Rick Scott and allegations of corporate spying and theft by a company he helped oversee

By Dan Christensen, BrowardBulldog.org 

Rick Scott celebrates his Republican primary victory over Bill McCollum at the Hilton Fort Lauderdale Marina on Aug. 24, 2010. One month earlier, Envestnet, a company where Scott was an investor and board member, settled civil charges of corporate espionage and theft.

Rick Scott celebrates his Republican primary victory over Bill McCollum at the Hilton Fort Lauderdale Marina on Aug. 24, 2010. One month earlier, Envestnet, a company where Scott was an investor and board member, settled civil charges of corporate espionage and theft.

Most Floridians know that before Rick Scott was governor he headed a hospital chain that paid an unprecedented $1.7 billion to resolve criminal and civil charges of Medicare and other healthcare fraud.

Much less known is the story of Scott’s involvement as an investor, director and paid consultant at another company that settled civil claims of corporate spying and theft a month before Scott’s 2010 victory in the Republican gubernatorial primary propelled him toward the governor’s mansion.

The company is Envestnet, a Chicago based firm that sells financial software to clients like giant Fidelity Investments.

Scott and his aides did not respond to written requests to discuss the governor’s involvement with Envestnet, or the 2009 federal breach of contract lawsuit brought against it by a Denver, Colorado company called Fetter Logic.

Records, however, show that Scott began investing in Envestnet at its inception as a privately held company 14 years ago. He served on Envestnet’s board of directors from 2001 until March 2010. In 2009, Scott was on the board’s compensation committee.

On his 2010 financial disclosure form, Scott valued his Envestnet shares at $2.1 million. That didn’t include his beneficial interest in another $1.2 million in Envestnet shares acquired by First Lady Ann Scott’s revocable trust between 2001 and 2008. Florida law does not require state office holders to declare assets owned by a spouse.

The disclosure form, filed six months after Gov. Scott took office, also says that Envestnet paid Scott $10,100 that year for unspecified consulting work.

A 2008 DEAL GONE BAD

The litigation, including a countersuit filed by Envestnet against Fetter Logic, arose out of a December 2008 deal in which the two companies had agreed to work together to integrate their separate software applications and to develop and sell joint data management products to brokers and investment advisors.

Envestnet invested $5.7 million in the much smaller Fetter Logic as part of the agreement.

But the deal quickly soured, and in November 2009 the companies sued each other in federal courts in Denver and Chicago for breaching their agreement. Fetter Logic did not accuse Scott, or any individual Envestnet board member, of wrongdoing or name them as defendants.

Envestnet, with reported total revenues of $77.9 million in 2009, claimed the much smaller Fetter had failed to disclose serious financial problems that would have kept it from investing in Fetter. In opposing court papers, Fetter said that instead of working with it, Envestnet planted an executive in Fetter’s office who proceeded to steal Fetter’s copyrighted software and “trade secrets” and handed them over to Envestnet.

“Envestnet used its position of trust to raid Fetter Logic and to steal Fetter Logic’s proprietary business information and intellectual property,” says the company’s amended complaint. “Once Envestnet had what it need from Fetter Logic, it severed all ties.”

“The result…was catastrophic for Fetter,” Chief Executive David Fetter said in court papers.

Envestnet officials celebrate the company's IPO at the New York Stock Exchange, July 29, 2010.

Envestnet officials celebrate the company’s IPO at the New York Stock Exchange, July 29, 2010.

Despite the seriousness of the allegations, the case settled quickly. It came in July 2010 as Envestnet was poised to conduct an initial public stock offering, and by now former Envestnet board member Rick Scott was locked in a tight primary campaign against Florida Attorney General Bill McCollum.

Envestnet went public July 29, selling 7 million shares at an initial offering price of $9 a share. Scott defeated McCollum on Aug. 24th.

ENVESTNET WALKS AWAY FROM $5.7 MILLION FETTER LOGIC STAKE 

The settlement agreement was not made public. But Envestnet’s 2011 annual report filed with the U.S. Securities and Exchange Commission states that the settlement caused it to relinquish its $5.7 million ownership interest in Fetter.

In an interview Monday, David Fetter confirmed that his company kept Envestnet’s $5.7 million investment as part of the settlement deal. He also said he did not know what role, if any, Scott may have played in Envestnet’s actions.

“I think he was involved in approving the agreement, but I don’t have any specific knowledge of his participation,” said Fetter, adding that he only now was learning that former Envestnet board member Richard L. Scott was in fact Florida Gov. Rick Scott. “I didn’t meet him.”

Gov. Scott stopped publicly disclosing information about his stake in Envestnet after April 30, 2011, the day he placed all financial assets in his name or the name of his revocable trust in the newly created Richard L. Scott Blind Trust. He valued his approximately 123,700 Envestnet shares at $1,639,233 – a reported $500,000 decline in value from just four months earlier, Dec. 31, 2010.

Scott later became the beneficiary of a new state statute, which he signed into law in May 2013, that gave him other public officials who place their assets in a “qualified” blind trust immunity from prohibited conflicts of interest.

The law was intended to eliminate conflicts in his official duties by “blinding” public officers like the governor, and the public, to the nature of their holdings. But as BrowardBulldog.org reported last March, the law has been ineffective in preventing public disclosure of Scott’s investments.

Scott raised the curtain on his stock holdings again briefly in June of this year when he dissolved his blind trust and filed “full and public disclosure” of his financial interests to ensure that he qualified to run for re-election. Florida’s Constitution requires such disclosure of candidates for public office.

The governor then opened a new blind trust to hold his assets.

At the same time, Scott released his joint income tax returns for 2010-2012. Last week, following a six-month extension to file, he made public his joint 2013 return.

SCOTTS BEGIN UNLOADING ENVESTNET STOCK

The tax returns show the Scotts began unloading their Envestnet stock in 2011. Mrs. Scott’s trust – the Frances Annette Scott Revocable Trust – reported collecting $1.2 million by disposing of nearly 97,000 shares in 21 transactions between May and December of that year. The trust acquired those shares between 2001 and 2008. The total gain was $480,000.

The couple’s 2012 tax return showed an even better rate of return for shares held in the governor’s name. In 35 transactions between January and May, Scott sold more than 127,000 shares for nearly $1.6 million – a reported gain of more than $900,000. Scott acquired those shares between May 2000 and February 2010.

The Scotts’ 2013 tax return does not report any transactions involving Envestnet shares. The governor’s financial disclosure form for 2013 likewise does not report any Envestnet assets or income.

In 1997, Scott resigned as chief executive of hospital giant Columbia/HCA, a company he founded, several months after FBI and IRS agents raided a company facility in Texas as part of a sweeping federal investigation into suspected Medicare and Medicaid fraud. The investigation focused on allegations of overbilling, fraud, kickbacks to physicians and other illegal practices. The company later changed its name to HCA.

The investigation lasted six years. Along the way, HCA subsidiaries pled guilty to substantial criminal conduct and paid more than $840 million in criminal fines, civil restitution and penalties, according to a 2003 Department of Justice press release.

Other litigation later brought the government’s total recovery from HCA to $1.7 billion, “by far the largest recovery ever reached by the government in a health care fraud investigation,” the release said.

