By Reity O’Brien, Center for Public Integrity
U.S. Supreme Court
At least five and perhaps as many as eight of the nine members of the U.S. Supreme Court are millionaires according to recently released financial disclosures, and only two hold any consumer debt.
Assets on the forms are reported in a range making it impossible to say precisely how much each justice is worth, but suffice to say, none of them are hurting financially. (more…)
By William Gjebre, BrowardBulldog.org
The Florida Legislature’s joint auditing committee is wading into Hallandale Beach’s questionable spending of local redevelopment funds, demanding that city officials explain the use and handling of those funds.
Legislators who head the committee also are urging the city commission to ask Florida’s Attorney General for a new opinion to clarify how Community Redevelopment Agency (CRA) funds can be spent. City leaders have challenged a previous opinion.
In a separate but related development, the Broward State Attorney’s Office issued subpoenas last week to Hallandale Beach officials -including Mayor Joy Cooper -in connection with a criminal investigation into the alleged misuse of city funds by a nonprofit group, the Palm Center for the Arts.
BrowardBulldog.org obtained one subpoena served on the city clerk asking her to produce the transcribed minutes and tape recordings of a March 17, 2010 commission meeting, a copy of a $5,000 check issued by the city to the Palm Center and any correspondence between the nonprofit group “and/or founder Dr. Deborah Brown” regarding that check.
City Clerk Sheena James is to appear at the State Attorney’s Office with the records and to testify on June 24 at 9 a.m. The subpoena is signed by Assistant State Attorney Deborah Zimet.
A YEARLONG INVESTIGATION
The subpoena and the audit committee’s inquiry stem from a yearlong investigation by the Broward Inspector General’s Office that found city officials had “grossly mismanaged” millions of dollars in CRA funds.
Hallandale Beach Mayor Joy Cooper
The CRA is funding by a portion of the property taxes collected within its boundaries.
Inspector General John Scott’s office said it found “probable cause” that Brown, the Palm Center’s founder and director, had engaged in criminal misconduct and asked the State Attorney’s Office to investigate.
Hallandale Beach officials have denied any misspending of CRA funds and defended how those funds were handled. They have also challenged many of the Inspector General’s findings, including criticism that the city wrongfully funded nonprofit groups, paid for fireworks displays and provided loans to businesses.
A delegation of city officials, led by Mayor Joy Cooper, went to County Hall last week in the wake of talk about a possible county audit of CRA tax funds it had sent to the city to inform Broward commissioners they don’t have the authority to do that.
County officials acknowledged that only the state has the authority to review CRA actions.
The Legislature now appears interested.
Sen. Joseph Abruzzo, a Palm Beach County Democrat who is chair of the Joint Legislative Auditing Committee, and Rep. Lake Ray, a Duval County Republican who is the vice chair, began asking questions on Thursday after being contacted by “a concerned citizen.”
Abruzzo and Ray sent a certified letter to Mayor Cooper. Copies were sent to Florida Auditor General David Martin, Broward’s commissioners, county Inspector General John Scott and City Manager Renee C. Miller.
Citing the report by Scott’s office, the legislators asked Cooper to respond to accusations that Hallandale had improperly co-mingled city and CRA funds and justify more than $2.2 million in questionable spending.
Abruzzo and Ray’s letter says that if the city fails to provide “specific authority” under state law, or if the expenditures were not included in the city’s CRA plan, Hallandale may have to restore the money to the CRA trust fund.
The legislators also suggested that city commissioners, who also sit as the CRA’s board of directors, seek a new Attorney General’s opinion regarding what constitutes allowable expenditures.
Abtruzzo and Ray also want to know if the city is complying with recommendations by Broward’s Inspector General, including whether the city has established policies to comply with state law and ensure the CRA operates independently.
Cooper said she has informed the committee that lawyers for the city and the CRA will respond to their questions. “I reaffirmed my position and that of our attorneys that expenditures by the CRA are within the authority of the statute to address slum blight, crime and economic development,” she said.
County agents have asked the city to provide a status report on their recommendations by July 16.
THE MAYOR’S SUBPOENA
Cooper said prosecutors subpoenaed her as a witness in their criminal case.
“I cannot comment any further on the matter. I was asked to go in as a witness on the 25th, but have asked to come in earlier due t o my schedule,” the mayor said.
Prosecutors’ investigation of The Palm Center for the Arts follows the Inspector General’s allegations that nearly $5,000 in city funds were used to make a payment on Brown’s timeshare at the Westgate Resort in Orlando and to make payroll payments to herself and her brother and for miscellaneous personal expenses.
