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Prodded by federal judge, FBI finally identifies Sarasota Saudis by name in court

By Dan Christensen, FloridaBulldog.org 

Six years after news broke that the FBI found ties between 9/11 hijackers and a Saudi family who’d moved abruptly out of their Sarasota home two weeks before the terrorist attacks – and didn’t tell Congress – the FBI has identified the family publicly.

The disclosure is in a partially declassified Memorandum for the Record that recounts a briefing about the family given by the FBI to the 9/11 Review Commission on April 30, 2014. “Briefing Title: Al-Hiijjii Family,” the document says.

The FBI reluctantly disclosed the family’s last name – which is correctly spelled al-Hijji – in the wake of a Miami federal judge’s Feb. 27 order that it had failed to show that disclosure would invade the al-Hijjis’ privacy. The original version of the memo, released in November, blanked out the al-Hijji name, claiming privacy exemptions to the Freedom of Information Act (FOIA).

Abdulaziz al-Hijji and his wife, Anoud, came to the FBI’s attention within hours of 9/11 when neighbors contacted them to say the couple abruptly had moved out of their upscale home in the Prestancia development, leaving behind their cars and numerous personal belongings. Anoud’s father, Esam Ghazzawi, an advisor to a Saudi prince, owned the home.

Among other things, agents later determined that vehicles driven by 9/11 hijack pilots Mohamed Atta and Ziad Jarrah – who trained at nearby Venice Municipal Airport – had visited the al-Hijji home at 4224 Escondito Circle.

The FBI kept its investigation secret for a decade, not informing Congress or the 9/11 Commission, according to former Florida Sen. Bob Graham, who co-chaired Congress’ Joint Inquiry into the attacks.

Florida Bulldog, working with Irish author Anthony Summers, first reported about the investigation in September 2011. The FBI later confirmed the existence of the probe, but said it found no connection to the 9/11 plot.

The FBI’s disclosure of the al-Hijji name is a small but noteworthy milestone in FOIA litigation brought by Florida Bulldog last June that seeks the release of records of the secretive 9/11 Review Commission. The commission, paid and controlled by the FBI, spent a year conducting an “external” review of the FBI’s post-9/11 performance and evaluating new evidence. It issued a 127-page report in March 2015.

Was al-Hijji a snitch?

The unwillingness of the FBI to publicly identify al-Hijji for so long, even though his name was widely reported, raises questions about why.

“It makes you wonder if they’re going through all this because there’s an arrangement with al-Hijji and Ghazzawi,” said Florida Bulldog’s Miami attorney Thomas Julin. “It smacks of a confidential source agreement.”

Abdulaziz al-Hijji, right, in Sarasota prior to 9/11 and leaving his London office in 2012 Photo in London by Warren Allot for The Telegraph

The FBI filed court papers this month seeking again to dismiss the lawsuit. In them, the FBI said it had reviewed about 900 pages of classified commission records and declassified and released 328 pages in whole or in part. While some records containing new information about 9/11 were disclosed, many of those records were copies of the FBI’s personal services contracts with commission members and staff.

The government’s filings seek to explain to the court why, despite several ostensibly thorough searches, the bureau continues to report finding new Review Commission documents, as recently as March 7 and again on March 13.

Government court papers said the records, like others previously processed, were under the direct control of FBI Director James Comey, who kept the 9/11 Review Commission’s records stored in his office and not in the FBI’s Central Records System.

The March 7 documents were said to include four additional Memoranda for the Record and “a number of transitory records” the FBI thought it had purged last year. The records were being reviewed for possible release.

“In addition, on March 13, 2017, the FBI Director’s Office identified certain hard copy records held in storage, which had not previously been identified or searched, and which it believes may include material responsive to plaintiffs’ requests,’’ said another government filing. “The Records and Information Dissemination Section is currently retrieving these additional records and will review the same.”

Releasing “in context”

The release of the al-Hijji name, while notable, was not complete. There are clear references to the al-Hijjis elsewhere in the April 30, 2014 Memorandum for the Record, but the names remain redacted.

Here’s how the FBI explains it: “The FBI concedes to releasing the Al-Hiijjiis in this context. This is the summary of information released in a public article.”

The disclosure marks the second time that judicial prodding has caused the FBI to make public names in the memorandum that it previously withheld citing privacy concerns.

In February, the bureau identified Special Agent Jacqueline Maguire as the briefer who told the Review Commission that an explosive April 2002 FBI report stating that agents found “many connections” between the al-Hijjis and “individuals associated with the terrorist attacks on 9/11/2001” was bogus.

The report flatly contradicted FBI public statements that agents had found no connection to the 9/11 plot.

The report “was a bad statement. It was overly speculative and there was no basis for the statement,” Maguire said, according to the memorandum. The memo, however, contains nothing to explain the basis for Maguire’s assertions.

The agent who wrote the controversial report is Gregory Sheffield. Judge Cecilia Altonaga has ruled that FBI disclosure of his name would not invade his privacy. Nevertheless, the FBI has not acknowledged his name.

The FBI kept Sheffield’s report secret for more than a decade before releasing a partially declassified version to the Florida Bulldog in March 2013 amid separate FOIA litigation in Fort Lauderdale. The document, censored on grounds of national security, confirmed previous reporting.

Strange case: BSO looking to buy rights to embarrassing lawsuit to quash it

By Dan Christensen, FloridaBulldog.org 

Broward Sheriff Scott Israel

The Broward Sheriff’s Office is making a bizarre bid to squelch a disturbing lawsuit brought against it by a former employee – it wants to buy all rights to the lawsuit from a bankruptcy court trustee.

The lawsuit, filed in 2015 by former BSO Human Resources Information Manager Jennifer Bakowski, includes a host of allegations against BSO including false imprisonment, defamation and malicious prosecution.

In federal bankruptcy court Thursday, a lawyer for BSO asked the court to deny the trustee’s plan to allow Bakowski to buy back her own lawsuit at a cost of about $86,000. Instead, he said, the sheriff should be allowed to buy it for $161,000 in public dollars.

“If we can acquire the case, we can dismiss the case,” said Fort Lauderdale attorney Thomas M. Messana.

“It was his client’s misdeeds that caused the bankruptcy,” countered the trustee’s lawyer, Jason S. Rigoli of Boca Raton. Rigoli argued BSO had no standing to object to the trustee’s proposal to sell the lawsuit back to Bakowski, noting her offer was sufficient to pay off all creditors and attorneys’ fees in full with interest.

“They’re trying to cover up and cap the amount of their liability,” Miami attorney Christian Olson told U.S. Bankruptcy Court Judge Raymond B. Ray on behalf of Bakowski.

Ray deferred a ruling, and asked both sides to submit final written arguments by March 31. It was unclear whether another hearing on the matter would be held.

Bankruptcy trustee Marc P. Barmat obtained opinions from independent trial attorneys that valued the case as being worth much as $1.2 million, according to attorneys for Bakowski.

Strange case

The strange case arose out of a reopened bankruptcy court case that Bakowski and her husband, Robert, originally filed in 2013 in the wake of her December 2012 firing by Sheriff Scott Israel.

Bakowski was a 13-year employee with an otherwise spotless record when two sheriffs – Al Lamberti and Israel, his successor – publicly accused her of embezzling approximately $1 million. A year later, however, BSO detectives and the State Attorney’s Office cleared Bakowski of wrongdoing after determining, among other things, that in fact no money was missing, court records say.

Jennifer Bakowski

While under investigation, Bakowski and her husband filed for bankruptcy in Fort Lauderdale as their debts piled up following the loss of what was said in court to be a “six-figure salary.” The court discharged the couple’s debts in August 2013.

More than a year later, on Jan. 31, 2015, Bakowski sued Sheriff Israel and several underlings in Broward Circuit Court alleging a variety of misconduct by BSO arising from her dismissal.

In June 2016, an attorney for BSO contacted the trustee to tell him about the lawsuit, alleging it should have been included in the bankruptcy estate because the claims arose well before the underlying damages case was filed in Broward Circuit Court. The trustee soon moved to reopen the Bakowskis’ bankruptcy case and, as required by law, gave notice to the couple’s debtors to refile any claims.