Scott was not charged with any crime; nor was he questioned during the criminal investigation.

But in 2000, while that investigation was ongoing, Scott asserted his Fifth Amendment right not to testify against himself 75 times in a deposition taken in a civil case involving Columbia/HCA. He did so on his lawyer’s advice.

Scott’s current opponent, former Gov. Charlie Crist, has sought to use that to score political points with voters in advance of the Nov. 4th election.

Amid rising inquiries, Gov. Scott files and makes public 2013 income tax return

UPDATE: Oct. 16

Former Gov. Charlie Crist, left, and Gov. Rick Scott

Former Gov. Charlie Crist, left, and Gov. Rick Scott

Responding to rising media inquiries about whether he would release his 2013 federal income tax returns, Gov. Rick Scott Thursday made public the 34-page return filed with the IRS on Wednesday.

Gov. Scott and First Lady Ann Scott jointly reported $8.2 million in adjusted gross income, including $3.6 million in capital gains from the sale of various securities and another $5.2 million in interest and dividends. Those numbers include earnings in Gov. Scott’s state qualified blind trust.

The couple reported no earnings from wages. Scott, who declared a net worth of $132.7 million in June, has declined the state salary that goes with his office.

The Scotts received a six-month extension to file their 2013 tax return in April. The extension expired Wednesday. Asked yesterday whether the return was now filed, and whether it would be made public, two of the governor’s aides refused to respond.

In a brief statement Thursday afternoon, Scott campaign spokesman Greg Blair, one of those aides, said the Republican governor had decided to release the return “in the interest of full transparency.”

Charlie Crist, the governor’s Democratic opponent in next month’s general election, made his 2013 federal income tax return public in June.

By Dan Christensen, BrowardBulldog.org

Oct. 15 - Like many other U.S. taxpayers, Gov. Rick Scott asked for an automatic six-month extension to file a joint tax return for himself and his wife that’s due April 15. The extension ran out Wednesday.

Whether the Scott’s now have filed their 2013 tax return, and whether they will make it public, is anyone’s guess.

Spokesmen for the governor’s executive office in Tallahassee and his re-election campaign would not respond to questions about the matter on Wednesday.

“No,” said campaign spokesman Greg Blair when asked later whether there would be any response to BrowardBulldog.org’s inquiries about the status of the Scott’s 2013 tax return.

Blair’s clipped reply marked a departure from the governor’s public position on June 16 when, as he qualified to run for re-election, he released the couple’s joint tax returns for 2010, 2011 and 2012. Scott also explained then that his 2013 return wasn’t available because he’d requested an extension to file.

Scott went on to chide his Democratic rival, ex-Gov. Charlie Crist, to release his tax returns.

“I think he ought to do that right away so every citizen in the state can look at that and because transparency is good for everybody,” Scott told the Miami Herald.

Nine days later, Crist released his tax returns for 2010-2013. Crist, who is married but files a separate return from his wife, Carole, reported an adjusted gross income of $541,000 in 2013.

That included wages of $295,000 for work in the Tampa office of the Morgan & Morgan law firm; $46,000 in state pensions payments; and $358,000 from work as a consultant and author. Crist listed his consulting clients as Miami-based Coastal Construction Group and the St. Joe Company, a large real estate developer based in the Panhandle. His total tax paid: $197,000.

SCOTT’S NET WORTH: $132.7 MILLION

While Scott has yet to disclose his 2013 tax return, he did file in June a Form 6 “Full and Public Disclosure of Financial Interest” for 2013 in which he declared a net worth of $132.7 million and provided a detailed list of his assets.

The governor’s asset list was the first he’d made public since placing his financial assets into a so-called Florida blind trust in April 2011. The governor did that to ensure he qualified to run for a second term, then immediately placed his assets into another blind trust that under Florida law affords him immunity from prohibited conflicts of interest.

BrowardBulldog.org reported in March that Florida’s blind trust law, and Scott’s own blind trust, have been ineffective in keeping the governor’s assets secret. One reason: Florida’s statute, signed into law by Gov. Scott in 2013, was said to be modeled on the federal blind trust law, yet omits more than a dozen federal requirements intended to “assure true blindness.”

The asset list showed that Gov. Scott owned a stake in a Houston company, Spectra Energy, that was chosen by Florida Power & Light to build and operate the $3 billion Sabal Trail Transmission – a controversial 474-mile natural gas pipeline that’s to run from Alabama and Georgia to a hub near Orlando.

Likewise, the list showed that as of Dec. 31 the governor had invested several million dollars in the securities of about two dozen other entities that produce and/or transport natural gas – including some, like Spectra, with substantial Florida operations.

Florida’s ethics laws generally prohibit public officials from owning stock in businesses subject to their regulation, or that do business with state agencies.

Scott spokesman Greg Blair has said that Scott has no knowledge of his investment in Spectra Energy or the other entities “because his decision to invest was made by a trustee of the blind trust.”

The trustee is New York’s Hollow Brook Wealth Management whose chief executive is longtime Scott crony Alan Bazaar.

Lt. Gov. Lopez-Cantera’s relatives profited from his 2008 House campaign, probe found

By Francisco Alvarado, BrowardBulldog.org 

Carlos Lopez-Cantera is sworn in as lieutenant governor on Feb. 3 as family members and Gov. Rick Scott look on.

Carlos Lopez-Cantera is sworn in as lieutenant governor on Feb. 3 as family members and Gov. Rick Scott look on.

Lt. Governor Carlos Lopez-Cantera is a generous big brother.

On October 09, 2008, about a month before then-state Rep. Lopez-Cantera won re-election by nearly 20 percentage points, his sister and her husband, a Miami-Dade police lieutenant, got into the electioneering business, forming High Ridge Consultants.

Eleven days later, Lopez- Cantera’s campaign cut High Ridge a $7,500 check – the first of several payments totaling $37,500 for claimed re-election campaign work done in 2008 and 2010.

Lopez Cantera’s all-in-the-family arrangement became the focus of a public corruption probe four years ago by the Miami-Dade State Attorney’s Office into the alleged theft of campaign funds.

BrowardBulldog.org obtained a close out memo that explains how investigators determined that Lopez-Cantera’s sister, Monica Cantera-Serralta and husband Gadyaces Serralta, made a profit of nearly $10,000 during the 2008 campaign. Detectives did not examine payments made during the 2010 campaign.

Assistant state attorney Howard Rosen, who authored the March 14, 2011 close out memo, concluded that no crime was committed.

“While it may not look good to campaign contributors or to the general public that a company wholly held by the candidate’s sister and brother-in-law made a profit on the campaign,” Rosen wrote. “Actual work was done by them, and there is nothing to preclude them from profiting from their work.”

POLICE LIEUTENANT REPRIMANDED

Miami-Dade police reprimanded Lt. Serralta, whose makes $120,000 a year as a robbery bureau supervisor, for failing to tell his bosses he was moonlighting as a political consultant, according to his internal affairs file.

The Serraltas did not return several messages left on their work voicemails, and did not respond to a list of questions sent to their work email addresses.

High Ridge doesn’t have an office. The couple lists their South Miami home as the company’s address.

Monica Cantera-Serralta is head of property management and brokerage services at Pan American Companies, her family’s real estate development firm. On state incorporation records, she is listed as High Ridge’s secretary.

