Man charged in levee bribery case

A former employee of the U.S. Army Corps of Engineers has agreed to plead guilty to rigging a bid on repairs to levees in the New Orleans area, Justice Department officials announced Thursday, as part of a broader investigation into procurement fraud in levee reconstruction.

The case marks the first criminal charges against a corps official involved in New Orleans levees since Hurricane Katrina, a department spokeswoman said. It is likely to stoke fears that fraud has plagued the construction both before and after the August 2005 hurricane.

The Justice Department said Raul Miranda of Houston supplied confidential bidding documents to an unidentified sand and gravel subcontractor in exchange for about $299,000.

Miranda was among the corps officials selecting the contractor to improve the Lake Cataouatche levee. The $16-million project is upgrading the lowest and most vulnerable part of the lake’s levee, an eight-mile stretch that protects Jefferson and St. Charles parishes to the west and south of New Orleans.

A Justice Department spokeswoman said an investigation was being led by its antitrust division, the U.S. attorney’s office in the Eastern District of Louisiana, the Army Criminal Investigation Division and the Department of Defense’s Criminal Investigative Service. The announcement Thursday was the first official confirmation that a large federal task force is examining levee fraud.

Miranda agreed to cooperate with the task force’s investigation, indicating that other potential targets in the kickback probe are likely to be identified. Miranda “gave his technical evaluation of a prime contractor’s bid and other confidential documents to another Army Corps employee with knowledge that this information would be given to the subcontractor,” a Justice Department news release said.

The Justice Department said Miranda agreed to accept 25 cents per cubic yard of sand and gravel sold under the contract, a skim of about 1% of the cost of those materials in the New Orleans market.

“Today’s guilty plea is further compelling evidence of the absolute commitment of the U.S. Department of Justice . . . to maintain a zero tolerance for any public corruption in the Eastern District of Louisiana, which is so critical to our rebuilding in the wake of the devastation wrought by Hurricane Katrina,” U.S. Atty. Jim Letten said.

A Hurricane Katrina Fraud Task Force, formed after reports of widespread cheating in seeking federal benefits, has charged 764 individuals in 680 cases, mainly involving applications for various kinds of disaster relief.

The federal government wants to spend as much as $15 billion to repair and upgrade the hurricane protection system around New Orleans, among the largest civil engineering programs in the nation. With so much money at stake and with Louisiana’s history of public corruption, there have been concerns about the risk of serious problems.

The potential for criminal wrongdoing was first raised in Senate testimony in November 2005 by an investigator looking into the technical causes of the levee breaches.

“We’re receiving disturbing reports that there may have been some conscious human error involved. There may have been some malfeasance,” said Raymond B. Seed, a civil engineering professor at UC Berkeley who was then heading an inquiry financed by the National Science Foundation. “We’re pursuing evidence of those stories.”

Seed, among others, has raised concerns that shoddy engineering and construction practices have compromised the city’s original levee system and continue to pose serious problems in post-Katrina repairs. Seed said the corps’ New Orleans division had long lacked the rigorous oversight that is typical in civil engineering systems elsewhere in the nation.

Efforts to overhaul the corps have also prompted tough political fights.

Measures to improve oversight of the corps were adopted in the Water Resources Development Act this month but were “significantly weakened” by the time they passed, said Sen. Russell D. Feingold (D-Wis.). “We need real meaningful corps reform, including real independent review of corps projects,” he said in a statement welcoming a Bush veto.

The Miranda case and the prospects for more indictments are renewing concerns about the levees in New Orleans.

“In such an environment where there is incentive for fraud and corruption, it shouldn’t come as a surprise,” said Sandy Rosenthal, executive director of Levees.org, a New Orleans group pressing for an independent federal probe of the levee failures. “The Army Corps of Engineers can do pretty much what they want. This kind of corruption has been a problem all along.”

A spokesman for the corps declined to comment on the Miranda case.

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ralph.vartabedian@latimes.com