A local engineer charged in the western Hidalgo County corruption case pleaded not guilty to theft on Tuesday.
Mariano Garcia, 49, of Mission — the owner of M. Garcia Engineering — allegedly paid nearly $250,000 to Andres “Andy” Morales, a major player in western Hidalgo County politics. In exchange, Garcia received a contract with the Agua Special Utility District.
“For lack of a better term, this appears to be a public corruption case,” U.S. Magistrate Judge Juan F. Alanis said Tuesday, when Garcia appeared in court.
A federal grand jury indicted Garcia on June 1. The indictment remained sealed until Monday, when the FBI arrested him, according to Angela Dodge, a spokeswoman for the U.S. Attorney’s Office for the Southern District of Texas.
The indictment described a pay-to-play scheme that involved Garcia, Morales and Agua SUD General Manager Jose E. “Eddie” Saenz.
In March 2018, the Agua SUD board approved a $7.4 million contract with Performance Services Inc., an Indiana-based company, to replace old water meters and install LED lights.
Agua SUD hired M. Garcia Engineering to monitor the Performance Services Inc. project. Garcia became the “Owner Representative.”
“The Owner Representative will be compensated three percent (3%) of the project value to be paid through project funding at the commencement of project,” according to the contract, which Agua SUD released under the Texas Public Information Act.
Agua SUD paid M. Garcia Engineering about $223,000.
Performance Services Inc. and Agua SUD approved a second project in March 2019.
Agua SUD agreed to pay $4.1 million for more water meters, more LED lights and solar power equipment.
M. Garcia Engineering signed another contract with Agua SUD, which paid Garcia about $123,000.
After conducting an investigation, FBI agents concluded the “Owner Representative” job was part of a pay-to-play scheme.
“Defendant gave approximately $249,839.13 to Andres Morales, through RGV Redlight, as instructed by the Agua SUD General Manager,” according to the indictment, “intending to influence and reward said General Manager for his official support and recommendation for Agua SUD to award Defendant’s company a contract to serve as an owner’s representative in connection with an energy savings project.”
While the indictment doesn’t identify the general manager of Agua SUD by name, Saenz held the position from January 2018 to September 2021.
“The district is very disturbed to hear that type of allegation against the former general manager of the district,” said attorney Matthew R. Beatty of Austin, who represents Agua SUD. “This board and the board president has instructed us, as legal counsel, to leave no stone unturned. And to make sure that the district and its constituents receive everything that they’re capable and entitled to recover.”
Attorney Oscar Vega of McAllen, who represents Saenz, said his client “will not be making any comments on any pending legal matters concerning Mariano Garcia.”
Garcia was born in Monterrey, Mexico, and grew up in Chicago, according to a report prepared by the U.S. Probation Office, which a judge summarized on Tuesday. He graduated from Rio Grande City High School and earned an engineering degree from Texas A&M Kingsville.
The La Joya Independent School District hired Garcia to serve as “Owner Representative” on another Performance Services Inc. project. Peñitas made Garcia the city engineer. And several other school districts in Hidalgo County paid Garcia for design work.
“He’s a family man,” said a friend who’s known Garcia for more than 20 years. “His #1 has always been his family.”
The friend, who spoke on the condition of anonymity because he didn’t want to be associated with the corruption case, said the indictment shocked him.
“Out of all people, when engineers were mentioned, he didn’t come across my mind at all,” the friend said. “I couldn’t believe it. Because that’s not Mariano.”
The case against Garcia is part of a federal investigation that revealed widespread corruption in western Hidalgo County.
Documents filed in the cases against them described a conspiracy that involved Performance Services Inc. projects at Agua SUD, La Joya ISD, the city of Mission and the Mission Consolidated Independent School District.
Several of the schemes involved the Performance Services Inc. projects at Agua SUD.
Jeremy Lancon, a manager at Aqua-Metric Sales Company, said a Performance Services Inc. employee promised to buy water meters from Aqua-Metric if the company hired certain people, including a member of the La Joya ISD school board.
Lancon pleaded guilty to a federal money laundering charge in March.
Chirag Patel, the owner of Ecolectrics, a solar power company, said a Performance Services Inc. employee promised him the Agua SUD job if Ecolectrics hired Morales. Patel paid him nearly $144,000.
“During interviews, Morales admitted that said proceeds were utilized to pay bribes” to elected officials, Assistant U.S. Attorney Roberto “Bobby” Lopez Jr. said in April, when Patel pleaded guilty. “And financial records also support the bribe payments made by Morales to such officials after receiving the payments from the defendant.”
Patel pleaded guilty to a federal money laundering charge in April.
Documents filed in the cases against Lancon and Patel don’t identify any Performance Services Inc. employees by name.
Performance Services Inc., however, fired Jonathan Blackwell, the “business development manager” who handled the projects, in March.
Jim Adams, the general manager for Performance Services Inc. in Texas, said the company didn’t know about “any potential misbehavior” by Blackwell.
“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,” according to a statement Adams released in January. “PSI has not nor will we tolerate any illegal behavior by our employees, partners, or subcontractors.”
On Tuesday afternoon, Garcia appeared before a judge for arraignment.
Wearing an orange jail uniform and a blue surgical mask, Garcia said he understood the charge against him and pleaded not guilty.
The judge set bond at $50,000 with no cash deposit required.
Garcia must comply with standard conditions of release, which include surrendering his passport, avoiding excessive use of alcohol and staying away from potential witnesses.
If convicted, Garcia faces a maximum of 10 years in federal prison.