06 September 2010

Public corruption: Feds allege bribery, kickbacks

Lawyers, judges, schoold board members, county commisioners taking bribes?  I'm shocked, I tell you.  SHOCKED.  I'm sure nothing like this is happening here in our county.  What a relief.  The worst we have are some of Hannah Kunkle's employees stealing some unearned vacation time, right?

From the El Paso Times

Public corruption: Feds allege bribery, kickbacks

By Ramon Bracamontes and Gustavo Reveles Acosta/ El Paso Times

09/03/2010 12:00:00 AM MDT

Investigation into public corruption

Eleven people -- including the mayor of Socorro, two lawyers and several current and former elected officials -- used a scheme of bribes and kickbacks to obtain contracts for Access HealthSource, a local health-care provider, federal prosecutors allege.

The workings of the enterprise were unveiled in a 27-page indictment that became public Thursday. The indictment charges all of them with six counts of bribery and fraud. Most of them are also charged with one count of violating the Racketeer Influenced and Corrupt Organizations act, known as RICO.

The RICO charge is commonly used by the government to fight criminal organizations.

Those indicted Tuesday and arrested on Thursday are:

  • Frank Apodaca Jr., 47, former president of Access, a health-care provider. He is charged with six counts of racketeering and fraud, as well as a RICO violation. He was released on $40,000 bond.
  • Marc Schwartz, 53, the former spokesman for Access and the National Center for Employment of the Disabled (NCED). He faces six fraud charges, as well as a RICO violation. He was released on $40,000 bond.
  • Luther Jones, 64, an El Paso lawyer and former county judge and state representative. He is charged with a RICO violation and one count of fraud.
  • Gilbert Sanchez, 42, the current El Paso County district clerk. He is charged with a RICO violation and one count of fraud.
  • David Escobar, 62, an El Paso lawyer and a former city representative. He is charged with a RICO violation and one count of fraud.
  • Milton "Mickey" Duntley, 64, a retired El Paso police officer and a former Ysleta Independent School District trustee. He is charged with a RICO violation and one count of fraud.
  • Charles Garcia, 61, a former Socorro Independent School District board president. He is charged a RICO violation and one count of fraud.
  • Ray Rodriguez, 57, a former SISD trustee and former mayor of Socorro. He is charged with a RICO violation and one count of fraud.
  • Larry Medina, 51, a former city representative and county commissioner. He is charged with a RICO violation and two counts of fraud. He was released on $20,000 bond.
  • Linda Chavez, 60, a current Ysleta Independent School District board member. She is charged with one count of fraud.
  • Willie Gandara Sr., 60, the mayor of Socorro and a former SISD trustee. He is charged with one count of fraud.

All of them are expected to plead not guilty next week in federal court.

Joe Spencer, the attorney for Gandara, said he is confident his client will be exonerated. The charge against Gandara is linked to when he was an SISD trustee and he voted to give Access the district's health insurance contract.

"He is named in one count and is accused of taking a $1,000 bribe in the form of a campaign contribution," Spencer said. "As a matter of practice, the Gandaras do not accept campaign contributions. He is not a man that needs a $1,000 contribution."

The heart of the indictment centers on the allegation that four of the men indicted -- Apodaca, Schwartz, Jones and Escobar -- bribed and made arrangements with the other seven to approve contracts for Access, the indictment states.

Access HealthSource eventually lost all of its public contracts and was sold. It is now known as Foresight TPA.

Medina, Chavez, Duntley, Garcia, Rodriguez, Sanchez and Gandara are accused of accepting bribes, some of which were masked as campaign contributions, the indictment states.

Federal prosecutors said the indictment is a part of a six-year investigation they dubbed "Operation Poisoned Pawns."

"That's exactly what happened," said John Murphy, the U.S. attorney for the Western District of Texas in El Paso. "We had some people come into the county and the school districts to poison the system in which fair and equitable contracts are awarded."

Investigators said the elected officials indicted on Thursday took sums of money from "as little as under $1,000 and as much as many thousands" to award the third-party health insurance contract to Access, which was sold and renamed.

Assistant U.S. Attorney Debra Kanof said the investigation began in 2004 when an FBI special agent, whom she didn't name, was transferred into the public corruption investigation office.

What the agent uncovered, she said, led to a wide-range investigation aided by at least three wiretaps and thousands of hours of recorded conversations.

David Cuthbertson, the FBI special agent in charge in El Paso, said Access "manipulated" public officials in order to secure contracts worth up to $150 million. He added that other victims of these allegations were the companies that also competed for the health-care and legal contracts in the school districts and the county.

"There are legitimate vendors who were deprived of their rights to compete in a fair and accurate manner," Cuthbertson said.

For years, Access was a third-party administrator of health-care benefits for local governments. Between 1998 and 2007, Access had contracts with the city, county and the three major school districts.

This is the seventh indictment stemming from a large-scale FBI investigation, which began in 2004. To date, 13 individuals have pleaded guilty to criminal conduct stemming from the investigation. The seven indictments contain a total of 17 charged defendants.

El Paso lawyer Tom Stanton, who is representing Charles Garcia, said that Thursday was a sad day for all of El Paso.

"My client is innocent, and I feel sad for him and for his family because he is being put through this," he said. "It's also a sad day for El Paso because a lot of people are being unjustly accused."

Ramon Bracamontes may be reached at rbracamontes@ elpasotimes.com; 546-6142.

Gustavo Reveles Acosta may be reached at greveles@elpasotimes.com; 546-6133.