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Bexar County Jail, Bexar County, Texas
March
12, 2008 Express News
A small plane crash Monday night killed a Louisiana businessman whose
private prison services company, Premier Management Enterprises, was at the
center of a public corruption investigation that last year forced the
resignation of Bexar County Sheriff Ralph Lopez. Patrick LeBlanc, 53, died
with the pilot while trying to land in rough weather in Lafayette, La.,
according to a family friend and local press reports. LeBlanc and his
brother, Michael LeBlanc, co-owned Premier and LCS Corrections Services,
which build or service prisons in several states, including in three South
Texas counties. The brothers' company remains the subject of an ongoing FBI
investigation into "contracting irregularities," a bureau
official confirmed. "He had great integrity and honor, unlike what
some of you guys tried to do to him," said Ron Gomez, a close friend
and partner in a small weekly newspaper that published its first edition
last week. Gomez said LeBlanc went into the news business as a response to
negative publicity about his company's role in a Bexar County corruption
probe that caused him to lose a race last fall for state legislative
office. Premier Management Enterprises, which has operated jail
commissaries in Texas, was at the center of a Bexar County district
attorney's investigation involving a foreign vacation gift to Lopez and
cash payments to the sheriff's top aide, John Reynolds, before, during and
after the company was given commissary contracts. The LeBlanc brothers have
repeatedly denied all wrongdoing and have not been indicted or formally
accused of any crime related to the Bexar County jail commissary contract.
But Lopez resigned and pleaded guilty to reduced misdemeanor charges for
accepting a Costa Rica golf vacation from the LeBlancs, while Reynolds last
month was sentenced to 10 years for demanding thousands of dollars in
"consulting fees" and charitable donations from Premier. The FBI
took over from state authorities, and over the last several months, agents
have interviewed Lopez and Reynolds as part of their respective plea deals.
FBI Special Agent Erik Vasys said the bureau was well aware of LeBlanc's
death but declined to discuss whether the tragedy might affect the
investigation.
December 4, 2007 San
Antonio Express-News
A Bexar County judge has agreed to dismiss a libel lawsuit brought against
the San Antonio Express-News by Premier Management Enterprises, a
Louisiana-based company that formerly ran Bexar County Jail's commissaries.
In the lawsuit, filed in February 2006 against Hearst Newspaper
Partnership, the San Antonio Express-News and reporter Elizabeth Allen,
Premier's principals, Patrick and Michael LeBlanc and Ian Williamson,
claimed the newspaper published two stories and one editorial containing
“false and misleading statements” accusing them of conduct that was
“unethical, incompetent and, in some cases, illegal.” On Thursday, Judge
David Berchelmann of the 37th District Court signed an order after both
parties agreed to dismiss the suit with prejudice, meaning it cannot be brought
again. As part of the agreement, the newspaper acknowledged three errors
that ran in Allen's stories and in a subsequent editorial in December 2005:
LCS Correction Services is not Premier's parent company. Michael LeBlanc
had no past legal problems at the time the articles were printed. Charges
against Patrick LeBlanc, Michael LeBlanc's brother, in connection with a
charitable bingo operation on an American Indian reservation were
dismissed. The 5th U.S. Circuit Court of Appeals later affirmed the dismissal.
Since Allen's stories, Premier has phased out its commissary operations at
the jail. Former longtime Sheriff Ralph Lopez resigned in August as part of
an agreement with prosecutors regarding his dealings with Premier. It
included that Lopez plead no contest to three misdemeanor charges, and pay
a $10,000 fine, resulting from an all-expenses-paid golfing and fishing
trip to Costa Rica that Premier gave him in August 2005. Lopez's plea deal
also shielded his wife, Nancy, from any potential state charges. Lopez's
longtime campaign manager and friend, John Reynolds, also pleaded guilty to
one felony count of theft related to his dealings with the company.
Reynolds was Lopez's appointee to the Benevolent Fund board, which awarded
and oversaw the commissary contract. According to court documents, Reynolds
told Premier to contribute to Lopez's campaign and give charitable
donations through Reynolds in exchange for operating the commissary.
Premier attorneys have insisted that there was no wrongdoing in the way the
company landed the contract. Reynolds is awaiting sentencing.
November 8, 2007 Caller-Times
A new commissary company started this week in Kleberg County Jail after
Premier Management Enterprises and the county mutually ended Premier's
contract. Premier was investigated in Bexar County for buying a trip to
Costa Rica for former Sheriff Ralph Lopez. Lopez resigned and pleaded no
contest to three charges related to the trip. Premier, based in Lafayette,
La., also operated in Kleberg County since former Sheriff Tony Gonzalez
signed the contract in fall 2004. Sheriff Ed Mata said last month he wanted
to end Premier's contract because of the Bexar investigation and because of
performance issues. Keefe Commissary Network, based in St. Louis, began
providing commissary services Monday to the Kleberg County Jail. The
one-year contract gives the county 24 percent of net sales, defined as
gross sales minus non-commissioned items such as stamps. Keefe was chosen
over Swanson Sales Corp., which said in a proposal it could offer up to
30.25 percent of net sales. Commissaries, which supply snacks and some
toiletries, are considered privileges for inmates. Texas law gives sheriffs
sole discretion over the contracts. A county's proceeds must be spent on
items or activities that contribute to inmates' well-being, such as
education, libraries, writing materials, clothing and hygiene items,
according to state law. Kleberg Chief Deputy Willie Vera said Keefe offered
the better overall package despite the lower commission. Some items will be
marked up to make up part of the difference. Plus, the company offered a
one-year contract, while Swanson initially wanted five, then agreed to
three, Vera said. Premier had signed a five-year contract with Gonzalez,
and Vera said the current sheriff isn't willing to sign such a long
contract. "We have a year to evaluate this company," Vera said.
"If he needs to go out and search for another company the door is
still open." Keefe also recently began service to the Nueces County
Jail, making it easier for the company to add Kingsville to its routes,
Vera said. Keefe made the transition smoothly and the Kleberg County Jail
was never without commissary services, he said. Premier ran the Nueces
County Jail commissary under a contract signed by former Sheriff Larry
Olivarez until Nueces County Sheriff Jim Kaelin terminated the agreement
after taking office in January, citing performance issues. Keefe gives
Nueces County a commission of 39 percent of net sales. Mata and Kaelin have
said their staffs told them their predecessors, Gonzalez of Kleberg County
and Olivarez of Nueces County, went on that trip to Costa Rica in August
2005. Neither Mata nor Kaelin has documentation corroborating the reports.
Gonzalez left office in 2004 after losing an election to Mata, and Olivarez
resigned in January 2006 to run for county judge. Gonzalez and Olivarez
have not responded to requests for interviews. Premier's principals,
Patrick and Michael LeBlanc, also own LCS Correctional Services, which is
building a private prison to house federal inmates near Robstown.
October 1, 2007 Caller-Times
Two local sheriffs are distancing themselves from their predecessors'
decisions to award jail commissary contracts to a company involved in a
criminal investigation in Bexar County. Kleberg County Sheriff Ed Mata said
last week officials are researching ways to end that county's five-year
agreement with the company, Premier Management Enterprises. Nueces County
Sheriff Jim Kaelin gave Premier a 30-day termination notice on Jan. 24,
after taking office. Former Bexar County Sheriff Ralph Lopez resigned and
pleaded no contest to accepting a trip to Costa Rica from the principals of
Premier. The Lafayette, La., based company runs the county jail commissary.
