By Camilo Smith
By Craig Malisow
By Jeff Balke
By Angelica Leicht
By Jeff Balke
By Sean Pendergast
By Sean Pendergast
By Jeff Balke
It was at that point, testified Stern, that he decided to initiate an undercover investigation of the councilman. To that end, Stern enlisted the services of Molineiro.
Flores is a wild card in the investigation. Although she has described herself as a foe of Reyes and worked for his opponent Gene Green in several contests, other City Hall insiders recall that she was friendly with the councilman during his last several years on Council. Reyes's attorney Ramsey described Flores as "the viper" who introduced FBI informant Molineiro, alias Carlos Montero, to the councilman. Ramsey says Flores had been avoiding a subpoena to testify in the current legal proceedings.
Eventually, the subpoena was served, and Friday morning, Flores appeared at the federal courthouse briefly to be sworn in as a future witness in Judge Hittner's chambers.
"She seemed hot as hell about having to be here," said one of the defense attorneys.
Flores's departure from the federal building played like something out of a Keystone Kops episode. First, she avoided reporters and photographers waiting for her outside by lingering in the courthouse coffeeshop, and then tried to slip out a different exit. Reporters found her anyway, and she walked away without comment.
Flores, though, is not the biggest wild card in the investigation. That distinction belongs to Molineiro, the informant who pretended to be Carlos Montero. Molineiro is a native of Chile, where there are 26 outstanding warrants for his arrest. Defense attorneys in the bribery trial want to know how it was that the Federal Bureau of Investigation chose him for the undercover role of a South American businessman looking to do business in Houston -- and paid him $107,000 for his assistance.
Before Molineiro was an FBI informant, he'd worked for the Drug Enforcement Agency. But according to attorney Mike Ramsey, that entry on his resume should have tipped the FBI that something was amiss: Molineiro was allegedly blackballed by the DEA for lying, stealing agency funds and endangering DEA agents.
The defense seized on Molineiro's DEA history, hoping to discredit the informant or, better still, to get a mistrial in the case. On the stand, FBI agent Stern claimed he knew nothing of those allegations, a position that led Ramsey to accuse Stern of incompetence. "What he didn't do was, he didn't do his job," said Ramsey of Stern. "He took into the political bloodstream a worm fired by the government for cheating and stealing."
Whatever Molineiro's history, Reyes at first found him credible as the shady Carlos Montero. During Molineiro's first meeting with Reyes at his district office on August 1, 1995, the informer told the councilman he was interested in obtaining city contracts and needed help finding minority subcontractors to perform those contracts. Because Molineiro specified he was only interested in minority contracts, defense attorneys have charged that the investigation was designed to snare only Hispanics and blacks.
Back in 1989, the councilman came under fire for voting on city contracts that provided $3.9 million in subcontracting work for Royal Supply. The company was headed by Tony, who had been accused of winning contracts under the city's minority business program and then brokering them to nonminority firms for a percentage of the deal. The district attorney probed the relationship, but no criminal charges resulted.
Once the Cayman Group came calling in 1995, Tony took the lead in searching for possible places to invest the FBI cash. According to an affidavit by Stern, Tony and Ben met with Montero/Molineiro at a Carrabba's restaurant a little more than two weeks after the informer's initial session with the councilman. According to the affidavit, Ben Reyes first broached the subject of the convention center hotel, telling Montero there was money in the deal for everyone and that he should be ready to move fast if Reyes could put a deal together.
In early September 1995, according to the Stern affidavit, Tony Reyes told Montero that Ben had gotten assurances from Wayne Duddlesten that they could have the subcontract for the downtown hotel garage, and Tony proposed that it be owned by Cayman Group and himself. A new term-limits law meant that Ben would have to leave office in January 1996, but Tony explained that Ben could continue to control the dispersal of city contracts even then.
"He can do it now, but he has to be careful," explained Tony Reyes, according to dialogue chronicled in the affidavit. "He has one hand tied right now. But he can still hit hard. Just imagine when he has both hands free, and he's outside."
Later that month, Tony accompanied Ben Reyes and one of the councilmember's sons on a trip to Captiva, Florida, to meet with more FBI operatives disguised as Cayman Group investors. It was at this meeting that Reyes announced he had gotten a better deal with Duddlesten, and that they could actually buy in for a share of the total contract.
According to the feds, Tony Reyes apparently sensed the operation was crossing the line into legally questionable behavior and bowed out, citing concerns about his family. Reyes then recruited attorney Isaias Torres to handle the negotiations between the Cayman Group and Duddlesten.