Last winter, Gov. Rick Scott tapped Lopez-Cantera, by then Miami-Dade’s elected property appraiser, to become the state’s first Cuban-American lieutenant governor. Lopez-Cantera replaced Jennifer Carroll, who resigned the post in 2013 after state agents questioned her about her ties to a nonprofit veterans organization suspected of fraud.

Today, Lopez-Cantera is on the Republican ticket with Scott in next month’s gubernatorial election against Democrat Charlie Crist and his running mate, Annette Taddeo.

Lopez-Cantera did not answer a list of questions about High Ridge provided to Rick Scott reelection campaign spokesman Greg Blair. “These are baseless accusations made years ago by a political opponent,” Blair said. “The state attorney reviewed and concluded they had no merit.”

That opponent Blair referred to is Alex Morales, a former executive director of the Hialeah Housing Authority who nevertheless has never run against Lopez-Cantera.

Morales declined to comment to a reporter, but according to the close out memo he filed a May 18, 2010 complaint with the Miami-Dade Police public corruption bureau alleging that “Lopez-Cantera misused campaign funds from his 2008 re-election campaign by siphoning out several thousand dollars through a fictitious company which did not do any real work for the campaign and which was owned by his family members.”

Robert Jarvis, a Nova Southeastern University law and ethics professor, said it was odd that an experienced politician like Lopez-Cantera – who held a house seat from 2004 to 2012 and spent his last two years as House Majority Leader – would hire a company owned by family members with no prior campaign experience during the final stretch of an election.

At the time High Ridge was hired in 2008, Lopez-Cantera’s campaign already had three established Miami-Dade political consulting firms  – Edge Communications, G & R Strategies, and Marin & Sons – on the payroll.

POLITICAL FEATHERBEDDING?

“It looks like featherbedding,” said Jarvis, referring to the practice of hiring more employees than are needed to do the job. “It looks like, ‘I’m going to take care of my relatives.’”

The public corruption investigation focused on the fees High Ridge received from Lopez-Cantera’s 2008 campaign.

Investigators subpoenaed High Ridge’s bank records and found 46 canceled checks totaling $5,760 used to pay poll workers on Nov. 5, 2008, the day after the election. The Serraltas also provided receipts and invoices for $6,698 used to pay for boxed lunches provided to poll workers, polo shirts, rental cars, gasoline, a victory party, and purchases at BJs, Costco and Office Depot.

Gadyace Serralta told detectives that High Ridge made approximately $9,606 for “get out the vote” services. He also said there was no written contract between his firm and Lopez-Cantera’s campaign “due to the familial proximity.”

In all, Lopez-Cantera’s 2008 campaign paid High Ridge $22,500 in three payments. The first payment, for $7,500, was made on Oct. 20, 11 days after the company was established. High Ridge collected another $10,000 on Nov. 5, the day after the election, and $5,000 more on Dec. 9, according to Lopez-Cantera’s 2008 campaign finance report.

The campaign also made individual payments of $8,000 and $1,152 in December and January, respectively, to Monica Cantera-Serralta, who served as her brother’s treasurer, according to his 2008 campaign finance report. The payments were for her work as treasurer.

In the 2010 campaign, High Ridge received $15,000 from the campaign.

The only other candidate to hire High Ridge during the same time period was Lopez-Cantera’s House ally, Rep. Erik Fresen, R-Miami. Fresen’s campaign made three payments totaling $23,700 between Dec. 9, 2008 and Dec. 30, 2010.

The Serraltas appear to have given up the elections biz. In 2012, High Ridge did not work on Lopez-Cantera’s successful bid for Miami-Dade Property Appraiser.

Still, Nova’s Jarvis says the relationship between High Ridge and the two Lopez-Cantera campaigns is the type of insider dealing that erodes public trust in elected officials. “Is he looking out for taxpayers?” Jarvis said. “Or is he looking out for family and friends?”

U.S. Sugar and Hendry County seek to turn sleepy airport into cargo hub to rival MIA

By Dan Christensen, BrowardBulldog.org flower

At the heart of a controversial plan for a huge new development near the northwest edge of the Everglades – dubbed “Big Sugar City” by environmentalists – is a crucial, but less noticed proposal for a $400 million makeover of a flyspeck of an airport in rural Hendry County.

The goal is to transform sleepy Airglades Airport, where skydiving is the reigning business, into an international hub for perishable cargo to rival Miami International Airport about 80 miles to the southeast. If it doesn’t happen, Big Sugar City, also known as Sugar Hill, may not become a reality either.

Airglades International LLC (AIA), the private outfit selected by Hendry County to develop the airport, has a straightforward business plan: add a new 10,000 or 12,000-foot runway, build a one-stop air cargo complex and siphon off MIA’s multi-billion dollar perishable cargo business – everything from fresh food and flowers to drugs and medical shipments.

Last year, MIA accounted for 72 percent of all U.S. perishable imports.

“The idea is to take the airport and turn it into a relief valve for MIA’s perishable air cargo in order to make more room for passenger growth and regular air cargo at MIA,” said AIA President Fred Ford. “We’re not here to steal, rob or purloin any of their key core business.”

Officials at MIA, who say their airport has plenty of capacity to expand, appear unconcerned.

“Fred told us about the concept, but I don’t think it’s even getting off the ground yet,” said Joseph Napoli, chief of staff and senior policy advisor for the Miami-Dade Aviation Department. “It’s many years into the future, I believe. We are very neutral to it.”

Indeed, AIA’s plan might seem laughable except for two things: the Federal Aviation Administration is taking it seriously and AIA’s players, including majority investors U.S. Sugar and rancher/grower Hilliard Brothers of Florida, have plenty of financial firepower at their command.

FAA’S AIRPORT PRIVATIZATION PROGRAM

Hendry County is seeking federal approval to privatize its airport under the FAA’s Airport Privatization Pilot Program. The program, authorized by Congress in 1996, allows local governments to sell or lease publicly owned airports to private developers with certain restrictions.

An advertisement in the September issue of Florida Trend magazine touts Airglades’ ability to promote economic development to the surrounding area. “Bringing jobs in for a smooth landing in southern Florida’s sweet spot,” the headline says.

Clearly, Hendry could use the huge shot in the arm that a successful air cargo hub could bring. Hendry is among Florida’s poorest counties, with the state’s highest unemployment rate, 13.1 percent in August.

The FAA approved Hendry County’s preliminary application in 2010. Since then, the county has negotiated airport management and purchase/sale agreements with AIA for the 2,800-acre airport facility. Last month, following FAA approval, AIA took over management of Airglades Airport, Ford said.

Hendry County's Airglades Airport Photo: U.S. Geological Survey

Hendry County’s Airglades Airport Photo: U.S. Geological Survey

The county’s price tag for the airport, located off U.S. 27 about five miles west of Clewiston, would depend on how many jobs are created. Ford said the floor price is $5 million.

“What we are doing now is working with (MIA’s) users and the tenants and brokers, the flower importers and such, and asking them, “If you had a clean canvas to build an airport what would it look like?” said Ford.

Ford did not discuss how who, exactly, would pay the estimated $400 million cost to develop Airglades, or how much each would pay.

