Lucio Vasquez/Houston Public Media
Pictured are Mayor John Whitmire and Houston City Council members at City Hall.
Nearly two years after its owner became embroiled in a bribery scandal, Nerie Construction again faced a delayed payment from the city of Houston on Wednesday.
Joseph Nerie, described by Mayor John Whitmire as a “bad actor,” was one of seven people charged in 2024 over a kickback scheme to obtain waterline contracts. He eventually pleaded guilty to a misdemeanor offense and remained on deferred adjudication.
The payment in question — about $400,000 — would close out the $8.3 million contract for a project in the Bonita Gardens neighborhood unrelated to the bribery case. The city paid for the project with a portion of the $87 million in federal disaster recovery funds awarded in the aftermath of two floods in 2015.
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After delaying the payment in August over the bribery allegations, Whitmire’s administration added the item back to the city council’s agenda last week — before delaying it by another week to further evaluate legal options.
On Wednesday, Whitmire said federal officials with the U.S. Department of Housing and Urban Development (HUD) indicated the city would have to return up to $9 million to the federal government if Nerie doesn’t receive its final payment.
Whitmire said he’s fine with the city getting sued by Nerie Construction, but he doesn’t want to fight officials at HUD.
“We could play chicken with them. I don’t think it’s wise,” he said.
HUD did not immediately respond to a request for comment.
According to a spokesperson for Whitmire, the payment will be reconsidered next week. The additional delay will allow for further “legal discussion” involving newly elected city council member Alejandra Salinas, a trial attorney.
“Mayor, I just want to echo — I commend your commitment to public integrity, and I very much appreciate the opportunity to kick the tires on this,” Salinas said.
A public relations firm previously retained by Nerie Construction did not immediately provide comment.
In a previous statement to Houston Public Media, the company argued the city “should pay Nerie Construction immediately for work successfully completed by Nerie and its subcontractors.”
“Nerie Construction understands Mayor Whitmire and Houston City Council’s frustration with recent criminal activity within City of Houston Public Works,” the company stated in August. “We share that frustration and regret that we had a lapse in judgement that allowed us to get caught up in a scheme perpetrated by a City of Houston Public Works employee.”
Court records show the employee, Patrece Lee, pleaded guilty to a felony bribery charge in 2024 and was sentenced to 10 years in prison. The charging documents in her case allege companies owned by Joseph Nerie received more than $8 million in city contracts while paying her more than $77,000.
Nerie Construction disputed details of the charging documents and asserted payments were made in accordance with Internal Revenue Service rules. The company emphasized that its owner pleaded guilty to a misdemeanor charge of offering a gift to a public servant, which will be “purged” from his record after he completes deferred adjudication.
Council member Julian Ramirez, who previously worked as a criminal prosecutor for the Harris County District Attorney’s office, said he will also scrutinize the payment over the next week.
“I look forward during this break to visiting with legal and seeing what HUD says about situations where a vendor engages in bribery and what ramifications that has with the contract,” Ramirez said.