City Commissioner Bill Julian said in an interview that the city clerk’s office informed him a subpoena had arrived for him, too. He had not seen the subpoena, but was told it requires him to appear at Zimet’s office on June 25th.
Julian believes that many of the same city officials who previously were questioned by the Inspector General’s Office were issued subpoenas. “I’ll go there and answer questions,” he said. “I have nothing to hide.”
Commissioners Anthony Sanders could not be reached for comment. Likewise, Brown could not be reached. Commissioner Alexander Lewy said he did not receive a subpoena.
PALM CENTER PAYMENTS
Palm Center received at least $107,000 in CRA funds over a three-year period. Brown was also listed as a principal and director of Zamar School of Performing Arts. About three years ago, Zamar received $25,000 in CRA funds.
Both programs operate on city property at 501 NW First Ave. The city leased the property to Palm Center in 2009 for a one-time payment of $10. While Palm Center was prohibited from subletting the facility, the city later modified the agreement to permit Zamar to operate a summer camp there in 2009.
The city property was once owned by a group headed by Commissioner Sanders. The Inspector General’s Office probe involved a review of the city’s purchase of the property from Sanders’ nonprofit Higher Vision Ministries.
Higher Vision bought the property in 2001 for $45,000 and sold it to the city eight years later for $235,000. Sanders, appointed to fill a commission vacancy in 2008, did not vote on the purchase.
In between the purchase and the sale, the CRA gave Sanders’ group a $46,000 property improvement loan. Sander’s group was only required by the city to repay $31,000; the rest was forgiven.
In its report, the Inspector General cleared Sanders of an allegation that the CRA showed favoritism toward him by substantially overpaying his nonprofit group for the property.
By Ronnie Greene, Center for Public Integrity
Tesla electric cars
They are two cutting-edge electric car makers, headquartered in California and backed by powerhouses of politics and money. In 2009, each secured half-billion dollar loan commitments from President Obama’s Department of Energy to help transform their clean-energy cars from drawing boards to showrooms.
But this week, the fortunes of Tesla Motors and Fisker Automotive took sharply divergent turns. (more…)
By Dave Levinthal, Center for Public Integrity
Amid withering accusations the Internal Revenue Service targeted tea party and other conservative groups with enhanced scrutiny, the agency faces another problem: it’s drowning in paperwork.
The IRS’ Exempt Organizations Division, which finds itself at the scandal’s epicenter, processed significantly more tax exemption applications in fiscal year 2012 by so-called 501(c)(4) “social welfare” organizations — 2,774 — than it has since at least the late 1990s, according to an analysis of IRS records by the Center for Public Integrity. (more…)
By William Gjebre, BrowardBulldog.org
County Commissioner Sue Gunzburger and Broward Auditor Evan Lukic
The Broward County Auditor’s Office has begun looking into whether Hallandale Beach should be required to repay some of the millions in tax dollars allegedly misspent due to “gross mismanagement” by city officials.
The preliminary review was undertaken recently at the urging of a county commissioner and a former Hallandale Beach city commissioner. It was also recommended by the Broward Inspector General’s April 18 report that was highly critical of the city’s handling of those public funds belonging to its Community Redevelopment Agency (CRA).
“Based on the final report of the Inspector General I believe we should recover any funds that were misspent,” said County Commissioner Sue Gunzburger, whose district covers parts of Hallandale Beach.
Broward Vice Mayor Barbara Sharief, who also represents the city, did not respond to calls for comment.
The county has an interest in the CRA funds because it approved establishment of the Hallandale Beach CRA in 1996. Since then the county has sent the CRA approximately $36 million in tax revenue, with the city putting up a matching amount to help rid slum and blight areas.
“The OIG report is problematic,” said County Auditor Evan Lukic. “If the funds were not used for the intended purpose in accordance with state law then money may be due back to the county.“ He said his review could take up to two months.
Following a yearlong investigation, the Inspector General reported that from 2007 to 2012 city leaders used the CRA like a piggybank to improperly pay for the city’s general expenses and other pet projects, including donations to favored charities and loans to local businesses. In all, agents found at least $2.2 million in questionable CRA expenditures.
The report urged the county government “to independently determine” whether Hallandale Beach expenditures were outside the scope the governing state statute, and if so to “determine what legal options are available to prevent ongoing abuse of the CRA process and recover those funds that may have been misspent.”