Neither Hendry County Administrator Charles Chapman, who is shepherding the Airglades proposal, nor County Commissioner Karson Turner, who told Fort Myers Florida Weekly in March that Airglades development could be “a generation changer,” responded to requests for comment.

The airport property is adjacent to U.S. Sugar-owned land the state has an option to purchase next year under the 2010 state deal that seeks to restore the natural flow of Lake Okeechobee water south to the Everglades – land that is also part of the massive Sugar Hill development now under review by state officials.

On Sept. 10, dozens of environmental groups and interests wrote to Gov. Rick Scott asking for a public discussion on how the Sugar Hill property might impact long term Everglades restoration. The land the state has an option on is just southwest of Lake Okeechobee and could be used to move excess water from south into the Everglades, and not dump it into the Caloosahatchee and St. Lucie rivers and estuaries.

Scott later put out a letter declaring that the state’s reviewing agencies “hold a special responsibility to ensure that proper rigor and careful, thorough evaluation” is given to the Sugar Hill proposal.

SUGAR HILL OPPOSED LAST WEEK

On Oct. 3, both the South Florida Water Management District and the Florida Department of Environmental Protection announced their opposition to Sugar Hill.

“The district recommends against approving the proposed [Sugar Hill] sector plan as it does not provide sufficient information to show that future Everglades restoration efforts will not be harmed,” wrote district water supply bureau chief Dean Powell in a letter to the State Land Planning Agency.

Hendry officials are preparing a draft environmental assessment for presentation to the FAA before the end of the year. During the FAA’s review period, public hearings and workshops will be held.

The FAA can either approve the county’s assessment and issue a “Finding of No Significant Impact,” or decide that a more detailed environmental impact statement is require. Such a finding could, at a minimum, significantly delay AIA’s plans.

Ford said he expects a decision from the FAA next year.

Planning documents describe numerous improvements in store for the Hendry County airport, including upgraded infrastructure such as lighting and drainage. They say the principal markets for perishable air cargo goods will be Central and South America. About 15 to 20 cargo aircraft are anticipated to use Airglades at the outset, with 25 to 35 flights five years after opening.
“No more than 100 flights a day at build out,” said Ford. Huge Boeing 747-400 cargo jets are among the aircraft that could land there.

AIA’s goal is to break ground by 2017.

Ford, a former airport manager, is also president of Florida Fresh Cargo, an investor group of local agricultural interests that first pitched the concept of a perishable air cargo complex at Airglades to Hendry County in early 2010.

“The growth in interest and scope made (Florida Fresh) realize that in order to fully realize its potential, other key business partners would be necessary,” says a history of the project on Hendry County’s web site.

U.S. Sugar and Hilliard Brothers “separately created a new entity named Sugar Hill, expressly for the purpose of joining (Florida Fresh) to form a new company…AIA” in February 2012,” the project history says.

Sugar Hill envisions the transformation of 43,300 acres – or 67.7 square miles – of sugar cane fields, citrus groves and pastureland into 18,000 homes and 25 million square feet of space for manufacturing, warehousing and other kinds of businesses.

Development would occur over the next 46 years, until 2060.

While the Sugar Hill Sector Plan has encountered opposition, the proposal to develop Airglades largely has avoided critical notice. For example, the southern regional director for the Florida Wildlife Federation, Martha Musgrove, said the group “has never focused on Airglades Airport.”

Musgrove said that while Florida Wildlife’s primary interest is the habitat of animals, her organization does recognize the need for economic growth in the area.

According to Ford, the success of the Airglades initiative will decide the fate of Sugar Hill.

“A lot of people don’t read the fine print (in the Sugar Hill proposal) and have concluded this is the plan for the future. It is not. It is a plan if the airport is successful – what could be done on the property in and around the airport,” Ford said.

Millions unspent to fix landmark Miami courthouse; $368 million sought for replacement

By Francisco Alvarado, BrowardBulldog.org 

Miami's Dade County Courthouse

Miami’s Dade County Courthouse

As judges and lawyers embark on a campaign to convince Miami-Dade voters to foot the bill for a new $368 million courthouse, it turns out taxpayers have already contributed $18.1 million to pay for extensive repairs to downtown’s landmark courthouse that have been repeatedly delayed.

Ten years ago, the county earmarked the funds to fix the courthouse’s air conditioning system, plumbing, and electrical systems, county records and interviews with officials in charge of the Dade County Courthouse show. The county commission subsequently diverted the $18.1 million to restore the historic landmark’s crumbling facade, a project that got under way in July of last year.

The delays are indicative of the county’s mismanagement of the Flagler Street building, said Miami-Dade School Board Member Raquel Regalado, an outspoken critic of using more taxpayer funds for a new courthouse.

“Voters have a right to know who is responsible for the conditions at 73 W Flagler,” Regalado said. “Approving this tax will result in a restored and abandoned historic courthouse in the heart of the city.”

County commissioners voted 11-2 on Sept. 2 to place a question on the November ballot asking the electorate to approve a $393 million bond issue backed by property taxes.

A political action committee organized by well-connected Miami attorney Gene Stearns plans to raise more than $1 million to galvanize voters.

In addition to a new 620,000-square-foot courthouse, the county would use $25 million to maintain the Flagler building for up to five more years. County officials have not said what would become of the historic structure after that. It could be used for county office space, sold or leased to private developers.

Property owners in Miami-Dade would face an additional $7 per year in taxes on every $100,000 of a property’s assessed value.

Built between 1925 and 1928 using steel, granite and tera cotta, the Dade County Courthouse is listed on the National Register of Historic Places. Yet it has fallen into an unsightly state of disrepair and some areas of the building are considered dangerous workplaces. It cannot be razed because it is designated as historic by the City of Miami.

ROOF LEAKS, FLOODS

The roof leaks water and the basement floods. Water intrusion resulted in the closing of the top floor of the 25-story building. Recently, a contractor found “black” mold on the 22nd and 23rd floors, forcing employees to work from home.

Things have gotten so bad the courthouse can’t pass a city code inspection that takes place every 40 to 50 years to re-certify the building as safe for public use.

According to an Aug. 7 letter to the Flagler courthouse’s building manager, Miami’s Code Compliance Office threatened demolition if the county doesn’t re-certify the building soon. Inspectors also posted notices on the Roman-style columns near the front and rear entrances of the building.

Nearly two months later, officials from the Miami-Dade Internal Services Department, which maintains county real estate, have not responded to the city.

Internal Services Director Lester Sola insisted the county is not avoiding the recertification process. The last one was in 1976, according to city building records. He claims the courthouse’s building manager never received the city’s correspondence or saw the posted notices.

“The county first became aware of this on Sept. 9 when ISD staff was at the city of Miami requesting any and all documentation relating to 73 W Flagler,” Sola said.

He said the county has been addressing deficiencies with the building since last year to bring 73 W Flagler into compliance. “The county also brought in a consultant to provide recommendations that would bring the building up to date with the recertification,” Sola said.

However, over the last decade the county has scrapped and delayed funding for projects that would address the building’s deplorable conditions.

PRIOR BOND ISSUE

In 2004, Miami-Dade voters green-lighted a $2.9 billion bond program that included $5.7 million to replace the Flagler courthouse’s heating and air conditioning system, $2.8 million for new electrical wiring and panels, and $9.6 million to replace plumbing pipes that date back to the 1920s.

