had any connection with the city,” O’caña said.
The subpoena requested any contracts with O’caña or the organizations, along with invoices and payment records.
“My suspicion is that it is political in nature,” O’caña said. “So somebody that’s against my politics has to be in touch with them.”
Mission City Councilman Jose Alberto “Beto” Vela, Divine Pharmacy and Apple Pharmacy
Divine Pharmacy, which is owned by Mission City Councilman Jose Alberto “Beto” Vela, provided the city of Peñitas with COVID-19 testing during the pandemic.
It also sold gloves and temperature screening technology to Peñitas.
“I did testing for Peñitas, I did testing for Agua SUD, I did testing for Palmview,” Vela said.
Vela provided the Progress Times with invoices he submitted to Peñitas in 2020, which show what Divine Pharmacy sold the city.
Divine Pharmacy billed Peñitas for COVID-19 testing in July and cases of medical gloves in September. Divine Pharmacy also sold Peñitas three temperature screening devices equipped with biometric face recognition technology for $7,500 each.
Vela provided the Progress Times with invoices that show Divine Pharmacy purchased the temperature screening devices for $6,000 apiece and sold them to Peñitas with a $1,500 markup.
Documents released by the city show Peñitas paid about $48,000 to Divine Pharmacy in 2020. Peñitas paid another $2,400 to Apple Pharmacy, another pharmacy Vela owns.
Vela said the FBI hadn’t contacted him and he didn’t know why the government had requested the information.
“I think they just see the pharmacies and I’m a councilman,” Vela said.
Hidalgo County Court-at-Law #9 Judge Patricia “Patty” O’Caña-Olivarez
Before she became a judge, Patricia “Patty” O’Caña-Olivarez served on the Mission school board from May 2008 to November 2020, according to information provided by the district. She also represented the Peñitas Economic Development Corp. and the Development Corporation of Peñitas.
The subpoena asked for all contracts between O’Caña-Olivarez and the city, along with invoices and payment records.
Peñitas paid $51,000 to O’Caña-Olivarez from 2018 to 2020, according to documents released by the city.
O’Caña-Olivarez said that she didn’t know why the government requested the documents.
Hidalgo County Precinct 3 Place 1 Justice of the Peace Sonia Treviño
Sonia Treviño, a local chiropractor, served on the Mission school board with O’Caña-Olivarez. Treviño served from May 2007 to August 2014 and from May 2016 to November 2020, according to information provided by the district.
Peñitas appointed Treviño to the position of alternate municipal judge in 2017.
“It was a non-paid position,” Treviño said, adding that she assisted Municipal Judge Jesse Lerma whenever he needed help.
Peñitas paid about $1,300 to Treviño over the three year period, according to documents released by the city, which appear to show payments for travel and other reimbursable expenses.
Treviño ran for justice of the peace in 2020 and took office in January 2021.
Peñitas Mayor Rodrigo “Rigo” Lopez incorporated Xizaka LLC in January 2018, according to documents filed with the Secretary of State’s Office.
Lopez, a La Joya ISD administrator, ran for mayor in May 2015. He won a second term in 2019.
Xizaka LLC appeared on a list of La Joya ISD vendors for athletic supplies, equipment and services in 2018.
Lopez said Xizaka LLC never did business with the city of Peñitas and documents released by the city don’t show any payments to the company.
Peñitas City Manager Omar Romero
The subpoena requested “all non-privileged records” in Peñitas City Manager Omar Romero’s personnel file.
Mayor Rigo Lopez and the City Council hired Romero in September 2015, according to documents released under the Public Information Act. During the next five years, Romero forged business and personal relationships with many politicians in western Hidalgo County.
He hunted with them, donated to campaigns and partnered with Peñitas Chief of Staff Andy Morales on business deals.
Romero also served as the chief restructuring officer for Hidalgo County EMS, a privately owned ambulance company that responded to 911 calls in western Hidalgo County; created a construction company, ST Infrastructure, that did work for Agua SUD; and helped Sullivan City submit COVID-19 expenses to Hidalgo County for reimbursement.
Romero declined to comment.
Peñitas Chief of Staff Andres “Andy” Morales and RGV Redlight LLC
The city of Peñitas created a job for Andres “Andy” Morales after the May 2015 mayoral election. He became the “chief of staff” — a job that doesn’t exist in any other city in western Hidalgo County.
The subpoena requested “all non-privileged records” in his personnel file.
Documents released under the Public Information Act, however, suggest Peñitas kept hardly any records on Morales.
The documents released by the city don’t include a resume, job application, background check or interviews with references. They also don’t include any mention of Morales’ felony conviction for possession of more than 50 pounds of marijuana.
At City Hall, Morales reported to City Manager Omar Romero. After hours, they moonlighted as consultants.
Morales created RGV Redlight LLC in March 2017, according to documents filed with the Secretary of State’s Office.
RGV Redlight LLC provided “fleet management and consulting” services to La Joya ISD and Agua SUD, according to documents released under the Public Information Act. Morales worked closely with Romero, who handled the financing.
They also helped the Valley View Independent School District create a police department.
The ATF arrested Morales in May. He’s charged with one count of being a felon in possession of a firearm and three counts of making a false statement during the purchase of a firearm.
Morales pleaded not guilty. He remains employed by the city.