Neither Kaelin nor Mata has documentation corroborating what their staffs
have told them -- that their predecessors, Larry Olivarez of Nueces County
and Tony Gonzalez of Kleberg County, went on that August 2005 trip. Neither
Gonzalez nor Olivarez has responded to requests for comment. There is no
known investigation in Nueces or Kleberg counties. "At this point no
case has been submitted to me," Kleberg County District Attorney John
Hubert said. "If something is submitted to me, I take every case on
its own merits. I don't have any information other than what I've read in
the papers and -- no offense to anybody -- that's not really
evidence." Nueces County District Attorney Carlos Valdez was out of
the office late last week, and the Bexar County District Attorney's Office
did not respond. The FBI would not comment. Olivarez signed a contract with
Premier five months after the Costa Rica trip involving the former Bexar
County sheriff. Gonzalez signed a contract in September 2004. Premier's
principals, Patrick and Michael LeBlanc, also own LCS Correctional
Services, which is building a private prison to house federal inmates near
Robstown. A receptionist at Premier referred all questions to the company's
chief executive officer, Chris Burch, who did not respond. An attorney for
the company, Tonya Webber of Corpus Christi, said her clients have not been
commenting because of the open investigation in Bexar County. She said she
would check with her clients for comment on the local contracts but did not
respond after that. Kaelin and Mata both cited performance issues with
Premier as reasons for terminating the contract. Mata said the Bexar
investigation also played a part. "What I'm trying to do is just
protect this county," Mata said. "I'm not trying to pass any
judgment if something was done wrong." Kaelin said his decision was
based solely on Premier's performance. He met with Premier officials about
complaints before ending the agreement, according to correspondence the
Caller-Times obtained under the Texas Public Information Act. Kaelin and
Premier also tangled over payments. A new contract, with Keefe Supply, also
is potentially more lucrative for the county. The Premier contract gave the
county $130,000 or 31 percent of net sales, whichever was greater. The new
contract gives a minimum of 39 percent with the possibility of 41 percent
after the first year. Texas law gives sheriffs sole discretion over
commissary contracts. Commissaries supply snacks, such as chips, candy bars
and soda, as well as certain toiletries, for inmates. Friends and family
put money in an inmate's account to spend on commissary items. A county's
proceeds must be used for commissary staff, social needs of inmates (such
as education or counseling), libraries, writing materials, clothing,
hygiene items or other programs that contribute to inmates' well-being,
according to state law. Kaelin said he uses commissary profits to buy
newspaper subscriptions, televisions and uniforms. Kaelin said inmates
frequently complained about Premier's service. Under that system, inmates
would order items to be packed into bags, shipped from San Antonio and
handed out the next day. Kaelin said his office received numerous
complaints about items being damaged or wrong. Keefe stores items at the
Nueces County Jail McKenzie Annex and brings items around on a cart twice a
week so inmates can choose and receive items immediately, Kaelin said.
Premier's accounting system also allowed inmates to buy on credit, and as a
result some inmates would leave custody owing money to Nueces County, Kaelin
said. Keefe's system charges inmates' accounts directly by scanning a
bracelet inmates wear. An inmate can't buy items unless there is enough
money in the account.
September 25, 2007 San
Antonio Express-News
The longtime campaign manager and friend of resigned Bexar County Sheriff
Ralph Lopez pleaded guilty to one felony count of theft Tuesday that could
bring him up to a decade in prison and a $10,000 fine. John Reynolds' plea
stemmed from his demands that Premier Management Enterprises give charitable
donations, campaign contributions and other money "so you can take
care of us," in exchange for contracts to operate the jail and jail
annex commissaries, which were under the control of Lopez. According to the
plea deal, Reynolds ended up diverting the Premier money — $32,000 — for
his personal use. 'You're killing me' -- Premier's Texas point man at one
time was Ian Williamson, who no longer works for the company. Now a
cooperating witness, Williamson told Bexar County investigators that
Reynolds "asked for certain things" in exchange for awarding
Premier the commissary business. Specifically, Reynolds told Premier to pay
the equivalent of 1 percent of commissary sales to Lopez's campaign fund
and give three payments of $7,500 each that Reynolds said were donations to
the Optimists, when, in fact, the money went into his own bank accounts.
Williamson testified that he called Reynolds this past spring, as the
investigation was heating up, and asked him for receipts for the three
$7,500 donations. "Williamson said there was dead silence until John
Reynolds stated, 'You're killing me; you're killing me,' at which time Ian
Williamson claimed it was then that he realized that John Reynolds had
never delivered the donations," according to court documents. At one
point, Williamson stated, Reynolds demanded a consulting fee of $5,014.
When Williamson asked why he shouldn't write a check for a round $5,000, he
said Reynolds replied: "that $5,000 looked too funny." Other
filings by the district attorney's office have shown checks made out to
Reynolds' accounts and signed by Michael LeBlanc, who is an owner of
Premier along with his brother Patrick, and by Chris Burch, who replaced
Williamson as Premier's CEO. Burch said in a recent interview that he
believed Reynolds' representations that the checks were for legitimate
charities. Premier's lawyers have denied any wrongdoing. After the scandal
broke, Premier mutually agreed with the Sheriff's Office to prematurely end
its Bexar County commissary contracts. Recently, Lopez pleaded no contest
to taking a gift from Premier — an all-expense paid trip to Costa Rica for
golf and fishing. He was forced to resign and fined $10,000; his interim
replacement, Roland Tafolla, was sworn in last week. Lopez claims he was
ignorant of how Reynolds was running his campaign finances. By pleading
guilty to third-degree theft, Reynolds will be going to prison, First
Assistant District Attorney Cliff Herberg said. Under the parole rules, the
10-year sentence would make him eligible for early release in 2.5 years.
That is much less than the potential sentence he could have faced had he
been indicted. District Attorney Susan Reed's office had threatened to
indict Reynolds as a repeat offender because of Reynolds' previous
conviction for falsifying a furniture damage claim while he was in the
military. That would have made Reynolds' minimum sentence 15 years, the
Express-News confirmed. Reynolds entered his plea before 399th District
Judge Juanita Vasquez-Gardner on Tuesday afternoon and was released on a
$10,000 bond. As part of his plea, Reynolds will have to tell all he knows
to federal authorities before his Jan. 4 sentencing as part of an FBI
investigation that may — or may not — continue for some time. "The
investigation is very fluid at the moment and to comment on the direction
just wouldn't be prudent right now," said Special Agent Erik Vasys, a
spokesman for the San Antonio-based FBI office. Goals met -- Reynolds' plea
effectively brings to a close Reed's public corruption investigation of the
lucrative jail commissary contracts, granted in 2005 and 2006 by the board
of the Benevolent Fund that was controlled by Lopez and chaired by
Reynolds. "Our goal was to go after the public officials that we
believe engaged in wrongdoing," Herberg said. "And with John
Reynolds' and the sheriff's plea, we believe we've accomplished our
goal." Also caught in the investigation was the ex-sheriff's wife,
Nancy Lopez, who kept her own close ties to Reynolds and whose signatures
were found on thousands of dollars worth of campaign checks that Reynolds
allegedly deposited into his private accounts. She was given immunity from
state prosecution. Reynolds will be required to talk with federal
investigators about "all transactions. This includes but is not limited
to, all of his experiences, whether illegal or not, with the Bexar County
Sheriff's Office, the BCSO Benevolent Fund, Michael LeBlanc, Patrick
LeBlanc, Premier Management Enterprises, LCS, Louisiana Corrections
Systems, and affiliated persons and entities," states a letter from
Reed to Reynolds' lawyer, outlining the plea deal. Louisiana-based Premier
and the prison-building company called LCS Corrections Inc., which is also
owned in part by Michael and Patrick LeBlanc, operate in five South Texas counties,
Louisiana and Alabama. Lopez and Reynolds weren't the only one to benefit
from their ties to Premier. The Express-News has reported that Premier also
gave a contract for temporary staffing to John E. Curran III, who, like
Reynolds, is a friend of Lopez's and a member of the Bexar County
Benevolent Fund board. Premier gave Curran the staffing business after he'd
voted to give Premier an initial commissary contract. He later recused
himself from further votes about Premier. In summer 2006, Reynolds, in a desperate
attempt to cover up the real reason he'd taken money from Premier, handed
out envelopes full of cash to his friends, purportedly college scholarships
for their children. District attorney investigators said Reynolds concocted
the Optimists scholarships as a disguise. One of the students whose parent
received the $7,500 told investigators "he did not know the name of
the organization that awarded him the scholarship money, he didn't know
about an organization named Optimist, nor does he know what the word
'optimist' means." In fact, Reynolds' affiliation with the Optimists
had ended years earlier, investigators found.
