By Dan Christensen, Browardbulldog.org
Gov. Rick Scott
Another political insider – this time a major contributor to Gov. Rick Scott – has cropped up in a $44.8 million-a-year government-business deal to manage mental health services in Broward County.
The Florida Department of Children and Families awarded the multi-year contract in March to Broward Behavioral Health Coalition and its for-profit partner Concordia Behavioral Health of Miami.
Bob Butterworth, the former head of DCF and an ex-Florida Attorney General, orchestrated the deal as president of Broward Behavioral. State officials say they expect to sign a deal by Nov. 1.
Now, BrowardBulldog.org has identified a second insider, this time as a silent partner.
Public records show that on Jan. 25, while DCF’s Broward procurement was pending, Concordia shareholder Miguel B. Fernandez gave $125,000 to Let’s Get to Work, a fundraising organization set up with the governor’s support.
Fernandez, a wealthy Coral Gables healthcare entrepreneur, and a company he controls, MBF Family Investments, together have contributed a total of $625,000 to Let’s Get to Work since September 2010, the records show.
“It sounds like maybe Gov. Scott is running Florida like a business – doing business with his friends,” said Katy Sorenson, head of the Good Government Initiative at the University of Miami.
“It smells, and it’s not the way to encourage public confidence in the process. Even if it’s legal it doesn’t make it right,” she said.
Bob Sharpe, president of the Florida Council for Community Mental Health and a critic of how the contract was awarded, said, “I think we now need to know more. I’m not necessarily going to tie (Fernandez’s) contribution to his participation in the plan…That’s kind of like business as usual.”
KEEP A LID ON IT?
The DCF appears to have tried to keep a lid on Fernandez’s connection to Concordia.
Several hundred pages of public records released by DCF to BrowardBulldog.org about the Broward managing entity procurement make no mention of Fernandez.
And a DCF spokesman said in an interview that while the names of Concordia’s shareholders were disclosed to the department, they were not written down on paper and no one could remember them.
“I spoke to (lead negotiator) Tom Lewis, (Assistant Secretary) Rob Siedlecki – the two key guys – and Secretary (David) Wilkins and to a person none of us knew about Miguel Fernandez’s name or any contributions he may or may not have made,” said spokesman Joe Follick.
Follick added that Gov. Scott did not contact Secretary Wilkins about the contract.
BrowardBulldog.org contacted Concordia chairman and chief executive Carlos Saladrigas this week and asked about the company’s investors. He confirmed that Fernandez, who runs the private equity firm MBF Healthcare Partners, and Martin Perez, co-founder of Miami’s Medica Health Care Plans, are fellow Concordia shareholders.
“They are passive investors and it’s not even in a personal capacity. It’s through some of their funds,” said Saladrigas, reached by phone while traveling in Japan.
FUEL FOR A CONTROVERSY
The disclosure that a major contributor to Gov. Scott’s re-election committee stands to profit from DCF’s Broward contract seems likely to ratchet up controversy about the lucrative deal won by a team whose public face is Butterworth.
Butterworth, a Hollywood resident, has long been a political powerbroker. In Broward, he’s also served as sheriff and judge.
The DCF is privatizing the state’s current job of managing government-funded substance abuse and mental health services for adults and children in Broward. It is a change that is happening across the state.
Shortly after the award, a competitor, the Partnership for Community Health, filed a 22-page bid protest alleging that unidentified state officials had illegally steered the contract to Butterworth’s nonprofit. Likewise, it alleged that Broward Behavioral is a front for its putative subcontractor, Concordia.
DCF administratively rejected the protest and an appeals court tossed out the matter in August because the Partnership did not post a required appeal bond. The underlying accusations were not examined.
Bid documents submitted by Broward Behavioral describe detailed plans to implement “an innovative operating model” intended to save money and improve access to care. The documents also cite Concordia’s role in the new care system and describe the backgrounds of its management team, which includes Saladrigas and his daughter, psychologist Elisa Saladrigas.
The documents offer little detail about Concordia’s owners: “Concordia is well capitalized from private investors to fund its operations.’
But it is the financial muscle of those investors who are making DCF’s contract with Broward Behavioral possible.
BID INITIALLY REJECTED
In January, Broward Behavioral’s original bid was deemed “nonresponsive” because it did not include information the state requires to demonstrate financial stability.
