Louisiana jail services company, LCS Corrections Services Inc. in an ongoing public corruption investigation
Premier's benefits didn't stop in Bexar
Web Posted: 09/09/2007 12:41 AM CDT
KINGSVILLE — Bexar County Sheriff Ralph Lopez and some of his friends weren't the only ones in South Texas who enjoyed the benefits of helping Premier Management Enterprises secure lucrative jail commissary contracts, according to interviews and records examined by the San Antonio Express-News.Like Lopez, the sheriffs of two other counties awarded contracts to the Louisiana jail services company, and either they or their associates reaped financial benefits.
Those sheriffs, now out of office, also boasted to their staffs about going on a golf and fishing trip to Costa Rica with Premier officials, the same trip that last week forced Lopez to resign.
Here in Kleberg County, then-Sheriff Tony Gonzalez, a close friend of Lopez, gave Premier a contract to run his jail commissary when he was in office in 2004 and has been paid by the company for consulting work of an unknown nature.
"I've done some consulting for them here and there," Gonzalez told the Express-News during a brief interview at his ranch-style home on the outskirts of Kingsville, declining to elaborate. "I'm just down here keeping my nose clean."
In Nueces County, one associate of former Sheriff Larry Olivarez, another Lopez friend, reaped rewards after helping Premier win a jail commissary contract there in 2005.
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The associate, a commercial real estate broker who was appointed by the sheriff to an ad hoc committee that awarded the contract, later earned a commission from the sale of 56 acres where LCS Corrections Services Inc., another company owned in part by Premier's principals, is building a private detention center, the Express-News has learned.
In addition, the former sheriff's chief deputy won political backing from LCS when he ran as a candidate to replace Olivarez, who had stepped down to run for county judge.
Premier, which has come up repeatedly in an ongoing public corruption investigation in Bexar County for doing favors for influential people in a position to help the company, has denied any wrongdoing.
That investigation, so far, has narrowly targeted only individuals in Bexar County, such as Lopez and his longtime campaign manager, John Reynolds, and Reynolds' financial relationship with the sheriff's wife. Lopez, Reynolds and at least one of their associates helped Premier land the local jail food commissary contract in 2005.
As part of an immunity deal with Bexar County District Attorney Susan Reed, the sheriff resigned, effective Sept. 19, and pleaded no contest Tuesday to three misdemeanor charges, two of which were related to the Costa Rica golf outing he accepted from Premier.
The deal protected him from further state prosecution; his wife wasn't indicted.
Reynolds, who played a key role in awarding the contract to Premier, is suspected by Reed of bribery, extortion, theft, money laundering and campaign finance violations. He also went on the Costa Rica trip and received checks totaling more than $30,000 from Premier and one of its owners for consulting and donations to fake charities Reynolds set up.
An associate of both Reynolds and the sheriff, John E. Curran, voted with Reynolds on a jail board to give Premier the commissary contract, then won a contract himself from Premier to provide temporary workers for the operation.
Largely unexamined is the broader picture of how Premier, its owners, Patrick and Michael LeBlanc, and LCS conducted a business expansion with local government partners throughout South Texas.
A closer look at some of those operations reveals similarities in conduct with local officials that have drawn none of the law enforcement or media scrutiny seen in Bexar County.
Nueces County Sheriff Jim Kaelin, who succeeded Olivarez, is among those who have been watching the news from San Antonio with keen interest because LCS is about to open an 800-bed prison in his county.
So far, no law enforcement agency has contacted him, Kaelin said.
Close relationships
LeBlanc-run companies Premier and LCS operate jail-related businesses in five South Texas counties. The first started in Brooks County in 2000. They have embarked on an aggressive expansion in recent years that has capitalized on tighter federal immigration control policies.
In addition to the work at Bexar County Jail, the companies also operate jails, commissaries or full-scale prisons in Brooks, Kleberg, Hidalgo and Nueces counties. They also run four jails in the LeBlancs' home state of Louisiana and one in Alabama.
Current Texas law makes sheriffs key gatekeepers for contracts such as those sought by Premier and to a certain extent by the prison-building LCS.
Under current law, Texas sheriffs have almost unchecked authority to contract management of their commissaries with no competitive bidding. County commissioners must approve deals to build private prisons but often keep their sheriffs closely in the loop as resident overseers and advisers.
Premier, LCS or sometimes both arrived in counties served by sheriffs who maintained close personal relationships with one another and with Bexar County's Lopez, according to interviews with personnel in several offices.