August 11, 2007 The
Independent
A Lafayette company headed by brothers Michael and Patrick Leblanc has
turned up in the middle of a public corruption investigation centered on
the Bexar County Sheriff’s Office in west Texas. Sheriff Ralph Lopez was
recently indicted on three misdemeanor charges related to unreported
benefits he received from the Leblancs’ company, Premier Management Enterprise.
Lopez took an all-expenses-paid golfing/fishing trip to Costa Rica with the
Leblancs, at a time when Premier was vying for a lucrative contract to run
the county jail’s commissary stores. Court filings also show that one of
the sheriff’s close associates, John Reynolds, appears to have laundered
money from Premier into his own personal bank account, through a fraudulent
charity scholarship organization named Optimists. “We were duped,” says Pat
Leblanc. “I really don’t know the whole length and breadth of the story,
but I can tell you this: If somebody played funny with our money, I want to
prosecute them to the end of the world.” Leblanc, who is a candidate for
District 43 state representative, also distanced himself from the company,
which he says is primarily run by his brother and another associate, Ian
Williamson. Michael Leblanc says he is working closely with investigators
and anticipates the entire issue should soon be resolved. “Unfortunately,
we didn’t know who this guy was,” he says, referring to Reynolds. “Shame on
us.” While it appears Premier is unlikely to face any charges from the
investigation, the circumstances surrounding its contract with the Bexar
County jail have certainly created a perception of quid pro quo. The
district attorney has labeled Lopez’s golf trip as an honorarium that “was
in consideration for services that the defendant would not have been
requested to provide but for defendant’s official position and duties.”
Lopez began pushing to farm out the county jail’s commissaries to Premier
in 2005. Initially the idea met resistance from the board of the
“Benevolent Fund” — a nonprofit Lopez had set up to manage the commissaries
several years ago. One board member, Amadeo Ortiz — who now is running
against Lopez for sheriff — commissioned a background report that was
critical of Premier and another Leblanc company. After Ortiz resigned, the
issue came up again. The board approved moving ahead with a six-month trial
contract with Premier in August 2005. The vote came at a special meeting
held while two board members were out of town. Reynolds was elected
chairman of the board at the same meeting. A few weeks after that meeting,
the Leblancs took both Lopez and Reynolds on the trip to Costa Rica.
Sheriff Lopez has stated the trip, which John Reynolds also attended, was a
private conference unrelated to any county business. Pat Leblanc says the
conference addressed security issues related to one of the Leblancs’
private prisons in Alabama. In addition to Premier, the Leblancs own LCS
Prisons, the fifth largest prison system in the U.S. with facilities across
the Gulf Coast region. “In our jail business, we hold conferences with
various law enforcement agencies to discuss security and issues having to
do with operation. That was the basis of the trip,” says Pat Leblanc. He
adds the business also “routinely entertains clients. We take them fishing
and we take them golfing,” he says. “That’s business culture; everybody in
the business world does that. All the service companies here do it.”
Premier signed its six-month contract with the Benevolent Fund’s board in
October 2005, and in the months following made a total of $27,500 in
contributions to charities now known to be controlled by Reynolds. The
district attorney’s office has bank records showing that Reynolds
transferred the funds into his personal account. Reynolds is yet to be
called before a grand jury. For his part, Sheriff Lopez, a Democrat, has
maintained that he is the victim of a “political witch hunt” by the
Republican district attorney. Premier’s Texas-based attorney, Tonya Webber,
issued the following statement on behalf of her clients: “Neither PME nor
any of its employees or principals has engaged in any misconduct. While
both the company and the Leblancs typically make charitable and political
contributions they had every reason to believe that any such charities were
legitimate and that all contributions or benefits were reported by the
recipients as required by law.” Pat Leblanc says that in hindsight, his
company was too trusting of the Brexar County officials. “We’re out of
towners,” he says. “We’re not from that area. We went in, we sold our
service; they wanted us to do the commissary service. We operate a good,
clean business and to think that we might have been taken advantage of in
that regard just turns my stomach.”
September 8, 2007 The
Advocate
This week’s conviction of a San Antonio area sheriff for his
involvement in a bribery and money laundering scheme has ties to a
Lafayette company owned by a candidate for the state House of
Representatives. Pat LeBlanc and his brother, Michael, own Premier
Management Enterprise. Bexar County prosecutors say now-resigned Sheriff
Ralph Lopez and his long-time campaign manager John Reynolds received money
and a golf and fishing trip to Costa Rica in exchange for awarding Premier
Management the contract to run the county jail’s commissary. LeBlanc, a
Republican, qualified Thursday to run for the District 43 seat being
vacated by Ernie Alexander, R-Lafayette. LeBlanc said Friday that he is
cooperating with investigators and as such cannot comment on the specifics
of the case. But LeBlanc said he is confident in his and his company’s
integrity. “We haven’t done anything wrong,” LeBlanc said. “We’re caught up
in something that’s a lot bigger than us.” Lopez and his wife, Nancy,
pleaded no contest Monday to charges of receiving an improper gift, failing
to file the proper disclosures, and tampering with a government record.
According to the couple’s plea deal, they will be required to cooperate
with both local, state and federal authorities in the ongoing
investigation. Affidavits attached to search warrants in the case allege
that in April 2005, Reynolds began lobbying the sheriff’s office Benevolent
Fund board — which at the time ran the commissary operations — in an
attempt to have the board award the commissary contract for the jail annex
to Premier Management on a trial basis. Reynolds sat on the board at the
time. In June 2005, a board member intended to present the board an analysis
that showed there would be a decrease in profits if the contract were
agreed to, according to the affidavit. Lopez, the board chairman and the
skeptical board member sent a letter to Premier Management in July 2005
telling the company the board would not be awarding it the contract, the
affidavit says. Soon thereafter, the chairman resigned from the board and
Reynolds took over as chairman. Reynolds then called a special meeting on a
date when he knew two objecting board members would be out of town; and at
that meeting, Reynolds gave Premier Management the contract, according to
the affidavit. Twelve days later, Lopez and Reynolds attended an
all-expense paid golf and fishing trip to Costa Rica, hosted by Premier
Management, according to the affidavit. A person investigators believe to
be an Alabama state senator also attended. In October 2005, the contract
was formally signed. One month later, Premier Management gave a $5,000
check to “Systems Analysts,” which prosecutors say was a shell business controlled
by Reynolds. In January 2006, Premier Management gave $7,500 to the
“Optimist Club Scholarship Fund,” which prosecutors say is a sham nonprofit
controlled by Reynolds. Another $7,500 check to Optimist followed on May
11, 2006, according to the affidavit. Two weeks later, despite an analysis
by the board’s accountant that showed the commissary profits had decreased,
the board voted to extend the contract to the entire jail, not just the
annex operations, the affidavit says. In total, prosecutors allege, Premier
Management or Michael LeBlanc gave Reynolds’ organizations more than
$32,000, which Reynolds then turned into cash and deposited into his
personal bank account. Pat LeBlanc said the contracts his company signs
with state and federal officials require a great deal of disclosure,
including the requirement that his company’s books be open for review at a
moment’s notice by those agencies. “I’m proud to say I have passed muster,”
LeBlanc said. “There’s probably no candidate in Louisiana that gets more
scrutiny.” LeBlanc said he and his brother started the commissary business
as a satellite business to serve their own prisons, before deciding to
branch off to serve other facilities. It’s not a large part of the overall
business, LeBlanc said. “I would never ever risk my integrity over selling
candy bars and potato chips,” LeBlanc said. LeBlanc said that most voters
see the issue as he sees it, as a “smear campaign.” He said most Lafayette
media outlets were tipped off on the San Antonio prosecutions within a
two-and-a-half hour period. “It’s politics as usual,” LeBlanc said. “It’s
the nature of the game. It’s a blood sport. People will use every little
piece of leverage they can.”
