FBI arrests two in local corruption investigation

It was at the end of December that we learned that Mike Surface had resigned as chairman of the Harris County Sports and Convention Corp., citing "personal and professional interests" as reasons. About one week later, his name emerged in an FBI investigation as reported by KTRK-13's Wayne Dolcefino:

We've learned the FBI has delivered subpoenas to Houston City Hall looking for records of dealings with two companies and contractors with close ties to a slew of local politicians involved in the creation of city fire stations, county jails and even our football stadium.

Today, the feds came calling for him and an associate (again via Wayne Dolcefino):

It was just before 9am today when FBI agents arrived with their corruption catch at Houston's federal building. Two of the city's most politically powerful developers, Andrew Schatte and Michael Surface, were arrested on public corruption charges.

Their arrests will likely trigger political shockwaves through town. Before this morning, Schatte had a long list of close friends in Houston government, from city hall to the commissioners court to the Houston Firefighters Pension Fund.

Three years ago, Schattes' name first surfaced in a Justice Department investigation. Houston's former building director, Monique McGilbra, and Mayor Brown's former chief of staff, Oliver Spellman, were snared in that bribery case, but at the time, Schatte escaped indictments.

Schatte and Surface were partners in a company called Keystone, which developed Houston's troubled emergency center and others.

It would appear Schatte and Surface have some major "personal and professional interests" to attend to at the moment.

UPDATE: KHOU-11 adds more:

11 News cameras caught up with the two men as they left court. Surface posted a $100,000 bail.

He and Schatte were indicted on three counts of conspiracy and wire fraud. Surface is also accused of making false statements to authorities.

The charges allege that the two coordinated payments to a city of Houston employee, including trips, football tickets and thousands of dollars in cash in exchange for the awarding of the contract to build the Houston Emergency Center and a downtown fire station.

Both men say the charges are based on questionable claims. Both pled not guilty Friday.

Two people have already convicted in the bribery scandal.

Monique McGilbra, the former head of Houston's building services department pleaded guilty to accepting a bribe. She was sentenced to three years in prison.

Oliver Spellman, the one time Chief of Staff for former Mayor Lee Brown also pleaded guilty to taking bribes in exchange for city contracts.

Spellman got probation and a $10,000 fine.

Posted by Anne Linehan @ 01/25/08 07:11 PM | Print |

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