The trustee and the Bakowskis later agreed to avoid the costs of further litigating whether all the alleged causes of action in the state complaint against BSO are property of the estate. They agreed to give all rights and title to the suit to the trustee.

The trustee then proposed to sell to Jennifer Bakowski those bankruptcy rights. After Thursday’s hearing, Bakowski said she would fund the rights purchase with money she recently inherited from her late mother.

The sale would have gone through, but BSO objected. Specifically, BSO’s lawyers complained in court papers, “The sale ‘process’ was opaque, was not conducted at arms length, and favors the debtor over the estate and its creditors.”

“We’re not a disgruntled bidder,” BSO lawyer Messana told Judge Ray. “We’re saying the process was unfair.”

President Trump on witness list in Palm Beach lawsuit involving billionaire pedophile

By Dan Christensen, FloridaBulldog.org 

President Trump and Jeffrey Epstein

President Donald Trump is on a list of witnesses for trial in a Palm Beach lawsuit that pits billionaire pedophile Jeffrey Epstein against a Fort Lauderdale attorney who represents Epstein’s victims.

The case appears bound for trial this summer following a Feb. 9 ruling by the Florida Supreme Court in another case that has allowed Fort Lauderdale lawyer Bradley Edwards’ claim of malicious prosecution against Epstein to proceed.

President Trump “has been identified as an individual who may have information relating to these allegations,” said Edwards’ West Palm Beach attorney Jack Scarola, who placed Trump’s name on a witness list on Aug. 31. “But it’s unlikely that he would ever be called” to appear at trial, especially now that he’s assumed the presidency.

Scarola said Trump is one of a number of high-profile individuals whose testimony might be relevant because they “had a relationship with Epstein that would have at least exposed them potentially to what was going on inside Epstein’s Palm Beach home … during the relevant period of time” between 2001-2007.

What was going on in Epstein’s mansion, court papers say, was an ugly child molestation scheme involving sex with “substantially more” than 40 girls, some as young as 12. A “statement of undisputed facts” filed by Scarola says Epstein used his staff and his victims to recruit more victims, employing “a pyramid abuse scheme in which he paid underage victims $200-$300 cash for each other underage victim that she brought to him.”

“There is no evidence the President was involved in Epstein’s schemes,” Scarola said.

Secretary of Labor nominee Alex Acosta

Still, the spectacle of a U.S. president being drawn into sordid litigation involving a notorious politically connected sexual criminal who got an apparent sweetheart deal from then-Miami U.S. Attorney Alex Acosta, now Trump’s nominee to become U.S. Secretary of Labor, represents a potential political nightmare for the White House.

The White House press office did not respond to requests for comment.

Epstein’s attorney, Tonja Haddad Coleman, declined to comment.

An affidavit about Trump

A little-noticed affidavit by Edwards recounting his knowledge of Trump’s involvement with Epstein is recounted further below in this story.

Investment banker Epstein, represented by a team of high-powered lawyers, pleaded guilty June 30, 2008 in Palm Beach Circuit Court to two felonies: procuring a person under 18 for prostitution and offering to commit prostitution. He served 13 months of an 18-month sentence. The Palm Beach Daily News has reported Epstein served his time in “a vacant wing at the Palm Beach County Stockade with liberal work-release privileges.”

Today, Epstein, 64, is a registered sex offender.

In exchange for his plea, U.S. Attorney Acosta agreed not prosecute Epstein or his employees on federal charges contained in a 53-page indictment. A 2007 federal non-prosecution agreement with Epstein states, among other things, that he “knowingly and willfully” conspired with others to use interstate commerce to “persuade, induce, or entice minor females to engage in prostitution.”

If convicted of that charge, and others cited in the agreement, Epstein faced possible prison for life.

Republican Acosta, dean of Florida International University’s Law School and chairman of U.S. Century Bank, is expected to be asked about his treatment of Epstein at his Senate confirmation hearing on Wednesday.

In addition to the malicious prosecution claim against Epstein, attorney Edwards is also suing the government on behalf of “Jane Doe 1 and Jane Doe 2” and others under the federal Crime Victims’ Rights Act (CVRA). The lawsuit, filed in 2008, alleges the U.S. Attorney’s Office under Acosta violated the rights of Epstein’s victims by, among other things, “conspiring” with Epstein to keep them “in the dark’’ so the plea arrangement could be done without the victims “raising any objection.”

Wifredo Ferrer, who stepped down as Miami U.S. Attorney earlier this month

In February 2016, Edwards and co-counsel Paul Cassell filed a still-pending motion for summary judgment that says Acosta’s successor, Wifredo Ferrer, “has continued to fight” victims’ efforts “to have the court declare that their rights were violated.” The motion asks U.S. District Judge Kenneth Marra to rule that the government violated the victims’ rights and explore possible remedies. Ferrer stepped down March 3.

Addressing a “terrible injustice”

“Both Brad and Professor Cassell undertook and have continued to prosecute the CVRA claim to address what they perceive to be a terrible injustice,” said Scarola. “There is no claim for money damages and there is no prevailing party provision in the CVRA” that would allow them to collect legal fees for their work on the case.

Attorney Edwards began representing several of Epstein’s victims while maintaining a solo law practice in 2008, settling a number of claims for undisclosed amounts two years later.

For eight months in 2009, however, he worked for Rothstein, Rosenfeldt and Adler, the law firm that spectacularly imploded in scandal in November of that year when it was discovered that founder Scott Rothstein was running a giant Ponzi scheme. Rothstein, now in prison, enticed investors by falsely claiming that they could buy into lucrative pending settlements in whistleblower, sexual harassment and other cases.

Edwards’ court papers say he knew nothing of Rothstein’s schemes, and federal authorities later determined Edwards to have been one of Rothstein’s victims. In 2009, however, Epstein sued Rothstein, Edwards and one of Edwards’ clients alleging, among other things, civil racketeering. Edwards’ court response: the suit was filed “for the sole purpose of attempting to intimidate” him and his client.

Epstein later dropped all his allegations, and Edwards since has turned the case back against him with his counterclaim of malicious prosecution. The case was on hold for two years pending last month’s Florida Supreme Court ruling, which reversed a lower court decision that dismissed the accusation on technical grounds.

Edwards won’t discuss either case. But in a little-noticed 2010 affidavit, given a year after the case was filed, Edwards explained why he thought Trump and other notables involved with Epstein, including former President Bill Clinton, might have relevant information to provide.

“If you’ve read Brad’s affidavit then you know everything there is to know regarding Trump,” Scarola said.

Does Trump have knowledge of Epstein’s crimes?

In his affidavit, Edwards suggests Trump has personal knowledge of Epstein’s criminality.

“I learned through a source that Trump banned Epstein from his Maralago [Mar-A- Lago] Club in West Palm Beach because Epstein sexually assaulted an underage girl at the club,” Edwards stated.

The affidavit notes that Trump visited Epstein at Epstein’s West Palm Beach home – “the same home where Epstein abused minor girls daily.”

Fort Lauderdale attorney Bradley Edwards

A “review of message pads confiscated from Epstein’s home” showed “that Trump called Epstein’s West Palm Beach mansion on several occasions during the time period relevant to my client’s complaints,” the affidavit says. Likewise “Epstein’s phone directory from his computer contains 14 phone numbers for Donald Trump, including emergency numbers, car numbers, and numbers to Trump’s security guard and houseman.”

The affidavit goes on to say that one of Epstein’s victims “Jane Doe #102” has alleged that she was initially approached at Trump’s Mar-A-Lago by Ghislaine Maxwell and recruited to be Maxwell and Epstein’s “underage sex slave.”

Maxwell, daughter of the late British publishing baron Robert Maxwell, is named in the affidavit as an Epstein associate of interest. She is described in court papers as Epstein’s “longtime companion” who helped run his companies and “recruit underage children” for the pleasure of both Epstein and herself. The affidavit says she attended the wedding of Chelsea Clinton, Bill and Hillary Clinton’s daughter, in July 2010.

The affidavit goes on to cite the 2009 deposition of Epstein’s brother, Mark Epstein, who “testified that Trump flew on Jeffrey Epstein’s plane with him (the same plane that Jane Doe 102 alleged was used to have sex with underage girls).”

