Nerie Construction, a Houston contractor caught up in a public-works bribery scandal, is still in line for a multi-million-dollar final check from City Hall, despite being debarred and its owner entering a guilty plea. City records tie the disputed payout to a Bonita Gardens drainage and paving job that staff have recommended as complete, leaving officials scrambling to balance legal and contractual obligations against intense political pressure not to cut a check to a company accused of buying influence.
How the payment landed on the council agenda
According to City of Houston agenda records, the final contract amount for the DR15 SWAT 12A Bonita Gardens Drainage and Paving Improvements project is $8,376,625.73. Staff urged City Council to sign off on the work as complete and authorize the last payment. The paperwork shows the contract was awarded in 2019 and wrapped up this fall after several change orders. Council members later pulled the item for extra scrutiny once they learned the contractor was at the center of a criminal probe involving city waterline contracts.
The bribery probe and plea deals
Investigative reporting by KPRC in its "DRAINED" series, along with subsequent court filings, linked the Bonita Gardens contract and other city jobs to a scheme in which former Public Works manager Patrece Lee steered emergency waterline contracts to preferred vendors. Prosecutors say Nerie and other contractors funneled roughly $77,000 in kickbacks to Lee while their city work ballooned into the millions, and Lee ultimately pleaded guilty and received a prison sentence.
Nerie later took a plea deal that knocked down felony charges to a misdemeanor for offering a gift to a public servant. Court records show some proceedings are still active, including a deferred-adjudication period that has not yet run its course.
Officials split between law and contract
Mayor John Whitmire has drawn a hard line in public, saying, “As far as I’m concerned, this individual and his company should not get any city payments,” and he moved to halt the payout while asking city attorneys to search for options. The Houston Chronicle reported his comments during the council meeting where members voted to send the payment item back to the administration for more review.
Behind the scenes, procurement and legal staff have cautioned that the city may still have contractual duties tied to the project. A Whitmire spokesperson told Houston Public Media that lawyers are weighing those obligations against the mayor’s public stance, a tension that could eventually limit how far the city can go in cutting Nerie out of the money flow.
Contractor says it's owed money
Nerie Construction has pushed back, arguing to investigators and reporters that the city is sitting on a retainage payment of roughly $418,831 and insisting the company finished the project “to city specifications.” Click2Houston published the company’s statement this summer as council members weighed whether to approve the final payment.
Attorneys for Nerie have also argued that subcontractors, who handled much of the on-the-ground work, are entitled to their portions of the contract and should not be left unpaid while the criminal case and political fight play out.
What's next for the council and the subs
In August, the council sent the payment request back to the administration and directed legal and public-works staff to craft a way to pay subcontractors without routing money through Nerie or its owner, according to reporting from the Houston Chronicle. Procurement officials have told reporters they can flag payments in the city’s accounting system to prevent disbursements, but those holds do not by themselves settle any open contract claims.
That leaves city attorneys with a familiar municipal headache: try to shield taxpayer dollars from a tainted vendor, or follow tight contract rules that might ultimately require some payment to a debarred company if subcontractor issues are not resolved another way.
Legal implications
Nerie Construction has already been administratively debarred from pursuing new city contracts, and the criminal cases have spawned complicated civil and contractual questions about restitution and retainage. Prosecutors alleged in court that contractors collectively sent Lee more than $77,000 in exchange for custom-tailored work orders, and Nerie’s lawyer has sought early termination of a deferred-adjudication term that otherwise runs into 2027.
The company has publicly maintained that the misdemeanor entered under the plea deal will be wiped from the record after deferred adjudication is complete, an assertion reported by Houston Public Media. Legal experts, however, note that debarments and restitution or contract disputes can easily outlast any individual’s criminal case.
For now, the final payment sits in limbo while Houston’s legal and procurement teams try to separate the city’s contract obligations from its political and ethical concerns. Council members say they want subcontractors paid in full without appearing to reward alleged corruption, and they are expected to revisit the matter once the administration brings back formal recommendations.
