After being named as a player in a federal bribery and extortion case, the director of the Houston Public Works and Engineering Department has been temporarily placed on leave, Mayor Sylvester Turner announced Wednesday.
A federal indictment unsealed Friday revealed that Karun Sreerama allegedly made illegal payments to Houston Community College Trustee Chris Oliver totaling more than $77,000 between 2010 and 2013. Sreerama is not charged in the case but is instead identified as a "victim" of Oliver's alleged extortion. That's because Oliver was in a position of power as a public official and Sreerama was working as a contractor with his former company, ESPA Corp, at the time of the transactions. Given Oliver's position of authority, he doesn't need to make a "threat" in order for the payment to qualify as extortion under the law.
Oliver, who pleaded guilty to the federal bribery charges, was accused of accepting payments in exchange for "promising to use his position to help that person secure contracts with HCC," U.S. Attorney Abe Martinez said in a release. Oliver now faces up to ten years in prison.
“I am placing city Public Works and Engineering Director Karun Sreerama on administrative leave with pay, effective today, while I review the entire matter stemming from a federal grand jury indictment naming him as the victim of a bribery scheme," Mayor Turner said in a statement. "It is against everyone’s best interest for a public servant to have to operate under a cloud, as Mr. Sreerama and I have discussed in a brief telephone call. I continue to have confidence in Karun and look forward to his return."
According to court documents, federal prosecutors agreed to drop the extortion charge against Oliver as part of his plea agreement on the bribery case.
Sreerama's attorney, Chip Lewis, told the Houston Press that the $77,000 at issue stemmed from three different occasions in which Oliver solicited money from Sreerama for personal and business reasons. The two had been friends because of the work Sreerama's company, ESPA, had done for HCC, Lewis said. On the first two occasions, Lewis said, Oliver asked Sreerama to lend him thousands of dollars amid marital problems and a dwindling bank account while he was trying to adopt a child. On the third occasion, Oliver asked Sreerama to hire his cleaning company to fix up a strip-mall property that Sreerama owned. Lewis said that the time period when this all happened was while HCC was awarding contracts to companies to work on 2012 bond referendum projects.
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"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."
Lewis insisted that Sreerama was the victim in this case, despite the alleged illegal nature of his payments.
While Turner continues to review the indictment, he said Public Works Deputy Director Carol Haddock will serve as interim director.
*Update, Wednesday, 2:50 p.m.: This story has been updated to reflect input from Karun Sreerama's attorney, Chip Lewis.