A No-Bid Contract to Watch

Today, we made publicly available a letter we sent yesterday to the Acting Commissioner of a little-known agency called the US section of the International Boundary and Water Commission (USIBWC) (The USIBWC is a semi-autonomous agency in the State Department and has a Mexican government counterpart). This letter raises concerns about an up to $600 million, no-bid contract awarded by the USIBWC to the Bajagua Project LLC, a small San Diego area company owned by investors who are hoping to turn a profit off of treating Mexican wastewater. The company, Bajagua, has friends in Congress who have helped make the deal happen through legislation and other sources of pressure to the USIBWC.

For example, Representative Bob Filner (D-CA) who tailored part of Public Law 106-457 to mirror Bajagua's proposal for an international wastewater treatment plant, wrote in a letter dated January 10, 2001 to the USIBWC (pdf):

Congress was briefed on, and supportive of, the Bajagua proposal at the highest levels. Congress intentionally exempted the owners of the proposed “Mexican facility” from federal procurement law anticipating that Aqua Clara, LLC would be the owner of that facility, Mr. Oberstar writes.

(Bajagua is a subsidiary of Aqua Clara LLC. Oberstar is Congressman James Oberstar (D-MN), the Ranking Democratic Member of the House of Representatives Transportation and Infrastructure Committee.)

Later Filner and former Representative Brian Bilbray (R-CA) wrote a letter to the USIBWC dated December 4, 2000 (pdf) telling them to view Mexican procurement laws as "not relevant."

The Mexican facility is not a public project in Mexico. Therefore, public contracting law in Mexico is not relevant. USIBWC has no responsibility to investigate public contracting law in Mexico with the Mexican section of the IBWC regarding contract issues. USIWBC should focus on Treaty issues. It is the responsibility of the owner of the Mexican facility to develop the project in Mexico, and therefore, comply with Mexican law with regard to its project.

But as we reveal in a letter dated July 28, 2005 from the Mexican government (pdf), the Mexican government felt that it was being left out of the process, even though the project was to be built in Mexico. This letter is also labeled "sensitive but unclassified" by the USIBWC, despite the fact that the author writes that Mexico's "points [were] made known to the public."

Bajagua's principals (and at least one principal's wife) gave thousands of dollars to Filner, Rep. Duncan Hunter (R-CA) and other political campaigns. But there's more to this story, stay tuned.