FBI: Family ran Texas town through intimidation


Associated Press

Posted on September 4, 2013 at 7:33 PM

Updated Thursday, Sep 5 at 3:03 PM

McALLEN, Texas (AP) — The FBI was so unnerved by one family's seemingly pervasive control of a small South Texas border town that agents began bringing a second unit when they conducted interviews so that the backup agents could watch their vehicle, the lead case agent testified Wednesday in McAllen.

But that didn't stop Jose Guadalupe Vela Jr., one of the investigation's targets, from standing outside the door of the school district office where potential witnesses to his reign were being interviewed, FBI special agent Ricardo Ale said.

Vela, a maintenance and transportation supervisor for the Progreso Independent School District, and his sons, Progreso Mayor Omar Vela and Michael Vela, president of the school district's board of trustees, were arrested Aug. 28, on public corruption charges. Prosecutors allege the Velas used their control of the city and school district to create a "pay-to-play" scheme that lined their pockets with bribes and kickbacks.

U.S. Magistrate Judge Dorina Ramos said she would issue her decision on whether to grant bond to the men by the end of the day Thursday. Lawyers for all three men argued their clients were not flight risks and would not intimidate potential witnesses if released. They declined to address specific allegations.

The FBI's Ale described a "family effort," but said he believed the elder Vela, as family patriarch, was in control of most of their activities.

In testimony at the men's detention hearing, Ale described an environment where school district Superintendent Fernando Castillo was completely at the mercy of his employee, Jose Vela.

Once word of the investigation spread, Castillo was told he had to get permission to travel from school board president Michael Vela. That meant that when Castillo was subpoenaed to testify before the grand jury in Houston investigating the Velas, he had to ask one of them permission to go. The school board told Castillo he could no longer teach outside of the district for other institutions, it ordered him confined to his office from 8 a.m. to 5 p.m. and eventually told him he could not attend school board meetings. When he did, he was not allowed to participate, Ale testified.

When the FBI complained to the school board's attorney that Castillo was being retaliated against, the lawyer said that was to be expected, Ale said. Castillo went so far as to install a door in his office that required a receptionist to buzz people in and security cameras to track Jose Vela's comings and goings in the administrative building. When the FBI started subpoenaing district records, one of the people tasked with pulling them was Jose Vela's daughter-in-law, Ale said.

Progreso is an isolated enclave of about 5,500 perched on the Texas-Mexico border. Some U.S. retirees spending the winter in South Texas pass through Progreso on the way to its Mexican sister city of Nuevo Progreso, seeking cheap prescription drugs and dental work.

The FBI began its investigation, dubbed "Legal Progress," in 2005, and soon found a construction company, architectural firm, supply outfit and local attorney who all admitted to getting contracts with the city or school district by giving bribes and kickbacks to the Velas.

The local attorney gave eight Buchanan's Scotch gift boxes to Jose Vela in 2008 to get the contract representing the school district. Jose Vela told the lawyer, "It's the barter system. ... You know, my back is itching. Scratch it," according to the indictment.

Ale testified Wednesday that that lawyer was one of several people wearing a wire to record conversations with the Velas. The FBI has more than 40 recordings. The lawyer had lost an earlier contract with the school district in 2005 after failing to give Jose Vela $1,000 per school board member for bribes.

A construction company president had a home safe filled with cash and a ledger detailing bribes paid to Mayor Omar Vela that totaled at least $85,000 to get general contracting business with the school district and city, Ale said.

Jose Vela was the kingmaker when it came to the school board. He would approach people to run for seats and the Velas would cover the campaign advertising costs, Ale said. Those who didn't go along with Jose Vela's wishes saw family members fired or demoted.

In one instance, a school board member who ran afoul of Jose Vela was forced off the road by one of Jose Vela's subordinates in the transportation department and hit, Ale said. The attacker made it clear the message came from Jose Vela.

A day earlier, Ricardo Salinas, attorney for Michael Vela, said the town's size, isolation and cultural ties to Mexico made the alleged pay-to-play system seem acceptable to the Velas.

"People seem to think it's OK," Salinas said. "I did something for you, so you can do something for me."