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Whistleblowers allege influence peddling by members of Congress, VP in Mexico wastewater project

Miriam Raftery and Larisa Alexandrovna
Published: Wednesday March 29, 2006

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An explosive report, obtained in part by RAW STORY, and soon to be released by the Project on Government Oversight (POGO), fingers high-level officials both on the federal and local California level in allegations of influence-peddling ensnaring members of both parties.

According to documents and whistleblowers concerning a San Diego wastewater treatment plant to be built in Tijuana, Mexico, Vice President Dick Cheney, Reps. Duncan Hunter (R-CA) and Bob Filner (D-CA), and former congressman and current Republican congressional candidate Brian Bilbray have allegedly advanced the project despite serious concerns from those involved.

The proposed Bajagua Project is a secondary wastewater treatment plant for San Diego, named after the company, Bajagua Project, LLC, which was founded solely to get the no-bid contract for water treatment. The agreement is a private-public fee-for-service proposition that will charge the federal government billions. The estimated profit forecast for the project is upwards of $600 million dollars over a twenty-year span.

Documents recently obtained by Raw Story and now also available at www.bajagua.org, a site set up by the National Security Whistleblower’s Coalition, indicate Cheney met twice with Bajagua officials, on October 15, 2002 and again on September 4, 2003. Cheney is alleged to have pressured the Department of Justice and the Council on Environmental Quality to give Bajagua a pass on clean water concerns and the no-bid contract for building the treatment facility.

In a letter to Cheney dated October 15, 2002, Bajagua Project manager Jim Simmons made clear that the Vice President had been instrumental in promoting Bajagua’s efforts.

“My colleagues and I are very grateful that you could spend some time with us in Roswell New Mexico on Monday October 14,” Simmons wrote. “We do appreciate your effort on our behalf and the wonderful job you and President Bush are doing for our country.”

The letter advised that Bajagua’s plans were being blocked by the International Boundary and Water Commission (IBWC), which manages shared water resources on the boundary between the US and Mexico, and asked Cheney to “consider arranging a meeting to facilitate a successful result.”

Simmons did not respond to repeated requests for comment.

Tracing alleged influence-peddling

How did Bajagua manage to get access to the Vice President?

Documents suggest it was due to another high ranking Republican, Chairman of the House Armed Services Committee Duncan Hunter (R-CA), who is cited in a letter from Simmons as “our champion.”

The letter to Cheney claims that the project is supported by both California senators as well as by the entire San Diego Congressional delegation, including Republicans and Democrats alike, by the City of San Diego and by the White House Office of Management and Budget.

“You don’t just call up the Vice President,” said a source close to the deal. The source suggested Hunter had the access and clout to persuade Cheney to wield his influence on Bajagua’s behalf.

A spokesman for Hunter’s office, Joe Kasper, would not respond to repeated requests for comment.

Several San Diego events seem to support Simmons' reference to Hunter as our “champion” and the suggestion that Hunter solicited the Vice President’s support for Bajagua.

According to documents acquired by RAW STORY, on October 16, 2002, two days after Cheney met with Bajagua representatives in New Mexico, Hunter received two $2,000 campaign contributions from Pedro and Letitia Landa of Austin, Texas. Project insiders say they are related to Enrique Landa, a principal at Bajagua. In addition, a patent application filed by Pedro Enrique Landa lists Keith A. Shuley, an attorney at Hughes and Luce.

“The same attorney called me representing Bajagua,” said Professor William Weaver, J.D., Ph.D. Professor Weaver is Director of Academic Programs at the University of Texas and acts as a senior advisor to the National Whistleblowers Coalition.

When Cheney next met with Bajagua representatives on Sept. 4, 2003, Hunter had a meeting at the White House on the same date. A Sept. 5, 2003 e-mail sent to various International Boundary and Water Commission employees and leaked by a whistleblower remarks, “note coincidence – Bajagua met with VP Cheney yesterday and White House met with Hunter. Any read out from that meeting?”

Hunter met with International Boundary and Water commissioner Carlos Ramirez and acting commissioner Debra Little in 2003. According to the former acting IBWC commissioner, the now retired Rev. Robert Ortega, Hunter “berated them for not entering into a contract with Bajagua.”

A Sept. 20, 2004 letter from International Boundaries Commissioner Arturo Q. Duran to Council on Environmental Chairman James Connaughton urged that Bajagua be treated as a “preferred alternative.” The only cc on Duran’s letter was to Hunter.

Hunter also testified on Bajagua’s behalf on Dec. 12, 2001. In his testimony, Hunter cited David Schlesinger, former director of the San Diego wastewater department, as an authority. He failed to mention that Schlesinger was working for Bajagua – and lobbying on the company’s behalf.

Shortly thereafter, Hunter received a $2,000 contribution check from Bajagua. He has received additional contributions since then.

GOP congressman who authored bill favoring project became project’s lobbyist

Bajagua has spent millions to win influence, approaching Democratic Congressman Bob Filner (D-CA) as well as former Republican congressman Brian Bilbray. Filner, the whistleblowers allege, has received at least $56,300 from individuals involved in the project.

Ortega, the former International Boundaries commissioner, told RAW STORY Filner and Bilbray initially wanted to finish the project in the U.S. because “Mexico didn’t know what it was doing.”

Later, however, “Filner was the one that championed their [Bajagua’s] cause,” Ortega said. “He tried to ram it down the agency’s throat.”

Filner and former GOP congressman Brian Bilbray coauthored legislation tailored to allow a no-bid contract for the Bajagua project. Without such legislation, awarding a no-bid contract would violate federal acquisition and procurement procedures. The Filner-Bilbray bill was signed into law in 2000.