Hallandale officials, including Mayor Joy Cooper, objected to many of the report’s findings. They also asserted it was riddled with “numerous factual inaccuracies” and even challenged the Inspector General’s authority to investigate the CRA. City commissioners sit as the CRA’s board of directors.
Inspector General John Scott’s office replied that Hallandale’s top leadership, including the mayor and city manager, showed a “basic misunderstanding” of what’s gone wrong.
Cooper could not be reached for comment about the auditor’s inquiry.
City Manager Renee C. Miller said, “I would understand that they are looking into this… We will communicate and will reach out to them.”
Miller said the city continues to work to improve CRA operations, which includes “having and retaining a stable staff.”
Auditor Lukic said his review would determine what spending authority the Hallandale Beach CRA was given when it began. Hallandale got one of the first CRAs, he said, and there were fewer restrictions placed on them at that time.
Should he find the county’s authority lacking, there will be “no recourse” to recover funds from Hallandale Beach, Lukic said.
The County Commission will address the matter at its regular June 4 meeting. One of those who will speak is former Hallandale Beach city commissioner Keith London, who has called for a full county audit.
London, who frequently challenged CRA expenditures when he was on the commission, said a county audit is necessary not only because of the Inspector General’s findings. He accused his former colleagues of skirting “their fiduciary responsibility to the taxpayers” by ignoring both the Inspector General’s recommendations and a relevant 2010 Attorney General’s opinion.
That opinion held that CRA expenditures should go toward “brick and mortar” projects. The Inspector General, however, determined that Hallandale CRA’s violated that guideline with spending on grants and donations for favored charities.
City officials have countered that the Attorney General’s advisory opinion was non-binding, and does not prevent the city from making such grants.
By Christie Thompson, ProPublica
President Barack Obama meets with Director of National Drug Control Policy Gil Kerlikowske in the Oval Office White House Photo by Pete Souza
When the Obama administration released its 2013 Drug Control Strategy recently, drug czar Gil Kerlikowske called it a “21stcentury” approach to drug policy. “It should be a public health issue, not just a criminal justice issue,” he said.
The latest plan builds on Obama’s initial strategy outlined in 2010. Obama said then the U.S. needed “a new direction in drug policy,” and that “a well-crafted strategy is only as successful as its implementation.” Many reform advocates were hopeful the appointment of former Seattle Police Chief Kerlikowske as head of the Office of National Drug Control Policy signaled a shift in the long-lasting “war on drugs.”
By Theodoric Meyer, ProPublica
President Obama opening this year’s White House Easter Egg Roll
When the annual White House Easter Egg Hunt faced cancellation this year due to the package of mandatory budget cuts known as sequestration, the National Park Service kicked into high gear. It rescued the event — held since 1878 — with money from “corporate sponsors and the sale of commemorative wooden eggs,” according to the Washington Post.
The nation’s airline passengers also caught a break last month when Congress passed (and President Obama quickly signed) a bill allowing the Federal Aviation Administration to shift some funds and halt the furloughs of air traffic controllers that had been blamed for long flight delays around the country.
But other programs haven’t been so lucky. (more…)
By Lois Beckett, ProPublica
Photo: ACS Law
In mid-April, Kansas passed a law asserting that federal gun regulations do not apply to guns made and owned in Kansas. Under the law, Kansans could manufacture and sell semi-automatic weapons in-state without a federal license or any federal oversight. (more…)
By Dave Levinthal, Center for Public Integrity
Facebook chairman Marc Zuckerberg
Gun groups, defense contractors, oil companies and the world’s largest social network increased their spending on lobbying last quarter, bucking an overall downward trend, newly filed congressional disclosures show.
As debate over gun control raged in the Senate, the National Rifle Association, the National Shooting Sports Foundation and Mayors Against Illegal Guns each spent more on federal-level lobbying during the year’s first three months than in any previous quarter. (more…)
By William Gjebre, BrowardBulldog.org
Hallandale Beach City Manager Renee C. Miller
Hallandale Beach officials have fired back at county investigators who last month found “gross mismanagement” of tax funds at the city’s Community Redevelopment Agency, accusing them of “numerous factual inaccuracies” and challenging their legal authority.
In its official 10-page response to the Broward Inspector General’s report, the city also said the OIG had misinterpreted the state statute governing the CRA.
“It is this failure which results in the OIG (Office of Inspector General) erroneously coming to certain conclusions that the city and CRA grossly mismanaged public funds,” says the report approved by City Manager Renee C. Miller.
