WORST KEPT SECRET: CC D.A. CONVENES P.U.B. GRAND JURY

Special to El Rrun-Rrun

It's supposed to be shrouded in secrecy, but numerous sources in the legal profession and a few court watchers say that Cameron County District Attorney Luis V. Saenz – after consulting with his federal counterparts down Harrison Street – has convened a grand jury to look into allegations that some individuals committed fraud or other crimes in the failed $500 million gas-powered electric plant.

The project started after energy producer Tenaska and the Brownsville Public Utility Board City projected an electric shortage that they claimed had prevented manufacturers from moving to the city to justify the plant's construction.

Auditors hired to investigate those claims determined that the "shortages" were projected using obsolete power consumption and "vintage" projections based on faulty numbers that were relied upon even after they learned the numbers were outdated. 

Nonetheless, led by then-Mayor Tony Martinez and PUB CEO John Bruciak, they convinced the PUB board and the city commission to approve the project and raise the utility rates to finance it.

At least $125 million were raised through increased utility rates since 2013 to finance the project, of which only $29 million remain, and the rest is gone.

The DA's office will neither confirm or deny that the grand jury has been formed and seated or whether witnesses have been subpoeaned to testify on the contents of the forensic audit that determined that some acts by those named in the report may have constituted crimes that should be prosecuted. And the role of the federal Asst. U.S. Attorney's Office in the probe hasn't been confirmed. 

With scores of witnesses, participants, politicians, vendors, and firms named in the forensic audit, it could include  anyone from the CEO and administrators at the PUB, city and other officials, and "consultants" which were used extensively to further the project.

"Given the findings above, we recommend that our report be forwarded to the authorities for their review and determination of next steps," the 69-report by Carr, Riggs & Ingram, LLC CPAs and Advisors (“CRI”) of Metairie, La., concluded.

Saenz apparently has taken this to heart and reportedly initiated the grand jury probe. But there are no indications who the targets may be, only that evidence is being prepared and has perhaps already been presented to the grand jury members.

One report indicates that several men in official looking suits had visited Bruciak's home at South Padre Island late last week and – learning that the PUB CEO was not at home – left their calling cards with his wife, who seemed visibly shaken when they left. The PUB board, reacting t the furor caused by the findings of the Tenaska forensic audit and Bruciak's alleged role in the massive cover up ad continued deception, voted to suspend him for 60 days with pay so he could respond to the allegations raised by the audit.

The plant was to have produced 800 MWs of electricity and included massive right-of-ways (ROWs) purchases and massive legal and engineering fees to facilitate the construction of the project. The city's $325 share of the $500 million cost of the plant would guaranteed it 200 MWs and Tenaska would sell the remaining 600 MWs to subscribers to initiate the project. 

Tenaska was granted the unilateral right in a secret Memorandum of Understanding (MOU or Agreements) to terminate its participation if it could not sell the 600 MWs to potential subscribers. Repeated attempts to procure the MOU met with stiff resistance by the utility's San Antonio legal counsel who argued that the release would reveal "proprietary and competitive" information that would hurt the company. 

Incidentally, that legal firm, Davidson, Troilo, Ream and Garza, received the most payments from the Tenaska money, a total of  $4,656,131.36 over the five years the project was kept alive.

That firm counseled PUB's Bruciak to continue to buy ROWs and "let sleeping dogs lie" and not notify the PUB board or the city commission that the money from the high utility rates weres till being raised despite the fact that they knew the plant would never be built.

Initially, Tenaska and the city announced that the project would be online by late 2016. Toward that end, the city commission approved the increase of utilities – electric, water, and wastewater treatment – by some 42 percent in December 2012. The forensic audit revealed that as early as 2015, Tenaska informed PUB CEO Bruciak and Martinez that they hadn't been able to land the subscribers, and were granted numerous extensions to acquire the customers for the 600 MWs.

And by 2017, Tenaska informed Bruciak and Martinez that they were going to terminate their participation in the project, a fact that Bruciak and Martinez kept from the PUB board and the city commission, allowing the continued purchase of ROWs and engineering studies for a plant they knew would never be built.

It also meant that the artificially-high rates paid by PUB ratepayers would not be rescinded. It wouldn't be until August 2020 that PUB administrators told the city commission and the PUB board members that the project had been abandoned, but warned that reducing the utility rates to pre-Tenaska levels would hurt PUB finances and the annual transfer of $12 million to the city's budget.

After the forensic audit revelations, the current city commission has moved to reduce utility rates, but by only 22 percent to go into effect this month. The commission also voted to stop disconnects and fines for unpaid bills until February 2023.  

In fact, one city commissioner said that of the $29 million left of the $125 million raised with the higher fees, the return of $35 million paid to lawyers and engineers and other "consultants" should also be explored. Will this include the increased transfers that the city received from PUB for years from then high utility rates after the plant's construction had been abandoned?

"This is not as simple as it sounds," said a source close to the DA's Office. "In a homicide you have a dead body, a perpetrator and – above all – a motive to commit the crime. "This is a bit more complicated since there are hugely complex energy issues involved. It's not as easy as it sounds."