Likewise, attorney Edwards cited in his affidavit a 2002 New York Magazine article about Epstein titled, “Jeffrey Epstein: International Moneyman of Mystery.”

“I’ve known Jeff for fifteen years. Terrific guy,” said Trump, then a prominent, wealthy New York developer. “He’s a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side. No doubt about it – Jeffrey enjoys his social life.”

The subtitle of the article about Epstein: “He’s pals with a passel of Nobel Prize-winning scientists, CEOs like Leslie Wexner of the Limited, socialite Ghislaine Maxwell, even Donald Trump. But it wasn’t until he flew Bill Clinton, Kevin Spacey, and Chris Tucker to Africa on his private Boeing 727 that the world began to wonder who he is.”

A second U.S. president

While ex-President Clinton is not on the witness list for trial, Edwards listed a number of reasons in his affidavit to believe that Clinton might have relevant information about Epstein. They include:

·      Clinton’s “well known” friendship with Ghislaine Maxwell, an alleged enabler of Epstein’s sexual crimes with young girls.

·      Clinton’s highly publicized travel with Epstein and Maxwell aboard Epstein’s private plane to Africa. Flight logs for “the relevant years 2002-2005 showed Clinton traveling on Epstein’s plane on more than 10 occasions and his assistant, Doug Band, traveled on many more occasions.” The logs also showed Clinton traveled with other “employees and/or co-conspirators of Epstein’s that were closely connected to Epstein’s child exploitation and sexual abuse.”

·      “Jane Doe No. 102 stated generally that she was required by Epstein to be exploited not only by Epstein but also Epstein’s ‘adult male peers, including royalty, politicians, academicians, businessmen and/or other professional and personal acquaintances’ – categories Clinton and acquaintances of Clinton fall into.”

Ex-President Bill Clinton

·      “Clinton frequently flew with Epstein aboard his plane, then suddenly stopped – raising the suspicion that the friendship abruptly ended, perhaps because of events related to Epstein’s sexual abuse of children.”

·      Epstein’s computer contact list “contains e-mail addresses for Clinton along with 21 phone numbers for him.”

Attorney Scarola would not say why Clinton is not on the Aug. 31 witness list, stating he is “not at liberty to discuss our litigation strategy.”

Edwards initially sought to depose Trump and Clinton about Epstein, but never did. Scarola said there was no need to depose them after Epstein dropped his racketeering and other claims against Edwards.

While there are other notables on the witness list of those with knowledge of Epstein, including retired Harvard University law professor Alan Dershowitz and illusionist David Copperfield, there’s only one other politician. That’s ex-New Mexico Governor and Clinton Administration Secretary of Energy Bill Richardson.

The affidavit says Epstein’s personal pilot, Larry Morrison, testified in a 2009 deposition about “Richardson joining Epstein at Epstein’s New Mexico ranch” and that “there was information that Epstein had young girls at his ranch which, given the circumstances of the case, raised the reasonable inference he was sexually abusing these girls since he had regularly and frequently abused girls in West Palm Beach and elsewhere.

“Richardson had also returned campaign donations that were given to him by Epstein, indicating that he believed that there was something about Epstein that he did not want to be associated with,” the affidavit says.

FBI censored documents to protect privacy of accused 9/11 mastermind, accomplice

By Dan Christensen, FloridaBulldog.org 

Khalid Sheikh Mohammed after his capture in Rawalpindi, Pakistan on March 1, 2003

Even as the FBI recently has made public more 9/11 records to satisfy the requirements of the Freedom of Information Act in advance of a possible trial, it continues to withhold untold documents that promise to cast new light on that terrible day in 2001.

Likewise, about 1,000 pages from the secretive 9/11 Review Commission that were declassified are shot through with blanked-out words, sentences, paragraphs, even entire pages – FBI deletions that undermine the act’s purpose as “a means for citizens to know ‘what their government is up to.’”

The FBI made public those pages in response to a Freedom of Information lawsuit filed in June by the corporate parent of Florida Bulldog after the bureau did not properly respond to lawful record requests. The Review Commission, also known as the Meese Commission after its best-known member former Attorney General Edwin Meese, was authorized by Congress to conduct an “external” review of the FBI’s post-9/11 performance and to examine new evidence. Its members were chosen and paid by the FBI. It issued its final report in March 2015.

National security and the need to protect informants were among the reasons the FBI cited to explain why certain information was kept hidden. In other cases, the reasons the FBI has asserted for redactions appeared arbitrary, even bizarre.

Take for example the 53-page FBI PowerPoint presentation titled “Overview of the 9:11 Investigation” that was shown to the commission during a briefing in April 2014. The PowerPoint included the “non-immigrant visa application” filled out by accused 9/11 architect Khalid Sheikh Mohammed, who for the last 10 years has been held at the Guantanamo Bay detention camp.

The FBI withheld Mohammed’s entire visa application. Its reason: disclosure “could reasonably be expected to constitute an unwarranted invasion of personal privacy.”

The FBI further asserted the privacy rights of Mohammed and fellow “high-value” Guantanamo detainee Mustafa al-Hawsawi in its decision to withhold PowerPoint slides about their credit card information. Specifically withheld: al-Hawsawi’s “credit card statement and supplemental card activity” and Mohammed’s “supplemental Visa card application” to the United Kingdom’s Standard Chartered Bank.

Al-Hawsawi, a Saudi charged with war crimes, is an alleged senior al Qaeda member and organizer and financier of 9/11.

Nine other pages from the 9/11 PowerPoint were deleted. Also redacted was all information about these titles: “Funding of the 9/11 Attacks” and “Additional Funding Early to Mid-2001”; “Early to Mid-2000: Pilots/Intended Pilots Arrive U.S.”; “Early to Mid-2001: Non-Pilots Arrive U.S.”; “July-August 2001: Knife Purchases; August 2001: Reserving 9/11 Tickets.”

The FBI withheld each of those records citing exemption b7E to the Freedom of Information Act, which shields from disclosure “techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law.”

In addition, four pages in the PowerPoint titled “Ongoing Investigation” were blanked out. A variety of reasons cited included privacy, inter-agency or intra-agency memorandums, and techniques and procedures – but not national security.

On the other hand, the bureau last month did release one tidbit that’s sure to fire up those who believe the destruction of the Twin Towers was an “inside job” or that the Pentagon was hit by a missile, not an American Airlines Boeing 757.

A partially declassified Memorandum for the Record (MFR) regarding an April 23, 2014 FBI briefing about its 9/11 investigation mentions a startling request for information to the FBI that day:

“The commissioners requested a list of evidence that shows it was actually a plane that crashed into the Pentagon,” the memo says.

Why did the Meese Commission make such a curious request? Did the FBI provide such a list?

The MFR’s declassified pages don’t answer those questions. Still, more than two pages of the six-page document were kept secret citing FOIA exemptions that prevent the disclosure of certain inter-agency or intra-agency memos and sensitive law enforcement techniques.

As some judges balk at Broward’s new high-rise courthouse, BSO has security issues

By Dan Christensen, FloridaBulldog.org 

Broward’s new 20-story courthouse tower

Broward’s juvenile delinquency judges have refused to move into the county’s new $276.4 million high-rise courthouse, while Broward Sheriff’s officials described the building as riddled with security issues, including a “serious escape risk.”

A Feb. 15 BSO internal memo obtained by Florida Bulldog lists 25 security issues or design flaws identified during a “thorough examination of the detention area” of the 20-story structure. Some might seem comical if they weren’t so serious.

For example, the report notes that light switches and thermostats for holding cells are located inside, instead of outside, the cells, giving inmates control.

BSO requested immediate corrective action to remove the switches and thermostats.

“The light switches should only be controlled by staff in the control room,” the memo says. “The temperature should only be controlled by staff in the control room.”

Further, the memo says lighting is adjusted by certain efficiency measures. Those measures “must be removed so that the cell lighting is strictly controlled by staff. Inmates in the holding cells must be visible at all times.”