Lopez's office calendar for the past few years shows he often traveled to visit Kleberg's Gonzalez on weekends for golfing and that Gonzalez traveled to San Antonio. The calendar also shows a number of trips to visit Olivarez in Corpus Christi, where he still lives in a house near a golf course.
At the Kleberg County Sheriff's Office, Gonzalez's former staffers say the three were often joined in golfing and hunting outings by other sheriffs and elected officials in counties where Premier or LCS are doing business today. Among them was Balde Lozano of Brooks County, who did not return three calls for this story.
"He kept a close-knit circle of friends," said Yvonne Barbour, Gonzalez's former office administrator. "I know Tony was a big golfer."
Those relationships would later prove mutually beneficial for the Louisiana companies and the sheriffs or their friends.
Gonzalez, for instance, used his relationships in Nueces County to help Premier and LCS gain entrance there. Assistant Deputy Chief Peter B. Peralta, who worked in the office when LSC first began courting county business, remembered that it was Gonzalez who made the introductions.
Later, Gonzalez approved giving Premier a food commissary contract for his jail during his final weeks in office. At some point either before or after Gonzalez left office in late 2004, he accepted private consulting work from Premier's owners, he and a company official acknowledged.
When Gonzalez transferred the commissary contract to Premier, two lifelong Kingsville residents, brothers who run a small local grocery, felt the pain. Betos Community Grocery had held the contract since the 1970s and had come to rely on the modest commissary revenue as competition from large grocery stores cut into Betos' bottom line. They were told they should only bid for the contract if they had a sophisticated computer system.
"We didn't even get one computer until last year," said Juan Garza, who co-owns the grocery with his brother Albert and supported Gonzalez's last failed re-election bid. "It hurt."
It remains unclear what kind of consulting work Gonzalez did for the company or when it started.
But former five-term Brooks County Judge Joe B. Garcia recalled one occasion — after Gonzalez lost his election — that he came calling, apparently after hearing that Garcia had begun agitating for Brooks County to renegotiate better terms from its LCS detention center contract. It was during this time that Gonzalez phoned Garcia wanting to meet for lunch and talk about local LCS operations.
"I've known Tony for a while. But I didn't want to talk to him about my contract with LCS," Garcia said.
Garcia remembered another story he found disturbing, when Michael LeBlanc himself showed up at his office, accompanied by the man Garcia had just beaten in the election.
That LeBlanc would travel to South Texas was not unusual; he often has personally tended to his business affairs. But Garcia said what he heard made him feel uncomfortable.
"They said if I had a campaign debt, they would contribute to my campaign," Garcia said.
He said he told them he had no campaign debt to pay off and wouldn't have accepted the offer even if he did.
"A lot of people try to do those type of things," Garcia said. "I've always been the type who, hey, I've worked hard for my education. I don't have fancy cars, no ranches."
Attorneys for LCS and Premier have declined all requests for interviews regarding the ongoing investigation in Bexar County or for this report. Last year, the LeBlancs sued the Express-News, alleging they were libeled in articles the paper published in late 2005. The lawsuit is pending.
But Chris Burch, chief executive officer of Premier, acknowledged that Gonzalez had done some consulting work for the company under an arrangement with a predecessor, Ian Williamson, who is no longer with the company. Burch said he was not privy to any details about that work.
Gonzalez still may be working for the company as a paid consultant, Burch said. "I do know he has done some consulting work, but I'm not the one who put this together."
Benefits and campaign
Like Gonzalez, then-Nueces County Sheriff Olivarez helped Premier land a commissary deal in his jail during his final days in office in late 2005. He then quit, as required, to run for county judge.
During his time as sheriff, LCS had a "pass through" contract with Nueces to refer federal prisoners to its other Texas facilities, and it advanced a proposal to build the 800-bed detention center, now nearing completion. The project is expected to generate $800,000 for the county in inmate transfer payments, plus $350,000 to $400,000 in taxes.
The Express-News has learned an ally of Olivarez benefited financially from LCS' effort to build the detention center — after helping the sheriff give the jail commissary contract to Premier. Corpus Christi commercial real estate broker and developer Tim Clower served in late 2005 on an ad hoc selection committee the sheriff appointed to examine bids for the commissary management job, according to the office of Kaelin, the current sheriff.
