Attorney claims Webb CISD board members profited from contract 

Last week, Webb Consolidated Independent School District board of trustees voted 4-1 against a censure resolution grievance put forth by two of their school board members. Additionally, the board voted on Sept. 14 to investigate them and former attorney, Juan J. Cruz, about financial matters and breach of attorney-client privilege.

The school board filed a lawsuit last year alleging that Cruz and his firm double dipped into the finances of the district to receive payments that would result as a conflict of interest.

During a Sept. 11 board meeting, attorney Ronald Rodriguez claimed that through his investigation, he found a systematic and continuing symbiotic relationship between Juan Cruz and Robert and Amy Marshall.

Rodriguez presented to the school board explaining what a local public official is required to report under Texas law in terms of conflict of interest in financial matters, including any matter that would benefit their relatives – parents, children or spouses.

“They should abstain if any of their family members have a financial interest in any of the votes that come before the board,” Rodriguez explained. “A local public official means an officer of a governing body, like a trustee of the local school district.”

A local government officer commits an offense if they do not file the conflict disclosure within seven days from the date that they’re given notice, Rodriguez said. The board can reprimand, suspend or terminate the employment of an employee who fails to comply with this requirement, he explained.

“You can also declare any contract upon which they voted void, if the board determines that a vendor failed to file a conflict of interest questionnaire required by the local government code,” Rodriguez said.

The attorney demonstrated an agenda item for a board meeting held on Aug. 25 where a decision was to be made on a bid for a Mirando Site Clearing project.

Rodriguez told the board that Robert and Amy Marshall “solicited, or agreed to accept $10,000 from Robert Marshall’s son, Steven Marshall.” Steven was working with Medina, one of the bidders for the contract. Steven was interested in a contract with Webb CISD, a contract under the discretion of the Marshalls.

Rodriguez adds that after disclosing a conflict of interest with the Javelina Wind Energy project, the Marshalls voted to approve the contract.

“The evidence obtained during my investigation revealed that the Marshalls sought payment of $10,000 in exchange for their vote on a school public works contract and are illegally receiving money from their votes on wind energy agreements and turbines located on their property in violation of Texas law,” Rodriguez said in a statement to LMT.
Motion for summary judgment

The Webb CISD school board filed a lawsuit last year alleging that Cruz and his firm double dipped into the finances of the district to receive payments that would result as a conflict of interest.

The petition alleges that Juan J. Cruz and J. Cruz & Associates fraudulently induced Webb CISD to enter into a legal services contract that allowed the firm to get paid large sums of money by double dipping into the pockets of taxpayers, teachers and children of the district by getting paid as general counsel and at the same time getting paid as bond counsel.

The petition states that Cruz failed to disclose a conflict of interest when he acted as general counsel and at the same time acting as bond counsel for Webb CISD.

“Instead, defendants engaged in self-dealing for personal financial gain at the expense of the taxpayers, teachers and children of the school district,” the petition states.

Rodriguez filed a motion for summary judgment in the 49th District Court on Aug. 26 stating that Cruz engaged in self-dealing for personal financial gain.

The summary judgment states that Cruz failed to disclose the share of fees that each lawyer or law firm would receive if the “division is based on the proportion of services performed.”

During the Sept. 11 board meeting, Rodriguez stated that Cruz committed fraud, was negligent, committed malpractice and breached fiduciary duties to the taxpayers and students of Webb CISD as a matter of law.

Rodriguez noted that Cruz has a similar legal contract with United Independent School District.

The contract with UISD from May 2013 states that the district “agrees to pay the law firm and Winstead PC as applicable, a fee, according to the schedule of fees.”

“The amount he is billing UISD is sometimes over $100,000 a month on the similar contract as with Webb CISD,” Rodriguez’s presentation states.

Through a statement from his attorney, Bryan Lauer, Cruz said, “It is disheartening to see that (Rodriguez) has apparently convinced four board members of the Webb CISD Board to spend thousands of tax payer dollars pursuing a personal vendetta against Juan Cruz in the guise of these contrived and utterly baseless allegations.”

“Juan Cruz served as Webb CISD’s counsel with pride, integrity and considerable success for the children of this school district,” the statement continues. “(Mr. Cruz) is confident that the facts will vindicate him and reveal this investigation to be the utter sham that it is.”

In response, Rodriguez said Cruz engaged in gross misconduct when he failed to disclose a conflict of interest.

“Mr. Cruz has hidden side deals with public bond counsel, engaging in illegal self-dealing for his personal financial gain and pocketing large sums of money at the expense of the taxpayers, teachers, and children of the school district, violating the trust of the very people he took an oath to protect,” Rodriguez said.

A hearing on the motion for summary judgment is scheduled for Sept. 29 in the 49th District Court.

This is Part 2 of a two-part story. To view the first story in this series, click here.