Assistant County Administrator Alphonso Jefferson said juvenile courtrooms, like other courtrooms, were “built in accordance with approved design plans” signed off on by the court years ago. He nevertheless said the county is working with the sheriff’s office to make the desired fixes.d

Broward Assistant County Manager Alphonso Jefferson

“I’m aware of this and these are punch-list items,” he said. “There are punch-list items with any building, items you have that need to be addressed. We’ve had numerous walk-throughs with BSO and we’ve identified these items that are additional.”

BSO declined to comment, except to say that the memo, prepared by Captain Veronica Carroll, commander of the detention department’s Central Intake Bureau, was later updated. A request to see a copy of the updated memo was denied.

Juvenile delinquency judges say no thanks

Apparently not fixable, however, were matters of concern to enough of the county’s four juvenile delinquency judges that they decided recently to remain in or move to courtrooms in the courthouse’s modern North Tower on Southwest Third Avenue in Fort Lauderdale.

“Judge [Elijah] Williams and I went over there and it didn’t take us long to figure out that those courtrooms were not appropriate for juvenile delinquency court,” said Broward Juvenile Court Judge Carlos Rebollo.

Among other things, he said, the new juvenile courtrooms located on the tower’s ninth floor are “very small,” include no jury box where in-custody juveniles are kept while in court and have “holding cells that looked like a prison.”

“You’re dealing with juveniles and the last thing you want to do is put them in an environment in which it looks like they’re in prison,” said Rebollo.

The juvenile holding cells, which do not allow for the separation of male and female inmates, have open toilets.

“The way these things were designed was very institutionalized and the judges were very adamant that they didn’t want these kids to be placed in those holding cells,” said Chief Assistant Public Defender Gordon Weekes, whose office also opposed the new juvenile courtrooms. “They have an open toilet. You put four kids in there and if one has to use the bathroom they have to do it in front of the other three with no partition, and maybe even in front of an adult passing through.”

Fixes would be costly

Weekes said the cost to modify the juvenile facilities to make them acceptable for such work would have been great.

“It’s my understanding after speaking to the county that it would be millions of dollars to fix issues in the juvenile courtrooms,” Weekes said. The courtrooms will now apparently be repurposed.

To date, the new tower remains largely unoccupied. Those that have moved in include the clerk of courts, the state attorney, BSO and probate courts, Jefferson said. March 20 was set to be the date by which most of the judges would move in, but the date was said by two sources to have been abandoned amid an argument between the county and BSO on appropriate security staffing levels.

BSO’s memo addresses a variety of security deficiencies in the new courthouse, the most critical of which was in the sally port, the secure gateway between the jail and court. One issue cited in the report “poses a serious escape risk.” The underline is in the memo.

Other issues include “numerous blind spots” that pose life safety issues, fire sprinklers can be too easily tampered with by inmate, and “in-cell cameras are encased in cheap plastic that is easily manipulated.’’ The detention area also has no Self Contained Breathing Apparatus, a device that can provide breathable air in an emergency.

Of particular concern to Weekes was another holding cell deficiency: a handicap railing that’s “contrary to suicide prevention.”

“Most people think of a jail suicide as someone hanging from an overhead bar, but anyone can wrap a towel around their neck and lean forward. That’s just as effective. I don’t understand why they would allow that.”

U.S. judge cites ‘shameful’ FBI delays in making 9/11 records public

By Dan Christensen, FloridaBulldog.org 

Miami U.S. District Judge Cecilia Altonaga

A Miami federal judge Tuesday excoriated the FBI for what she called its “shameful” delays in making public certain records about the bureau’s 9/11 Review Commission.

“It is distressing to see the length to which a private citizen must go” to obtain records under the Freedom of Information Act [FOIA],” said U.S. District Judge Cecilia Altonaga. “It’s quite shocking frankly.”

At the same time, however, the judge gave the government two weeks to file a further summary judgment motion explaining why it believes the case brought by Florida Bulldog’s parent company should be dismissed. The ruling put off for now an unusual FOIA trial that had been scheduled to begin next week.

“The judge has done an excellent job moving this difficult case forward irrespective of the FBI’s stall tactics,” said attorney Thomas Julin, a partner in the Miami office of the Gunster law firm who represents Florida Bulldog. “This short delay will not put the Bulldog off the scent.”

Assistant U .S. Attorney Carlos Raurell represents the government. He declined to comment.

Broward Bulldog Inc. sued the FBI and the Justice Department last June, looking for records about the secretive three-man 9/11 Review Commission, whose most prominent member was Reagan-era Attorney General Edwin Meese. The group, also known as the Meese Commission, was authorized by Congress to conduct an “external” inquiry into the FBI’s post-9/11 performance and to assess new evidence. The commissioners were selected by FBI Director James Comey and paid by the FBI.

The Meese Commission, which began its work in 2014, went out of business after issuing a 127-page report in March 2015. The citizen’s 9/11 Commission released its findings in 2004.

In a related case, Bulldog is suing the FBI in federal court in Fort Lauderdale seeking records from the FBI’s 2001-2003 investigation of Abdulaziz and Anoud al-Hijji, a Saudi couple living in Sarasota with ties to the kingdom’s royal family and apparent ties to the 9/11 hijackers. The al-Hijjis came to law enforcement’s attention after neighbors reported they’d abruptly moved out of their upscale home two weeks before the terrorist attacks, leaving behind their cars, clothes, furniture and food in the refrigerator.

U.S. District Judge William J. Zloch is reviewing more than 80,000 pages of classified 9/11 records produced by the FBI for his inspection and possible release.

The ‘many connections’ FBI report

One document the FBI did release six months after that initial FOIA case was filed in September 2012 was a copy of an April 16, 2002 report that said agents found “many connections” between the al-Hijjis and “individuals associated with the terrorist attacks on 9/11/2001.” The couple’s name was blanked out, but discernible.

Abdulazziz al-Hijji in a photo taken when he lived in Sarasota

The report flatly contradicted prior statements by the FBI that agents had found no connection to the 9/11 plot. The FBI, however, repudiated its report in a briefing given to the Meese Commission on April 30, 2014.

A memorandum about the briefing says FBI Supervisory Special Agent Jacqueline Maguire called the 2002 report “a bad statement. It was overly speculative and there was no basis for the statement.” The Meese Commission report said the agent who wrote it was “unable” to explain to his superiors why he wrote it as he did. The FBI has not identified the report’s author, but he is former Fort Myers Special Agent Gregory Sheffield.

At Monday’s calendar call, attorney Julin said the Bulldog was prepared to proceed to trial next week while prosecutor Raurell argued the government needed a continuance in order to file additional court papers asking the judge to dismiss the case. Judge Altonaga gave Raurell two weeks to file a new motion for summary judgment. If summary judgment is not granted on all remaining issues, a trial date will be scheduled.

Julin contends the FBI had no basis to keep Meese Commission records secret.

“The FBI started this fight by claiming it found nothing in Sarasota when it quite obviously did. We’re trying to get records which show why the Meese Commission continued this charade,” he said. “Did the FBI agree not to investigate Saudis who supported the 9/11 hijackers? That is what we’re trying to find out.”

Altonaga’s order

On Monday, Judge Altonaga issued a 37-page order in which she addressed the government’s initial motion for summary judgment, filed Dec. 30, and issues about the appropriateness of FBI redactions laced through four previously released documents. The FBI has cited various exemptions to the Freedom of Information Act to justify those deletions, but the news organization objected to many of those redactions as improper.

In a nutshell, the judge ruled the FBI improperly veiled the names of FBI agents, the al-Hijjis and others in the records it has released by repeatedly citing two exemptions intended to shield information that could result in “an unwarranted invasion of personal privacy.”

The ruling could prompt the FBI to restore those names and re-release those documents, or the bureau could choose to try to persuade the judge of its position at a future trial.

The FBI fared much better with Altonaga regarding its other cited exemptions.

Specifically, the judge ruled the bureau had properly asserted exemptions intended to protect national security, confidential informants, law enforcement records or techniques and procedures and inter-agency or intra-agency memos or letters. The ruling means the FBI is not required to make that information public.

Altonaga saw un-redacted copies of the documents. In her decision granting summary judgment in favor of the FBI on matters of national security, she cited legal precedent that courts “should defer to an agency’s decision to withhold information” about national security matters.