To make up for that, Concordia’s owners offered to provide personal guarantees and/or a letter of credit to the state worth $750,000, according to records obtained by BrowardBulldog.org.
DCF negotiator Lewis endorsed the idea in a Feb. 23 email to Siedlecki and department General Counsel Marion Drew Parker that was not among the documents made public.
“Concordia’s three major shareholders are well known, financially substantial and respected investors with significant expertise in managed health care,” Lewis wrote. I “would intend to sit down and review the financial statements of the three guarantors to be sure the guarantee has substance.”
Lewis does not identify the shareholders in the memo, and apparently never reviewed their financial statements before forgetting their names.
Saladrigas said Monday he expects those guarantees to be signed upon his return to Florida this week.
Fernandez did not respond to a request for comment. Perez declined comment.
INSIDER AND PHILANTHROPIST
Fernandez, whose MBF Healthcare boasts in excess of $500 million in capital to invest in healthcare businesses, is a major philanthropist who has built and sold a number of South Florida businesses and given millions away to charity.
Recipients of his largesse include the University of Miami’s business school, St. Thomas University and Miami Children’s Hospital.
Fernandez is also among South Florida’s most active political donors – mostly to Republican candidates and causes.
Besides the money he sent Gov. Scott’s way, state records show that since 2010 Fernandez has personally contributed $540,000 to the Republican Party of Florida. His MBF Family of companies kicked in thousands more.
The Florida Democratic Party received $25,000 from Fernandez in the same period.
Fernandez is also a strong supporter of Republican Mitt Romney’s presidential bid. He and MFB Family have contributed $1 million to Restore Our Future, a Super PAC supporting Romney.
Another $100,000 spent during the current election cycle went mostly to the Republican National Committee.
Aside from Concordia, Fernandez and Saladrigas are business associates in MBF.
Saladrigas is on a three-person advisory committee at MBF Healthcare Partners that helps Fernandez vet investment opportunities. Both men are on the board of directors of MBF Healthcare Acquisition Corp.
In 2010-2011, another MBF company run by Fernandez and incorporated only in Delaware, was registered as the owner of short-lived Concordia Healthcare Ventures.
CHV was voluntarily dissolved on Aug. 19, 2011 – two months before the October public announcement of the Broward managing entity procurement.
Four days later, on Aug. 23, another ownership group – Concordia Healthcare Limited Partnership – was formed. Its general partner was another company, Concordia Healthcare Management.
Concordia Healthcare Management lists a single officer and director, Carlos Saladrigas.
Miguel Fernandez’s name is nowhere to be found.
By Lois Beckett, ProPublica
If you’re a registered voter and surf the web, one of the sites you visit has almost certainly placed a tiny piece of data on your computer flagging your political preferences. That piece of data, called a cookie, marks you as a Democrat or Republican, when you last voted, and what contributions you’ve made. It also can include factors like your estimated income, what you do for a living, and what you’ve bought at the local mall. (more…)
By William Gjebre, BrowardBulldog.org
A short-lived, perk-laden retirement plan has paid off big for some top Hallandale Beach officials who helped set it up a decade ago – but today it’s costing city taxpayers extra millions of dollars.
Approved and implemented by the city commission in October 2001, the plan’s key provision granted those ranking city officials retroactive credit for prior years of service – even if they were in another retirement plan.
The Professional Management Retirement Plan also boosted pensions for top city bureaucrats in other costly ways. For example, the plan was calculated to equate the sedentary desk jobs of department heads and their assistants to the “high risk” street duties of city police and firefighters.
City commissioners were also eligible for the plan, but because their pay was so low, and their length of service varied, the financial impact was minimal.
Three former city managers who played key roles in developing the retirement plan or subsequent add-on benefits are now collecting pensions that are at or near their highest annual salaries when they were active city employees.
Ex-city manager Mike Good was fired in 2010 after eight years due to his chronic work absences and for other reasons. Today, at age 51, Good receives a monthly pension of $17,522, or more than $210,000 a year. His highest regular salary was $212,000.
But a higher monthly pension isn’t the only way that Good and his fellow city managers have benefitted from the management retirement plan.
Good, who started working for the city as a welder in the 1980s, cashed out $786,000 from his city DROP (Deferred Retirement Option Plan) savings account a few months before he departed. The account, established under the retirement plan, was funded largely by the city.
