HISD's former COO indicted: Prosecutors allege contractor overcharged district $6M in scheme
Feds also indicted Anthony Hutchison, the landscaping company owner who investigators allege as Busby's co-conspirator.
HOUSTON, Texas (KTRK) -- Houston ISD's former chief operating officer and a landscaping business owner who contracted with the district have been federally indicted on public corruption charges as part of an alleged kickback that totaled about $6 million over a seven-year span.
The FBI's Houston office announced the arrests Thursday of Brian Busby, the former district executive, and Anthony Hutchison, who feds identified as an HISD contract vendor.
Both men made their first appearances before a U.S. magistrate judge Thursday afternoon, and they were released from custody, with Eyewitness News cameras capturing them walking out from the courthouse in the early evening.
As part of their bond conditions, Busby and Hutchison were ordered not to have contact with current or former HISD employees or any other witnesses in the case. Prosecutors allege the two have tried to intimidate witnesses into lying to investigators.
Last year, 13 Investigates reported on FBI search warrants executed at Busby's home and at HISD headquarters after allegations emerged of mismanagement.
Court documents later stated that Hutchison, allegedly in conjunction with Busby, overbilled the district for work it was contracted to perform but never completed.
"Busby allegedly helped award HISD construction and grounds maintenance contracts to Hutchison in return for cash bribes and hundreds of thousands of dollars in home remodeling," the U.S. Attorney's Office for the Southern District of Texas said Thursday.
Busby's attorney, Dick DeGuerin, has denied the claims.
Last year, the district decided not to renew Busby's contract in the midst of the allegations.
Several other former HISD officials have admitted guilt in the case, according to the FBI.
SEE MORE ON THE HISD INVESTIGATION:
- FBI at HISD admin building months after allegations of mismanagement
- Former HISD employee seeks return of $90K seized in FBI raid
- Prosecutors allege contractor overcharged Houston ISD $6 million in scheme with former COO
Former HISD Board of Education president Rhonda Skillern-Jones, previously entered a plea agreement related to the conspiracy charge and could face up to five years in prison. Other former HISD officials, including Derrick Sanders, 50; Alfred Hoskins, 58; Gerron Hall, 47; and Luis Tovar, 39, also entered a plea agreement for the conspiracy charge and also face up to five years in prison.
"Today's arrests and related charges are the result of a lengthy, multifaceted FBI Houston investigation," Acting Special Agent in Charge Richard A. Collodi said in a news release. "Houston taxpayers and the thousands of HISD students, along with their teachers and staff, are the potential victims of this alleged multimillion-dollar public corruption scheme. The FBI will continue to work to hold accountable public officials who fail the citizens of their community by accepting bribes, and those who pay bribes."
Busby started working at HISD in the late 1990s as a custodian. As he advanced within the ranks, he was later appointed COO in December 2016. He was responsible for overseeing more than 7,000 employees and an annual operating budget of more than $250 million.
In a warrant unsealed in May, federal officials allege Busby was engaged in a kickback scheme with multiple vendors, including Southwest Wholesale and Just Construction, which later changed its name to Just Partners Construction.
Hutchison owns both of those companies.
Southwest Wholesale started providing limited gardening and landscaping services to HISD in 2010.
In 2016, the company was awarded a contract for grounds maintenance, landscaping, tree pruning, and removal and irrigation systems for certain schools in the district. The contract was valued at $26.8 million and was expected to be extended to January 2021, according to court filings.
"Busby and his colleagues instructed HISD's grounds maintenance employees to perform the work that had been contracted to Southwest Wholesale, in effect supplying Southwest Wholesale with HISD labor," the search warrant states. "Meanwhile, Busby, through his direct reports, directed his managers to authorize and approve overtime pay to incentivize HISD grounds maintenance employees to perform the work."
One of the first examples of Southwest Wholesale not completing work happened in March 2018 when Sharpstown Middle School's playing fields were contracted to receive $984,000 in renovations. That amount was paid in full despite not all of the work being completed, court documents allege.
The HISD athletic director expressed "concerns about the high price," but went Busby through with giving the contract to Southwest Wholesale, according to court documents.
The athletic director later found work, such as ramp installations, striping of the fields, and new trees planted, was not performed.
The FBI also found that Southwest Wholesale billed for mowing work at other schools, despite the work not being completed.
In a statement, HISD said it is cooperating with the federal investigation into allegations that took place between 2011 and 2020.
"From the time that HISD became aware of the federal investigation in February 2020, HISD provided information as requested by law enforcement with respect to the investigation. As that criminal investigation progressed, HISD also implemented additional internal procedures to safeguard against the type of conduct alleged in the charges announced today. No person charged in connection with the indictments announced today is currently employed by HISD," the district says. "HISD fully respects the criminal justice process, and HISD cannot comment further with respect to the underlying facts of the investigation or the charges announced today pending resolution of those charges."
This is a developing story. All updates can be found here.