Judges “must recognize that the Executive departments responsible for national defense and foreign policy matters have unique insights into what adverse affects [sic] might occur as a result of public disclosure of a particular classified record,” the court papers say.

‘Penttbomb 2.0’ and the FBI’s brush-off of reports alleging 9/11 ties to Saudi Arabia

By Dan Christensen, FloridaBulldog.org 

September 11, 2001
Photo: Det. Greg Semendinger NYC Police Aviation Unit

FBI officials who briefed the 9/11 Review Commission on the bureau’s sprawling 9/11 investigation code-named PENTTBOMB steered the discussion away from Saudi Arabia by repeatedly disavowing or downplaying reports by agents alleging terrorist ties to the kingdom.

The FBI’s stance is similar to its repudiation before the commission of a startling April 2002 FBI report that said investigators had determined that Saudis living in Sarasota had “many connections to individuals associated with the terrorist attacks on 9/11/2001.” The memo, made public by the FBI in March 2013, flatly contradicted earlier FBI statements that its Sarasota investigation, kept secret for a decade, had found no ties to terrorism.

The FBI’s March 31, 2014 Memorandum for the Record (MFR) about the briefing, stamped “SECRET,” was partially declassified and released to Florida Bulldog last week along with other records. The news organization is suing the FBI under the Freedom of Information Act (FOIA) for access to 9/11 Review Commission records it has not released. A trial is scheduled for next month in federal court in Miami.

The FBI, which for more than a year refused to disclose any documents about the 9/11 Review Commission, recently has dribbled out records to comply with FOIA requirements following a judge’s admonishment this month that she was not satisfied with the FBI’s explanations for withholding certain information.

Many other FBI records on the commission continue to be withheld in full, while the bureau has yet to acknowledge the existence of additional documents that appear to exist.

Former U.S. Sen. Bob Graham, a Florida Democrat who served as co-chair of Congress’ Joint Inquiry into 9/11, reviewed the MFR and called it “just another chapter in the cover-up.”

Former Florida Sen. Bob Graham

“It sounds like the FBI was going through the original reports that were submitted and 10 years later they were trying to change the facts and discredit much of the information that was in their original reports,” he said. “There’s no indication of the basis on which they thought the original reports were inaccurate other than they were poorly written.”

The Review Commission was authorized by Congress to conduct an “external” review of the FBI’s post-9/11 performance and to evaluate new evidence, but was largely controlled by the FBI. Its three members, including Reagan-era Attorney General Edwin Meese, were chosen by FBI Director James Comey and paid $84,000 each by the FBI. The commission issued its final report in March 2015.

The March 2014 briefing was given by Jacqueline Maguire, supervisory special agent in the FBI’s Washington field office; Nikki Floris, director of the Analytical Branch of the FBI’s Counterterrorism Division, and an unidentified FBI supervisory special agent from New York.

Classified until 2039

The briefing’s title and much of its content was redacted from the three-page MFR on grounds of national security. The censored parts are to remain classified until Dec. 31, 2039.

The PENTTBOMB investigation is discussed in a less heavily redacted section. The document notes that PENTTBOMB, the FBI’s code-name for its Pentagon and Twin Towers inquiry was originally assigned to the New York field office, but that the investigation was later moved to FBI headquarters and the Washington field office.

“For 5 years,” the MFR states, “we worked from HQ and worked to prosecute (Zacarias) Moussaoui,” a French citizen who pleaded guilty in April 2005 to conspiring to murder U.S. citizens as part of the Sept. 11 attacks. “From 2006 to the present, it became Penttbomb 2.0 This was broken up into four teams for the four planes. This was the largest investigation in FBI history.”

The memorandum goes on to recount brief summaries of five cases involving individuals “who had interactions with the hijackers.”

9/11 hijackers Khalid al-Mihdhar, right, and Nawaf al-Hazmi.

The first is Omar al-Bayoumi, a suspected Saudi agent who befriended 9/11 hijackers Khalid al-Mihdhar and Nawaf al-Hazmi, both Saudis, shortly after their arrival in Southern California on Jan. 15, 2000. Here is what the MFR says about Bayoumi, though the wording is heavily garbled and confusing:

“The FBI found Bayoumi had role or at least not a role in terrorist activities, despite the 911 Commissions reporting that he was involved and a Saudi Intelligence Offices. The [FBI’s] 911 IG [Inspector General’s] report [written in November 2004 and made public in June 2006] cleared this individual. He came here for school and everything seems accidental with Bayoumi.”

Factual errors in FBI briefing

But the FBI’s briefing for the 9/11 Review Commission was seriously flawed.

The FBI Inspector General’s 9/11 report did not clear Bayoumi of involvement in 9/11. Rather, it found that a preliminary FBI inquiry of Bayoumi opened three years before 9/11 had been investigated and closed appropriately a year later. The inquiry was started after Bayoumi’s apartment manager reported several suspicious episodes.

Moreover, as Florida Bulldog reported on Dec. 19, a newly released FBI report from October 2012 identified Bayoumi as one of three “main subjects” of an active New York criminal investigation targeting an apparent support network for Mihdhar and Hazmi, who with three other terrorists crashed American Airlines Flight 77 into the Pentagon.

Among other things, the report said that in June 2012 a team of FBI agents, analysts and a federal prosecutor traveled to London “to exploit evidence seized in 2001 in New Scotland Yard’s searches of Omar al Bayoumi’s residences and offices” in England. The outcome of that 2012 investigation is not known.

The briefing memo also refers to a memorandum written by San Diego’s Joint Terrorism Task Force. The subject matter is blanked out for reasons of national security. It says, however, “This was based on early, bad FBI reporting, but it alleged a connection to Saudi Arabia. Subsequent investigations did not collaborate [sic] this.”

The MFR does not explain the basis for the FBI’s statement.

The name of another “individual with suspected ties to the hijackers” is redacted, but appears from other information in the report to be Osama Basnan, or Bassnan as it sometimes is spelled. The memorandum says he “hated Bayoumi” and was receiving money “for living, school and medical expenses.”

Prince Bandar, Saudi Arabia’s ambassador to the U.S. from 1983-2005

“The FBI didn’t see any connection or money going to terrorists,” the MFR says.

Documents prepared by investigators for the 9/11 Commission in June 2003, however, identify Basnan as “a very close associate of al-Bayoumi” who was “in frequent contact with him while the hijackers were in San Diego.” Basnan was “a vocal supporter of Usama Bin Laden” and “received considerable funding from Prince Bandar [then Saudi Arabia’s ambassador to the U.S.] and Princess Haifa, supposedly for his wife’s medical treatments.”

A 9/11 Commission investigator interviewed Basnan in Riyadh, Saudi Arabia in October 2003. “The interview failed to yield any new information of note. Instead, in the writer’s opinion, it established beyond cavil the witness’ utter lack of credibility on virtually every material subject.”

The MFR also briefly recounts two other matters involving Saudi nationals.

The first states how FBI briefers told the 9/11 Review commissioners about a pair of Saudi naval officers who had contact with the San Diego-based hijackers. The first several words about the matter were censored citing national security, but the MFR contains no other information about the naval officers.

Saudis on a plane

The second involves “a situation that happened when 2 Saudi individuals were on a plane asking questions about the aircraft. The plane ended up making an emergency landing and [blank]. We do not know what these individuals were doing and we do not have any additional bad information on them.”

In fact, the FBI had plenty of additional information about the Saudis that the briefers appear not to have shared with the 9/11 Review Commission.

The Saudis were Hamdan al Shalawi and Muhammad al-Qudhaieen.

The 9/11 Commission Report published in 2004 says that in November 1999 the pair were detained after the crew of a cross-country America West flight reported that Qudhaieen “had attempted to open the cockpit door on two occasions.”

Both men told investigators that Qudhaieen “was only looking for the lavatory on the plane,” the report says.

The FBI chose not to prosecute the two men who were traveling to Washington to attend a party at the Saudi embassy with tickets paid for by the government of Saudi Arabia.

After 9/11, however, FBI agents in Phoenix “considered whether the incident was a ‘dry run’ for the attacks,” according to the 9/11 Commission report.