Good also received another $146,000 in accrued sick leave, vacation time and other benefits when he left.
The city commission closed the retirement plan, including the DROP program, to new employees in 2007 citing exorbitant costs. City records indicate that about 70 employees, active and inactive, are eligible to receive benefits under the plan that initially required employees contribute five percent of their salary, but was later hiked to seven percent.
“It’s outrageous: fat, oversized pensions,” said Csaba Kulin, a community activist and city commission candidate. “This was mismanagement…employees should not have gotten credit for past years of service. They should have begun accumulating benefits when the plan went into effect. It’s undue compensation.”
The pension disclosures come as the Broward Inspector General’s Office continues its investigation into suspected mismanagement and fraud involving city loans to local businesses and questionable land purchases by the city’s commission-run Community Redevelopment Agency.
PAYOUTS JACKED UP
Payouts to top city workers were further jacked up by management plan provisions that reduced the full retirement age from 60 to 52 with 25 years of service, inserted regular cost of living increases, and allowed workers to purchase additional years of service for time they didn’t actually work.
Some top employees also received two pensions because they were allowed to keep 10-17% of gross salary contributions by the city in the previous retirement plan.
Some details of the Professional Management Retirement Plan are unclear. BrowardBulldog.org asked the city clerk’s office to provide commission minutes and documents regarding the authorization of retroactive service credit for employees prior to October 2001, but was told those records are “not available.”
Mark Antonio, 56, is a former city finance director who succeeded Good as city manager in 2010 and retired at the end of June. In 2001, he explained aspects of the retirement plan to commissioners before it was approved. He now receives a monthly pension of $10,645, or $127,800 annually. City records state that his highest base city salary was $165,000.
Like Good, Antonio accumulated a considerable city-funded nest egg in his DROP account: $744,637 by July 31, 2012, according to city records. City officials said he was also due about another $100,000 for unused sick and vacation days and other earned benefits.
Ex-City Manager Mike Good
Randolph J. “R.J.” Intindola, under whose administration the retirement plan was adopted, retired as city manager in 2002. He receives a monthly pension of $9,308, or $111,700 annually. His highest base city salary was $118,664.
Intindola, now 61, retired a year after the plan was implemented citing health concerns. At the time, the plan did not allow him to have a DROP account. He did receive a payment of $139,000 for accrued sick, vacation and other benefits, according to city documents.
Two city commissioners who backed the plan in 2001 now wish they hadn’t.
“My thinking today is ‘no,’ ” said Commissioner Dorothy Ross. “We can’t go back to that time.”
William Julian, who left the commission but is now running again, said he had “no experience with pensions” when the matter was brought up years ago by City Manager Intindola and staff. He said they told him the plan was “normal” for top city officials.
“Looking back, we should never have offered the plan,” said Julian, especially the granting of credit for past years of service. “I was new,” Julian said. “It sounded logical and we took staff at their word, but I wouldn’t take it now.”
The cost of the plan is in the millions, said Julian. He added that cost includes the $900-a-month he began to receive last year. He was credited for service on the commission from 2001 until 2010 when he was not reelected.
Mayor Joy Cooper, who has been on the commission since 1999, was the lone vote against the plan back in 2001. “I did not feel comfortable,” she said.
She said she also now opposes the idea of equating top management jobs to those of police and firefighters – something she voted to approve in 2003.
“Police and firefighters are in a different category,” Cooper said. “They put their lives on the line.”
EX-CITY MANAGERS LIKE THE PLAN
Each of the three former city managers defended the management retirement plan, though only Intindola acknowledged that it has elevated costs to taxpayers by millions of dollars.
“Absolutely, it was okay,” said Antonio, who got retroactive credit for the 14.25 years he worked for the city before the plan went into effect in 2001. He also purchased an additional five years of service credit at a cost of 8% of salary for each year purchased.
Without credit for those 14.25 years, Antonio’s pension would be about 57% lower. Without those years and the extra years he purchased, his pension would be approximately 77% lower.
Antonio said commissioners implemented the management retirement plan to address a lack of fairness regarding pensions for top managers. At the time, the city was contributing 10 to 17 percent of gross salary to their 401a retirement accounts.
Intindola agreed. “It was a good thing,” he said. “We had to improve the [existing] plan; we had a high turnover.”
