Feds Rest In Insurance Bribery Case – Are Bribes Gifts Between Friends?

“The Mullen Group had 20 accounts, but SAISD represented 80 percent of their commission revenue, so it was important to keep its relationship with Mrs. Hernandez,” Holmes testified…………….

Feds rest bribery case against ex-SAISD trustee

By Guillermo Contreras

December 15, 2017

Former San Antonio Independent School District trustee Olga Hernandez is scheduled to testify in her own defense Monday at her federal bribery trial.

Prosecutors on Friday rested their case after the lead investigator, FBI special agent Darren Holmes, tangled with Hernandez’s lawyer over when gifts among friends become bribes.

Holmes testified that “Operation Wicked Trust,” the agency’s public corruption case, had started in 2008 against Joshua Cerna, who was on the Harlandale ISD board.

Over time it expanded to “where the evidence led us,” Holmes said. Acting on a tip, agents found a local insurance brokerage firm, Mullen Pension & Benefits Group, had been conspiring with William Haff, a consultant for school districts, to rig insurance bids at SAISD and other school districts, Holmes said.

The Mullen Group employed Cerna, who used his contacts to bring in business, particularly at SAISD, which became the firm’s largest account. Its co-owner, Sam Mullen, and Cerna conspired with Haff to get inside information, and cultivated Hernandez to become the firm’s top ally on the school board, Holmes said.

She accepted gifts including casino vacations, jewelry, meals and campaign contributions from Mullen and Cerna, in exchange for advocating and voting for the board to approve insurance contracts that would earn commissions for the Mullen Group.

“The Mullen Group had 20 accounts, but SAISD represented 80 percent of their commission revenue, so it was important to keep its relationship with Mrs. Hernandez,” Holmes testified.

Hernandez served on the school board for 11 years after a 30-year secretarial career in SAISD. She resigned from the board after her Feb. 15 indictment on charges of conspiracy to commit honest service wire fraud and conspiracy to solicit and accept bribes.

Her defense lawyers began presenting character witnesses Friday who described Hernandez as above reproach. Her husband, Frank, disputed some the allegations made this week in testimony by Haff, Cerna and Mullen, saying the Mullen Group never paid for the Hernandez’s airfare or hotels anywhere.

“Her integrity has always been impeccable,” testified Charles R. Muñoz, principal of Edison High School.

Hernandez’s lead lawyer, William T. Reid IV, while questioning Holmes, argued that Hernandez accepted gifts and trips from the Mullen Group because she and her husband became friends with Mullen and his then-wife. Reid also argued that she met with the Mullen Group because she wanted information on how to protect employees from rising insurance costs.

Reid’s questioning of Holmes became a debate over whether gifts can be legally accepted without being considered bribes.

“Would you agree all politicians wine and dine?” Reid asked. “If they can’t meet with their constituents, they can’t do their jobs, correct?”

“Yes,” Holmes replied. “I agree.”

On its face, accepting such gifts from “someone who is truly your friend” isn’t a federal crime, Reid suggested. Not unless “it’s in exchange for an official act,” Holmes replied.

Reid also argued that Hernandez never injected herself into the process by which the district developed requests for proposals for insurance, and did not vote against recommendations by school staff in insurance contracts.

Holmes disagreed. He noted testimony by Haff, Cerna and Mullen, who have pleaded guilty in the case and said they met for meals with Hernandez ahead of school board meetings to discuss insurance bids Haff had leaked or crafted with input from the Mullen Group.

Holmes also noted testimony in which Hernandez was alleged to have voted to override a district benefit committee and risk manager’s recommendation for a proposal for the 2012-2013 school year that would have excluded commissions, though they were to be paid by the insurance company that got the contract. And, Holmes added, in 2013, Hernandez, at the request of the Mullen Group, voted for an extension of that contract that included language passing on the commission costs to the district.

According to the FBI, Mullen, Haff and Cerna also worked together to steer insurance contracts in the Edgewood and South San Antonio independent school districts and the now-defunct Bexar Metropolitan Water District. The FBI said Mullen bribed Haff more than $83,000 to help win contracts.

gcontreras@express-news.net | Twitter: @gmaninfedland