A Year After a Corruption Scandal, Crystal City Works to Pick Up the Pieces

Mar 13, 2017

From Texas Standard:

You may remember hearing about Crystal City, Texas, about this time a year ago. The story made national headlines and brought a lot of unwanted attention to the small city southwest of San Antonio.

The city’s mayor, mayor pro-tem and two council members were indicted on federal corruption charges, leaving just one council member unscathed. There were accusations ranging from mishandling town funds and taking bribes to colluding with a local, underground gambling kingpin known as ‘Mr. T.’

Crystal City is a town of less than 8,000 people. It’s a town even many Texans hadn’t heard of before the indictments were handed down and government officials were arrested. Then a media circus rolled in.

Local news outlets took interest. So did national ones. Crystal City went from being the self-proclaimed ‘Spinach Capital of the World’ to what the Washington Post called “the most corrupt little town in America.”

Eventually the dust settled and most of the media left town. But the city’s problems were far from over. Ahead was the arduous journey towards reinstating the entire government.

And then there was the fact that after posting bail and awaiting trial, the indicted city council members refused to leave their positions. Local citizens including Richard Diaz led an effort to petition for a recall election.

“My office was used as a point of collection of signatures. The radio was also used to advertise on particular days when signatures would be collected and where. I think it was around 1300 signatures,” says Diaz.

At first, the citizens’ petition was rejected by the very council it sought to oust.

"In the beginning, we didn't get any assistance from anywhere. That's when we had to go to court and that's when we got more people involved," he says.

Success eventually came in court – thanks in part to pro bono help from attorneys from across the state.

When the recall elections were finally held in May of 2016 – four months after the indictments –  the city elected a whole new slate of representatives. Richard Diaz is now a city council member. Frank Moreno Jr. is the new mayor. Their first priority was making sense of the previous administration’s dubious accounting.

“Initially, in the general fund of the city, when we took over, there was a $31,000 balance. That wasn't even enough for payroll," Moreno says.

Diaz says that wasn’t even enough for payroll or for bond obligations.

“All the payments on those bonds became due, and when we took over we were two payments behind on a bond of $112,000 and also a payment of 50 some thousand dollars on a another bond that was delinquent,” Diaz says.

Indicted City Manager James Jonas’s $216,000 salary was one of the biggest financial drains on the town. Speaking with the Texas Standard a few months before he was indicted, Jonas argued that his work as city manager, city attorney and lobbyist in Austin and Washington merited the salary.

"The economics of what it takes for me to do work in these three roles, that's been appropriately billed and that's where the number comes from. I would be doing that if I was doing other assignments. I might be charging more if I was doing assignments for corporate clients. So this is a perfectly logical capturing of services,” Jonas said then.

Diaz never questioned Jonas’s qualifications but the math didn’t add up.

“All in all our city manager was being paid over $250,000 a year, our whole tax levy for the city is $500,000, so he was actually getting one half of the total taxes that the city collects,” Diaz says.

Over the past year Mayor Moreno says he found few people in the state government he could turn to for help. Even the governor’s office sent Crystal City a letter saying the city was now on probation from grant applications due to mishandling of funds. Moreno tried to explain that the new city council was not responsible for the previous transgressions.

“We are not precluded from applying from any type of grants – we can do that, however, it still remains that we will be at the bottom of the totem pole. We have to give them a large justification why we should receive grants,” Moreno says.

Despite the fits and starts of the new administration, Moreno says they are making progress – including on public works projects long left neglected.

"Our streets have been in deplorable condition. We're starting to repair some of the streets. We can't do all of them of course it is expensive but we're trying to the best we can,” he says.

Though it was not an easy year, 2016 ended on a better note than it began for Crystal City. Council Member Diaz attributes this to the community that took its government back into its own hands.

“People are happy that the corruption has ended and the things will get back up to normal. Of course they understand it’s going to take some time,” Diaz says.

With the former officials all either awaiting sentencing or trial, it may be some time before Crystal City citizens gain a sense of closure. For now though the focus is on moving forward. And ditching the title of most corrupt little town in America.