Intindola began working for the city in February 1982. He received nearly 20 years of retroactive credit under the management retirement plan, and also bought another four years of service.
Without those nearly 24 years of credit, Intindola’s pension would be about 96 percent lower.
HOW MUCH DOES IT COST?
The 2001 switch to the management retirement plan was not supposed to be costly, Intindola said. The amount the city was then paying in benefits was expected to cover most of the new plan.
But changes made after he left, including the addition of a cost of living adjustment (COLA), and a guaranteed 8 percent annual increase to DROP accounts, proved to be “a killer” – driving up annual pension costs by $2 million, Intindola said.
Radu Dodea, a Hallandale personnel official who administers the management pension plan, said he has no estimate as to how much the city will have to pay management plan participants over their lifetimes.
But city activist and commission candidate Kulin said those cost estimates are exorbitant. He estimated the long-term cost to city taxpayers for the years of service and other benefits total about $10 million.
A city financial report from 2002 obtained by BrowardBulldog.org stated those payouts could amount to nearly $9 million. The report said the initial estimate for unfunded costs, including covering past years of service for employees, was approximately $1.7 million.
The change that Intindola said caused the city’s costs to spike occurred while Good was city manager.
Good, unlike the other ex-city managers, said he did not receive retroactive credit for years of service because he had been in the General Employees Pension Plan since the day he started in March 1985. He switched to the management plan for its superior benefits when it was approved in 2001 and transferred money he and the city previously contributed. By then he was director of Public Works.
It was also under Good in 2007 that the management plan was finally shutdown for new employees.
“The economy went kaput and defined pension plan costs were rising and they wanted to cut costs,” city Human Resources director George Amiraian said.
By Fred Schulte, The Center for Public Integrity
Dr. Farzad Motashari
The nation’s top health information technology official has launched an internal review to determine if electronic health records are prompting some doctors and hospitals to overbill Medicare.
Dr. Farzad Mostashari, the Obama administration’s National Coordinator for Health Information Technology, said in an interview Monday afternoon that his policy-setting committee of experts would examine the issue and make recommendations on how to address it. (more…)
By Buddy Nevins, BrowardBulldog.org
Coral Glades High School
Three years before cheerleading coach Melissa Prochilo was fired for ignoring bullying in her program at a Parkland high school, faculty members and parents at a nearby Coral Springs high school where she used to work leveled the same complaint against her.
And just like at Parkland’s Stoneman Douglas High School, the principal and his staff at Coral Glades High were accused of doing nothing.
Coral Glades Principal Michael Ramirez “overlooked all of the complaints” against Prochilo in 2009, according to an October 2 letter sent to Broward School Board members by one of Prochilo’s former co-workers and obtained by Browardbulldog.org.
The School Board fired Prochilo, the head cheerleading coach at Stoneman Douglas, earlier this month. She continues to work at the school as a substitute teacher.
The author of the letter is Carmela Ferreira, a former cheerleading coach with Prochilo at Coral Glades. She stated that she wrote to support Prochilo’s firing “100 percent.”
Her story from 2009 is almost identical to what got Prochilo in hot water at Stoneman Douglas, where parents complained that school staff did nothing about their 2011 complaints.
Ferreira’s letter says that shortly after Prochilo arrived at Coral Glades “many parent complaints started to arise…the JV (junior varsity) coach at the time also had many complaints.” The allegations included “many valid complaints such as bullying being allowed at practice, varsity girls making fun of JV girls, girls quitting because of the constant bullying.”
“Rules were not being followed properly; girls had to run their own practice because she (Prochilo) was not showing up to them. I recall having to bench a Varsity girl because she was making fun of the entire JV team at practice in front of both teams. Melissa did not agree with the benching because she liked the girl and her mother,” the letter stated.
Ferreira’s letter was similar to one received by Browardbulldog.org earlier this year after it first reported about problems in the Stoneman Douglas cheerleading program. That e-mail, whose author did not want to be publicly named, stated:
“You may want to investigate when this coach Melissa Prochilo was at Coral Glades. The same accusations were presented to the principal Ramirez and the school board. It was all pushed under the rug. We had girls that were bullied so bad they quit the team…”
The email is bolstered by a second email sent by another Coral Glades staff member, who asked not to be named, and others to Principal Ramirez on Oct. 27, 2009 when the incidents at the school were occurring.
