Conspirators forged a conspiracy that lasted from 2007 through 2015, federal authorities contend.
Another FBI informant testifies about under-the-table dealings
Published 8:41 pm, Wednesday, December 13, 2017
To maximize business, a local insurance broker exploited its connections at the San Antonio Independent School District at various levels so it could land and keep lucrative contracts that paid out handsome commissions.
The broker, the Mullen Group, worked its political contacts on the SAISD school board to keep a superintendent that would be supportive of the Mullen Group, and lobbied the contacts to push through the hiring of a consultant that not only would work for the district, but secretly for the Mullen Group as well, according to testimony Wednesday in a federal bribery trial for a former SAISD trustee.
In doing so, the Mullen Group’s chief financial officer, Sam Mullen, bribed the consultant, William Haff, and also secretly gave gratuities to at least one school board trustee, Olga Hernandez — picking up her tab on trips, lavish meals, gift cards, and even giving her cash, Haff and ex-Mullen employee Joshua Cerna testified at Hernandez’s trial on Wednesday.
With Hernandez, the Mullen Group, Cerna and Haff forged a conspiracy that lasted from 2007 through 2015, federal authorities contend.
“The only way that we would be able to get into any school district was to be able to directly have a relationship with the decisionmakers — the school board, the trustees,” Cerna testified.
Sometimes it involved campaign contributions, or even gratuities. Their goal was to push districts to buy insurance products that would get the Mullen Group greater returns on commissions, Cerna said.
“We wouldn’t waste time on people where we couldn’t make money,” Cerna testified. “We would contribute to the opponent of those (board members) who did not vote for us.”
Cerna was the second star witness to testify for federal prosecutors, following Haff. A veteran of local politics, Cerna served 11 years on the Harlandale Independent School Board. He also worked as a vice president of government relations at the Mullen Group and used his connections to help bring more business to Sam Mullen and his wife, Diane, the chief executive officer.
At SAISD, Cerna introduced the Mullens to trustees Justin Rodriguez, Tom Lopez, Hernandez, Ed Garza, and Adela Segovia.
Whatever relationship Cerna forged with the other school officials, Assisant U.S. Attorney Mark Roomberg limited Cerna’s testimony largely to his dealings with Hernandez.
She is the only trustee to be charged so far, after the FBI spent more than seven years investigating the Mullen Group and its contracts at multiple school districts. Hernandez is accused of accepting several gratuities from the Mullen Group that helped influence her vote, and the feds also say she swayed fellow trustees to support the Mullen Group.
Cerna, who turned FBI informant after he was confronted in 2014, did say that gratuities were given to other board members, including Lopez and Helen Madla, a board trustee with the South San Antonio Independent School District. Lopez has denied any wrongdoing. A call seeking comment from Madla on Wednesday was not returned.
At one point, Roomberg showed jurors pictures that FBI agents had obtained showing Hernandez and Madla as part of a group accompanying Diane Mullen at a Las Vegas casino hotel in February 2015.
Cerna explained that it was customary for the Mullens to travel to Las Vegas for the Super Bowl. There, they would meet for dinner with Hernandez and her husband, and on this occasion, Madla also made the trip. Generally, Sam Mullen would pay the dinner tab for everyone, including any entourage the school officials brought along.
Cerna said that on that particular trip, Madla got to stay in a Vegas hotel room that had been “comped” by one of the casinos to the Mullens, who were heavy gamblers.
At SAISD, Cerna said, Hernandez was their top supporter.
Cerna and the Mullen Group used Hernandez first to help get Haff, who worked as a consultant for other districts and municipalities, hired as a consultant for SAISD. Haff was supposed to work for the district, giving advice to school officials about what was best for the district in the marketplace.
But Haff testified he also “worked both sides,” getting paid by Sam Mullen for inside information and for advising district officials on crafting requests for proposals that would largely favor the Mullen Group and its insurance clients or the insurance products they were pushing.
Hernandez helped the Mullen Group when there was pushback from an administrator in human resources, who preferred insurance contracts that excluded the Mullen Group and other agents so the district and its employees would save money, according to Haff and Cerna.
In some cases, Hernandez met with the Mullens or Cerna and even Haff shortly before board votes, and she would be given “talking points” to use during those board meetings in a way that would favor the Mullen Group.
“Sometimes they were texted to her during the board meetings,” Cerna testified.
Hernandez was a friend of the Mullens, but over the years the Mullen Group paid for her travel to some gambling destinations, lavish meals, gave her other gratuities or contributed to her campaign.
“It was a quid pro quo,” Cerna testified. “It was continuous.”
Besides SAISD, the Mullen Group greased the wheels at school districts in the Rio Grande Valley and Corpus Christi. They also did the same at SAISD, South San Antonio and Edgewood school districts and at the now-defunct BexarMet.
Prosecutor Roomberg also showed jurors a video recording the FBI captured of Cerna giving Hernandez a $500 gift card to James Avery Jewelry in 2015 “as a token of our appreciation” for her support. At the time, Sam Mullen and Diane Mullen had separated, but the Mullen Group was still benefiting from their quid pro quo relationship with Hernandez, Cerna testified.
On another occasion, Cerna gave Hernandez $500 cash, and in a later recorded phone conversation that was played for the jury, Hernandez told Cerna she did not report it on her financial disclosure forms with the district.
Cerna’s testimony corroborated much of the stories told by Haff, but Cerna didn’t cover one subject thing Haff did. In his second day of testimony Wednesday, Haff said that the Mullen Group had a relationship with then-interim SAISD superintendent Sylvester Perez, and they used their contacts on the board to get him appointed as superintendent.
“They knew him as ‘Coach.’” Haff testified. “He was a Harlandale grad. Plus, he was very close to the board at SAISD.”
Asked by prosecutor Roomberg if Sam Mullen or Cerna ever said anything about Perez’s position at the district, Haff replied, “They said he was put in place for a reason, and one of those reasons was to take care of the interests of the Mullens.”
Reached by phone Wednesday, Perez let out a loud laugh when told of Haff’s testimony about him. “Oh, my gosh,” Perez said. “That is so ridiculous. Are you kidding me?”
Perez said he was never told by anyone to protect the Mullens’ interests and he didn’t get the sense that trustees were voting on contracts to protect their friends.
“I was just supposed to keep the ship afloat until they found a permanent superintendent,” Perez said.
He was named permanent superintendent in 2013 after a national search produced a lone finalist from Arizona who withdrew his candidacy amid a legal and financial scandal.
Perez retired about two years later when his father fell ill.
“To me that’s just a real far reach,” Perez said of Haff’s statement.
firstname.lastname@example.org | Staff Writer Alia Malik contributed to this stor