Authorities later received information that both men had trained in al-Qaeda training camps.

As trial date draws near, FBI releases more about secretive 9/11 Review Commission

By Dan Christensen, FloridaBulldog.org 

FBI Director James Comey, center, announces release of 9/11 Review Commission report on March 25, 2015. Flanking Comey from left to right are commissioners Bruce Hoffman, Edwin Meese and Timothy Roemer. At far right is Executive Director John Gannon

In moves aimed at heading off an unusual Freedom of Information Act trial in Miami next month, the FBI has released new information about the secretive work of its 9/11 Review Commission.

In one disclosure, the FBI made public how much it paid Reagan-era Attorney General Edwin Meese and two other men who served on the Review Commission, and staff. In another, the FBI put a human face on its effort to discredit a dramatic April 16, 2002 FBI report that said agents had found “many connections” between Saudis living in Sarasota and the 9/11 hijackers.

The FBI withheld the 2002 report from both Congress and the National Commission on Terrorist Attacks Upon the United States, more simply known as the 9/11 Commission.

Late last year, in response to FOIA litigation brought by Florida Bulldog, the FBI made public copies of its personal services contracts with Meese, former ambassador and congressman Timothy Roemer and Georgetown professor Bruce Hoffman, but blacked out their pay.

On Friday, however, after U.S. District Court Judge Cecilia Altonaga told a trio of government lawyers she wasn’t satisfied with the FBI’s explanations for withholding such information, the bureau relented and restored those contract details in documents re-released to Florida Bulldog.

The contracts show that Meese, Roemer and Hoffman were paid $80,000 apiece plus $4,000 for travel expenses for 11 months of work.

Payments to staff

The FBI also provided new information about payments to more than a half-dozen staffers for the 9/11 Review Commission.

Executive Director John Gannon, a former CIA Deputy Director for Intelligence, was paid $134,000 plus $4,000 for travel. The FBI’s biggest payout, however, went to Barbara A. Grewe, whose contract shows she was detailed to the 9/11 Review Commission by The MITRE Corporation to serve as a senior director for eight months starting in April 2014. Grewe was paid $163,000 and given $20,000 more for travel. She was hired under an agreement involving the Intergovernmental Personnel Act.

MITRE, with principal locations in Bedford, MA and McLean, VA, is a not-for-profit company that operates federally funded research and development centers to address national security and homeland security and other matters. Grewe’s Linked In profile describes her as a “trusted advisor to senior government officials across a variety of MITRE programs.” She is a former federal prosecutor in Washington who also served as senior counsel for special projects on the 9/11 Commission in 2003-2004.

FBI Director James Comey

The 9/11 Review Commission, also known as the Meese Commission, was authorized by Congress to conduct an “external review” of the FBI’s performance in implementing the original 9/11 Commission’s recommendations and to assess new evidence. FBI Director James Comey picked the Meese Commission’s members, who operated in virtual secrecy, holding no public hearings and releasing no records about its work beyond its March 2015 final report.

Florida Bulldog’s corporate parent, Broward Bulldog Inc., sued the FBI in June for access to Meese Commission records, including those regarding the April 2002 FBI report that says agents found “many connections” between Saudis living in Sarasota and “individuals associated with the terrorist attacks on 9/11/2001.”

The 2002 report, released to Florida Bulldog in 2013 amid a separate and ongoing FOIA lawsuit in Fort Lauderdale, corroborated earlier reporting by the Bulldog in collaboration with Irish author Anthony Summers that disclosed the existence of the FBI’s Sarasota investigation. That reporting showed that the FBI began its probe after being summoned by neighbors who told them that Abdulaziz and Anoud al-Hijji had moved abruptly out of their upscale home about two weeks before 9/11 – leaving behind cars, clothes, furniture and other personal belongings. The home was owned by Anoud’s father, Esam Ghazzawi, an advisor to the late Prince Fahd bin Salman bin Abdulaziz al Saud, a nephew of former King Fahd, and eldest son of Saudi Arabia’s current monarch, King Salman. The prince died in July 2001 at age 46.

In September 2011, Bulldog reported that agents had found evidence that Mohamed Atta and other 9/11 terrorists had visited the al-Hijjis’ home. The bureau, however, did not alert Congress or the subsequent 9/11 Commission to its probe. After the story broke, the FBI acknowledged its investigation, but said it had found no connection to the 9/11 plot. It declined to explain.

The Sarasota Family

The Commission addressed the matter briefly in a section of its 2015 report titled “The Sarasota Family.” The commission’s inquiry consisted of obtaining copies of the case file and being briefed by an agent who discredited the 2002 report, calling it “wholly unsubstantiated” and “poorly written.” The commission took no other testimony about what happened in Sarasota, and its final report does not explain how the FBI came to its conclusion.

The FBI has not released the name of the agent who wrote the report citing privacy considerations. He is Special Agent Gregory Sheffield, who at the time worked in the FBI’s Fort Myers office.

The FBI recently filed a motion for summary judgment that asks the court to dismiss much of the lawsuit. This week, bureau attorneys are expected to file additional court papers seeking dismissal of the entire case. The matter is set for trial in early March.

Tuesday’s hour-long hearing before Judge Altonaga focused on whether the FBI had made an adequate search for records of any discipline given to the agent who wrote the allegedly bogus 2002 report, and whether it had properly redacted portions of records previously released to the Bulldog.

Representing the government at Tuesday’s hearing were Miami Assistant U.S. Attorney Carlos Raurell and two FBI lawyers from Washington, Assistant General Counsel Jonathan Fleshner and Paul Marquette of the FBI’s Record/Information Dissemination Section.

Miami attorney Thomas Julin represented the Florida Bulldog. He argued that a trial would be the proper forum to resolve questions about the FBI’s withholding of information. He told the judge that the news organization’s principal concern was that the FBI had found significant evidence of Saudi government support for the 9/11 attacks and then failed to disclose it to Congress or conduct an adequate investigation.

Joining Julin at the plaintiff’s table was former Florida governor and Sen. Bob Graham, who co-chaired Congress’s Joint Inquiry into the 9/11 attacks. Graham has strongly criticized the FBI for, among other things, failing to notify Congress about its Sarasota investigation.

A heavily redacted Memorandum for the Record

This past November, the FBI released in heavily redacted form a four-page, April 30, 2014 Memorandum for the Record describing the FBI’s briefing about the Sarasota family for the Meese Commission. Among the information the FBI kept secret was the name of the briefer for privacy reasons.

But on Jan. 30, 2017 after Florida Bulldog attorney Julin argued that the Meese report itself had named certain FBI personnel who it said provided “invaluable access to key people and relevant data,” the FBI identified the briefer as Supervisory Special Agent Jacqueline Maguire. Among other things, Maguire told the Meese Commission that the April 2002 report “was a bad statement. It was overly speculative and there was no basis for the statement.”

FBI agent Jacqueline Maguire testifying before the 9/11 Commission June 16, 2004

(The FBI also identified Agent Elizabeth Callahan as the Technical Point of Contact for the Meese Commission members and staff. The FBI has asserted privacy exemptions to the Freedom of Information Act to shield the names of other agents, including the agent who wrote the April 2002 report.)

The memorandum, however, offers no explanation for Maguire’s assertions. On Thursday, attorney Julin asked Miami U.S. Magistrate John O’Sullivan for permission to depose Maguire, but the request was denied.

Maguire previously said in court that she was assigned to the FBI’s New York field office after graduating from the FBI Academy in June 2000. A month after 9/11 she was assigned to a team of agents in Washington working PENTTBOMB, the code-name for its Pentagon, Twin Towers investigation.

“Specifically, I was assigned responsibilities in the investigation into the crash of American Airlines Flight 77 into the Pentagon,” she said in a declaration in another FOIA action in 2005.

In November 2011, Maguire accompanied FBI Deputy Director Sean Joyce to a Washington, D.C. meeting with former Sen. Graham. The White House arranged the meeting after Graham expressed concern about FBI documents he’d seen that contradicted the bureau’s public assertions that it had found no ties to terrorism during its Sarasota investigation. One of those documents was the April 2002 “many connections” report that the FBI provided the Senate Intelligence Committee in the wake of Bulldog’s reporting.