That e-mail contains 40 different complaints against Prochilo, compiled from parents and staff. They include:
· Prochilo “allowed a girl to stunt with glasses—then injury occurred.”
· “Shows favoritism—and at this level it causes nothing more than animosity amongst girls and bullying.”
· “Practice out of control – JV and Varsity fighting, parents complaining.”
· “Girls allowed to curse and disrupt practices.”
· “Other coach witness their practice and its just crazy…way out of control with everything (playing around, language, laziness, etc).”
Ferreira told the School Board that Principal Ramirez simply brushed off the complaints “because he really did not want to deal with it.”
Ramirez was later promoted and today serves as one of the School Board’s 11 directors of School Performance and Accountability.
Ramirez and Porchilo did not respond to requests for comment.
Porchilo was fired after a parade of tearful moms who complained to the School Board that their daughters were being bullied in cheerleading and that neither Prochilo nor the school administration did anything to stop it. The mothers also accused Porchilo’s program of widespread violations of School Board policies, including requiring parents to pay more than a thousand dollars to participate.
Porchilo had her supporters. Before the Board meeting, fliers were circulated in the community calling the coach “fair, knowledgeable and kindhearted.” And during the meeting, cheerleaders dressed in the Stoneman Douglas school colors of burgundy and black, chanted outside the meeting room, “L-O-V-E. We love Coach Melissa, can’t you see.”
“It’s sad what’s being presented about this coach,” Cindy Beach, former vice president of the cheerleading booster club, told The Miami Herald. “I’ve never seen her yell at a kid.”
The Board, however, decided to follow Superintendent Robert Runcie’s recommendation and not have Porchilo continue cheerleading at the school.
“It’s a travesty,” Prochilo told the Sun-Sentinel. “I love all these children. I’m really disappointed for the girls.”
Prochilo also had supporters at Coral Glades who fought back with her, according to former cheerleading coach Ferreria’s letter earlier this month to the Board.
“It got very ugly and I decided to resign as the stress was not worth the fight and I could no longer support a coach that refused to follow the rules that had been in place for years,” Ferreria wrote.
By Rachael Marcus, The Center for Public Integrity
Since Labor Day, the once-unofficial start of the election season, 70 percent of outside spending on the presidential race made possible by the Citizens United Supreme Court decision has benefited Mitt Romney, according to a Center for Public Integrity analysis.
More than $106 million of the $117 million spent on the Obama-Romney matchup since Sept. 3 has been on negative ads, with President Barack Obama absorbing more than $80 million in attacks, according to the analysis of Federal Election Commission data. (more…)
UPDATE: Nov. 19 — The South Florida Water Management District last week approved a settlement with Hollywood’s Morrison Pump that it hopes will end a dispute that dragged on for five years without reaching court. In 2006, Morrison Pump sold the district 15 large pumps that cost $1.5 million. The pumps quickly failed and Morrison refused to honor its warranty, claiming the pumps were misused. Morrison now has agreed to fix the pumps, and provide an 18 month warranty. “In addition, district staff has recommended that Morrison be suspended from contracting with the district for three years” regarding the sale of the same kind of pumps.
By Dan Christensen, BrowardBulldog.org
A flood control structure on Lake Okeechobee where pumps failed
Five years ago, the South Florida Water Management District took a $1.5 million bath when a Hollywood company sold it 15 large electric pumps that quickly failed, then refused to honor its warranty.
Now, the top lawyer for the budget-challenged independent taxing district is recommending it sue the Hollywood company that manufactured the pumps.
“If the district does not pursue this lawsuit, it will risk not being compensated for the damages it sustained,” the district’s nine-member governing board was told in a memo by General Counsel Carolyn Ansay.
The recommendation follows more than a year of failed negotiations with representatives of Hollywood’s Morrison Pump Company.
The talks began after Broward Bulldog reported last year how the Water District had been stuck with the faulty pumps, yet had done little to recover its money or enforce a threat to suspend Morrison as a vendor for failing to honor its five-year pump warranty.
It purchased replacement pumps from a different supplier for an additional $1.85 million.
Rather than go after Morrison, the district later allowed it to supply $2 million in additional pumps as a subcontractor for a pump station off U.S. 27 being built as part of the enormous Everglades restoration project.
The company’s Coral Gables lawyer, former Water District Chairman Nicolas Gutierrez, could not be reached for comment. He is serving a one-year suspension from the Florida Bar for falsifying and fabricating evidence in an unrelated civil case.