September 9, 2007 San
Antonio Express-News
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. 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."
September 1, 2007 San
Antonio Express-News With an indictment hanging over his head, Sheriff
Ralph Lopez resigned Friday in a deal struck with prosecutors that
guarantees him no jail time in exchange for a no contest plea and $10,000
fine, a source familiar with the negotiations told the San Antonio
Express-News. Lopez's brief resignation letter marked the end of his
15-year reign as Bexar County sheriff. The letter was faxed to District
Attorney Susan Reed at 5:36 p.m., following what the Express-News confirmed
were ongoing negotiations about resolving his criminal case. Lopez faces
misdemeanor charges stemming from an investigation into a jail commissary
contract awarded to a Louisiana private jail services company called
Premier Management Enterprises. "I, Rafael Lopez, hereby resign my
position as Sheriff of Bexar County, Texas, effective at 5:00 p.m. on
August 31, 2007," Lopez's resignation letter said. Reed turned the
resignation letter over to Commissioners Court, whose members plan to meet
Tuesday to begin choosing a successor. A new sheriff could be named by
Sept. 19. The resignation was the product of a deal Lopez and his attorneys
struck with Reed's office, a source familiar with the agreement confirmed.
Under the undisclosed terms, Lopez agreed to plead no contest to all three
misdemeanors, and to pay a $10,000 fine. A review by the Express-News of
the court's records Friday showed no plea agreement was filed, and judges
who could have formalized the deal had left the building by the time
Lopez's resignation was made public. Sources familiar with the
negotiations, however, confirmed the sheriff will formalize the proposed
deal in front of a judge, possibly as early as next week. Reed declined to
comment. So did Lopez's lawyer, Mike McCrum: "I cannot comment about
anything regarding his pending case," he said. After formally
resigning, Lopez retreated to the privacy of his Leon Valley home, which
raided last week by investigators, and did not answer calls from the media.
Through other officials, he requested to be left alone. County Commissioner
Paul Elizondo said Lopez may issue a public statement in the coming days.
The indictments against Lopez, issued just as the statute of limitations
was about to expire, are part of a broader ongoing investigation into just
how Premier Management Enterprises came to win the jail commissary
contract. Lopez faces three misdemeanor counts: accepting a gift, accepting
an "honorarium," and failing to disclose the gift and honorarium
in his finance reports to the county. The alleged gifts were in the form of
a golfing and fishing trip to Costa Rica in August 2005, at a time when
Premier's contract was in jeopardy. Key questions remain unanswered. Chief
among them is whether Lopez or his wife, Nancy Lopez, still might be
subject to charges in the public corruption investigation. She has been named
as a suspect in bribery, money laundering and campaign finance law
violations. Also unknown is whether Lopez and his wife will become
cooperating witnesses against others who have been named as suspects or who
have been called before the grand jury. The grand jury's term was extended
until late September. "The sheriff clearly wants to spend more time
with his family, and he's confident that his department is being left in
capable hands," said McCrum, who declined to comment on Nancy Lopez's status
or any possible deal involving Lopez himself. "He's proud of the Bexar
County Sheriff's Office and that it is in capable hands. Because of a lot
of different factors, he's decided to resign to spend more time with his
family." County officials called a news conference late Friday
afternoon to announce the resignation. Bexar County Judge Nelson Wolff
described a calm, professional interaction with the sheriff during which
Lopez disclosed his intention to resign. Wolff said he didn't ask Lopez any
questions. "He did say he's going to take some time with his family
and wanted some privacy," Wolff said, later adding: "The last two
or three weeks have obviously been difficult. I think at least I feel
relieved in the sense that it's come to a conclusion, and we now know a
timeline in which we will take action. It's never good when any elected
official has legal problems." Elizondo and Commissioner Tommy Adkisson
also expressed regret. "It is sad for a person who came in with great
aplomb and reception ... to come to this juncture," Adkisson said.
"I had a very good relationship with the sheriff, and I always really
respected him," Elizondo said. "He's had an outstanding career in
law enforcement and he's done a lot to modernize and upgrade the Sheriff's
Office during his career. It's sad that it comes to this juncture."
Wolff said he had no successor in mind for Lopez. Sheriff's Deputy Al
Damiani, president of the Bexar County Sheriffs Deputy Law Enforcement
Officer's Organization, long considered a Lopez ally, expressed dismay over
the resignation. The union, known as LEO, has had its records subpoenaed,
along with some of its top members, and long has retained longtime Lopez
campaign manager John Reynolds as a political consultant. The investigation
into the jail commissary contract also has encompassed Reynolds, who served
on the nonprofit board. "If this hadn't have come up, they would have
been naming buildings after Ralph Lopez," Damiani said. "He took
our organization from the dark ages to a situation where we're a viable
modern law enforcement organization." Damiani, who only recently
became LEO's president, said he has ordered a full 10-year audit of the
organization's books that will focus on any dealings involving Reynolds. He
also urged Commissioner's Court to appoint an interim sheriff who knows the
department well and isn't currently a declared candidate for the office. He
said the office has been in "absolute turmoil." "We want
someone who can stabilize things and get us back to the business of serving
the public," Damiani said. Premier took over management of the jail
food commissary contract at the urging of Lopez, who used close associates
on a nonprofit corporate board overseeing the jail commissary to push the
contract through when a majority of other board members were prepared to
vote it down. Through their attorneys, Ralph and Nancy Lopez and Reynolds
have denied any wrongdoing.
