A major break in our ‘DRAINED’ Investigation into the City of Houston water department. Seven people at the center of the waterline repair contract scandal KPRC 2 Investigates exposed are charged with bribery, abuse of official capacity, and tampering with government documents. A Harris County Grand Jury handed down the indictments Thursday afternoon.
PREVIOUS: Corruption charges after ‘DRAINED’ Investigation uncovers emergency water repair scam
Investigator Amy Davis spent months investigating questionable contracts within the City of Houston Public Works department. This work sparked a criminal investigation that led to the indictments.
Who was indicted for questionable city contracts?
- Patrece Lee, former City of Houston water department manager
Charges: Abuse of official capacity, tampering with documents
- Andrew Thomas, Lee’s brother
Charge: Abuse of official capacity
- Danielle Hurts
Charges: Abuse of official capacity and bribery
The other four defendants were contractors and business owners charged with bribery for making payments to Lee in exchange for the steering the waterline repairs, inspections and city payments their way.
They are:
- Joseph Nerie, Owner of Nerie Construction
Charges: One charge of Bribery (2nd degree felony), One Charge Tampering with a Government Document (State Jail Felony)
- Edelmiro Castillo, Owner of Omega Engineering, Inc.,
Charges: Bribery (2nd degree felony), Tampering with a Government Document (State Jail Felony)
- Tieasha Coleman Houston, Owner of T. J. Cole Enterprises, LLC
Charge: Bribery (2nd degree felony)
- Frank Perkins, Owner of CST Connections, LLC
Charge: Bribery (2nd degree felony)
(Abuse of official capacity is a crime that involves a public servant violating law or misusing government property.)
“Abuse of official capacity punishes public employees and officials for using their position to steal,” said Harris County District Attorney Kim Ogg. “We just want to thank Channel 2, because without your work, we wouldn’t have called in the Rangers.”
Harris County District Attorney Kim Ogg spoke exclusively to Investigative reporter Amy Davis about the indictments that just came down. Ogg said KPRC 2, and Investigator Amy Davis are the reason the investigation began.
“When your reports aired publicly and revealed information that itself established reasonable suspicion that Patrice Lee and others might be involved in a theft scheme of our city water funds. I contacted the Rangers. Our public corruption division saw the story. We were concerned. We said, let’s look at the documents,” said Ogg.
How did all of this start?
KPRC 2 Investigates broke our investigation into these contracts last November.
Here is the quick wrap of what happened: You may remember when water lines were breaking all over the city. City Council approved $80 million to fix them fast, authorizing emergency contracts that required no bidding and little scrutiny.
Investigator Amy Davis discovered Patrece Lee, a Houston water department manager in charge of choosing the companies and doling out the contracts, quickly formed a construction and inspection company. She made her brother the owner and then awarded him a $4.5 million dollar contract. Investigator Amy Davis tracked down Thomas at his home.
“What we find troubling is that your sister works for the city of Houston. Did she give you that contract? What’s your experience fixing water lines and breaks?” Amy asked.
“I can give you all that information. Like I said I am on a call right now,” Thomas responded.
“We as taxpayers will never know how badly we got ripped off,” said Ogg. “The water mains may have been repaired properly and may not have been. But what we know is that taxpayers got a lot less than they should for a lot more money than they should have paid. And that’s classic public corruption.”
The City of Houston fired Lee days after we broke our story. Then Mayor Turner refused to talk about the pending contracts or possible criminal charges only saying that the City’s office of Inspector General was investigating.
“You are very rude!” the Mayor told Davis. “You are very rude. I will talk to your General Manager.”
Check this out to see the entire exchange.
So, what now? Will taxpayers get their money back?
Amy Davis asks Kim Ogg: “At the end of the day, I think taxpayers want to know, is there any chance they’ll get this money back?”
“So unfortunately, in public corruption cases, what we see are that thieves don’t save money. It’ll be difficult for the public to get restitution in this case, for money stolen. However, jail time is the punishment for a felony conviction, and nobody wants to go to jail. In these cases, prison time would be an option,” said Ogg.
Houston Mayor John Whitmire and DA Kim Ogg plan to release more details about these indictments Friday afternoon. We will let you know what happens.
Need a full refresher on the KPRC 2 ‘DRAINED’ Investigation and Public Works questionable contracts?
November 16, 2023: Millions of dollars in questionable Houston water department contracts uncovered by KPRC 2 Investigates
November 30, 2023: Houston Public Works employees out of work after KPRC 2 Investigation exposes millions in fraudulent contracts
November 2023: ‘The problem is no one cares’: Houston Mayoral candidates bring up water bill issues
December 5, 2023: ‘We really sat in our trucks, watched YouTube’: City contractor comes forward on questionable water repair contracts
December 18, 2023: Suspended water employee authorized $116K payment to her brother after city of Houston started investigation
December 20, 2023: DRAINED: Who is investigating questionable city contracts? What is the Office of the Inspector General?
More information on the multi-million-dollar contracts awarded to questionable companies
KPRC 2 Investigates confirmed Patrece Lee, a Houston Public Works Project Manager, gave emergency contracts to at least two relatives.
- Lu’s Construction and Inspection received a $4.5 million contract. State business filings show the company is owned by Lee’s brother, Andrew Travis Thomas. The company was created on February 23rd, just six months before Council approved the contract. We also discovered the registered business address for Lu’s is the same address Lee has used for multiple other businesses in her name. The address goes to the same box at a UPS Store in Bellaire.
- KPRC 2 Investigates stopped by Thomas’ home to talk with him about the connection and the contract. He confirmed he was Andrew Thomas, the owner of Lu’s Construction.
We wanted to ask Lee about other questionable contracts she handed out, like the $3.6 million contract awarded to Space City Environmental, owned by Lee’s ex-brother and sister-in-law.
- No one was at the Sugar Land office listed as the registered address for Space City Environmental and the business number property management gave us was out of order.
- C & J Arsenal Construction had only existed for about six weeks when city council approved a $3 million contract for an emergency waterline repair on Oct. 3rd. Their Rosenberg address on C & J’s business filing goes to a house whose homeowners were less than thrilled to see Davis.
- Frank Perkins, Jr., the owner of CST Connections, told Davis that Patrece Lee was his point of contact for the $3.9 million contract he received. Perkins explained that CST Connections is a staffing company that specializes in placing admins and data entry personnel where they are needed. For the nine-month contract, Perkins said he had provided about 12 to 13 data entry employees to the City of Houston to help process work orders.
‘DRAINED’ Investigation and your water bills
The ‘DRAINED’ Investigation is about much more than contracts. It started nearly two years ago as Investigator Amy Davis and Producer Andrea Slaydon started looking into inaccurate and outrageous water bills for Houstonians.
Fast forward to 2024 and the new Houston Mayor enacted sweeping changes to the water bill system. Customers will now pay an average usage fee until it is confirmed that their water meter sensor is updated and working properly. (More on what the changes mean to you here.)
The ‘DRAINED’ Investigation has always been about transparency with the city regarding both customer water bills and contracts dealing with the water department.