Five years later, county commissioners diverted those funds for the facade, which has become so porous it acts like a sponge, retaining large amounts of water during heavy rainfalls.

A July 21, 2009 memo from then-County Manager George Burgess to commissioners states the original estimate of $15 million for the facade restoration was off by roughly $18 million. “This work must be completed prior to the other projects,” Burgess wrote. “Or those projects will not be effective in the long-term due to the unabated water intrusion.”

Yet, county records show work on the facade restoration, which now stands to cost $35 million, did not begin until last year.

An April 2, 2013 memo from Mayor Carlos Gimenez to county commissioners, partly explains the delays were the result of “a multi-year process of research, evaluation, and development of construction documents to support a restoration plan that started in 2007.” Four months later, the scaffolding finally went up. The restoration won’t be finished until 2016, Sola said.

At the same time, the county began to address some of the courthouse’s myriad of other problems. Since 2013, Internal Services has spent approximately $25,000 on some electrical upgrades and roughly $1.1 million replacing the heating and air conditioning systems on the 3rd, 14th and 15th floors. Earlier this year, repairs began on the structural columns in the basement.

“We’ve also stationed construction staff on and off the facility since 2013 to initiate repairs as needed,” Sola said.

Still, the delays should concern voters, according to Regalado.

“Now that we are at the point of crisis we need to know how did we ended up in this predicament,” she said.

Gov. Scott and GE: Jobs, incentives and investments in Scott’s oil & gas partnerships

By Dan Christensen, BrowardBulldog.org 

Gov. Rick Scott with Jacksonville Mayor Alvin Brown and GE representatives on Friday

Gov. Rick Scott with Jacksonville Mayor Alvin Brown and GE representatives on Friday

When Gov. Rick Scott announced last week that GE Oil & Gas would open a $50 million manufacturing facility in Jacksonville he talked about how it would create 500 new jobs for Florida.

GE Oil & Gas’s official welcome package: up to $15.4 million in financial incentives, including $10 million from the city and $5.4 million from the state.

Not mentioned in the hoopla was how another division of General Electric, GE Energy Financial Services, has invested hundreds of millions of dollars in publicly traded oil and natural gas partnerships in which Scott had a financial interest.

Financial disclosure records made public by Gov. Scott in June show that as of Dec. 31 he was heavily invested in more than two-dozen oil and gas ventures. One was Spectra Energy, which is currently working with Florida Power & Light to build the contentious, $3 billion Sabal Trail pipeline in north Florida.

As BrowardBulldog.org reported in July, Scott and his appointees at the Public Service Commission backed construction of Sabal Trail despite state ethics laws that generally prohibit public officials from owning stock in businesses subject to their regulation. Scott acquired his Spectra shares via a controversial “qualified blind trust,” which by law allows politicians to hide their investment activity and also affords them immunity from prohibited conflicts of interest.

A spokesman for the governor’s re-election campaign, Greg Blair, has said Scott was unaware of his Spectra investment because the trustee of the blind trust made it. Longtime Scott crony Alan Bazaar runs the trustee, Hollow Brook Wealth Management.

Gov. Scott’s oil and gas assets include 18 publicly traded master limited partnerships, some with significant ties to GE Energy Financial Services. Oil and gas master limited partnerships don’t pay corporate income taxes, offering investors liquidity and tax benefits.

For example, the governor reported a $135,800 investment in Houston-based Crestwood Midstream Partners LP. He also disclosed an additional $110,600 stake in Crestwood Equity Partners LP, the master limited partnership that manages and controls Crestwood Midstream.

‘VALUE CREATION FOR STAKEHOLDERS’

Crestwood Midstream announced in June that GE Energy Financial was one of a trio of corporate investors that had agreed to buy up to $500 million worth of its Class A preferred units. The proceeds were earmarked to expand Crestwood’s ability to extract and process shale oil, reduce debt and “provide long-term value creation for all our stakeholders.”

GE Energy Financial made another large investment intended to boost Crestwood last year. In that July 2013 deal, GE provided $80.6 million to a Crestwood subsidiary that gathers and transports fracked natural gas extracted from shale in Wyoming. GE also agreed then to provide a total of up to $150 million in future capital contributions, according to a press release.

“This transaction is another step in the execution of our strategy to position Crestwood in rich gas plays,” Crestwood chairman and chief executive Robert G. Phillips said at the time.

The governor’s spokesman, Greg Blair, said Monday that Scott’s backing for GE Oil & Gas’s Jacksonville plant was not influenced by General Electric’s favorable investments in partnerships in which he owned an interest. Blair also said again that Scott had “no knowledge” of his portfolio holdings “because the decision to invest was made by the trustee of the blind trust.”

GE Oil & Gas’s new plant will manufacture regulators, control valves and other products used by the industry. It is expected to open in November.

Regency Energy Partners, LP is another entity in which GE Energy Financial and the governor shared an interest.

Gov. Scott valued his Regency units at $194,000 as of Dec. 31, while reporting he also had a $206,600 stake in PVR Partners LP, which was acquired by Regency in March.

The governor obtained his Regency units sometime after he created his first blind trust in April 2011. That trust was terminated in June when he publicly disclosed his assets in a move apparently designed to make sure he qualified to run for a second term. The governor immediately opened a new blind trust instrument and placed his assets into it.

Dallas-based Energy Transfer Equity LP, another master limited partnership in which the governor reported owning a $310,600 stake, controls Regency.

Energy Transfer acquired Regency’s general partner from an affiliate of GE Energy Financial for $310 million in May 2010. Affiliates of GE Energy Financial retained 24.7 million limited partner units in Regency, according to a Regency press release.

In an October 2012 report to the U.S. Securities and Exchange Commission, GE reported that its affiliate had reduced its Regency holdings to 8.4 million units, or 4.9 percent of Regency’s outstanding units. The move meant that GE was no longer required to publicly disclose its ownership interest in Regency. Its holdings today, if any, are unknown.

9/11 victims: Saudi Arabia’s ‘lavish sponsorship’ of al Qaeda made attacks possible

By Dan Christensen, BrowardBulldog.org twintowersexplosion

As defense attorneys tried again last week to get Saudi Arabia dropped from a massive federal lawsuit accusing it of complicity in the 9/11 attacks, lawyers for those who survived, and relatives of the dead, filed a sweeping new statement of the evidence they are marshaling for trial.

The 156-page pleading offers the court a fresh account of what’s become known about Saudi Arabia’s alleged ties to al Qaeda since it was initially dismissed from the lawsuit in 2005. An appeals court reinstated Saudi Arabia and its agency, the Saudi High Commission for Relief of Bosnia and Herzegovina (SHC), as defendants late last year.

Likewise, the document seeks to counter retooled Saudi claims of sovereign immunity.

The 9/11 victims don’t argue that Saudi Arabia had foreknowledge of the attacks. Rather, they contend the attacks were made possible by the Saudis’ “lavish sponsorship” of al Qaeda for “more than a decade leading up to September 11, 2001.

