A state judge stopped the city of Mission from making payments to Performance Services Inc. on Tuesday after federal prosecutors linked the company to a kickback scheme.
State District Judge Noe Gonzalez made the announcement during a hearing Tuesday morning in a civil lawsuit filed by former Mission Mayor Norberto “Beto” Salinas.
Attorney Rick Salinas, who represents his father, compared the contract between Mission and Performance Services Inc. to a drug deal.
“This is the same thing,” said Rick Salinas, a prominent criminal defense attorney who frequently handles drug cases. “It’s an illegal agreement. It was procured through an illegal scheme.”
The City Council approved the contract with Performance Services Inc. in 2021 after several years of discussion.
Performance Services Inc. suggested Mission install LED lights to reduce energy costs and replace old, mechanical water meters with new, electronic water meters. It promised the $17 million project would pay for itself through a combination of higher water bills for customers and lower electric bills for the city.
The City Council approved the Performance Services Inc. project in January 2021.
Mayor Armando “Doc” O’caña, City Councilwoman Jessica Ortega and City Councilman Alberto “Beto” Vela voted to approve the contract. City Councilman Ruben Plata and City Councilwoman Norie Gonzalez Garza voted against it.
The lawsuit claimed the financing mechanism for the project, a lease-purchase agreement, is actually a debt — and violated the Texas Constitution. Attorneys for the city and Performance Services Inc., which intervened in the lawsuit, said that argument didn’t hold water.
The case took an unexpected turn last week, when former La Joya school board Trustee Armin Garza pleaded guilty to participating in a conspiracy to steer contracts to Performance Services Inc.
Garza waived indictment and pleaded guilty to a criminal information, a type of charging document typically used when a defendant is cooperating with prosecutors.
The criminal information described a conspiracy to influence members of the Mission City Council.
“On or about January 18, 2021, Persons H, I, and J cast official votes on behalf of Governmental Entity B to finalize a contract with Company D,” according to the criminal information.
Minutes from the Jan. 18, 2021, City Council meeting — when Mission approved the Performance Services Inc. contract — make clear the city is Governmental Entity B and Performance Services Inc. is Company D.
Person H, Person I and Person J are members of the Mission City Council.
“During the relevant period, GARZA attempted to secure a promotion for Person H at LJISD,” according to the criminal information. “GARZA, Person B, Person H, and other co-conspirators communicated with one another via WhatsApp messages regarding said attempts during the relevant period. The attempts to secure said promotions were to award Person H for Person H’s vote in favor of a contract to be awarded to Company D by Governmental Entity B.”
Ortega is the only member of the City Council employed by La Joya ISD.
After the City Council meeting on Monday afternoon, Ortega said that she hadn’t read the criminal information. Ortega referred the Progress Times to a statement that she made last year, when the FBI served the La Joya Independent School District with a subpoena for her records.
“I sleep well at night,” Ortega said during that interview. “And I never do anything illegal, immoral or anything like that.”
The criminal information refers to O’caña as Person J.
“During the relevant period, Person J executed a contract with Governmental Entity D for ‘Consultant Professional Services as a COVID-19 Specialist’ purportedly effective on October 1, 2020 in the amount of $3,000.00 per month from October 1, 2020 until September 30, 2023,” according to the criminal information.
O’caña signed a contract with the city of Peñitas that had identical terms, according to documents released under the Texas Public Information Act. The copy of the contract released by the city, though, isn’t signed by anyone from Peñitas.
The agreement is titled “Contract for Consultant Professional Services as COVID-19 Specialist.” It would start on Oct. 1, 2020, and end on Sept. 30, 2023. Peñitas would pay O’caña either $3,000 per month or $100 per hour.
All three elements of the contract — the title, the term and the amount — mirror the description in the criminal information.
O’caña said the contract with Peñitas wasn’t connected to his decision on the Performance Services Inc. deal, but he declined to comment further.
“At this time, it’s best that I stay out of it,” O’caña said.
The criminal information also discussed “Person D,” a person employed by Performance Services Inc.
“The company — and it’s been in the news — has been and is continuing to cooperate with the federal government in every instance, pursuant to a grand jury subpoena. The company does not condone any illegal activity,” said attorney Benigno “Trey” Martinez of Brownsville, who represents Performance Services Inc. in the lawsuit. “And, based upon the information that was filed last week, the individual that is mentioned there has been placed on administrative leave pending the investigation, so we can determine exactly what happened as well.”
Martinez didn’t identify the employee by name. Performance Services Inc., however, said the employee in question is Jonathan Blackwell.
Blackwell, a business development manager, worked on the Mission project and later became the “National Director of AMI and Water Meter Solutions.”
“Performance Services, Inc (PSI) has no knowledge of any potential misbehavior by Jonathan Blackwell nor any other employee except for the information provided in the recent Federal Indictment, “according to a statement the company released on Tuesday. “PSI promotes and lives by our Guiding Principles and Fundamentals and our culture is based on these beliefs. In 23 years of operations, there have been no accusations that PSI nor any of our employees have ever acted in an illegal manner on any of our past 604 projects. PSI has not nor will we tolerate any illegal behavior by our employees, partners, or subcontractors.”
Integrity is a key principle at Performance Services Inc., according to the statement, and the company puts customers above any concerns about making money.
“Jonathan Blackwell was placed on Administrative Leave on Friday, January 7, 2022, after we read the Indictment and Criminal Information Charges against Armin Garza,” according to the statement. “After the FBI subpoena was issued in May 2021 requesting us to turn over all information related to our Hidalgo County projects, Jonathan assured us that he had no illegal or inappropriate dealings with anyone related to the Hidalgo County projects. We believe in our employees and assume innocence until proven otherwise. We still hope that Jonathan is innocent but have taken this action now due to the grave nature of the assertions in the Federal Indictment.”
After the attorneys discussed the criminal information and the status of the civil lawsuit, Gonzalez decided to issue a temporary restraining order.
The order prohibits Mission from making payments to Performance Services Inc. until Jan. 25, when the court will hold a hearing on whether or not to issue a temporary injunction.