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make lots of money.” He presented the jail venture as a single, “take-it-or-leave-it” package that included the companies that , would finance, design, build, and operate the facility. “They make it seem like you have to accept the whole thing,” Guerra says. The county has never taken bids or appointed an independent supervisor to monitor expenses on any of its prison projects. Rather than finance the construction themselves, the prison consortium used the county’s power as a government body to issue debt. More critical, however, were the type of bonds floated: project revenue bonds, which can be issued by counties with almost no state oversight. It’s up to local government officials to judge the wisdom of the undertaking. But those officials do not issue the bonds directly. Instead, a \(\(public facility corporation” \(a five-member board appointed almost-limitless amount of debt. Revenue bonds for jail projects tend to be highly risky because they are paid back from the profit generated from housing prisoners. Without a continuously large number of inmates, the county cannot make the payments. In the case of Willacy’s first federal project, the public facility corporation in 2002 issued $24 million in high-interest “project revenue” bonds, to be paid back with the revenue the U.S. Marshals Service would dispense for housing its detainees. By the time the bonds mature in 2024, the county will have returned about as much in interest$25 millionto investors as the principal amount, according to the Texas Bond Review Board, a tiny state agency that collects data on local government debt. Dallas-based Municipal Capital Markets Group Inc. structured and underwrote the bonds. Municipal, a niche investment-banking firm, has been involved in 11 of 23 revenue-financed jail projects in Texas in the last 10 years, according to the Bond Review Board. In Willacy County alone, Municipal has financed a mountain of debt, over $92 million in project revenue bonds, on three jails. While doing so, the company has earned $5.4 million. In 2003, when the federal slammer finally opened for business, County Judge Salinas was ecstatic. “We scratched the walls jumping up and down, jubilation all over the place,” he said at the time. The jail was bringing 200 jobs to the area. But perhaps the biggest beneficiaries of the project were the cadre of private prison-related companies that gained a foothold in Willacy County: Houston-based contractor Hale-Mills Construction Ltd.; Municipal Capital; operator Management & Training Corp. of Utah; and of course Corplan. For its part, the county receives $2 a day per prisoner, about $300,000 to $400,000 in a good year. The county’s modest income would come at a steep price for some of its elected officials. In January 2005, two Willacy County commissioners, Israel Tamez and Jose Jimenez, pleaded guilty to accepting cash bribes in exchange for their votes to award the contract for the Marshals Service jail. A few months later, a former Webb County commissioner, David Cortez, was convicted of funneling the bribes to “several” FOR ONE POLITICIAN, PRISON’S A GOOD THING In the past three years, state Senator Eddie Lucio Jr., a Brownsville Democrat, has reported income of at least $115,000 from three companies involved in private prison deals in South Texas: Argyle-based Corplan Corrections Inc., Utah’s Management and. Training Corp., and Aguirre Inc. of Dallas. Lucio has also lobbied unsuccessfully for a proposed federal detention center in Wilson County, southeast of San Antonio, according to Wilson County Commissioner Albert Gamez Jr. Gamez says Lucio joined Richard Reyes, a private prison salesman from Boerne, in an August meeting with him. “Reyes and Lucio are talking to me, trying to convince me so that they can get another vote and push [the detention center] through,” he recalls. Lucio says he attended the meeting but that he was only present as a longtime friend of Reyes, not as a consultant or senator. Lucio did acknowledge that Reyes plans to hire him in the future. “I never asked him to vote for nobody,” Lucio says. “I accompanied [Reyes], and I concurred with what Mr. Reyes was saying because I know the people he’s talking about who could possibly do a good project in that county.” Lucio says he realizes the difficulty in balancing his role as an elected official with that of a businessman, but carefully abides by state rules and regulations. ” [E]verything we have done, we have done based on the parameters given to me by attorneys general and chairmen of the Ethics Commission.” Lucio last wrote to Attorney General Greg Abbott in 2003 seeking an opinion on his private business dealings. Abbott responded to the senator that he could not make a definitive legal ruling because “Your letter does not elaborate on the nature of your clients’ businesses or your ‘dealings and communications’ on their behalf…” For specific legal concerns, Abbott suggested Lucio consult private counsel. Tom Smith, director of the Texas office of the government watchdog group Public Citizen, affirms that state law allows legislators to lobby county officials on behalf of private clients. Nonetheless, Lucio’s actions, while legal, are ethically questionable, Smith says. “[Lucio] has extraordinary power over the affairs of the county. His actions in Austin can not only affect their revenues, but their rights to take certain types of action, so county officials are going to bend over backwards to please the senator or to take action to benefit his clients .”F.W 10 THE TEXAS OBSERVER OCTOBER 20, 2006