In February 2006, several months after Clower voted for the commissary contract, he brokered a real estate purchase of 56.6 acres on behalf of LCS for the $20 million detention center. The property's seller, Patricia Ann Bernsen, said Clower's company approached her and brokered the purchase of her farmland for $4,000 an acre, or $225,000.
"He did get a commission, that's for sure," Bernsen said, declining to say how much. "It was a good commission."
On average, commercial real estate agents earn between 6 percent and 10 percent, according to one South Texas commercial real estate broker.
At the time of the sale, the 2006 sheriff's primary race was heating up. Clower co-signed for a $20,000 campaign loan to Olivarez's former chief deputy, Jimmy Rodriguez, whose opponent at the time was publicly criticizing him for helping bring LCS to town. LCS went to Rodriguez's aid by lambasting his opponent.
At one point in the campaign, LCS went public with a threat to halt construction of its detention center if Rodriguez did not win the Democratic primary.
"We're not going to work with or for someone who doesn't respect our company," Michael LeBlanc was quoted in the Corpus Christi Caller-Times as saying about Rodriguez's opponent. "If Mr. (Pete) Alvarez wins, we're out of Nueces County — plain and simple," LeBlanc said.
Rodriguez won the primary but lost the general election. Last week, he insisted that he was paying off the $20,000 bank loan he said Clower co-signed.
"He's been a friend for a long time," Olivarez's former chief deputy said of Clower. "He had a long history with the department before we even got there."
Clower did not return repeated calls seeking comment about the loan or his commission on the LCS land purchase.
Traveling together
The Express-News could not substantiate or refute comments from those in the Sheriff's Office that Olivarez, while he was sheriff, went on the same Costa Rica trip in August 2005 with Lopez, Reynolds and Premier officials.
Olivarez did not return numerous phone calls or respond to a message left during a visit to his home.
Kaelin said Olivarez boasted of the Costa Rica trip and a separate hunting trip to employees who remain on staff.
Kleberg's Gonzalez, while in office, also told some of his staff of going on the same Costa Rica trip, said Kleberg Sheriff Ed Mata, who beat Gonzalez in the 2004 election. Mata conceded that he can't prove the story, but he wondered why no one has investigated as in Bexar County.
Gonzalez, during the recent interview at his home near Kingsville, was asked several times if he would deny going on the trip. He declined each time.
The Costa Rica trip was not the only reputed benefit Kaelin heard about in regard to Olivarez. Shortly after taking office, Kaelin said, a staff person phoned him to report that Olivarez had appeared with a small group of businesspeople seeking to tour the detention center project. Kaelin said he was told that Olivarez had represented himself as an "unpaid spokesperson for LCS."
Kaelin called LCS officials to inquire as to whether Olivarez might have been hired to run the detention center, a prospect Kaelin worried would undermine his office's working relationship with it. But he was told Olivarez had no known connection to the company or employment prospects.
Bexar Sheriff Lopez's office calendar indicates he planned to attend the detention center groundbreaking with Olivarez on Feb. 23, 2006, after Olivarez had left office to run, unsuccessfully it turned out, for judge.
Today, Olivarez works as a manager for the Corpus Christi branch of CGT Law Group International, according to a woman who answered the phone there.
Richard Harbison, a vice president in charge of LCS' Texas operations, is certain that Olivarez has had no financial relationship with LCS. As he was preparing to take his own vacation to Costa Rica, Harbison also said by phone that he was unaware of any paid trips involving sheriffs in Texas and the LeBlancs.
Burch, of Premier, said he was not working for the company at the time of the August 2005 trip.
In Bexar County, where the public corruption investigation has been in high gear lately, District Attorney Susan Reed has said she is mainly interested in prosecuting local individuals such as Reynolds, whom she called "rotten fruit." None of Premier's San Antonio offices have been searched, Reed acknowledged.
"I'm not finished, so I'm not ready to make any definitive determination yet" about Premier, she said.
The FBI and Texas Rangers, which have been involved in the Bexar County investigation, aren't commenting.
Patrick LeBlanc, who last week formally became a candidate for the Louisiana Legislature, is running in part on a message that he will fight against political corruption that "robs us of our confidence in government."
Last week, he told the Lafayette Advocate that he has been cooperating with investigators in Bexar County but couldn't elaborate.
"We haven't done anything wrong," he told the newspaper. "I would never, ever risk my integrity over selling candy bars and potato chips."
tbensman@express-news.net
News Researcher Julie Domel contributed to this report.
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