August 15, 2007 San
Antonio Express-News
Bexar County Sheriff Ralph Lopez was indicted Thursday on three
misdemeanor criminal charges related to benefits he allegedly took from a
jail contractor, but the four-term officeholder avoided the indignity of
getting booked into his own jail. The indictments accused Lopez of
accepting and failing to report a gift and an "honorarium" — both
involving the same 2005 all-expenses paid golfing/fishing trip to Costa
Rica — from a company he helped get the contract to run his jail's food
commissaries. In particular, the indictments allege that he solicited and
accepted food, lodging, transportation and entertainment, including golfing
and fishing, from two officials of Louisiana-based Premier Management
Enterprises, which now runs the commissaries. One indictment labels the
trip as a gift to a public servant; the other an "honorarium," or
informal payment, that "was in consideration for services that the
defendant would not have been requested to provide but for defendant's
official position and duties." The third charges that he failed to
report the gift on his personal financial disclosure form. Lopez remains in
office, as allowed by law for an official under indictment, but if found
guilty, Lopez would be automatically disqualified for service and could end
up behind bars. Despite warrants issued for his arrest Thursday, Lopez
never had to join his prisoners. After reporting to a judge, he was allowed
to remain free on a personal recognizance bond. The charges are the first
to surface as part of a wider-ranging public corruption probe that District
Attorney Susan Reed said focuses on the relationship between Premier,
Lopez, his longtime campaign manager John Reynolds, members of a nonprofit
board the sheriff set up and appointed to run the jail commissaries, and
others. Attorneys for Premier did not respond to requests for comment
Thursday. After testifying under subpoena for 45 minutes before the grand
jury Thursday morning, Lopez said, "I've done nothing wrong." A
Democrat who recently announced he would run for re-election next year,
Lopez called the 18-month investigation by Republican Reed "a political
witch hunt." Jason Davis, one of Lopez's attorneys, said, "We are
looking forward to our day in court." In previous interviews, Lopez
has acknowledged accepting the trip to Costa Rica for an undisclosed
business purpose, a kind of favor to friends, but has insisted it had no
bearing on his decision to help Premier take over the jail commissaries. He
maintains he has never received any form of payment from Premier for his
help. Reed characterized the indictment of Lopez as merely a stepping-stone
in an investigation that is far from over, involving the FBI and Texas
Rangers. She said the misdemeanor indictments against Lopez were presented
Thursday only because the legal time limit for filing such charges would
have ended on Monday. Reed dismissed the sheriff's accusation that the
investigation was political, noting that it began long before Lopez
declared he would run for re-election. "That is a fairly typical
response from any politician who has been indicted. In fact, I can't
remember anyone not claiming that," she said. "The sheriff has
run for office before and I have kept my distance. I didn't even support
the candidates who were running. I made no public endorsements. I felt I
needed to work with him. He's the sheriff." The charges against Lopez
fall short of more penalty-heavy public corruption or bribery, which
challenge prosecutors to present evidence that meets a more stringent
standard. Instead, the two charges characterizing the trip as a payment or
benefit, if proved, each carry up to a year in prison, a $4,000 fine, or
both. A third charge accusing Lopez of failing to report it as required on
financial disclosure statements carries a penalty of up to 180 days in jail
and a $2,000 fine. Jail business -- The sheriff's Costa Rica trip came at a
time when Premier's prospects of getting the jail business was in jeopardy,
and he wasn't the only one who benefited from a relationship with the
company. Until the fall of 2005, the county's two jail commissaries were
being run and managed directly by the sheriff's office through the
nonprofit Benevolent Fund. By most accounts, the commissaries were run
efficiently and had some $2 million a year in revenue. But starting earlier
in 2005, the sheriff began pushing hard for his appointed board members to
hand over management to Premier, on grounds that a private company could
run the commissaries more professionally. Premier's principals were
brothers Michael LeBlanc and Patrick LeBlanc, as well as CEO Ian
Williamson. But some of Lopez's own staff and appointed Benevolent Fund
board members strongly objected to the change. A background check turned up
information about Premier that was generally critical of the company and
cited specific examples where another company run by the LeBlancs, a
private prison firm, had faced legal challenges to their operations. A
majority of board members were prepared to vote against the project. Even
Lopez momentarily withdrew his support, but he was soon pushing for it
again. A key meeting that broke the logjam occurred in August 2005, when
Reynolds became chairman of the board and pushed the Premier contract
forward, minutes show. In a recent court filing seeking to force Reynolds
to give up handwriting samples, the district attorney's office accused him
of accepting more than $27,000 in unreported "donations" to
"shell" charities and "consulting" fees from Premier
during the time that Reynolds was also helping the company win the jail
commissary business as a sheriff-appointed member of the Benevolent Fund
board. He is a target of the investigation, subpoenaed at least three times
by the grand jury. Neither Reynolds nor his attorney has returned phone
calls. He has invoked the Fifth Amendment right against self-incrimination
all three times. It was also later that month, from Aug. 20-23, that Lopez
accompanied Michael LeBlanc and Ian Williamson to Costa Rica, according to
the sheriff's calendar and the indictments. Investigators have interviewed
a number of other current and former Benevolent Fund board members. Among
them is John E. Curran III, a longtime political and business associate of
both the sheriff and Reynolds. The Express-News reported July 29 that
Curran runs a temporary worker company that got a contract to staff
Premier's commissary operations after he helped the Louisiana company
overcome Benevolent Fund board opposition to gain a footing at the jail
during the summer of 2005. Curran said he fully disclosed his contract,
worth an estimated $15,000 annually, to the sheriff and fellow board
members and abstained from further voting as a board member on Premier
business.
July 29, 2007 San Antonio
News-Express
In the summer of 2005, a determined effort by Bexar County Sheriff Ralph
Lopez to privatize the county jail commissary stores — which generated some
$2 million a year in gross sales — was on the verge of foundering. In
Texas, elected sheriffs enjoy wide leeway and independence in managing and
operating county jails, including the jail commissary, where inmates can
purchase everything from snacks to toiletries. But Lopez had met strong
resistance from several board members of a nonprofit "Benevolent
Fund" corporation that he had established several years earlier to run
the commissaries. They saw no good reason to contract out the operation to
a private vendor of Lopez's choice, Premier Management Enterprises, or any
other business. The deal seemed all but dead when Premier's fortunes took
an abrupt turn for the better. Some board members, including the chairman
who staunchly opposed the deal, resigned. The new leaders of the board
along with a new member, all allies of Lopez, would push the Premier
contract through the rough patch. Within weeks of the contract approval by
the sheriff's Benevolent Fund board in August 2005, Lopez, an avid golfer
known to travel the country playing at elite resorts, was visiting Costa
Rica, where he spent time on the greens with Premier officials at the
expense of Premier's principal owners, Patrick and Michael LeBlanc. Later,
less than a month after the contract was officially inked, board Chairman
John Reynolds was allegedly depositing the first of four checks totaling
$27,500 from Premier into accounts named for charities that were
"shells" and "fronts," according to court documents
filed by a district attorney investigator. And within four months, board
Vice Chairman John E. Curran III was preparing to cut his own financial
side deal with Premier. Curran's temporary worker company, PersoNet, now
provides the very commissary employees that Premier uses to carry out the
contract Curran helped along as vice chairman. In a recent interview,
Curran said his own ongoing business with Premier, based in Louisiana, to
supply the jail commissaries with about a dozen temporary workers is worth
between $12,000 and $15,000 a year to him. Curran said he did nothing
criminally or ethically wrong, and that he verbally disclosed the
relationship with Premier to the sheriff and abstained on relevant votes
once his company had Premier's business in April 2006. "I had the
sheriff's permission prior to doing any business with Premier, and I asked
the board's permission. Both granted it," Curran said. "I wanted
to be sure there was no conflict of interest. I did not want anyone to find
out in the newspaper, or any other way, that one of my clients was Premier."
The sheriff did not reply to several telephone messages last week. Neither
Reynolds nor his attorney returned messages requesting comment for this
article. Even if no laws were broken, disclosures about Premier's
generosity toward elected and appointed officials who have helped it win
lucrative contracts have left — at the least — a public perception of
wrongdoing in how the sheriff and his allies conduct business.
"Ugh," Bexar County Judge Nelson Wolff groaned when told of
Premier's arrangement with Curran's company. "This thing's worse than
it already has been. This is not good at all. Nothing about it looks good.
Whether you've violated a criminal act or an ethics issue, or neither, it's
still not appropriate behavior. It looks bad." District Attorney Susan
Reed's public corruption investigators, joined by the FBI and the Texas
Rangers, are conducting interviews and have sought grand jury subpoenas
regarding Reynolds. On several occasions, he's invoked his Fifth Amendment
right against self-incrimination in response to subpoenas, according to
court documents. First Assistant District Attorney Cliff Herberg said his
office would not discuss the investigation. Curran acknowledged that
investigators have questioned him about PersoNet's relationship with Premier.
