Houston Mayor John Whitmire stopped a payout last week to a Houston business owner charged with bribery, following KPRC 2’s ‘DRAINED’ Investigation into the city’s waterline contract corruption scandal. Now that business owner says he’s sorry for what happened and explains he’s still owed for the finished work.
The payout was for work completed on an unrelated city project.
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Joseph Nerie, owner of Nerie Construction, appeared on August 13th City Council agenda, catching the attention of our investigative team. Houston officials have told us that defendants in the scandal are banned from city contracts and business.
Nerie was charged with bribery and tampering with government documents last year. Texas Rangers investigators say he paid Patrece Lee, a water maintenance manager, more than $77,000 over 15 months. During that time, the emergency contracts Lee awarded to Nerie’s company ballooned from $1 million to over $8 million.
The Rangers say Nerie paid Lee through Cash App and personal checks.
In January, Nerie pleaded guilty to “gift to a public servant.” In exchange, prosecutors dropped the two more serious felony charges.
According to the city’s procurement website, Nerie Construction and three other businesses involved in the scheme are listed under debarment, meaning they cannot be awarded city contracts for the next five years.
So why was City Council voting to pay Nerie?
The city’s chief procurement officer, Jedidiah Greenfield, told us Nerie Construction was already more than halfway through a paving and drainage project on the city’s northeast side when he was charged in the scandal. The project began in 2021 and was completed in November 2024. Greenfield says the city owes Nerie $8.3 million for that work.
A spokesperson for Nerie Construction LLC sent KPRC 2 Investigator Amy Davis a statement (see below), explaining the disappointment in the removal of the contract payment last week.
“Nerie Construction is disappointed that the City of Houston refused to refund a retainage payment of $418,831.39 due to Nerie Construction for work Nerie Construction completed in 2023 to city specifications.”
The statement explains that a retainage fee of five percent is typically withheld on construction projects until completion with final payments owed after the project is signed off on.
“Nerie Construction won competitive bid for work with the City of Houston and completed that work successfully to city specifications. In fact, Nerie successfully completed more than 1,000 water repairs on a prior contract secured through an open bid, before starting work November 8, 2021, on a second project through an open bid.”
“Nerie Construction understands Mayor Whitmire and Houston City Council’s frustration with recent criminal activity within City of Houston Public Works. We share that frustration and regret that we had a lapse in judgement that allowed us to get caught up in a scheme perpetrated by a City of Houston Public Works employee.”
“Joe Nerie apologizes to Nerie Construction customers and the public for his misjudgment. Nerie Construction will move forward with these hard lessons learned, and a debt paid for that error in judgement. We are confident that we have safeguards in place to work in the highest professional manner and prevent inappropriate steps in the future.”
The procurement chief did not tell KPRC 2 what portion of the $8 million was already paid, just that the work was already completed. See this clip from the agenda: