Karun Sreerama standing outside the federal courthouse, where he held a press conference at 5 p.m. Friday.EXPAND
Karun Sreerama standing outside the federal courthouse, where he held a press conference at 5 p.m. Friday.
Photo by Meagan Flynn

Turner Asks Public Works Director to Step Down Amid Bribery Scandal

After the Houston public works director was implicated in a bribery scandal, Mayor Sylvester Turner has asked him to step down, saying the two of them agreed it "would be best for the city."

PWE Director Karun Sreerama has not been charged with any crime, but was identified as a "victim" in a federal bribery and extortion case against Houston Community College board trustee Chris Oliver. Oliver pleaded guilty to bribery after accepting more than $12,000 from Sreerama in exchange for "promising to use his position to help that person secure contracts with HCC," Acting U.S. Attorney Abe Martinez said. Sreerama had been cooperating with the FBI.

Oliver also was accused of accepting roughly $77,000 in illegal payments from Sreerama between 2010 and 2013, but that extortion charge was dropped as part of the plea deal. (It is considered extortion simply because Oliver was in a position of power as an elected official when accepting the money, and Sreerama was a private citizen at the time, as head of his contracting business, ESPA.)

"Karun Sreerama has accomplished much in Houston as a businessman and involved citizen. I am sure he will continue to be an asset to our community," Mayor Turner said in a statement late Friday afternoon. "However, he and I have agreed that it would be best for the city for him to step down as director of the city Public Works and Engineering Department. Carol Haddock will continue to serve as acting director until I choose a new director."

Sreerama held a press conference outside the federal courthouse Friday to take questions regarding his involvement in Oliver's criminal case and maintain that he has done nothing wrong — but there were several inconsistencies that Sreerama did not appear willing to clear up.

According to court records released Thursday, Sreerama began working with the FBI in 2015 to catch Oliver red-handed. (The payments he made to Oliver in 2010 to 2013 were not while he worked with law enforcement.) The FBI had given him a wire and the $12,000, which he would pay Oliver in small sums each month while pretending to be gunning for certain contracts with HCC that Oliver promised to help him win, particularly a pest-control contract. But what's notable about their agreement is that it appears clear from wording in court records that this was not the first time Sreerama and Oliver had played this game.

At one meeting in May 2015, "Oliver and KS [Sreerama] discussed how Oliver had helped KS secure business with HCC in the past, and how he could do so again in future endeavors. Oliver and KS then agreed that KS would pay Oliver approximately $2,500 per month based on what he had paid him in the past." (In pleading guilty, Oliver agreed that this was true.)

At the press conference, Sreerama essentially refused to explain what business Oliver helped him get in the past and what he had paid Oliver in the past as part of an agreement, saying he did not know what reporters were talking about and what passage from court records they were referencing. He maintained that the last contract he received from HCC was in 2010, which was before he paid Oliver the $77,000 at issue in the extortion case.

"I was victimized by a public official, and then I worked with the FBI to send him to jail," Sreerama said. "The FBI will tell you that if it were not for me, that person would still be out there today, out there extorting people."

From 2010 to 2013, Sreerama paid Oliver a total of $77,000 on three separate occasions. He said the first two payments were personal loans to Oliver, who Sreerama said had come to him asking for help: The first time, Oliver's marriage was in jeopardy and he was having financial problems; the second time, Sreerama said, it was a loan so that Oliver could adopt an orphan. It's the third payment that raises questions: Sreerama's attorney, Chip Lewis, told the Houston Press and other news outlets that Oliver had come to Sreerama and asked Sreerama to hire Oliver's cleaning company to fix up a strip-mall property that Sreerama owned.

Lewis told the Press: "Karun's fear was if he didn't loan the money [Oliver] was asking for," Lewis said, "it would be to his detriment for future contracts."

Sreerama diverged from this Friday, saying that this was not the case and that the payments had nothing to do with any concern about HCC contracts. He said he had sold his company, ESPA, in 2012 and wasn't doing engineering work.

"I hope you go out there, I wish you go out there and set the record straight, and tell the people that I am not a bad person," Sreerama said, making an appeal directly to reporters. "I did not do anything wrong. I did not make any unlawful payments. I am not a criminal. I did not do any bribery. I was working with law enforcement officials, and that is the truth, and if you could help me clear my name, get me back to where I was, I would really appreciate it."

The Houston Chronicle reported that Chip Lewis had said that Turner had fired Sreerama, but Sreerama maintained at the press conference Friday that it was a mutual agreement.

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