Morrison spokesman and sales manager Michael Murazzi did not respond to a request for comment.
Previously, Murazzi said district officials had sought to wrongly blame Morrison for their own mistakes. “Whatever their internal problems were, we were the fall guy,” he said.
The South Florida Water Management District is a regional agency with an unelected board that oversees water resources in 16 counties from Orlando the Florida Keys, including Broward. It’s 2013 fiscal year budget is $567.3 million – about 40 percent of which is generated by property tax dollars.
The district purchased 15 of Morrison’s 42-inch horizontal axial flow submersible pumps. They were needed to draw water from Lake Okeechobee in case of a drought. The pumps quickly failed. Ansay’s memo says the Water District retained experts to determine why.
“These experts concluded that the design of the pumps was the cause of the failure,” the memo says.
In contrast, Morrison previously declined warranty coverage claiming the pumps were misused. For months, a district spokesman had said a settlement with Morrison was near. What happened to derail it was not disclosed.
The memo says the district’s in-house lawyers will handle any litigation against Morrison using “budgeted” property tax revenues.
The board is expected to decide Thursday whether to authorize a lawsuit.
By Dan Christensen, BrowardBulldog.org
Ex-Department of Children and Families Secretary Bob Butterworth lobbied heavily this year to convince his former agency to award his nonprofit company – and its for profit partner – a $44 million-a-year state management contract.
Butterworth, however, is not registered in Tallahassee to lobby state officials.
The Broward Behavioral Health Coalition, Butterworth’s group, won the competition in March to become Broward’s new “managing entity for substance abuse and mental health services.”
Today, after months of delay caused by an unsuccessful bid protest, Butterworth is negotiating final contract terms with DCF. A signed deal is expected by Nov. 1.
As president of Broward Behavioral, Butterworth led the company’s campaign to secure the lucrative, multi-year contract. Their bid was chosen over one made by Partnership for Community Health, a group of established Broward healthcare providers.
State procurement records obtained by BrowardBulldog.org show Butterworth assembled, signed and submitted a lengthy bid proposal on behalf of Broward Behavioral and its partner, Miami-based Concordia Behavioral Health.
Butterworth, a former Florida Attorney General and Broward County Sheriff, later participated in pre-award negotiations that included direct correspondence with DCF’s lead negotiator in which Butterworth advocated the merits of “BBHC/Concordia team’s” cost savings proposal.
HOLE IN THE LAW
One state ethics expert said Democrat Butterworth – also a former judge and prosecutor – may have taken advantage of holes in the lobbyist law.
“It’s like Swiss Cheese,” said Philip Claypool, the retired executive director and general counsel for the Florida ethics commission.
Florida law broadly defines lobbying as “seeking, on behalf of another person, to influence an agency with respect to a decision of the agency in the area of policy or procurement.”
But its definition of lobbyist is narrower, turning on questions of a person’s employment, pay and job description.
“I think there is an argument on both sides,” said Claypool. “The question would have to be determined by knowing who paid whom, for what, and when, as well as what communications were made, when and under what circumstances.”
The Florida ethics commission can investigate alleged failures to register or to submit a required compensation report. It does not initiate probes, but responds to sworn complaints.
Violators may be reprimanded, censured or prohibited from lobbying for up to two years. They can also be fined up to $5,000.
Butterworth declined several requests to discuss his push to obtain the DCF contract and explain why he is not registered to lobby executive branch agencies.
Butterworth, who also serves as Broward Behavioral’s chairman, told Sun-Sentinelcolumnist Michael Mayo in June that Concordia – owned by Miami businessman Carlos Saladrigas – was paying him as both a lawyer and a lobbyist.
That potentially conflicting relationship is not disclosed in Broward Behavioral’s proposal submitted to DCF, an agency that he ran from January 2007 to August 2008.
Butterworth’s financial arrangement with Broward Behavioral also is not discussed in the proposal documents. Company bylaws allow officers to be paid “reasonable compensation for their services.”
Nova Southeastern University law and legal ethics professor Robert Jarvis said Butterworth should have registered.
“We say we take seriously government in the sunshine. So having to register as a lobbyist is just part and parcel of that effort to make government as transparent as possible,” Jarvis said.
