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WASHINGTON D.C.-Water treatment company Aqua Alliance agreed yesterday to plead guilty to bribing a New Orleans official in return for favorable business treatment, the Justice Department announced. Also yesterday, a federal grand jury in Houston indicted the official, Katherine Maraldo, and four former associates of Professional Services Group (PSG), an Aqua Alliance subsidiary, on fraud, conspiracy and related criminal charges.

The 10-count indictment, returned yesterday in U.S. District Court in Houston, Texas, charges Katherine Maraldo, a former member of the New Orleans Sewerage and Water Board, Michael Stump,William Gottenstrater, H. Grant Simmons, former executives of PSG, and Salvador Anzelmo, an attorney retained by PSG, with one count of conspiracy, four counts of interstate travel in aid of bribery, four counts of mail fraud, and one count of wire fraud.

According to the indictment, beginning in July of 1993, the four PSG defendants conspired to provide legal services and cash payments to then-Board member Maraldo in order to influence and reward Maraldo for supporting PSG's business interests with the New Orleans Sewerage & Water Board. Among the benefits alleged was the payment of over $70,000 in cash to cover her mortgage in a real estate investment. She recommended that the Board renew PSG's contract to operate New Orleans' water system for five years rather than the one year called for in the original contract, thereby potentially locking PSG into the lucrative New Orleans market.

The proposed plea agreement with Aqua Alliance, which will be filed at a later date, contains both parties' recommendation of a $3 million fine and calls for Aqua Alliance's cooperation in the government's ongoing prosecution and investigation of public officials.

If convicted of all charges, each defendant faces a maximum sentence of 50 years in prison.

The investigation leading to this prosecution was conducted by attorneys from the Public Integrity Section of the Criminal Division of the Department of Justice and by the Houston field office of the Federal Bureau of Investigation (FBI). An indictment is merely an accusation. The defendant is presumed innocent until and unless proven guilty.

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