Filner and Bilbray did not respond to requests for comments by press deadline. Both have denied wrongdoing involving Bajagua in the past.

Bilbray, who retired from Congress in 2001, soon became a Bajagua lobbyist. In interviews, he said that he lobbied Congress on Bajagua's behalf because he believed in the project. He was paid $35,000 for his lobbying efforts in 2001.

That year – in December 2001 – he testified in favor of the Bajagua project. He did not, however, tell committee members that he was being paid by the group. Bilbray told the San Diego Union-Tribune that he didn't think his lobbying ties were relevant because he was asked to testify as the bill's author.

Filner has called accusations of a quid pro quo arrangement with Bajagua, made by his primary opponent, Juan Vargas, "absurd."

“This is nothing but an attempt to sabotage at the very moment of success a solution to a 70-year-old health and environmental problem suffered by my constituents,” Filner said.

Responding to a local report, Jim Simmons, Bajagua's managing partner, said of Vargas, “I'm really appalled that he would use this as a political football and put the health of his constituents in jeopardy.” Simmons noted that Vargas has been among Bajagua's supporters for years – and that as a San Diego councilman, Vargas voted to support legislation that Filner co-sponsored in 2000 with then-Rep. Brian Bilbray.

Simmons would not respond to repeated requests for follow-up comment.

Bilbray takes heat for lobbying work

After losing his reelection bid, Bilbray testified before Congress on behalf of Bajagua – without revealing that he was a paid lobbyist for the company. Bilbray is now running for the Congressional seat vacated by Duke Cunningham, who also supported the Bajagua project before pleading guilty to accepting bribes from defense contractors.

“Bajagua simply has a history of spending a lot of money to get access to people like Cheney,” Assemblywoman Lori Saldana, a Democrat representing California’s 76th Assembly District, told RAW STORY. “For the first time ever in the IWBC, the State Department Agency, they are looking at a private contract. This is the Bush administration. This is the privatization of what in the past has been public projects.”

Saldana also levied criticism at Bilbray for lobbying on behalf of a company for whom he had recently authored special legislation. “I think it does violate the House rules on when lobbying is allowed. To say he went back to testify only as the author of the bill – who paid for him to go? Who paid for his travel?”

“Bob Simmons, hired by Bajagua, was elected to be on the executive committee of the Sierra Club for San Diego, where he immediately began lobbying for them to support Bajagua,” Saldana recalled.

Cheney 'directed meeting' with Bajagua

Influence of local advocacy groups pales, however, in comparison to the potential effect of a meeting between Vice President Cheney and the International Boundaries Commission.

Just how much influence did the Vice President wield on Bajagua’s behalf? According to an e-mail from former Internal Boundaries Commissioner Ortega to the Project on Government Oversight, investigator Nick Schwellenbach confirmed that Cheney wielded his political influence on behalf of Bajagua.

Recalling a meeting at the Council of Environmental Quality to coordinate U.S. agencies' efforts on behalf of Bajagua, he noted, “It was somehow understood that the Vice President’s office had directed the meeting…The IBWC had received prior to this meeting a copy of a document on a meeting the Vice President had with Bajagua in Roswell, N.M.”

The Department of Justice initially opposed awarding a sole-source contract to Bajagua. But when the DOJ attorney originally assigned to handle the case, Randall Humm, was replaced in 2003 by DOJ attorney and liaison to the Office of the Vice President, Mary Neumayr, the Justice Department reversed its position abruptly.

Critics contend that other companies should have been given the opportunity to bid on the controversial wastewater treatment project.

“Any competent company could build a secondary treatment plant,” Professor Weaver observed. “It’s not rocket science. That’s why the fix has been in to get these people the money.”

EPA says they have done 'no assessments'

At least three different environmental assessments have been conducted on the Bajagau project, a procedure Ortega said is “not normal at all.” In the first environmental assessment, the project was excluded, he recalled.

“It was dead last out of 12 or 13 alternatives because the Bajagua project did not have any land in Mexico, so it was a speculative proposal,” he said. “They didn’t have Mexico supporting it.”

In addition, Bajagua raised serious environmental concerns because the proposed project would transport sewage upstream, then back downstream.

“So if Mexico didn’t maintain the line, it would come spilling back to the states,” Ortega explained. The project would also discharge through the international outflow from an existing South Bay plant into ocean waters off San Diego, making control of sewage discharged into California waters “questionable,” he added.

Asked if the EPA has conducted any environmental assessments of the proposed Bajagua project, Environmental Protection Agency spokesperson Dale Kemerly replied, “To my knowledge, no. It is a Mexican facility and we would have no jurisdiction."

Asked if the EPA would have jurisdiction if the Mexican plant made discharges into U.S. waters off California, he said, "If they are discharging treated wastewater that would not be a problem.”

What if the facility discharged untreated wastewater into U.S. waters? “I don’t know what the agency’s response would be,” Kemerly said.

As for whether outsourcing or privatizing a municipal wastewater treatment function to a company operating in another country violates U.S. laws or regulations, Kemerly said he didn’t know.

“We don’t deal with the laws of other countries,” he said.

The Project for Government Oversight will publish a full report on Bajagua at its website (www.pogo.org) by next week, and possibly as soon as Friday.

“We got involved because a whistleblower inside the international boundary and water commission (IBWC) told us that there was an extremely large contract that the IBCW was going to award soon,” said POGO investigator Nick Schwellenbach. “It was a no-bid contract. That grabs your attention.”

Clarification: Brian Bilbray is a former congressman.

Miriam Raftery can be reached at: Miriam@rawstory.com. Larisa Alexandrovna can be reached at: Larisa@rawstory.com.