Ortiz Earmarks May Have Benefited Former Security Firm
Rep. Solomon Ortiz (D-Texas) has requested millions of dollars in earmarks that may have benefited a security firm he founded.
Ortiz, a member of the House Transportation and Infrastructure Committee, helped direct earmarks and federal grants worth tens of millions of dollars to the Port of Corpus Christi, the nation’s fifth largest port. Since 1997, the port – which is in Ortiz’s district — has hired Amtex Global Services, Ortiz’s former firm, on contracts that have ranged from $900,0000 to more than $1 million annually. The company continues to pay Ortiz for the sale of his stake in it.
Ortiz sold his 55 percent ownership in the firm in late 2003 after media reports raised conflict-of-interest concerns and accusations of political retaliation against critics of Amtex Security. He noted the sale on his congressional financial disclosure forms for that year.
Yet financial disclosure reports filed by Ortiz between 2005 and 2010 show a $250,000 to $500,000 holding labeled Amtex Security, as well as $15,000 to $50,000 worth of annual “interest/capital gains.”
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Ethics watchdogs, however, said Ortiz still has a financial interest in the earmarks because the federal funds help provide work and a stream of income for Amtex.
“Whether or not they can afford to make those payments to him would rest on their continued viability…then he does have a financial interest [in the earmarks],” said Meredith McGehee, policy director of the Campaign Legal Center.
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Craig Holman of Public Citizen said Ortiz’s response — that he sold the company — appears to contradict the capital gains notation on his financial disclosure forms and requires further clarification to avoid conflict-of-interest accusations.
“Both answers cannot be true,” Holman said. “The fact that an accountant for Ortiz is reporting a steady stream of income from Amtex Security strongly suggests that Rep. Ortiz may be violating his pledge to avoid personally benefiting from earmarks.”
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According to Ortiz’s earmark request letters, since the earmark pledge was instituted, earmarks Ortiz secured or won that have gone to entities that have hired or have contracts with Amtex include:
• A $1.148 million earmark for Corpus Christi’s Ship Channel Improvement Project for fiscal year 2009.
• A $750,000 earmark for the Port Aransas Ferry Boat Expansion in fiscal year 2008 and a $475,000 earmark in fiscal year 2009.
• A $47,000 earmark for Port Aransas police communications equipment in fiscal year 2008. The recipient is the City of Port Aransas.
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Amtex has been providing security for the Port Aransas ferry since June 2005. In November 2005, Ortiz announced that the City of Port Aransas would receive a $320,000 earmark for a 28-car ferry and another $500,000 earmark to fund an additional ferryboat, as well as a $1.2 million earmark for the construction of a wetlands education center in the Port of Aransas, according to Ortiz’s press releases.
In June 2006, Ortiz announced another $750,000 earmark for the expansion of the ferry, and in 2007 he secured an additional $750,000, as well as $47,000 to purchase police communications equipment. He announced yet another grant in 2008 for more than $643,000 for the design and construction of a new ferryboat, and another $475,000 earmark for the ferry in 2009. He requested an additional $4.2 million for the ferry in the fiscal 2010 transportation appropriations bill.
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But the media scrutiny continued about Amtex’s contracts with the Port of Corpus Christi and other district entities.
For instance, in November 2002, the port commission created its own police force and cut back on its reliance on Amtex Security, limiting the contract to more routine gate security and other tasks. That same year, the port commission considered cutting hours for security guards by 22 percent, which would result in a $300,000 reduction in payments to Amtex, according to the Corpus Christi Caller-Times.
Port Chairman Ruben Bonilla publicly expressed concern that the port commission was being pressured by Amtex’s owners to reverse the cuts, according to the Corpus Christi Caller-Times. At the time, Ortiz said he didn’t contact any commissioners regarding the cuts, but also said he supported Miguel Rendon’s decision to send a letter laden with Sept. 11 references to the port’s staff and commissioners to oppose the cuts.
Bonilla later repeatedly accused Lencho Rendon of working with other county officials, including Ortiz’s brother Oscar, a Nueces County commissioner, to try to oust him from the chairmanship, the Corpus Christi Caller-Times reported in 2003.
The Amtex contract came under additional scrutiny in 1998 when port commissioners decided to renew its contract even though Amtex was underbid by $23,000.
Read more: (Susan Crabtree, “Ortiz Earmarks May Have Benefited Former Security Firm,” The Hill, 10/22/10)