Prominent insurance agent pleads guilty in PSJA corruption case

McALLEN - One of the three remaining defendants in the Pharr-San Juan-Alamo school district corruption case pleaded guilty Thursday, a week before his trial was set to begin.

Arnulfo "Arnie" Olivarez, a top Rio Grande Valley insurance agent, told the court he attempted to buy influence among school board members with cash payments.

His admission of guilt makes him the fourth person in the case to confess to the alleged bribes-for-votes scheme that governed construction and service bids within the district for at least six years.

Former PSJA superintendent Arturo Guajardo and ex-board members Rogelio "Little Roy" Rodriguez and Evangelina "Vangie" De Leon have entered guilty pleas to extortion charges.

The officials accepted gifts from nine contractors that included cash payments totaling more than $600,000, paid vacations, concert tickets and in some cases even the services of prostitutes, according to a May 2007 federal indictment.

Authorities arrested Olivarez and the three district officials in June 2006 at the conclusion of a two-year investigation.

Current trustee Raul "Big Roy" Navarro and construction contractor George Hernandez were also charged but have maintained their innocence.

 At Thursday's court hearing, Olivarez admitted to giving former board member Guadalupe Jaime Santa Maria a total of $1,800 over two years to steer the district's insurance contracts his way.

As the district's insurance agent of record, Olivarez was responsible for recommending which large companies the district should choose to provide health and life coverage for its employees.

The board selected an Olivarez-backed health insurance provider in August 2002 and chose to renew that contract over the next two school years.

Santa Maria resigned his post after pleading guilty in a separate corruption case and awaits sentencing later this year.

Prosecutors have also alleged Olivarez made cash payments totaling $2,600 to former board member De Leon and paid $4,000 for entertainment at a reception honoring one of current trustee Navarro's relatives.

Thursday, however, Olivarez denied some of those allegations.

"I plead guilty even though some of the things in (the indictment) are not true," he said.

U.S. District Judge Ricardo Hinojosa cut him off before he could get into specifics, saying Olivarez only needed to admit that at least one of the allegations was true to be found guilty.

Olivarez did not return calls for comment after Thursday's hearing.

Prosecutors agreed to drop a separate case against him involving similar bribery allegations with the Edcouch-Elsa school board in exchange for his guilty plea.

 Olivarez, 58, of Rancho Viejo, won several key insurance contracts in the late '90s with a handful of prominent local government organizations and school boards.

His Harlingen-based business - Insurance Associates of the Valley - was named the insurance agent of record for the PSJA school district from 1998 until at least August 2001, according to the indictment in his case.

Despite his prominence with local politicos, he lost a 2006 bid to take over the Texas House District 38 seat, a position currently held by state Rep. Eddie Lucio III, D-Brownsville.

Olivarez now faces up to five years in prison and up to $250,000 in fines at a sentencing hearing scheduled for December.

The cases' two remaining defendants - Navarro and Hernandez - are set to go before a jury Wednesday.

They each face nine counts of conspiracy and extortion.

Hernandez, who was also the president of the Donna school board at the time of his indictment, faces an additional witness tampering charge for allegedly trying to get a government cooperator to retract statements that implicated him.

Despite losing the school board's top spot, Hernandez maintains his position as a trustee because the alleged illegal activity in this case only involved his actions as a private contractor.