Houston City Council is set to vote Wednesday, January 21, on whether to approve a $403,000 payment to a construction company tied to a major public corruption case involving the city’s water department.
City records show the payment request comes from Nerie Construction, a Houston-area firm whose owner, Joseph Nerie, admitted involvement in a bribery scheme connected to former Houston Public Works officials. The money would cover work completed on a city water project before Nerie was indicted.
The contracts tied to the work carried a potential value of up to $8 million. Investigators later determined that Nerie paid $77,000 to former Houston Water Maintenance Manager Patrece Lee after she helped steer repair contracts toward his company, according to court records.
Nerie pleaded guilty in the case and received deferred adjudication, allowing him to avoid a final conviction if court-ordered conditions are met.
City Council delayed action on the final invoice last August. During that meeting, Mayor John Whitmire told council members that the project used federal Housing and Urban Development funds and warned that refusing payment could trigger federal penalties.
Whitmire said HUD could seek reimbursement of up to $9 million if the city fails to pay for work city staff have already determined was completed.
The vote has revived attention on the broader corruption investigation inside Houston Public Works. The case grew out of KPRC 2’s “DRAINED” investigation, which uncovered widespread issues with water billing, meter accuracy, and contract oversight within the department.
That investigation led to criminal and administrative reviews and resulted in seven arrests, including contractors and city employees.
At the center of the case was Patrece Lee, who oversaw water maintenance operations. Prosecutors accused her of abusing her position to exchange contract influence for money. She pleaded guilty in 2024 and received a 10-year prison sentence.
City leaders have since discussed reforms to procurement, auditing, and oversight practices. Still, the pending payment has raised new questions about how Houston handles contracts linked to criminal cases.
Council members will decide whether legal obligations tied to the HUD-funded project require payment, or whether the city should reject the request and risk federal financial consequences. No council member has publicly disclosed how they plan to vote.