Sunday, May 09, 2010

Keeping it in the family

Nepotism, money laundering, corruption, and a deal with a neighboring city to land a high-profile company -- it's all there, just up IH-35 where the San Antonio suburb of Windcrest lies, according to the Texas Rangers.

The release in mid-April of a Texas Rangers affidavit detailing financial improprieties in the city of Windcrest has yet to produce any criminal charges, but its implications are weighty against the former city manager and his brother, a real estate developer.

The April 13 affadavit alleges that Ronnie Cain, who retired April 1 from his post as Windcrest city manager, sat silent as his brother, real estate developer Gary Cain, misrepresented himself to the Windcrest City Council and eventually cost the city $2.8 million ... and may have damaged the city's relationship with its newest business partner, Rackspace Hosting. [ellipsis in original]

On April 11, 2008, then-Windcrest Mayor Jack Leonhardt signed a memo authorizing the city to honor a March 1, 2008 invoice for $2.8 million, to be paid out of a $5 million escrow account established by Rackspace for development around the former Windsor Park Mall, Rackspace's new home.

That $2.8 mill was funneled into the bank account of a fictitious company that the developer Cain created Feb. 26, 2008 — just six days before the invoice date. It was Ronnie Cain who first presented the invoice to Leonhardt and urged him to honor the request and sign the $2.8 million wire transfer.

Today, every cent of the $2.8 million is gone. There's been little progress on the public infrastructure at Rackspace.

(from the Northeast Herald)

Read the whole thing at the link for more wheeling and dealing.

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