Asked if he had ever shared any of the Premier revenue with Reynolds or
anyone else, Curran replied: "I'm not sharing my revenue with anyone
but my kids. My staff is not donating to anybody. There's just nothing
there." One of Premier's attorneys, Tonya Webber of Corpus Christi,
wrote in an e-mail reply, in part, that: "Temp-to-hire services are a
prudent business practice. This was an arms-length transaction documented
in writing with an experienced temp-to-hire company." Webber said she
wasn't at liberty to respond to specific e-mailed questions, such as why
Premier chose a Benevolent Fund board member's company, rather than more
than a dozen other area licensed temp worker companies. Created in 2002 by
Lopez, the Benevolent Fund appears to be the only one that exists in the
state for the purpose of running a jail commissary. Sheriffs in other
counties have contracted the job directly with private companies in line
with state laws that allow them to do so without competitive bidding.
Because of the Benevolent Fund's unique existence and function, said Lauri
Saathoff, a spokeswoman for the Texas attorney general's office, the
question of how the state's conflict of interest law might apply has never
come up. "We don't have any previous attorney general's opinions for a
board like this," Saathoff said in response to an Express-News
request. Three-way alliance -- Curran's ties to the sheriff and Reynolds
date to the late 1990s when Curran worked as a senior analyst in the Bexar
County Personnel Division. Close alliances were built among the three over
the years, each assuming positions of potential benefit to the others.
Lopez and Reynolds have known each other for at least 15 years; Lopez has
hired Reynolds as his campaign manager for years and once made Reynolds his
chief of staff. Curran began serving on various boards alongside Reynolds,
doing business with a deputies' union considered aligned with Lopez, and
working on the sheriff's campaigns that Reynolds managed. While Reynolds
was chairman of the West San Antonio Chamber of Commerce, which he helped
found, Curran was treasurer. Reynolds also nominated Curran in 2004 for
appointment to the Alamo Workforce Development board, one of 28 such boards
across the state that spend Texas Workforce Commission funds to help the
unemployed find work. Curran and Reynolds also share a connection through
the Bexar County Sheriff's Deputies Law Enforcement Organization's union.
The fact that LEO routinely hires Reynolds as its paid lobbyist has led to
the perception among some deputies that Lopez wields some influence over
the organization. LEO also has given consulting contracts to Curran to
conduct salary surveys the union uses to justify pay raise requests, he
said. And Lopez's wife, Nancy, served at one time with Reynolds on a
now-defunct nonprofit fundraising arm of LEO. Curran, for his part, said he
has donated PersoNet's "time and energy" to man phone banks
soliciting past Lopez election campaign contributors and will again for the
sheriff's 2008 re-election campaign. When Lopez founded the Benevolent
Fund, Curran was among the first whom the sheriff asked to serve on it. The
alliance between Curran, Reynolds and the sheriff would come into play at a
critical moment during the summer of 2005, in ways that would yield fruit
for more than just Premier. Opposition to proposed contract -- Starting in
early 2005, when commissary revenues were approaching record highs of $2
million under Benevolent Fund board management, Lopez began pushing for
Premier to run the jail annex commissary, the smaller of two, on a
six-month trial basis. If that worked out, the contract would be expanded
to the main jail commissary. Rather than contract out the commissary at
first, Lopez had opted to set up a Benevolent Fund with a seven-member board
to do the job in-house. He has authority to nominate and appoint members.
Lopez said last month that he later wanted to switch to Premier because the
commissary operations were outgrowing the limited expertise of board
members and it was time for professional management. "None of us had
experience," Lopez said. "Running a jail is not just putting guys
in jail. It's detention ministries; it's banking and other services. It's
all comprehensive." Some of the sheriff's subordinates on the board
immediately opposed the change. But the endeavor did not run into serious
trouble until the eve of a scheduled board vote on the pilot contract June
22, 2005. The chairman at the time, Deputy Chief Amadeo Ortiz, released the
results of a background investigation of Premier that he had quietly
commissioned from the Houston law firm McFall, Sherwood & Breitbeil.
The report was generally critical of Premier and cited specific examples
where another company in which the LeBlancs also were shareholders, LCS
Corrections Services Inc., had faced legal challenges to their operations.
The background report — and a financial analysis projecting an initial
revenue loss of $103,790 if Premier took over — raised sufficient concern
for Reynolds to table the Premier contract that day, according to meeting
minutes and two former board members. Ortiz, who resigned from the board
shortly after that meeting and is running for sheriff against Lopez, said
he believes he knows why. "It would have failed a vote at that
time," said Ortiz, guessing the board would have voted 4-2 against
Premier. "My fellow board members didn't like the contract because
there was nothing wrong with the way the commissary was being run."
Even the sheriff momentarily wavered in his support for Premier because of
the background report. But Lopez was soon pushing again. And in the
sheriff's corner, Ortiz and another board member said, were the only two
who had supported the proposal all along and who would go on to break the
stalemate: Curran and Reynolds, "the two Johns," as Ortiz and
other board members sometimes referred to them. Doing 'business with
friends' -- On Aug. 9, 2005, Reynolds and Curran called a special meeting.
Ortiz had by then resigned, and the two other board members were out of
town, at least one of whom was firmly opposed. Reynolds and Curran were
joined by Dr. Bert Cecconi, a 71-year-old dentist and occasional candidate
for local political office who had recently been added to the board. Only
weeks earlier Reynolds has asked him to join the board as a favor to the
sheriff, Cecconi recalled in an interview last week. He said he'd gotten to
know Reynolds and Lopez over the years at Saturday morning community
breakfast meetings downtown. The three, enough for a quorum, elected
Reynolds the new board chairman and Curran the new vice chairman. Lopez put
in a brief but rare appearance at the meeting. Then, according to meeting
minutes, the trio "approved and unanimously recommends implementation
immediately" of the Premier annex commissary tryout program. Curran
acknowledged the purpose of that Aug. 9 special meeting. "That meeting
was called to help get things going forward," he said. "We were
just trying to coordinate it to get things up and going." Cecconi, who
described himself as a "passive member" of the board, said he
served for just four meetings, dropping off shortly after signing the
Premier contract. Cecconi was given to believe the Premier deal was a
routine matter requiring little scrutiny. "To me, I thought it was
like a machine with Cokes coming out of it or something. I didn't know it
was a major deal," Cecconi said last week about transferring the $2
million a year jail commissary operations to Premier. "I probably just
said, 'OK.' I didn't give it much thought, for better or for worse."
Later that month, from Aug. 20-23, the sheriff, who frequently played golf
with Premier's owners, traveled to Costa Rica, his office calendar shows.
Lopez recalled last month that the LeBlancs paid all of his expenses to
Costa Rica for an undisclosed business trip, unrelated to county affairs,
that included tee time. Lopez still refuses to fully disclose the business
purpose of the trip, only that it involved a favor to his Premier friends,
a foreign ambassador and a senator, neither of whom he would name in deference
to a confidentiality agreement he said he struck with all involved. He also
said he was not paid. "The LeBlanc people paid for the Costa Rica
trip," the sheriff said. "I was over there carrying my resume
with me for credibility for part of the trip." From August on, Lopez
and Premier would encounter no more dissent. After several resignations,
the board, under the guidance of Chairman Reynolds and Vice Chairman
Curran, would reconstitute itself with new members who would continue
clearing the path for Premier's pilot six-month contract. On Oct. 19, 2005,
Cecconi, as board secretary, signed the contract with Premier for the pilot
program, a copy of the agreement shows. A short time later, Cecconi dropped
off the board. He told the Express-News his dental practice had gotten too
busy. About three weeks after the contract was signed, Premier wrote a
$5,014 check for "consulting" to Systems Analysts Inc., described
as Reynolds' "alter ego," according to allegations by district
attorney investigators. Three more Premier checks, totaling another
$22,500, to Reynolds-controlled accounts would follow, according to court
filings. Webber, Premier's attorney, said last month when asked about the
checks that there is no evidence of Premier being connected to any alleged
wrongdoing. Curran's firm gets hired Once Premier had its signed the pilot
contract, Curran said a company official asked him for advice about
staffing the limited operation. Premier was going to need only four of its
own workers. Curran said he offered to let Premier conduct interviews in
the offices of PersoNet, free of charge, as a favor. As vice chairman,
Curran continued to consider and discuss Premier's status until about
February 2006, by which time the tryout period was more than half over, and
it was clear to board members that Premier would secure a five-year
contract to run both jail commissaries. Curran confirmed that was about
when Premier first broached the topic of his company getting paid to
provide commissary workers for the anticipated expansion. He said he tried
to refer the business elsewhere but that the company insisted on PersoNet.
