IN WAKE OF $3.3 MILLION CONTRACT PROBE, BISD EMPLOYEE BENEFITS DEPT. GOES INTO FULL DAMAGE CONTROL MODE

By Juan Montoya
The Employee Benefits Department at the Brownsville Independent School District has gone into full mode damage control mode  following the disclosure that federal and state investigators are looking into the award of a $3.3 million insurance contract without the approval of the district's board.
The director of that department, Judy Cuellar, was said to have placed Employee Benefits staffer Ernesto de Leon Jr. on administrative suspension after weeks of suggesting that he may have kept files from some bidders without authority.
De Leon, who was not one of the staff members who participated in the insurance evaluation committee that made the recommendation that the district award the lucrative $3.3 property, windstorm, hail, boiler machinery insurance to McGriff and Seibels and Williams of Houston, Texas.
The district insurance evaluation committee which recommended McGriff were Cuellar, Payroll Administrator Kenneth Lieck, Warehouse Adm. Kent Wittenmore, CFO Lucio Mendoza, Finance Coordinator Mark Alaniz, and Belia Rodriguez, a representative from the purchasing dept.
The three BISD board members who head the insurance committee are Cesar Lopez, Jose Chirinos and Carlos Elizondo.
Cuellar apparently suspected de Leon Jr. might have been feeding another insurance company inside bid information because his brother Don de Leon, is a representative of Klements Insurance, one of two companies that was deemed a non-bid by the insurance committee, reportedly because they could not contact companies who provided windstorm insurance who were locked in by McGriff already.
The companies that were considered were McGriff and Bordon's Insurance of Corpus Christi. Documents submitted by the two companies showed that the identical same carriers were listed in both the bids, leading some to conclude that the Bordon bid – because it was higher than McGriffs using the same companies – was a "straw" bid to assure McGriff the contract.
The district let out Request For Proposals (RFPs) for the insurance early December 2014. The policies on the district's property ran out January 31.
After a majority of the board at their January meeting instructed the administration to rebid because they thought the price was too high, BISD CFO Lucio Mendoza instead decided to allow McGriff to continue providing the service and then-superintendent Carl Montoya approved his recommendation. A purchase order and a check for the $3.3 million was made out to McGriff.
That check was later returned after the board found out that Lucio and Montoya had acted without the authority of the board in contracting with McGriff.
Later, the district approved the continuation of the coverage for 90 days, including the windstorm insurance. That means that at the end of April, a new award will be made. Regardless, McGriff will collect $1.3 million for the 90 days that includes windstorm protection even though hurricane season does not start until June, more than a month later.
The district in the past has had to take McGriff to court because its carriers refused to pay the district for damages suffered during a recent hurricane. A court ruled in favor of the BISD.
Cuellar, sources say, had been "dogging" de Leon as the matter heated up, forcing him to file a grievance against her for harassment.
Just last week, before spring break, she reportedly went to his office and accused him of having unauthorized files on the bidders for the insurance and went directly to a file and pulled one belonging to Montalvo Insurance of Weslaco, one of the companies she and the rest of the insurance evaluation committee members, had declared a non-bid.
She also seized de Leon's computer, they said.
"How did she know where to look for that file in the first place/," asked a BISD employee who works in the district's main office. "Everyone thinks that file was planted there as an attempt to divert the attention of the insurance investigation by law enforcement."