In a sworn declaration, Graham said Joyce sought to allay his concerns by saying that while the documents he’d reviewed did appear to contradict the FBI’s public statements about Sarasota, other FBI files he could review would provide context to show that the FBI’s public statements were correct.

Maguire was to provide Graham with those documents at a follow-up meeting. Joyce, however, soon changed his mind and declined to let Graham see anything else. Graham said Joyce also told him, in so many words, to “get a life.”

Broward insurance firm-turned-‘Ponzi scheme’ cost Florida, policyholders $100 million

By Dan Christensen, FloridaBulldog.org 

Broward entrepreneur Philip Morgaman aboard his luxury yacht, Golden Rule, before AequiCap Insurance Company was declared insolvent in 2011.

The final act in the little-noticed liquidation of a Fort Lauderdale-based insurance company that regulators say evolved into a “Ponzi scheme” that cost Florida and its policyholders more than $100 million is set to unfold in court this spring.

The Florida Department of Financial Services’ fraud case is an offshoot of its receivership of AequiCap, the property and casualty insurance company the state was forced to take over – and pay claims for – when it went belly up in 2011. It was one of Florida’s largest insurance company failures.

AequiCap’s chairman and principal owner was South Florida insurance, taxi and private school entrepreneur Philip Morgaman, a longtime business partner of Broward Yellow Cab kingpin Jesse Gaddis. State court filings say Morgaman milked big money from AequiCap, using the insurer’s funds to provide him with “a form of self-insurance for his business ventures unaffiliated with AequiCap as well as to perpetuate his extravagant lifestyle.”

Today, the state is seeking $1.2 million in damages from four family trusts owned or controlled by Morgaman, and Gulf Coast Transportation. Gulf Coast, based in Broward, operates a fleet of taxis, luxury sedans and shuttle buses on Florida’s West Coast and is owned 50-50 by the Morgaman family and Michael Gaddis, Jesse’s son. Michael Gaddis, a Gulf Coast director, is also a defendant.

Morgaman and son Justin Morgaman, Gulf Coast’s vice president, were recently dismissed as individual defendants due to a previous settlement of a broader lawsuit in the receivership case filed in February 2015, but the trusts remain on the line. Philip Morgaman said in an interview that the defendants have offered to pay $600,000 to settle the lawsuit, but the state won’t accept it.

Leon County Circuit Judge Karen Gievers

Trial is set for June 5 before Leon County Circuit Judge Karen Gievers.

Michael Gaddis did not respond to requests for comment sought over several days.

Fort Lauderdale attorney David Ferguson, who represents the Morgamans, Gaddis and Gulf Coast, filed court papers Monday asking the judge to toss the case out of court saying, among other things, that the state filed its claim well after the five year statute of limitations was up.

“I believe that the (state) has got serious standing and statute of limitation issues and the amount of money they’re claiming is significantly more than they’d be due if they didn’t have this problem,” Ferguson said in an interview.

Also in an interview, Philip Morgaman denied any wrongdoing by himself, his son or Michael Gaddis. He called the state’s case “flimsy” and said it fails to note that he funneled “tens of millions of dollars” into AequiCap in an unsuccessful attempt to save it.

‘We should have gotten a thank you’

“I wore a white hat here. I liquidated most of what I owed, including the schools company I loved and founded in an attempt to turn AequiCap around,” he said. “We paid a quarter of a billion dollars in claims…We should have gotten a thank you.”

The private schools company was for-profit Meritas LLC, which Morgaman started in 2005 with significant backing from private investors. According to a report by the Florida Office of Insurance Regulation, Aequicap invested more than $10 million in Meritas. AequiCap liquidated those holdings in April 2009 as its financial troubles were beginning.

Philip Morgaman and Jesse Gaddis founded AequiCap in 1985. The company specialized in providing commercial auto liability, workers compensation, and public livery insurance in Florida and other states in the southeast. Morgaman said he bought Gaddis out in 1998.

AequiCap’s collapse began in 2009 when the insurer began experiencing what the state’s complaint says were substantial financial problems, including “serious cash flow issues.” The company’s response was to delay and refuse to pay debts and “to disguise and hide” its deteriorating condition from both state regulators and its creditors, the complaint says.

The Aequicap Building in Fort Lauderdale

One of AequiCap’s biggest liability insurance customers was Gulf Coast, which the complaint says was run by Justin Morgaman and Michael Gaddis. The suit alleges the Morgamans had “dual and conflicting roles” at those companies that allowed them to siphon off AequiCap’s assets to benefit Gulf Coast.

In turn, Gulf Coast sent big money back to Morgaman.

“At one point, Gulf Coast distributed $38,000 to [Philip Morgaman] each month,” says the state’s 19-page complaint filed in July. That money, plus payouts for dividends, profit distributions, loan repayments, consulting fees “and all other guises paid to Phillip [sic], Justin and Gulf Coast shareholders were fraudulently transferred assets of Gulf Coast…and were to the detriment of the legitimate creditors.”

To make matters worse for AequiCap, the lawsuit says, the Morgamans also “failed to direct or cause” Gulf Coast to pay its debts to AequiCap or to collect funds Gold Coast owed AequiCap.

AequiCap’s board was a “mere rubber stamp” that gave “total control” to Morgaman “for his personal benefit and the benefit of his friends, affiliates and other insiders,” court papers say.

“Justin and [Michael] Gaddis breached their fiduciary duties to the creditors of Gulf Coast by participating in self-dealing and failing to adequately manage the corporate affairs of Gulf Coast” by not paying Gulf Coast’s debts, making improper loans and allowing improper cash transfers to shareholders, insiders and affiliates of Gulf Coast, the lawsuit says.

State has ‘misrepresented’

Morgaman, who lives in Boca Raton, said it was not true that he and Justin had conflicting roles. “I can see why they say that, but it’s misrepresented and taken out of context,” he said.

Earlier, in the related lawsuit that was settled, the state accused Morgaman of having Aequicap subsidiaries and affiliates distribute cash and benefits to him in lieu of “appropriately transferring profits and cash flow to AequiCap.”

“By way of example, [Philip Morgaman] had $5,900 per month lease payments plus the cost of insurance and a private driver for a Maybach automobile transferred so as to provide him with lavish benefits, all at the expense of and to the detriment of the creditors and policyholders of Aequicap,” court papers say. Maybach is an ultra-luxury brand of Mercedes-Benz.

As AequiCap’s position deteriorated its A.M. Best rating for financial strength fell to “weak.” In response, the Morgamans, company president Mark Stephenson and vice president and general counsel Matthew Jones began issuing cut-rate, risky policies to bring in new customers and dollars “to meet the worsening cash flow issues,” court papers say.

AequiCap Insurance Company logo

“This led to the creation of a form of a Ponzi scheme – AequiCap used its current premium revenues in order to pay past-due expenses, while ignoring the true financial condition of AequiCap. This action further substantially contributed to the losses sustained by the receiver in the liquidation process,” court papers say.

The Department of Financial Services, however, never proved its Ponzi scheme allegation in court.

As of Jan. 30, 2017, a total of 3,233 claims were filed in the AequiCap receivership. Of those claims, only about 510 were evaluated by the receiver under state priority rules. Those claimants include the Florida Insurance Guaranty Association and the Florida Worker’s Compensation Guaranty Association, which paid numerous claims in the immediate aftermath of AequiCap’s collapse.

“These 510 claimants filed claims totaling in excess of $117 million; the amount recommended [for payment] on these claims is approximately $22 million,” said Department of Financial Services (DFS) spokeswoman Ashley Carr.

Additional claims, such as those involving large court judgments, are also expected to receive distributions on a pro rata basis, but many claims will never be paid.

Despite AequiCap’s huge losses and the state’s misconduct allegations, the Department of Financial Services, overseen by Florida’s Chief Financial Officer Jeff Atwater, a Republican, agreed in October 2015 to a broad settlement with the Morgamans and other AequiCap directors, officers and employees that didn’t cost any of them a dime. The $10-million settlement, including $300,000 to cover defense costs, was paid entirely by Aequicap’s directors’ and officers’ insurance policy.