"They said, 'We need employees,'" Curran recalled. "I
recommended a couple of different avenues for them because I am in the
business, and they chose not to follow those, so ..." While there are
a dozen licensed temporary staffing companies in the greater San Antonio
area, Curran said Premier preferred to do business with him because "I
guess it's all networking. You like to do business with friends." During
the February 2006 board meeting, minutes show, Reynolds disclosed Curran's
pending business relationship with Premier. The sheriff, Reynolds
announced, had requested that Curran's company "bid" on work to
supply Premier with workers. Curran's fellow board members then approved a
motion that he recuse himself "from voting on matters that may create
a conflict of interest with the (Benevolent) Fund's activities,"
according to the minutes. When the time came for the Benevolent Fund to
extend the contract in April 2006, Curran abstained. PersoNet had penned
its deal with Premier. Once Premier had all the commissary business, the
Benevolent Fund no longer needed to employ the 13 commissary workers. Some
were laid off; others were encouraged to reapply to Premier for their old
jobs, at substantially lower pay and with no benefits, according to two
former employees. PersoNet handled the initial reapplication process,
bringing some of the old commissary employees into PersoNet's fold as
temporary workers. It also became the equivalent of Premier's human
resources department, outsourced. Curran said he hopes his company grows
with Premier, which has contracts elsewhere in South Texas. "We want
them to do well, both as a board member and as a client," Curran said.
"Their success — just like all my other clients' success is — if I can
help them be more successful, then I'm successful. "That's
business."
Kleberg County
Jail, Kleberg County, Texas
November
8, 2007 Caller-Times
A new commissary company started this week in Kleberg County Jail after
Premier Management Enterprises and the county mutually ended Premier's
contract. Premier was investigated in Bexar County for buying a trip to
Costa Rica for former Sheriff Ralph Lopez. Lopez resigned and pleaded no
contest to three charges related to the trip. Premier, based in Lafayette,
La., also operated in Kleberg County since former Sheriff Tony Gonzalez
signed the contract in fall 2004. Sheriff Ed Mata said last month he wanted
to end Premier's contract because of the Bexar investigation and because of
performance issues. Keefe Commissary Network, based in St. Louis, began
providing commissary services Monday to the Kleberg County Jail. The
one-year contract gives the county 24 percent of net sales, defined as
gross sales minus non-commissioned items such as stamps. Keefe was chosen
over Swanson Sales Corp., which said in a proposal it could offer up to
30.25 percent of net sales. Commissaries, which supply snacks and some
toiletries, are considered privileges for inmates. Texas law gives sheriffs
sole discretion over the contracts. A county's proceeds must be spent on
items or activities that contribute to inmates' well-being, such as
education, libraries, writing materials, clothing and hygiene items,
according to state law. Kleberg Chief Deputy Willie Vera said Keefe offered
the better overall package despite the lower commission. Some items will be
marked up to make up part of the difference. Plus, the company offered a
one-year contract, while Swanson initially wanted five, then agreed to
three, Vera said. Premier had signed a five-year contract with Gonzalez,
and Vera said the current sheriff isn't willing to sign such a long
contract. "We have a year to evaluate this company," Vera said.
"If he needs to go out and search for another company the door is
still open." Keefe also recently began service to the Nueces County
Jail, making it easier for the company to add Kingsville to its routes,
Vera said. Keefe made the transition smoothly and the Kleberg County Jail
was never without commissary services, he said. Premier ran the Nueces
County Jail commissary under a contract signed by former Sheriff Larry
Olivarez until Nueces County Sheriff Jim Kaelin terminated the agreement
after taking office in January, citing performance issues. Keefe gives
Nueces County a commission of 39 percent of net sales. Mata and Kaelin have
said their staffs told them their predecessors, Gonzalez of Kleberg County
and Olivarez of Nueces County, went on that trip to Costa Rica in August
2005. Neither Mata nor Kaelin has documentation corroborating the reports.
Gonzalez left office in 2004 after losing an election to Mata, and Olivarez
resigned in January 2006 to run for county judge. Gonzalez and Olivarez have
not responded to requests for interviews. Premier's principals, Patrick and
Michael LeBlanc, also own LCS Correctional Services, which is building a
private prison to house federal inmates near Robstown.
October 1, 2007 Caller-Times
Two local sheriffs are distancing themselves from their predecessors'
decisions to award jail commissary contracts to a company involved in a
criminal investigation in Bexar County. Kleberg County Sheriff Ed Mata said
last week officials are researching ways to end that county's five-year
agreement with the company, Premier Management Enterprises. Nueces County
Sheriff Jim Kaelin gave Premier a 30-day termination notice on Jan. 24,
after taking office. Former Bexar County Sheriff Ralph Lopez resigned and
pleaded no contest to accepting a trip to Costa Rica from the principals of
Premier. The Lafayette, La., based company runs the county jail commissary.
Neither Kaelin nor Mata has documentation corroborating what their staffs
have told them -- that their predecessors, Larry Olivarez of Nueces County
and Tony Gonzalez of Kleberg County, went on that August 2005 trip. Neither
Gonzalez nor Olivarez has responded to requests for comment. There is no
known investigation in Nueces or Kleberg counties. "At this point no
case has been submitted to me," Kleberg County District Attorney John
Hubert said. "If something is submitted to me, I take every case on
its own merits. I don't have any information other than what I've read in
the papers and -- no offense to anybody -- that's not really
evidence." Nueces County District Attorney Carlos Valdez was out of
the office late last week, and the Bexar County District Attorney's Office
did not respond. The FBI would not comment. Olivarez signed a contract with
Premier five months after the Costa Rica trip involving the former Bexar
County sheriff. Gonzalez signed a contract in September 2004. Premier's
principals, Patrick and Michael LeBlanc, also own LCS Correctional
Services, which is building a private prison to house federal inmates near Robstown.
A receptionist at Premier referred all questions to the company's chief
executive officer, Chris Burch, who did not respond. An attorney for the
company, Tonya Webber of Corpus Christi, said her clients have not been
commenting because of the open investigation in Bexar County. She said she
would check with her clients for comment on the local contracts but did not
respond after that. Kaelin and Mata both cited performance issues with
Premier as reasons for terminating the contract. Mata said the Bexar
investigation also played a part. "What I'm trying to do is just
protect this county," Mata said. "I'm not trying to pass any
judgment if something was done wrong." Kaelin said his decision was
based solely on Premier's performance. He met with Premier officials about
complaints before ending the agreement, according to correspondence the
Caller-Times obtained under the Texas Public Information Act. Kaelin and
Premier also tangled over payments. A new contract, with Keefe Supply, also
is potentially more lucrative for the county. The Premier contract gave the
county $130,000 or 31 percent of net sales, whichever was greater. The new
contract gives a minimum of 39 percent with the possibility of 41 percent
after the first year. Texas law gives sheriffs sole discretion over
commissary contracts. Commissaries supply snacks, such as chips, candy bars
and soda, as well as certain toiletries, for inmates. Friends and family
put money in an inmate's account to spend on commissary items. A county's
proceeds must be used for commissary staff, social needs of inmates (such
as education or counseling), libraries, writing materials, clothing,
hygiene items or other programs that contribute to inmates' well-being,
according to state law. Kaelin said he uses commissary profits to buy
newspaper subscriptions, televisions and uniforms. Kaelin said inmates
frequently complained about Premier's service. Under that system, inmates
would order items to be packed into bags, shipped from San Antonio and
handed out the next day. Kaelin said his office received numerous
complaints about items being damaged or wrong. Keefe stores items at the
Nueces County Jail McKenzie Annex and brings items around on a cart twice a
week so inmates can choose and receive items immediately, Kaelin said.
