Perry veto hobbled probe into multimillion-dollar DPS contracts

Prosecutors in the Travis County district attorney’s office were investigating multimillion-dollar contracts related to the Texas Department of Public Safety when Gov. Rick Perry vetoed state money for their office, the American-Statesman confirmed Friday night.

“We were investigating some issues with DPS contracts, but I can’t be more specific than that,” said Gregg Cox, who was heading the inquiry. The veto of $7.5 million in state money to the Public Integrity Unit — which is housed in the district attorney’s office and investigates ethics violations involving state officials — “definitely contributed” to the office’s inability to advance the investigation, Cox said.

The Houston Chronicle first reported Friday evening that previous investigation, which came 18 months before a current inquiry focusing on a multimillion-dollar, no-bid contract at the state Health and Human Services Commission.

A grand jury in August indicted Perry on felony charges relating to abuse of power for his veto. He had threatened to withhold the money unless District Attorney Rosemary Lehmberg resigned after her April 2013 drunken driving arrest. Lehmberg did not resign, and Perry carried out that threat.

Perry, who will leave office on Tuesday and is considering a second run for the presidency, has repeatedly denied any wrongdoing and is fighting the charges.

The revelations provide new information about the investigation that might have been derailed because of the veto.

Perry spokeswoman Lucy Nashed said late Friday: “The governor vetoed this funding for no other reason than the fact that despite the otherwise good work the Public Integrity Unit’s employees, he could not in good conscience support continued state funding for an office with statewide jurisdiction at a time when the person charged with ultimate responsibility of that unit has lost the public’s confidence. This unit is in no other way held accountable to state taxpayers, except through the State budgetary process.”

Cox would not say what prosecutors were investigating specifically, but the Chronicle reported that they were looking into contracts with Virginia defense contractor Abrams Learning and Information Systems Inc.

A 2012 Statesman investigation revealed that DPS had awarded Abrams about $20 million through a series of no-bid contracts to develop the state’s border security strategies.

According to the Statesman’s review of contract documents, DPS awarded the initial Abrams contracts on an emergency basis, saying there wasn’t time to solicit bids from other vendors. DPS then extended the emergency contracts through a state procurement system that is more often used to purchase goods and commodities from a list of pre-qualified vendors, bypassing the bidding process.

According to an internal DPS memo, the role of Abrams expanded dramatically after Perry, then in the midst of a campaign for governor, ordered an acceleration of border security operations that the state wasn’t equipped to handle on its own, the Statesman reported.

In 2012, the Compliance and Oversight Division of the governor’s office found that DPS improperly diverted nearly $1 million in federal stimulus grant money from one 2010 Abrams contract to another. Reviewers said that although in the end the appropriate amount of money was spent on both contracts, the situation exposed issues with how DPS oversees its contracts.

After the Statesman report ran, Sen. José Rodríguez, an El Paso Democrat, asked for a state investigation into the contracts. Texas Comptroller Susan Combs’ office conducted an audit of the Abrams contracts, looking at whether payment guidelines were followed, but did not find major issues with the border security contracts.

“All renewals were within the scope of that emergency contract,” a comptroller’s spokesman said at the time.

In 2012, the Statesman also reported that the Public Integrity Unit was pursuing two separate criminal investigations into contracting irregularities at DPS regarding how officials handled homeland security grants.

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