Concerned about corruption, state senator considers big changes at Agua SUD

State Sen. Juan “Chuy” Hinojosa, concerned about a series of corruption cases that involved the Agua Special Utility District, may attempt to restructure the board.

Agua SUD is governed by an elected board of directors. Hinojosa said Agua SUD – and more than 16,000 customers who depend on the utility district for water – may be better served by an appointed board.

“I’m inclined to do away with elections at Agua,” Hinojosa said. “And have appointments made – responsible people who have some kind of background and experience serving in public office.”

Courtesy photo of Senator Juan “Chuy” Hinojosa

Hinojosa said information that surfaced in a series of public corruption cases reinforced his concerns about the Agua SUD board:

> On Nov. 10, 2021, former Peñitas City Manager Omar Romero pleaded guilty to a federal bribery charge.

As part of his plea, Romero admitted that he paid a $6,000 kickback to “Board Member A” after Agua SUD purchased a water tank from his company. Romero provided another $42,500 to a middleman, which he believed “would at least be partially delivered to Agua SUD board members for their respective votes or to influence them.”

Assistant U.S. Attorney Roberto “Bobby” Lopez Jr., who is prosecuting the case, didn’t identify the board member or the middleman by name.

> On Jan. 6, 2022, former La Joya school board Trustee Armin Garza confessed to participating in a conspiracy to steer “energy savings” contracts to Performance Services Inc., an Indiana-based company.

During the conspiracy, Person E, Person F and Person G worked for the La Joya Independent School District and served on the Agua SUD board.

They received stipends or promotions, according to the criminal information against Garza, as part of a plan to secure their support for Performance Services Inc. projects.

Person G also participated in a WhatsApp group chat, according to the criminal information, where members discussed “extorting companies for government approvals” and referred to themselves as a “cartel.”

Documents filed in the case against Garza don’t identify them by name.

> On Jan. 12, 2022, businessman Jaime A. Rodriguez of Edinburg pleaded guilty to a bribery charge.

Rodriguez paid $55,000 to “Company B,” a corporation owned by a “high ranking” Agua SUD employee, in exchange for a favorable recommendation.

Lopez, the federal prosecutor, didn’t identify the company or the Agua SUD employee by name.

Questions about corruption at Agua SUD, though, stretch back decades.

Lawmakers created Agua SUD after they concluded the troubled La Joya Water Supply Corp., which served western Hidalgo County, simply couldn’t be fixed.

Agua SUD started with an appointed board and transitioned to elections after the utility emerged from receivership.

“And here we are,” Hinojosa said. “Same stuff. Same problem.”

Hinojosa said the allegations that Garza improperly influenced members of the utility board with promotions and stipends particularly bothered him.

In 2017, both Garza and La Joya school board Trustee Oscar “Coach” Salinas worked for Agua SUD. A majority of the Agua SUD board, meanwhile, worked at La Joya ISD.

Concerned about the reciprocal employment relationship, Hinojosa filed Senate Bill 814. The bill prohibited Agua SUD from employing a school board trustee if a member of the Agua SUD board worked for the school district.

Agua SUD, meanwhile, signed five-year employment contracts with Garza and Salinas. When lawmakers passed the bill, they received six-figure severance payments.

The Texas Rangers investigated the severance payments, but the Hidalgo County District Attorney’s Office declined prosecution.

“That just gave them more courage,” Hinojosa said. “They thought they were invincible.”

In the aftermath, Hinojosa filed several bills designed to make Agua SUD more transparent and accountable. Replacing the elected board with an appointed board would require another.

State Rep. Oscar Longoria, who represents western Hidalgo County, said the prospect of replacing elections with some kind of appointment system concerned him.

“I think it’s a very difficult question,” said Longoria, who served on the Agua SUD board when members were appointed.

The La Joya Water Supply Corp. was placed in receivership because of financial and management problems, Longoria said.

“If the utility district fails to honor their debt and service their community it’d be something to look at,” Longoria said, adding later: “But at this point, I don’t know if that’s the case.”

David Gonzalez, who served on the Agua SUD board from 2007 to 2014, said he supported the idea.

When he was appointed, Gonzalez said the city of Mission had a thorough interview process. He spoke with the mayor, the city manager and members of the City Council.

“I really, truly believe that was the best way to go about it,” Gonzalez said.

Other regional organizations that handle infrastructure and planning, including the Hidalgo County Regional Mobility Authority, are managed by appointed boards.

Former utility board President Mario Chapa said he agreed that Agua SUD had serious problems, but he wanted to know more about how the board would be appointed.

“It’s not an easy answer. There’s no question about it,” Chapa said. “But does it need a solution or an effort to change? Yes.”