Carla Miller, a former federal prosecutor who now heads Jacksonville’s ethics office, said Florida’s lax lobbying requirements have allowed many to skate through without registering, including presidents of companies.
“There is an appearance that we are doing something to protect citizens when we aren’t, and that’s the bottom line,” said Miller, who founded CityEthics.org a dozen years ago to promote ethics in government. “Bob Butterworth has probably figured out the lobbying law. “
The idea of using managing entities to privatize oversight of state substance abuse and mental health services was a DCF initiative under Butterworth, according to department documents.
The idea: to save millions of dollars in expenses that can be redirected to improving care in a state where such government-funded services have long lagged the rest of the nation.
In 2007, DCF held a public meeting to hear comment on “the role and functions of a managing entity” in advance of a planned procurement in southeast Florida, records say.
Last fall, DCF Secretary David Wilkins announced an “intent to negotiate” for the job of managing entity for Broward.
DCF Secretary David Wilkins
He said he expected “a significant number” of qualified nonprofits to submit sealed bids.
But there were only two bidders: Broward Behavioral and the Partnership for Community Health.
The Partnership was ranked higher by six of the state’s eight evaluators. It also had the highest score.
Broward Behavioral was deemed to be “nonresponsive” because it did not include required paperwork to demonstrate its financial stability.
Nevertheless, as DCF’s general counsel Marion Drew Parker has put it, a “wrinkle” in the competitive process allowed DCF to scrap the idea of sealed bids.
Negotiations started over, now with just a single DCF employee – instead of a committee – charged with recommending a winner, and Broward Behavioral came out on top.
The deal was delayed when the Partnership filed a 22-page bid protest alleging, among other things, that the contract award was illegally steered to Butterworth’s group.
DCF quickly denied the protest. The Partnership sued, but an appeals panel dismissed the case in August because it had neglected to post a required protest bond
The underlying corruption allegations were not addressed. A DCF spokesman has denied any impropriety.
Broward Bulldog reported last week that DCF awarded the contract to Butterworth’s group without required rules in place to promote public scrutiny.
By Theordoric Meyer ProPublica
With the documents MittRomney released recently, we know a bit more about his taxes.
We know, for instance, that Romney paid a rate of 14.1 percent on $13.7 million in income on his 2011 tax return, which he achieved by purposely overpaying. Though he was entitled to deduct $4 million in charitable contributions, Romney deducted only $2.25 million to keep his tax rate above 13 percent. (more…)
By Dan Christensen, BrowardBulldog.org
Mitt Romney with Tiffany and James Catledge at 2010 fundraiser for California's Meg Whitman
Two figures at the center of an alleged $164 million real estate scam marketed out of South Florida have been indicted by a federal grand jury in San Francisco on mail fraud and conspiracy charges.
James B. Catledge, an investment guru and major Republican Party donor, and Canadian businessman Derek F.C. Elliott, are accused of fraudulently soliciting $91.3 million from investors to build a resort in the Dominican Republic that never opened.
Each man faces up to 20 years in prison, and a maximum fine that is twice the value of the property involved.
The six-page indictment announced Friday is a bare-bones document that, despite the enormous sums involved, provides few details about the scope of the alleged fraud, how many people were burned or the identities of victims.
The indictment grew out of an FBI investigation that began 2½ years ago during a civil racketeering lawsuit in Miami federal court filed by 230 disgruntled investors in the ill-fated EMI Sun Village Resort and Spa.
Broward Bulldog.org reported in January 2010 that court-appointed special master Thomas Scott, a Miami lawyer and former federal judge and U.S. Attorney, had found evidence that Sun Village was actually a huge “Ponzi-style” scheme. He recommended that U.S and Canadian law enforcement investigate.
“The unassailable fact (is) that thousands of investors/owners and by extension their families in the U.S. and Canada, as well as other countries, have been financially destroyed,” Scott wrote in his 50-page report.
According to the indictment, Elliott was the president of various hospitality businesses in the Dominican Republic, including a pair of resorts. Catledge is a motivational speaker and the founder of several marketing companies that, among other things, sold investments in island resorts.
In 2005, the pair took out a 2005 bank loan to buy an old hotel near Santo Domingo they named the Sun Village Juan Dolio resort. They began renovations and recruited investors through Catledge’s Nevada-based sales and marketing companies Impact Inc. and Net Worth Solutions.
