City official allegedly made unlawful payments to indicted HCC trustee

Karun Sreerama was appointed Houston public works director in March. ( Melissa Phillip / Chronicle ) Karun Sreerama was appointed Houston public works director in March. ( Melissa Phillip / Chronicle ) Photo: Melissa Phillip, Houston Chronicle Photo: Melissa Phillip, Houston Chronicle Image 1 of / 3 Caption Close City official allegedly made unlawful payments to indicted HCC trustee 1 / 3 Back to Gallery

Houston Public Works Director Karun Sreerama allegedly made $77,143 in unlawful payments to a Houston Community College trustee who faces up to 10 years in prison after pleading guilty to bribery, according to federal court records.

The alleged payments are related to an extortion charge against 21-year HCC Trustee Chris Oliver that the U.S. attorney has agreed to dismiss in exchange for his guilty plea, court records show, not the bribery charge.

The extortion count lists an individual with the initials "K.S." as a "victim" of "extortion under color of official right" carried out by Oliver between December 2010 and August 2013, meaning Oliver allegedly used his position as a public official to obtain an unlawful payment.

Two sources with knowledge of the case confirmed Sreerama, an engineer who then owned the engineering firm and frequent public contractor ESPA Corp., is the person identified as "K.S."

Sreerama did not address the allegation in a brief phone call Monday evening, saying he needed a chance to read the filing, and has not responded to subsequent calls for comment.

"I don't know what this is," he said. "Let me look at it. I don't even know what to say."

Houston attorney Chip Lewis, who is representing Sreerama, said his client was one of several targets of a "shakedown" by Oliver, and suggested broader fallout from the federal probe is to come.

Lewis said the payments in question were related to projects stemming from the college's 2012 bond election.

"In doing the very diligent work the agents and prosecutors did in this case, they discovered Oliver soliciting and extorting Karun," Lewis said. "When he was approached, he voluntarily met with the authorities and told them everything. Obviously, everything he told them checked out and was corroborated. That's why he was a victim of Mr. Oliver's scheme and not implicated in any criminal wrongdoing."

That Sreerama consented to the payments, as the indictment states, does not mean he was not a victim of extortion, Lewis said.

"Oliver made it very clear if Karun refused to make the payments that are reflected in the indictment he wouldn't get the contracts," he said.

Mayor Sylvester Turner appointed Sreerama in March, putting him atop the city's largest department, which manages all city streets, drainage, water and sewer systems on a $2.1 billion annual budget.

Turner, who is traveling on city business in Europe, declined comment through a spokesman, who said the mayor's office was aware of the situation.

Rusty Hardin, a Houston attorney who represented former HCC chancellor Renee Byas, said his knowledge of the widespread corruption allegations that have swirled around the college led him to conclude that "K.S." could refer only to Sreerama.

Byas sued HCC after she was fired in 2014, alleging she had been wrongfully terminated after the Board of Trustees learned she had told the FBI about potential misuse of bond money and that some trustees had attempted to steer business to friends and political allies.

"Several different board members at different times encouraged her to try to get him (Sreerama) a project because he was always so nice to them," Hardin said.

The count in Oliver's indictment that mentions Sreerama was filed under the Hobbs Act.

Though that statute uses the term "extortion," the U.S. Supreme Court has ruled that, under the Hobbs Act, "extortion by the public official was the rough equivalent of what we would now describe as 'taking a bribe.'"

The public official need not induce the payment by threat, the U.S. Department of Justice website states, because "the coercive element is provided by the public office itself." The Oliver indictment states that the payments were made "with K.S.'s consent."

Philip Hilder, a Houston attorney and former federal prosecutor, said the extortion and bribery charges are similar but distinct.

"In bribery, you have to have a quid pro quo. In other words, the payment is for something particular that the individual is going to deliver on," Hilder said. "In the Hobbs Act violation, you don't need that. You need to be in a position of authority."

Oliver is set to be sentenced in August on the bribery charge, which stemmed from $12,000 in bribes the indictment states he solicited between May 2015 and May 2016.