The Inspector General’s preliminary report in March, after a year-long investigation, concluded that top city officials had grossly mismanaged millions of dollars in public funds “entrusted to the care of its” CRA. It identified at least $2.2 million in questionable CRA expenditures between 2007 and 2012, including inappropriate loans to local businesses and grants to nonprofits.
More than $400,000 in bond proceeds also were said to have been used improperly, according to the Inspector General’s report.
The report identified several contributing factors to the mismanagement: the city commingled CRA money with city funds instead of setting up a separate CRA trust fund in years past; the city improperly spent on parks and other activities outside the CRA’s boundaries; and it failed to access and verify work performed by nonprofits that received grants.
The CRA was established in 1996 under a state law that allows it to collect tax revenue to be used to rid slum and blight conditions. It receives 95 percent of the taxes collected on the appreciated value of properties within its boundaries. Hallandale’s CRA has received approximately $70 million since it began.
Florida law does not permit the CRA to fund charitable donations to nonprofits, according to the Inspector General’s report. And a Florida Attorney General’s opinion in 2010 said CRA expenditures should be used only for “brick and mortar” projects, it said.
Yet in its April 4 response obtained by the Browardbulldog.org, the city challenged many of the Inspector General’s assertions, including that one.
“A close reading of this opinion will reveal that the Attorney General gives no definite answer as to whether or not grants to nonprofits are outside the scope of the community redevelopment act,” says the response, noting the opinion was advisory and nonbinding.
City Manager Miller declined to discuss the response in detail. “We asserted our objections,” she said.
City Attorney V. Lynn Whitfield and CRA attorney Steven Zelkowitz helped Miller prepare the response, which included the assertion, first raised last June, that the Inspector General does not have regulatory authority over the CRA.
Mayor Joy Cooper, who like her fellow city commissioners also acts as a CRA director, did not respond to a request for comment.
But Hallandale Beach’s response made it clear that city officials were not backing down and asserting they had acted properly and in accordance with state law.
“There is very little case law or authority providing guidance as to what types of projects may or may not qualify as a community redevelopment project,” stated the response.
The response pointed out that in a case involving the Panama City Beach CRA, a court ruled the state statute governing CRA expenditures for public projects.
The city objected to the Inspector General’s finding that the city had failed to create a separate CRA trust fund until last May, saying in its response that a fund was established in 1996 by city ordinance. The response adds that state law does not require that the trust fund “be maintained in a separate bank account.”
The city also parried the Inspector General’s assertion that the CRA had failed to create an update its redevelopment plan saying, “there is no statutory requirement to update the plan.” The city noted, however, that it is currently updating its plan.
The Inspector General’s critique that the city had failed to established standards for awarding grants to charitable organization was met by a similar defense. The city argued that state law “does not require a transparent process or standardized criteria” — and because of that cannot be accused of “gross mismanagement.”
The city said, however, that it has adopted a formal process for applying for grants that will go into effect next year.
The city’s response acknowledges a good practice would have been to monitor how non-profits spent the money the CRA gave them, but once again contended that state law did not require this.
“The legal requirement is that the funds be utilized for a public purpose,” the response said. “It is the responsibility of the government board to determine whether or not it is a public purpose.”
The city attacked the Inspector General’s criticism of the CRA loan program saying it had failed to understand the need for “flexibility in the administration of its programs” and that some businesses may not qualify for regular private financing.
“This is the nature of community redevelopment,” the response stated. “In certain instances, such may result in financial losses and require the waiver of certain loan terms. Such does not necessarily constitute gross mismanagement….”
Likewise, the city took issue with the Inspector General’s concern that CRA bond funds were used to pay costs related to the upgrading of two parks outside its boundaries, Scavo and South Beach.
“The city objects to the inclusion of this matter in the report,” the response said.
City officials have said a plan is in place to repay any CRA funds used for those parks once work actually gets underway.
The city noted, too, that changes have been made in the past year to improve CRA management and operations.
These include hiring an experienced CRA attorney and a financial analyst; amending CRA policies on loans and grants; assuring accountability for loans; creating standards and accounting for charitable loans to nonprofit groups; fiscally separating CRA funds from city funds; ensuring city and CRA priorities are aligned; maintaining clear and consistent lines of communications regarding for plans and projects.
“It is our mission to continue to implement enhanced internal controls as well as stabilize the administration of the CRA and the city,” the response concludes.
The Inspector General’s Office has said that once it receives the city’s response it will finalize its report and officially release it.
William Gjebre can be reached at firstname.lastname@example.org
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