Lawrence Marshall Accused of Rigging HISD Bid Process, HISD Also Sued Under Federal RICO Statute

Update: HISD responds; see end of article.

No stranger to controversy, Houston ISD school trustee Lawrence Marshall was sued in federal court today accused of replacing contractors who'd been selected through a bid process with one of his political donors and thereby violating the federal RICO Act.

In fact, according to the lawsuit, Marshall was responsible for running off former superintendent Abe Saavedra after Saavedra refused to allow Marshall to replace one of the approved contractors with his political patron, Eva Jackson, who is also being sued in this lawsuit.

Contractor Gil Ramirez Jr. and the Gil Ramirez Group also filed their suit again HISD itself, alleging among other things, that it regularly charges a 2 percent "marketing fee" (AKA kickback) to its contractors whenever they compete some work. They allege this has been going on for the past 10 years and the returned money is put into HISD's general fund and used for operating expenses instead of as bond.

Also included in the suit are allegations of bribery (the money allegedly paid to Marshall "in exchange for preferential treatment to Defendants Jackson and RHJ-JOC, INC"), wire fraud (how the money was allegedly transferred) and money laundering (the 2-percent fee HISD allegedly charged.)

The suit and the Ramirez attorney, Chad Dunn, went out of their way to specifically exempt new superintendent Terry Grier, saying he had no idea of what had gone on other than his reported remarks at board meetings showing he was concerned about the district's bidding process.

Hair Balls put in calls to the HISD press office and to Larry Marshall through the HISD board services department and will update when we receive any comment.

Jackson's company RHJ-JOC, Inc. replaced the Ramirez Group and is now doing work for HISD. According to the lawsuit, Jackson is also under investigation by the U. S. Attorney's Office in connection with its dealing with the Houston Community College System and Texas Southern University.

According to the lawsuit, the Ramirez Group was one of six contracting firms that went through an expensive bid process. They were on the job about nine months, when suddenly all six contracts were canceled en masse, Dunn said.

The lawsuit says that Marshall approached Saavedra when Marshall, a longtime board member, became president, asking him to use Jackson as a contractor. Saavedra refused and "Defendant Marshall states that he would move forward to obtain an agreement from the school board forcing out Dr. Saavedra."

"The principal, if not exclusive, reason Dr. Saavedra is pushed out is so that Defendant Marshall can award contracts as he desires and more specifically to Defendant Jackson and her company," the lawsuit states, adding that once Saavedra is gone, Marshall makes sure all contracts for the approved contractors are canceled.

Also, when the HISD chief of bidding also opposed the re-bidding process, he was "ultimately fired by HISD."

Following the rebidding process, only Jackson's company was approved, although finally two more were added, the lawsuit says.

Asked why he filed the suit under the RICO Act, attorney Dunn said: "That statute's designed for a group of folks who get together and try to obtain the results they want from a governmental entity through using undue influence. It's the Racketeering Influence Corrupt Practices Act so we think it's designed to handle this situation."

Dunn, who's handled similar cases, but involving businesses rather than a school district, said his greatest feeling was disappointment. "It disappoints me. It disappoints me as a father of children in the school district and as a taxpayer and as a lawyer for clients who did good work for the public through HISD and through no fault of their own lost the work. It disappoints me that public tax dollars in a sense are being distributed based on reasons other than what is the best value for the taxpayer."

"What we're trying to do is straighten up the process and have a fair bidding process that's in the public and out in the open and also the Ramirez Group wants compensation for these unfair practices," Dunn said.

Update: Jason Spencer with the HISD press office issued this response: "We haven't been served with a copy of the lawsuit. And even if we had, it's our policy not to comment on litigation."

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