Attorney Ricardo Montalvo of McAllen, who represents Morales, declined to comment.
Sullivan City Manager Ana Mercado
Ana Mercado worked for the city of Peñitas from 2010 to 2020, when she resigned to become the city manager in Sullivan City.
Peñitas hired Mercado in January 2010, according to her resume. She became the city secretary in March 2013. As the city secretary, she notarized documents, kept minutes for city meetings and handled public information requests.
Mercado said she never had a contract with Peñitas and didn’t know why the government had requested that information.
Sullivan City Councilman Julian Peña
Julian Peña joined the Sullivan City Council in 2019, when he ran unopposed for Place 2. After decades in the construction business, Peña discussed becoming a building inspector for the city of Peñitas.
“I was going to be an employee,” Peña said. “But I didn’t get the certification.”
Peña said he discussed the possibility of becoming a building inspector with someone at Peñitas City Hall — Peña said he didn’t remember the person’s name — last year.
He couldn’t become certified and decided to quit. Documents released by the city don’t show any payments to Peña, who said he wasn’t concerned about the subpoena.
“They can investigate me. They can do whatever they want,” Peña said. “I don’t mind.”
Peña, who said he doesn’t plan to run for re-election, went back to construction after the job didn’t work out.
“I’ve got nothing to hide. I’m just me. I’m just a normal person,” Peña said. “I really don’t even like politics.”
Agua SUD General Manager Jose E. “Eddie” Saenz, CSJ Group and Synergos Consulting LLC
Jose E. “Eddie” Saenz became the general manager of the Agua Special Utility District in 2018.
Saenz owns CSJ Group, an engineering firm based in Edinburg, and Synergos Consulting LLC, according to documents filed with the Secretary of State’s Office.
CSJ Group became the Peñitas city engineer in November 2017, when Richard LeFevre resigned from the position, according to City Council meeting minutes. CSJ Group is no longer the city engineer but still handles projects for Peñitas.
Peñitas paid nearly $443,000 to CSJ Group from 2017 to 2021, according to documents released by the city.
Saenz didn’t respond to a request for comment.
Best Medical Supply
Best Medical Supply is owned by McAllen businessman Jose Luis Trejo and his wife, Gabriela.
The connection between the company, which sells used medical equipment to customers in Mexico, and the city remains unclear. Documents released by the city don’t show any payments to Best Medical Supply.
A grand jury indicted Trejo on a federal money laundering charge in October 2020. He pleaded not guilty.
The subpoena requested all contracts between the city and Best Medical Supply from January 2017 to May 2021, along with invoices and payment records. It also sought all emails between the city and Best Medical Supply during the same period.
Attorney Alejandro Ballesteros of McAllen, who represents Trejo, didn’t respond to requests for comment.
Mariano Garcia and M. Garcia Engineering
Mariano Garcia owns McAllen-based M. Garcia Engineering.
Garcia is one of several engineers who handled projects for Peñitas during the past few years.
He also had contracts with Agua SUD and La Joya ISD. They hired Garcia to supervise energy savings projects handled by Performance Services Inc.
Garcia — the “owner’s representative” — monitored the projects and approved payment requests.
Agua SUD agreed to pay Garcia 3% of the total amount, according to the contract, which the utility district released under the Public Information Act.
Garcia didn’t respond to requests for comment.
Ecolectrics is a “full-scale distributor of selected brands of solar panels, inverters and mounting systems,” according to the company’s website, which lists an office in Austin.
The company was founded in California during 2008. It expanded to Texas in 2016.
Ecolectrics worked on solar projects for La Joya ISD, Agua SUD and the city of Mercedes, according to the company’s website.
Peñitas didn’t make any payments to Ecolectrics, according to documents released by the city.
Documents filed with the Secretary of State’s Office list Chirag Patel of Austin as the company’s registered agent.
The company didn’t respond to requests for comment.
Regional Concrete Services LLC
Regional Concrete Services LLC is owned by Juan Jose Garcia of Peñitas, according to documents filed with the Secretary of State’s Office.
He also owned Regional Concrete Company, which shut down in 2017.
Regional Concrete Company advertised “Stamped & Decorative Stained Concrete Services” on Facebook and shared photos of projects throughout South Texas. It also shared photos that promoted Peñitas Mayor Rigo Lopez’s re-election campaign.
Peñitas paid nearly $18,000 to Regional Concrete Services from 2017 to 2021, according to documents released by the city.
The phone number listed on corporate paperwork is disconnected.
The subpoena requested city audits for the 2016, 2017, 2018, 2019 and 2020 fiscal years. Peñitas, though, never completed the 2018, 2019 and 2020 audits.
After the city switched accountants, Peñitas discovered problems with the 2016 audit, City Manager Omar Romero said in an April 2021 interview. That caused problems with audits for the next four fiscal years.
Reinvestment Zone #1 Records
Peñitas created Reinvestment Zone #1 in November 2004 to spur development. It’s sometimes called the “TIRZ,” which is an acronym for tax increment reinvestment zone.
The subpoena requested all City Council meeting minutes “approving the appointment of any individual to serve as a director on the Board of Directors of Reinvestment Zone Number One, City of Peñitas, Texas from January 1, 2017 through May 18, 2021.”
The subpoena requested “all COVID-19 grant reviewer contracts and contract drafts between the City of Peñitas and any individual or entity.”