Testimony by an FBI agent revealed years of intimidation, retaliation and corruption at the hands of the most powerful family in Progreso.
Progreso ISD School Board President Michael Vela, his brother Progreso Mayor Omar Vela and their school district transportation and maintenance director father Jose Guadalupe Vela all remain behind bars.
FBI agents arrested the three last week in connection to a federal indictment out of Houston revealing a Pay To Play bribery scheme.
The three have remained in custody but appeared for a bond hearing before U.S. Magistrate Judge Dorina Ramos in McAllen late Wednesday morning.
The hearing ended without a decision but federal prosecutors are asking Judge Ramos to keep them behind bars due to fears that they would retaliate against witnesses in the case.
Defense attorneys assured Judge Ramos that no retaliation would take place because Michael Vela is resigning from his seat as school board president while his father would resign from his job at the school district.
Judge Ramos is expected to make a decision late Thursday afternoon but an FBI agent gave her several examples of retaliation and intimidation.
Operation Legal Progress
FBI agent Ricardo Ale testified against Vela and his two family members revealing that the agency TMs investigation began back in 2005 and continued all the way through December 2012.
Ale testified that FBI agents called the investigation Operation Legal Progress.
The seven-year investigation included raids at homes and businesses but also includes recorded conversations and controlled bribe payments.
The investigation culminated with a federal grand jury in Houston handing down a public corruption indictment back on August 21st.
FBI agents rounded up Vela, his brother and father last Wednesday.
FBI agent Ale testified that a construction company president is a witness in the case against the Velas.
The FBI agent did not name the company nor its president but testified that the company got business through bribes in San Benito, Brownsville, San Isidro, PSJA and Progreso.
FBI agents raided the company president TMs home back in 2006 where they found a ledger in his personal safe.
That ledger allegedly revealed cash payments to Progreso Mayor Omar Vela.
School District Attorney
FBI agent Ale testified that a local attorney is also another witness against the Vela family.
The attorney told FBI agents that the attorney used bribes to get a lucrative contract to represent the Progreso Independent School District.
Agent Ale testified that the attorney lost his contract when Jose Gudalupe Vela demanded more money.
The attorney allegedly caved in and agreed to pay $10,000 dollars in bribes, including a $1,000 per school board member payment.
Cooperating as a witness for the FBI, the attorney recorded at least 40 telephone and personal conversations and made bribe payments using FBI funds.
FBI agent Ale also testified that an architectural firm TMs marketing director is also a cooperating witness against the Velas.
The company was not named but the Velas allegedly charged the architecture firm a 1 percent fee for the value of each contract.
According to the agent's testimony, the firm's president would cash checks and would count the bribe money with the marketing director.
Agent Ale testified that the firm paid both Michael Vela and his brother Omar Vela in cash.
Building Supply Company
FBI agent Ale testified that a local building and materials supply company owner is also a witness against the Vela family.
The owner allegedly participated in a fake invoice scheme over several years time.
Agent Ale testified that that company would provide fictitious invoices for goods that were never delivered.
The FBI agent testified that the company owner would cash checks and give most of the money to Mayor Omar Vela.
According to testimony, the owner got to keep some of the cash for himself for his work.
FBI agent Ale testified that the company owner conducted recordings for the FBI in December 2012.
School Board Members
FBI agent Ale testified that several past and present Progreso ISD school board members are witnesses against the Velas.
According to the agent's testimony, Jose Guadalupe Vela asked people to run for school board and then gave them his family TMs assistance.
Agent Ale testified that the Vela family paid for their political campaign expenditures.
Those same school board members told FBI agents several stories of intimidation and retaliation.
Retaliation & Intimidation
FBI agent Ale testified that some past and present school board members felt the wrath of Jose Guadalupe Vela and his family.
According to Agent Ale, family members of the those who fell out of favor were fired or demoted at their jobs.
The family member of one school board member was demoted by Mayor Omar Vela and moved from her job at City Hall to the Progreso Police Department back in 2006.
The FBI agent testified that one school board member was driving, run off the road and then assaulted by a school district employee who made it clear that he did so under the direction of Jose Guadalupe Vela.
According to testimony, things started to heat up after May 2013 when the FBI started to issue subpoenas to the city and school district for both records and witnesses.