The Saudis allegedly supplied that funding – as much as $35 million a year – even though they knew “of al Qaeda’s intent to conduct terrorist attacks against the United States,” according to the pleading filed in federal court in Manhattan on Sept. 15.

In contrast, Saudi Arabia’s memorandum of law in support of its motion to dismiss the multi-billion dollar lawsuit opens with a blanket denial of wrongdoing.

‘KINGDOM HAD NO ROLE’

“The Kingdom of Saudi Arabia had no role in the attacks of September 11, 2001. The United States has said often and vigorously that Saudi Arabia is an important ally in the fight against terrorism,” says the memo. It also says the 9/11 Commission found “no evidence” that the Saudi government or senior Saudi officials funded terrorists.

Saudi Arabia’s claim to exoneration met stiff resistance. Lawyers for the victims cited affidavits made by 9/11 Commission member Bob Kerrey, an ex-Nebraska senator, and former Florida Sen. Bob Graham, who co-chaired Congress’s Joint Inquiry into the attacks, rebutting the Saudi’s assertions.

“Further undermining the Kingdom’s efforts to characterize the 9/11 Commission investigation as ‘exhaustive,’ recent disclosures make clear that both the 9/11 Commission and the 9/11 Joint Inquiry were deprived of critical information by the FBI,” the plaintiffs’ lawyers wrote.

9-11hijackers (1)“For example, a Freedom of Information Act (FOIA) lawsuit brought against the FBI by BrowardBulldog.org has revealed that the FBI never disclosed to the 9/11 Commission or the 9/11 Joint Inquiry the existence of a massive investigation into an apparent Saudi support network for the 9/11 hijackers in Florida.”

That once-secret FBI investigation concerned links between 9/11 hijack pilots Mohamed Atta, Marwan al-Shehhi and Ziad Jarrah and a Saudi family with ties to the royal family who lived in a gated community near Sarasota. Abdulaziz al-Hijji and his wife, Anoud, came to the FBI’s attention after they moved out of their home two weeks before 9/11, leaving behind cars, clothes, furniture and other personal belongings.

BrowardBulldog.org, working with Irish journalist and author Anthony Summers, broke the story in September 2011. At the time, the FBI confirmed that it had investigated, but said no connection was found to the 9/11 plot.

Yet last year, seven months after the FOIA lawsuit was filed, the FBI made public records that say flatly the Sarasota Saudis had “many connections” to “individuals associated with the terrorist attacks on 9/11/2001.” The records tie three of those individuals to Huffman Aviation – the Venice flight school where hijackers Atta and al-Shehhi trained – but the FBI blacked out their names and other details citing national security.

Fort Lauderdale U.S. District Judge William J. Zloch is currently reviewing more than 80,000 pages of records turned over by the FBI in response to his order to decide what additional records can be made public.

The 9/11 victims, whose ranks include companies that suffered enormous property losses, are suing hundreds of other defendants – from Middle East banks and “purported” Islamic charities like the Muslim World League to the estates of the dead hijackers.

“Although representing themselves to the West as traditional charities or “humanitarian organizations,” these organizations are more accurately described as Islamic da’awa organizations, created by the government of the kingdom to propagate a radical strain of Islam throughout the world, commonly referred to as Wahhabism,” the 9/11 victims’ pleading says.

On Monday, a federal jury in New York City found Jordan-based Arab Bank liable for knowingly helping terrorists carry out two-dozen suicide bombings in Israel in the early 2000s. The verdict marked the first time a bank was found liable for violations of the U.S. Anti-Terrorism Act.

“It makes it pretty clear how jurors view this kind of conduct when courts allow cases to reach them,” said Sean P. Carter, an attorney for the 9/11 victims.

FSIA CLAIMS

The 9/11 case consolidates several lawsuits filed between 2002 and 2004. It proceeds today under the jurisdiction of the Foreign Sovereign Immunities Act.

FSIA generally bars plaintiffs’ claims against other nations. One exception, however, is when a foreign state commits a tort – a wrongful act that causes harm – in the U.S.

The current legal fight focuses on complex legal issues regarding FSIA applicability.

Michael Kellogg, a Washington, D.C. attorney who represents the kingdom, argues the case should be dismissed because FSIA’s “tort exception” does not apply. Among his reasons: the law says wrongful acts, like funding al Qaeda, must be committed in the U.S., but that no such acts took place here.

“It is irrelevant that the September 11 attacks themselves occurred in the United States. Those attacks were ‘distinct and separate’ torts from those that involve giving money and aid to purported charities that supported al Qaeda, and those attacks therefore cannot serve as a basis for avoiding the entire-tort rule,” Kellogg wrote.

But attorneys for the other side say their clients’ claims are based on wrongdoing within the U.S. – both by Saudi “agents” who “provided direct assistance and support” to the 9/11 hijackers and Saudi charity “collaborators” like the Saudi High Commission that supported al Qaeda “through offices located in the United States.”

“Literally troves of governmental investigative reports have been declassified,” since the lawsuit was dismissed in 2005 that supports those claims, says the pleading filed on behalf of more than a half-dozen law firms by Carter’s Philadelphia law firm, Cozen O’Connor. More “evidence” was obtained from the charities and other defendants as the lawsuit has proceeded.

Some of that developed evidence involves a terrorist support network in southern California whose members allegedly included suspected al Qaeda advance man Omar al-Bayoumi and two other Saudis, Fahad al-Thumairy, and Osama Basnan.

The trio is accused of aiding 9/11 hijackers Khalid al-Mihdhar and Nawaf al-Hazmi when they entered the U.S. in January 2000 after attending an al Qaeda conference in Kuala Lumpur, Malaysia. The support network “assisted them in settling in the United States and beginning preparations for the September 11th Attacks,” the pleading says.

Mihdhar and Hazmi were among the terrorists who flew a hijacked American Airlines jet into the Pentagon.

Bayoumi is described in the pleading as a Saudi intelligence agent. Bayoumi moved out of his San Diego apartment on June 23, 2001, telling his landlord he was leaving the U.S.

According to the pleading, Thumairy was a diplomat with the Saudi consulate’s Ministry of Islamic Affairs from 1996 to 2003. He was also a religious leader at the King Fahd Mosque in Culver City, Ca. with a reputation as an Islamic fundamentalist.

Basnan was an associate of Omar Abdul Rahman, the blind sheikh who is serving a life sentence for his role in supporting the 1993 World Trade Center bombing, the pleading says.

Video-on-demand finally comes to Broward County Commission meetings

By Dan Christensen, BrowardBulldog.org 

A screen shot of archived video of last week's Broward commission  meeting.

A screen shot of archived video of last week’s Broward commission meeting.

Broward County took a step toward greater government transparency last month with the start-up of a new system of on-demand video for commission meetings and public hearings.

The changes mean the public can now access online archived videos of county meetings and hearings for anytime viewing. Comprehensive agenda information and minutes are also available. The new video archive began with the commission’s August 12th meeting.

BrowardBulldog.org reporter William Hladky reported last October that Broward was the only county in southeast Florida, and the only major government within the county, that did not archive its recorded commission meetings for later on-demand viewing by the public.

“The public is far better served as a result of this,” said Commissioner Lois Wexler, who led the county’s push to implement on-demand video. “That story empowered me with information about the situation. I never realized how many cities and counties had it and we didn’t.”