Premier's accounting system also allowed inmates to buy on credit, and as a
result some inmates would leave custody owing money to Nueces County,
Kaelin said. Keefe's system charges inmates' accounts directly by scanning
a bracelet inmates wear. An inmate can't buy items unless there is enough
money in the account.
September 9, 2007 San
Antonio Express-News
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. 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."
Nueces County
Jail, Nueces County, Texas
November
8, 2007 Caller-Times
A new commissary company started this week in Kleberg County Jail after
Premier Management Enterprises and the county mutually ended Premier's
contract. Premier was investigated in Bexar County for buying a trip to
Costa Rica for former Sheriff Ralph Lopez. Lopez resigned and pleaded no
contest to three charges related to the trip. Premier, based in Lafayette,
La., also operated in Kleberg County since former Sheriff Tony Gonzalez
signed the contract in fall 2004. Sheriff Ed Mata said last month he wanted
to end Premier's contract because of the Bexar investigation and because of
performance issues. Keefe Commissary Network, based in St. Louis, began
providing commissary services Monday to the Kleberg County Jail. The
one-year contract gives the county 24 percent of net sales, defined as
gross sales minus non-commissioned items such as stamps. Keefe was chosen
over Swanson Sales Corp., which said in a proposal it could offer up to
30.25 percent of net sales. Commissaries, which supply snacks and some
toiletries, are considered privileges for inmates. Texas law gives sheriffs
sole discretion over the contracts. A county's proceeds must be spent on
items or activities that contribute to inmates' well-being, such as
education, libraries, writing materials, clothing and hygiene items,
according to state law. Kleberg Chief Deputy Willie Vera said Keefe offered
the better overall package despite the lower commission. Some items will be
marked up to make up part of the difference. Plus, the company offered a
one-year contract, while Swanson initially wanted five, then agreed to
three, Vera said. Premier had signed a five-year contract with Gonzalez,
and Vera said the current sheriff isn't willing to sign such a long
contract. "We have a year to evaluate this company," Vera said.
"If he needs to go out and search for another company the door is
still open." Keefe also recently began service to the Nueces County
Jail, making it easier for the company to add Kingsville to its routes,
Vera said. Keefe made the transition smoothly and the Kleberg County Jail
was never without commissary services, he said. Premier ran the Nueces
County Jail commissary under a contract signed by former Sheriff Larry
Olivarez until Nueces County Sheriff Jim Kaelin terminated the agreement
after taking office in January, citing performance issues. Keefe gives
Nueces County a commission of 39 percent of net sales. Mata and Kaelin have
said their staffs told them their predecessors, Gonzalez of Kleberg County
and Olivarez of Nueces County, went on that trip to Costa Rica in August
2005. Neither Mata nor Kaelin has documentation corroborating the reports.
Gonzalez left office in 2004 after losing an election to Mata, and Olivarez
resigned in January 2006 to run for county judge. Gonzalez and Olivarez
have not responded to requests for interviews. Premier's principals,
Patrick and Michael LeBlanc, also own LCS Correctional Services, which is
building a private prison to house federal inmates near Robstown.
October 1, 2007 Caller-Times
Two local sheriffs are distancing themselves from their predecessors'
decisions to award jail commissary contracts to a company involved in a
criminal investigation in Bexar County. Kleberg County Sheriff Ed Mata said
last week officials are researching ways to end that county's five-year
agreement with the company, Premier Management Enterprises. Nueces County
Sheriff Jim Kaelin gave Premier a 30-day termination notice on Jan. 24,
after taking office. Former Bexar County Sheriff Ralph Lopez resigned and
pleaded no contest to accepting a trip to Costa Rica from the principals of
Premier. The Lafayette, La., based company runs the county jail commissary.
Neither Kaelin nor Mata has documentation corroborating what their staffs
have told them -- that their predecessors, Larry Olivarez of Nueces County
and Tony Gonzalez of Kleberg County, went on that August 2005 trip. Neither
Gonzalez nor Olivarez has responded to requests for comment. There is no
known investigation in Nueces or Kleberg counties. "At this point no
case has been submitted to me," Kleberg County District Attorney John
Hubert said. "If something is submitted to me, I take every case on
its own merits. I don't have any information other than what I've read in
the papers and -- no offense to anybody -- that's not really
evidence." Nueces County District Attorney Carlos Valdez was out of
the office late last week, and the Bexar County District Attorney's Office
did not respond. The FBI would not comment. Olivarez signed a contract with
Premier five months after the Costa Rica trip involving the former Bexar
County sheriff. Gonzalez signed a contract in September 2004. Premier's
principals, Patrick and Michael LeBlanc, also own LCS Correctional
Services, which is building a private prison to house federal inmates near
Robstown. A receptionist at Premier referred all questions to the company's
chief executive officer, Chris Burch, who did not respond. An attorney for
the company, Tonya Webber of Corpus Christi, said her clients have not been
commenting because of the open investigation in Bexar County. She said she
would check with her clients for comment on the local contracts but did not
respond after that. Kaelin and Mata both cited performance issues with
Premier as reasons for terminating the contract. Mata said the Bexar
investigation also played a part. "What I'm trying to do is just
protect this county," Mata said. "I'm not trying to pass any
judgment if something was done wrong." Kaelin said his decision was
based solely on Premier's performance. He met with Premier officials about
complaints before ending the agreement, according to correspondence the
Caller-Times obtained under the Texas Public Information Act. Kaelin and
Premier also tangled over payments. A new contract, with Keefe Supply, also
is potentially more lucrative for the county. The Premier contract gave the
county $130,000 or 31 percent of net sales, whichever was greater. The new
contract gives a minimum of 39 percent with the possibility of 41 percent
after the first year. Texas law gives sheriffs sole discretion over
commissary contracts. Commissaries supply snacks, such as chips, candy bars
and soda, as well as certain toiletries, for inmates. Friends and family
put money in an inmate's account to spend on commissary items. A county's
proceeds must be used for commissary staff, social needs of inmates (such
as education or counseling), libraries, writing materials, clothing,
hygiene items or other programs that contribute to inmates' well-being,
according to state law. Kaelin said he uses commissary profits to buy
newspaper subscriptions, televisions and uniforms. Kaelin said inmates
frequently complained about Premier's service. Under that system, inmates
would order items to be packed into bags, shipped from San Antonio and
handed out the next day. Kaelin said his office received numerous
complaints about items being damaged or wrong. Keefe stores items at the Nueces
County Jail McKenzie Annex and brings items around on a cart twice a week
so inmates can choose and receive items immediately, Kaelin said. Premier's
accounting system also allowed inmates to buy on credit, and as a result
some inmates would leave custody owing money to Nueces County, Kaelin said.
Keefe's system charges inmates' accounts directly by scanning a bracelet
inmates wear. An inmate can't buy items unless there is enough money in the
account.
September 9, 2007 San
Antonio Express-News
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. 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."
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