FBI agent Ale testified the person who most felt the wrath of the Vela family was Progreso ISD Superintendent Dr. Fernando Castillo.
According to agent Ale, the FBI had issued subpoenas for school district records and for Dr. Castillo to testify in Houston.
Dr. Castillo had school district employees Lupita Valadez and Jose Guadalupe Vela TMs niece Ana Vela fulfill the records request.
Agent Ale testified that Dr. Castillo had to get permission from Michael Vela to travel to Houston to testify.
Under the alleged direction of the Vela family, the Progreso ISD school board allegedly put Dr. Castillo on severe travel restrictions.
When Dr. Castillo planned a a trip to Austin to visit with the Texas Education Agency (TEA) about alleged misconduct by the Velas, the superintendent was told that the school district vehicle for him to use was "broken down."
According to Agent Ale, the school board also took away Dr. Castillo TMs ability to moonlight as a professor at a local university.
The school board also ordered that Dr. Castillo be confined to his office between the hours of 8 a.m. and 5 p.m. every day.
Dr. Castillo was allowed to leave for lunch and go to the bathroom but Agent Ale testified that Michael Vela would often be in the parking lot noting Dr. Castillo TMs comings and goings.
The FBI agent also testified that Jose Guadalupe Vela worked down the street but would often show up inside Dr. Castillo TMs building.
According to testimony, Dr. Castillo installed a security door, security cameras and creating a new policy that visitors sign in due to Jose Guadalupe Vela's presence.
Dr. Castillo contacted the school district TMs current attorney who eased the office confinement restrictions because they were too onerous.
FBI agent Ale testified that Dr. Castillo was also told he could not attend school board meetings but the district attorney told the superintendent that he could go to the meetings even if he did not participate in them.
Agent Ale testified that Jose Guadalupe Vela also wanted Dr. Castillo TMs secretary to spy on him and that told her that Dr. Castillo would "soon be fired."
The FBI agent testified that he is not aware of Dr. Castillo participating in the bribery scheme and believes that Velas were setting him up to fire him.
FBI Agents Followed
FBI agent Ale testified that Jose Guadalupe Vela and his supporters often made themselves present when agents arrived at the school district.
Agent Ale testified that Jose Guadalupe Vela would often be outside in the hallways while the FBI interviewed somebody inside a room.
According to agent Ale, FBI agents had to travel in two cars with agents staying in one of the vehicles to keep watch.
Agent Ale testified that while the FBI was interviewing somebody inside a building, Jose Guadalupe Vela TMs employees would constantly be driving, circling outside the building.
Drug Use & Criminal History
FBI agent Ale testified that one witness told him that school board president Michael Vela was a habitual cocaine user and unpredictable.
Federal prosecutors revealed in open court that Jose Guadalupe Vela has a previous conviction in the federal court system more than 20 years.
Prosecutors also revealed that Mayor Omar Vela was on deferred adjudication for a crime at the time he allegedly accepted bribes.
Agent Ale testified that the Velas are avid hunters and had hunting weapons at their homes.
Michael Vela TMs defense attorney Ricardo Salinas denies allegations that his client abuses drugs.
If the court were subject him to a test, they wouldn TMt find anything, Salinas told Action 4 News. They can do hair follicle tests now that go back months and I think he TMs willing do to that as well.
Defense attorneys for Omar Vela and Jose Guadalupe Vela stress that both are not flight risks because they are American citizens, lifelong residents of Progreso with strong family ties and do not have any ties to Mexico.
"My client does not even have a passport or plan to get one," a defense attorney for Mayor Omar Vela said in court.
Offers To Resign
Although the Velas deny the allegations, both Michael Vela and Jose Guadalupe Vela are willing to resign from their posts in order to get a bond.
Attorney Jason Jarvis said in open court that his client Jose Guadalupe Vela voluntarily surrendered to FBI agents and is not a threat to the community.
Jarvis also said in open court that the TEA is already investigating the school district and could alleviate any possible retaliation.
Defense attorney Salinas said his client Michael Vela's willingness to resign is not an admission of guilt.
Salinas said Michael Vela is resigning whether or not he gets bond and wants to stay with his family and work to clear his name.
It TMs unfortunate that the school district is on the front page because of this and because of some great achievement, Salinas told Action 4 News. So I think he feels that the best thing for the kids and the school district is for him to resign and give them an opportunity to move forward.