Broward commission meetings and hearings continue to be broadcast live on cable television and online. Before, however, viewers were limited to catching either the live daytime broadcast, a rebroadcast later in the week, or filing a public records request to obtain a DVD copy of the session at a cost of $8 plus postage.

Wexler said getting the system up and running was “like pulling teeth” due to resistance to on-demand video “from within the organization itself.”

“The party line was that it was about money. At first it was said the cost would be around $150,000 or a quarter of a million dollars. Numbers were thrown out to scare people, but it wasn’t about the money,” said Wexler.

In a May 9 memo, County Administrator Bertha Henry told commissioners “the costs associated with the software and maintenance is approximately $15,000 in addition to some part time staff assistance and minor renovation in the back video area, which I will secure from internal sources.”

The implementation of the video-on-demand system was accompanied by a new web site that county officials said displays information in so-called “responsive design” that “makes content more readily accessible across multiple mobile devices, including Apple and Android smartphones and tablets.”

Commission meeting videos include embedded agenda item numbers that viewers can use to fast forward to discussions of interest. Meeting agendas and back-up material are also available.

The county’s use of on-demand video comes a decade after the county began live webcasting of its meetings online.

The county commission holds regular meetings on Tuesday. County officials said videos “will typically be available for on-demand viewing by noon each Wednesday.”

Hallandale city manager’s going away gift of public money to departing commissioner

By William Gjebre, BrowardBulldog.org 

Hallandale Beach City Manager Renee Miller, ex-Vice Mayor Alexander Lewy

Hallandale Beach City Manager Renee Miller, ex-Vice Mayor Alexander Lewy

Thanks to Hallandale Beach City Manager Renee Miller’s generosity, former Vice Mayor Alexander Lewy collected a tidy gift of taxpayer cash after he quit the city commission last May before his term was finished.

To make it happen, Miller liberally interpreted a new and controversial city rule that commissioners’ enacted last year. The rule allows them to pocket thousands of unspent city dollars every year from their annual travel accounts.

“I made judgment calls,” Miller said when asked about the city’s $5,253 farewell payout to Lewy.

Miller said she decided Lewy was entitled to a payout even though he left his commission seat just seven months into the fiscal year. Likewise, she acknowledged hiking Lewy’s payout by raising his yearly travel account to $15,000. Commissioners’ standard travel budget per year is $10,000.

“I didn’t ask for it,” said Lewy, who quit to work for a lobbying group. He pointed out that he voted against allowing city commissioners to be paid for unused travel funds.

Lewy compared the travel fund payouts to other city benefits, like health insurance. “It’s not my fault that I benefited by it,” Lewy said. “I didn’t receive anything I didn’t deserve.”

Lewy said the commission authorized the increase to $15,000 as a way of providing additional funds for the mayor and commissioners who travel more on city business, but the approved resolution says each would receive $10,000 apiece. The city manager was also authorized to establish “an additional travel account” to cover such travel.

At the July 2013 meeting where the new travel policy vote was taken, Miller suggested $5,000 more for Mayor Joy Cooper plus an additional $5,000 for those traveling frequently on behalf of the city, according to city commission video.

In interviews, Commissioners Michele Lazarow and William Julian raised concerns about Miller’s payout to Lewy. Each said the city administration should have asked the commission’s approval before increasing a commissioner’s travel budget beyond $10,000.

“It was not voted up,” Lazarow said, adding the higher budget for Lewy “is a surprise.”

“It’s not right to get money if he leaves” before the end of the budget year, Julian said. He said the notion that anyone would leave early wasn’t contemplated when the policy was adopted.

Without consulting the commission, Miller said she decided to pay Lewy for unused travel on a prorated basis for the year. She also authorized $15,000 travel accounts for both Lewy and Cooper, who also voted against the travel payout policy, because they were tasked with attending numerous local, state and national conferences and meetings on the city’s behalf.

When Lewy quit he’d only spent $3,497 of the $10,000 in his city account. Miller, however, pro-rated his payout based on a $15,000 travel budget.

The city manager’s calculations allowed Lewy to receive nearly $3,000 more than he would have had his benefit been calculated using the standard $10,000 travel budget.

In 2012-2013, both Cooper and Lewy traveled extensively on the city’s behalf, each exceeding their $10,000 travel budget. The commission approved an extra $5,000 for both that year.

Records show that through Aug. 18, Cooper had spent $10,814 in travel. If she spends no more by the end of the fiscal year on Sept. 30, she’ll be entitled to a payout of $4,186 from her $15,000 travel account. The fiscal year ends Sept. 30.

Here is the comparable travel spending for the three commissioners who voted to approve the travel policy. The number in parentheses is the current amount each would be due after Sept. 30: William Julian, $277 ($9,723); Michele Lazarow, $2,333 ($7,667); Anthony Sanders, $3,844 ($6,156).

Commissioner Leo Grachow, appointed by the commission in May to fill Lewy’s seat, has a $5,000 travel account this year. He’s spent $76, and stands to collect $4,924 after Sept 30.

 

9/11, Saudi Arabia and the search for answers amid government secrecy

By Dan Christensen, BrowardBulldog.org 

President Obama with Saudi King Abdullah at the White House in 2010; President George W. Bush with Crown Prince Abdullah shortly before he became king in 2005

President Obama with Saudi King Abdullah at the White House in 2010; President George W. Bush with Crown Prince Abdullah shortly before he became king in 2005

It’s been 13 years since al Qaeda hijackers commandeered four U.S. passenger jets and slammed them into America’s heart, yet a basic question persists: Did they act alone or with the help of a support network?

The answer is shrouded by government secrecy. Many believe that secrecy exists to protect oil-rich Saudi Arabia.

From the start, questions have simmered about the kingdom’s role in the September 11, 2001 attacks because 15 of the 19 hijackers were Saudi, as was Osama bin Laden. Congressional investigators and the 9/11 Commission stoked suspicion when they found evidence that at least some of the hijackers received direct financial support traceable back to the Saudi government.

The Saudis have consistently and strongly denied involvement in 9/11. Those denials, however, have been undercut by U.S. government documents – leaked or made public under the Freedom of Information Act – detailing the kingdom’s financial support for various Muslim extremist groups, including al Qaeda.

Here’s a candid assessment of Saudi Arabia’s dealings with external terrorists by then-Secretary of State Hillary Rodham Clinton contained in a secret December 2009 cable to U.S. diplomats that was made public by Wikileaks in 2010:

“Donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide…Saudi Arabia remains a critical financial support base for al-Qa’ida, the Taliban, LeT [Pakistan’s Lashkar-e-Taiba] and other terrorist groups, including Hamas.”

Such assertions, like others found in Treasury Department documents linking members of the Saudi royal family to charities supporting terrorist groups, take on new urgency with recent news about the kingdom’s financial support for the brutal Islamic State of Iraq and the Levant (ISIL), also known as ISIS.

Today, the heat is on in Congress and the courts to expose more information about the backdrop to 9/11. That includes obtaining facts about Saudi Arabia’s suspected involvement in funding the hijackers kept hidden by the administrations of two presidents – Democrat Barack Obama and Republican George W. Bush.