State records show that in 2002 Morgaman was a major contributor to both the Republican Party of Florida – $45,000 – and The Coalition to Protect Florida – $25,000 – a political committee set up by Republican State Sen. John Thrasher to oppose a proposed constitutional amendment opposed by then-Gov. Jeb Bush to limit the size of public school classes. Voters approved the amendment.

DFS’s 2015 AequiCap settlement, however, left unresolved a single count for claims of fraudulent transfers against Gulf Coast that is the basis for the ongoing lawsuit.

Why Florida settled most of case

DFS spokeswoman Carr said Florida settled to obtain “a guaranteed recovery for an estate with overwhelming losses – over $100 million” and to avoid “lengthy complex litigation” that would have eaten up most of the insurance policy’s proceeds.

“The individuals did not appear to be collectible, and the financials of Phil Morgaman showed him to have huge gambling losses and other financial problems,” Carr said.

Carr declined, however, to explain why the state considered Morgaman uncollectible when he sold his luxury Feadship yacht, Golden Rule, for about $5 million around the same time the state put AequiCap into receivership. Likewise, she did not respond to a question about whether the state believes assets it might be owed are stashed offshore.

Morgaman declined to discuss his personal finances or his alleged gambling losses. He did say, however, that he got no money when he sold his 127-foot yacht because there was a $5 million lien on it.

Morgaman contends the state has been overly aggressive, making assertions that are untrue just to try to collect more money.

“At the end of the day, everyone of us has had to live with having to explain this over and over and over again when there was nothing here in the first place,” Morgaman said. “The fact is the receiver will make any claim they can to make a collection.”

Despite the Department of Financial Services’ conclusion that Aequicap became a Ponzi scheme, it did not refer the case to the Florida Department of Law Enforcement for further investigation.

“There was insufficient evidence to refer the case for criminal prosecution,” Carr said, without elaborating.

Morgaman can no longer operate an insurance company in Florida, Carr said. He remains, however, a member in good standing with the Florida Bar, which admitted him to practice law in 1980.

Today, Morgaman serves as chairman and CEO of the Deerfield Beach-based nonprofit United Schools Association, which, according to its website, operates residential programs for international students at U.S. schools with which it partners.

Until recently Morgaman operated a pair of charter schools, the Florida Virtual Academies of Broward and Palm Beach, and also served as chairman of the South Florida Virtual Charter School Board. Both of those virtual academies were shuttered last year in the wake of critical reports by the Broward and Palm Beach school boards.

Broward schools auditors found “numerous deficiencies” requiring “immediate action to improve” academic performance. There were likewise concerns about ethical violations amid allegations that Morgaman, as board chair, had engaged in “related party transactions” with his United Schools Association. In July, Palm Beach investigators substantiated similar ethical breaches.

No discipline for FBI agent accused of writing 9/11 report FBI now calls bogus

By Dan Christensen, FloridaBulldog.org 

FBI Tampa Field Office

The FBI agent who wrote a powerful investigative report about 9/11 that the bureau later publicly repudiated faced no apparent discipline even though the FBI subsequently deemed his report to be “poorly written” and “wholly unsubstantiated.”

The April 16, 2002 report, approved by superiors in the FBI’s Tampa field office, said agents had determined that Saudis living in Sarasota had “many connections” to “individuals associated with the terrorist attacks on 9/11/2001” and requested a more urgent investigation be opened. The heavily redacted report, made public in 2013 after Florida Bulldog’s parent, Broward Bulldog Inc., sued the FBI for access to records of its once-secret Sarasota investigation, flatly contradicted earlier FBI public statements that the Sarasota Saudis had no involvement in the 9/11 plot.

The 2002 FBI report became a hot potato in 2015 when the 9/11 Review Commission, also known as the Meese Commission, recounted FBI criticism of the unidentified agent in its final report. It says that when the agent was questioned he “was unable to provide any basis for the contents of the document or explain why he wrote it as he did.”

The report does not explain how the agent could have made such a serious error, why its conclusions are cited in other released FBI documents or why the FBI made such flawed documents public.

Last June, Bulldog filed a parallel Freedom of Information lawsuit seeking Meese Commission records and any related disciplinary action taken by the FBI against the agent it accused of filing a bogus report in the biggest criminal investigation in FBI history.

The government moved on Dec. 30 to dismiss a part of the suit. Essentially, it contends that it has released, or will soon release, all the records about the Meese Commission that it legally can.

The government also informed Miami U.S. District Judge Cecilia Altonaga that an extensive search of its records had turned up no disciplinary records about the unidentified agent. The lack of disciplinary action calls into question the Meese Commission’s criticism of the agent’s 2002 report.

The FBI has declined requests to interview the agent, believed to be former Fort Myers-based Special Agent Gregory Sheffield.

Censored on the CIA’s orders

The government’s motion for summary judgment also disclosed the reason that the FBI heavily redacted a “Memorandum for the Record” (MFR), released in November, that recounts a briefing on “9/11 Additional Evidence” given to the Meese Commission on Oct. 24, 2014. The two-page memo, containing “materials from the Abbottabad raid” on May 2, 2011 in which U.S. Navy Seals killed al Qaeda boss Osama bin Laden, was censored on orders of the Central Intelligence Agency.

“The CIA subsequently determined that four paragraphs of the MFR contain information that is both classified and protected by statute and advised the FBI to withhold that information,” said CIA official Mary E. Wilson in a declaration filed by the government.

The motion for summary judgment filed by Miami Assistant U.S. Attorney Carlos Raurell also offers an explanation for the government’s decision to withhold from public release information about how much the FBI paid the three members of the 9/11 panel, including former Reagan-era Attorney General Ed Meese.

Congress authorized the 9/11 Review Commission to conduct an “external review” of the FBI’s post-9/11 performance and to assess new evidence. But copies of personal services contracts signed by all three in January 2014 at the outset of their duties make clear the Meese Commission was not independent. Instead, the commission and its FBI paid staff were under the FBI’s direction and control.

To redact from the contracts the terms of the commissioners’ financial compensation, the FBI invoked an exemption to the Freedom of Information Act that protects the release of trade secrets or confidential commercial and financial information obtained from persons by the government.

“Disclosure of these salaries would cause substantial harm to the competitive negotiation process in the future,” the motion says. “Specifically … release of this information would enable potential government contractors the opportunity to judge how they might underbid their [sic] those that served on the 9/11 Reports [sic] Commission board when bidding for similar contracts in the future.”

FBI Director James Comey chose the three commissioners in “consultation with Congress,” the Meese Commission’s report says.

The motion does not address the same redactions of salary information in the FBI’s personal services contracts of Meese Commission staff.

The lawsuit the government wants dismissed was filed in June to challenge the FBI’s failure to produce any records, or to conduct a good faith search for records, since the Bulldog filed its initial Freedom of Information Act request in April 2015. The government has not explained why a lawsuit was necessary to gain access to Meese Commission records the government’s motion acknowledges were stored in director Comey’s office.

Claim of privacy hides names of FBI agents

The government’s motion also seeks to justify, on privacy grounds, the redaction of the names of both FBI agents and support personnel from about 300 pages of documents released since the lawsuit was filed.

“Publicity (adverse or otherwise) regarding any particular investigation to which they have been assigned may seriously prejudice their effectiveness in conducting other investigations,” the motion says, without further explanation. “The privacy consideration is also to protect FBI SAs [special agents], as individuals, from unnecessary, unofficial questioning as to the conduct of this or other investigations, whether or not they are currently employed by the FBI.”

The motion goes on to assert “the release of an agent’s identity in connection with a particular investigation could trigger hostility toward a particular agent … In contrast, there is no public interest to be served by disclosing the identities of the SAs to the public because their identities would not, themselves, significantly increase the public’s understanding of the FBI’s operations and activities.”

The motion does not note, however, that the names of FBI agents and employees typically are not secret. For example, FBI personnel are routinely identified in public court documents filed in both criminal and civil proceedings. The reason: accountability.

Trial in the case is scheduled for early March. Judge Altonaga is expected to rule next month on the government’s motion to dismiss.

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