James Catledge with President George W. Bush at 2008 fundraiser at Mitt Romney's home in Deer Valley, Utah
Sun Village marketed its Dominican properties out of an office in Doral in western Miami-Dade County. Money that flowed in was routed through an account at a Citibank branch in Tamarac, the Miami lawsuit said.
According to a statement released by prosecutors, Catledge and Elliott’s sales pitch “failed to tell investors that the full commissions being taken on their investment were approximately 44 percent, that the renovations were underfunded, that investors’ money was being used on other projects, and the returns they promised were unsupportable and could not be achieved.
The Miami special master’s report described Catledge as “the main architect of the Ponzi scheme.”
Catledge and Elliott diverted nearly $69 million from investors to commissions, other projects and to pay “guaranteed” interest to early investors, the indictment said.
‘REAL ESTATE SECRETS OF THE WEALTHY’
More details are contained in related, but non-criminal charges brought in May by the Securities and Exchange Commission against Catledge and Elliott. The principal allegation is that the men were involved in the fraudulent offering of unregistered investments for Juan Dolio and another Sun Village resort, Cofresi.
The SEC’s complaint contends the two men raised nearly $164 million selling timeshares and other ownership interests to approximately 1,200 investors between 2004 and 2009. The complaint also stated the pair promised investors 5 to 12 percent annual returns, while also assuring that principal investments remained safe.
Catledge and Elliott used various sales materials to convince people to use their home equity and savings to invest in securities tied to the resorts, the SEC complaint said. One visual presentation was titled, “Real Estate Secrets of the Wealthy.”
Neither the indictment nor the SEC complaint details what happened to the millions that Catledge and Elliott allegedly siphoned away from investors.
The SEC, however, said Catledge set up a trust in the South Pacific’s Cook Islands where he funneled more than $15 million in commissions that bypassed his marketing company. He and his families were the only beneficiaries.
Court papers filed in the now-closed investor litigation in Miami say the money went to pay for the lavish lifestyle and gambling debts of the resorts’ developers.
The SEC complaint says that Elliott and his father, former Sunrise resident Frederick Elliott, originally purchased the Cofresi resort in 2003 and a year later needed additional funds to finish construction work. A mutual friend suggested they talk to Catledge, who could help them raise the capital they needed.
Net Worth sales associates soon began soliciting potential investors.
Both Juan Dolio and Cofresi were ultimately foreclosed. Investors were wiped out when both projects were sold at public auction in late 2009.
The Miami special master’s report blamed Elliott and his father for “mismanagement and/or essential theft of investor monies” that ultimately delivered “the fatal blows to the investors.”
Still, prosecutors or SEC attorneys have not accused Frederick Elliott of any wrongdoing.
James Catledge and Sen. Orrin Hatch, R-Utah
The SEC’s complaint seeks disgorgement of all of Catledge and Derek Elliott’s allegedly ill-gotten gains. Also sought: fines and permanent injunctions against them and EMI Sun Village.
BIG POLITICAL DONOR
In 2008, while authorities contend the scam was in operation, Catledge contributed more than $100,000 to the Republican National Committee, John McCain’s presidential campaign and other Republican causes.
Catledge and his wife, Tiffany, also contributed to Mitt Romney’s 2008 presidential campaign before he dropped out of the race.
On May 28, 2008, Catledge and his wife attended what the Deseret News in Salt Lake City reported was a $70,000-a-couple dinner with President George W. Bush at Mitt and Ann Romney’s vacation home in Deer Valley, Utah.
In April 2010, the Catledges attended a California fundraiser for Republican gubernatorial candidate Meg Whitman. California records show Catledge gave $30,000 to Whitman’s unsuccessful bid.
Catledge has reported no contributions to federal candidates this election cycle.
Catledge’s attorney, Las Vegas celebrity lawyer David Chesnoff, was unavailable for comment. He previously said his client maintains his innocence.
“He categorically denies engaging in any criminal conduct,” Chesnoff said.
Despite last week’s indictment, neither Catledge nor Elliott have been arrested.
Catledge, 45, who lives in Rancho Santa Fe, California, received a summons and is due for arraignment Oct 5., according to the U.S. Attorney’s Office in San Francisco.
No court date has been scheduled for Elliot, 42, who lives near Toronto. The spokesman declined comment when asked if prosecutors consider Elliott a fugitive.
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