THE NOOSE TIGHTENS

“The noose is starting to tighten,” said former Florida Sen. Bob Graham, who chaired the Senate Intelligence Committee. “All of this points to the role of Saudi Arabia, over a long period of time, in some of the most horrific actions against the U.S., the people of the Middle East today and possibly the world tomorrow.”

In New York, a rejuvenated federal civil lawsuit brought by thousands of 9/11 victims and relatives promises to uncover a trove of primary U.S. and Saudi records.

9-11-01The Saudis had been dismissed as a defendant in 2005 after claiming sovereign immunity. But last December, in an unusual and complex ruling citing legal error, a federal appeals court in Manhattan reversed itself and restored both the kingdom and the Saudi High Commission for Relief of Bosnia and Herzegovina, its charity, as defendants.

The U.S. Supreme Court denied Saudi Arabia’s appeal on June 30.

To date, proceedings in the case have involved a number of Saudi funded charities, including the Muslim World League and its financial arm, the Rabita Trust, which was designated as a terrorist entity by President Bush a month after 9/11.

While some material produced by the charities has made it into the public domain via court pleadings, many other documents that were turned over are stamped confidential pursuant to a protective order entered early in the case by U.S. District Judge Richard Casey, according to Philadelphia plaintiff’s attorney Sean Carter.

“I can say with confidence that the discovery we’ve received from certain of the charities documents significant financial irregularities,” said Carter. “The documents confirm that certain money ostensibly distributed to branch offices for humanitarian projects was not applied to humanitarian projects.”

At the same time, the 9/11 families have a number of Freedom of Information Act requests pending – “some for many years,” said Carter.

SUSPECTED SAUDI AGENT

One request to the FBI concerns Dallah Avco, a corporate contractor with the Saudi Ministry of Defense and Aviation identified as a possible employer of Omar al Bayoumi. a suspected Saudi agent who befriended 9/11 hijackers Khalid al-Mihdar and Nawaf al-Hazmi in San Diego.

Bayoumi met the pair – who later died aboard American Airlines Flight 77 when it crashed into the Pentagon – shortly after their arrival in the U.S. after attending an al Qaeda summit meeting in Kuala Lumpur, Malaysia.

The FBI reply to that FOIA request was that it had no responsive records about Dallah Avco, yet Carter said an online search later found responsive documents posted in the FBI’s electronic reading room.

“To say the least, we are experiencing frustration,” said Carter. “The potential for litigation between the 9/11 plaintiffs and agencies of the U.S. government looms.”

Such a lawsuit would be a spectacle – thousands of 9/11 victims suing the United States to force the release of information about those suspected of responsibility for their injuries and the deaths of their loved ones.

But such lawsuits can achieve results.

BrowardBulldog.org is currently suing the FBI seeking records about its investigation of a Saudi family with ties to the royal family that moved out of their home in a gated community near Sarasota about two weeks before the September 11, 2001 terrorist attacks – abandoning cars, furniture and other personal items. Agents later determined that hijack ringleader Mohamed Atta and other terrorists had visited the home, according to sources.

The FBI, however, did not disclose the existence of that investigation to either Congress’s Joint Inquiry into the 9/11 attacks or the subsequent 9/11 Commission, according to former Sen. Graham, who co-chaired the Joint Inquiry. And when BrowardBulldog.org first reported the matter in September 2011, FBI officials said the probe had found no links to the 9/11 plot.

A subsequent Freedom of Information request was similarly met: The FBI said it had no responsive documents. Yet in March 2013, six months after the suit was filed, the Bureau unexpectedly released 35 pages. The heavily redacted records said the Sarasota Saudis in fact “had many connections to individuals associated with the terrorist attacks on 9/11/2001.”

80,000 PAGES UNDER REVIEW

Further small releases of documents have restated that finding and provided additional insights. Today, Fort Lauderdale U.S. District Court Judge William J. Zloch is reviewing 80,000 pages of records turned over by the FBI this summer for his private inspection to determine whether they should be made public.

“He could issue a ruling at any time,” said the Bulldog’s Miami attorney Thomas Julin.

Julin also represents the news organization in a separate administrative appeal requesting the declassification of 28 pages redacted from the Joint Inquiry’s 858-page final report to the nation. The pages concern “specific sources of foreign support” for the hijackers while they were in the U.S.

The appeal parallels a push by members of Congress to pass House Resolution 428, which calls on President Obama to declassify the 28 pages. The resolution says that declassification is “necessary to provide the American public with the full truth.

“These efforts to force the release of 28 pages of a 13-year-old investigative report by the House and Senate intelligence committees will disclose particularly the role of Saudi Arabia in funding 9/11,” said Graham, who helped write those pages.

9/11 Commission Chairman Thomas Kean, a former Republican governor of New Jersey, and Vice Chairman Lee Hamilton, an ex-Congressman from Indiana, offered their support for declassification when asked about it by Naples resident Matthew Sellitto during a public appearance on July 22 to mark the 10th anniversary of the commission’s report. Sellitto’s son, Matt, was on the 105th floor of Tower 1 of the World Trade Center.

9/11 COMMISSION MEMBER ‘EMBARRASSED’ BY SECRECY

“I’m embarrassed that they’re not declassified,” said Hamilton. “We emphasized throughout transparency. I assumed incorrectly that our records would be public, all of them, everything.

Still, the 28 pages remain secret despite efforts by numerous political leaders to have them made public. In 2003, for example, 46 senators signed a bipartisan letter to President Bush asking him to declassify the pages.

“If we are to protect our national security, we must convince the Saudi regime to get tough on terror. Keeping private its involvement – or that of any nation – in the September 11th attacks is not the way to accomplish that goal,” the letter says. The signers included Joe Biden, Sam Brownback, Hillary Rodham Clinton, John Kerry, Bill Nelson and Harry Reid.

For a CNN report Monday about the 28 pages, the Saudi government re-released a statement in support of their disclosure made by Saudi Foreign Minister Prince Saud al-Faisal in 2003 shortly after the Joint Inquiry published its censored report.

“We have nothing to hide. And we do not seek nor do we need to be shielded,” al-Faisal said. “We believe that releasing the missing 28 pages will allow us to respond to any allegations in a clear and credible manner; and remove any doubts about the kingdom’s true rule in the war against terrorism and its commitment to fight it.”

Following CNN’s Monday report, in which 9/11 relative Bill Doyle accused President Obama of breaking a promise to make public the 28 pages, the National Security Council issued a statement saying the White House had taken previously unannounced steps toward releasing the 28 pages.

“Earlier this summer, the White House requested that ODNI (Office of the Director of National Intelligence) review the 28 pages from the joint inquiry for declassification. ODNI is currently coordinating the required interagency review and it is ongoing,” said NSC spokesman Edward “Ned” Price.

Meanwhile, BrowardBulldog.org’s administrative appeal seeking release of the 28 pages is pending before the Interagency Security Classification Appeals Panel, which makes recommendations to the president after conducting what’s known as a mandatory declassification review.

The panel is not a rubber stamp. Last year, in its annual report to the president, it said it had reviewed 151 classified documents and approved declassifying 131 in whole or in part.

The panel’s six members are from the Office of the Director of National Intelligence, the National Security Council, the National Archives, and the Departments of Defense, Justice and State.

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