Pipeline company to judge: Evidence of Gov. Scott’s investment in us ‘irrelevant’

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott

Gov. Rick Scott

Lawyers for a company that wants to build a natural gas pipeline in north Florida have told a judge that environmental opponents should be blocked from “presenting evidence or argument” about Gov. Rick Scott’s financial interest in the company.

“Such evidence is irrelevant and the admission of which would be unfairly prejudicial,” attorneys for Sabal Trail Transmission, LLC told Administrative Law Judge Bram D.E. Canter in last week’s filing.

The Florida Department of Environmental Protection (DEP), which is backing the $3 billion Sabal Trail pipeline, filed a similar argument earlier this month when it called the “allegation regarding a conflict of interest…not material to this proceeding.”

Sabal Trail is a joint venture of Spectra Energy Partners and Florida Power & Light parent NextEra Energy. Spectra Energy’s investors have included Gov. Scott.

The nonprofit WWALS Watershed Coalition filed for an administrative hearing on September 3 after state regulators said they intended to award Sabal Trail both a permit and rights to drill under riverbeds in order to build the 267-mile stretch of 36-inch underground pipeline in Florida. WWALS has asked the judge to deny the permit.

Among the documents WWALS has asked the DEP to produce are all communications from Scott or his executive office about the Sabal Trail project since the governor took office.

WWALS Watershed Coalition logo

WWALS Watershed Coalition logo

The case is proceeding quickly. On September 21, Sabal Trail’s attorneys at the Tallahassee law firm Hopping Green & Sams invoked a law that Scott signed in May 2013 that speeds up the permitting process for the construction of interstate natural gas pipelines.

Under the law, challenges to new pipelines must be heard within 30 days “regardless of whether the parties agree to the summary proceedings.” Before Scott signed the law, natural gas pipelines were specifically excluded from consideration for expedited review.

The bill (HB 999) that ultimately amended the law to include expedited review for natural gas pipelines was introduced by then State Rep. Jimmy Patronis, R-Pensacola.and overwhelmingly passed by the Legislature. Last October, Republican Scott appointed the term-limited Patronis to Florida’s Public Service Commission.


Judge Canter has set a hearing on Sabal Trail, which is to run a total of 474 miles from Alabama and Georgia to a hub south of Orlando, for Oct. 19-22 in either Jasper or Live Oak. Click here to view documents filed in the case, 15-004975.

The issuance of a Florida environmental resources permit would be a key step toward construction of the pipeline. But it is not the only remaining hurdle.

The Federal Energy Regulatory Commission is the lead federal agency responsible for reviewing the Sabal Trail proposal and preparing an environmental impact statement. FERC’s decision is expected by the end of the year.

FERC’s first public hearing in Florida is 5:30 p.m. Thursday, October 1, at Columbia High School Auditorium, 469 SE Fighting Tiger Drive in Lake City.

WWALS’s petition contends the pipeline poses threats to native wildlife, including threatened species, and argues that proposed drilling into the area’s karst limestone to lay pipe could cause new sinkholes to form.

The group, an affiliate of the Waterkeeper Alliance, also raises a potentially explosive political issue: Whether Gov. Scott, as a trustee of the state board that owns the land beneath the rivers, has a conflict of interest due to his investments in Spectra Energy and Williams Company, owner of the Transco pipeline from which Sabal Trail plans to obtain its gas.

“The governor and other public officials are prohibited by state ethics laws from owning stock in businesses subject to their regulation or that do business with state agencies,” the group’s petition says.

The governor’s blind trust is supposed to shield him, and the public, from conflicts of interest by putting his investments under the control of an independent trustee, and keeping them secret. Public officers who put their assets in a qualified blind trust receive immunity from prohibited conflicts of interest.

As FloridaBulldog.org has reported, however, Scott’s trustee is Hollow Brook Wealth Management, run by his longtime business crony Alan Baazar. The blind trust also has proved ineffective in preventing public disclosure of Scott’s assets.

Moreover, Florida’s qualified blind trust law, which Scott signed into law in May 2013, does not contemplate the unique situation that has transpired as Scott has used the law.


Scott created his original blind trust in 2011. Last year, while qualifying to run for re-election, he dissolved that trust, disclosed a lengthy list of his assets, opened a new blind trust and immediately stashed his assets into it.

The asset list revealed that during Scott’s first term the governor acquired substantial investments in the natural gas industry. His holdings, first reported by FloridaBulldog.org in July 2014, included stock in Spectra Energy, majority owner of Sabal Trail Transmission; Williams and more than two-dozen other entities that produce and/or transport natural gas, including some with substantial Florida operations.

Scott’s investments in Spectra and Williams also gave him a financial interest in the Gulfstream pipeline that runs from Alabama to Tampa Bay under the Gulf of Mexico. Those companies and their limited partnerships jointly own and operate Palmetto-based Gulfstream Natural Gas System, LLC.

Scott, too, reported owning a bigger stake in giant Energy Transfer, the publicly traded master limited partnership whose subsidiaries include a joint venture that owns Florida Gas Transmission, Florida’s other major natural gas pipeline that runs from Texas through the Florida peninsula to Miami-Dade.

Scotts also invested in Boardwalk Pipeline Partners (BWP), a master limited partnership that wholly-owns Gulf South Pipeline Co. Gulf South operates pipelines in Florida’s Panhandle.

Scott has declined to be interviewed about the matter, but his staff has said the governor has no conflicts of interest because he has no knowledge of the current contents of the blind trust that are under the control of trustee Hollow Brook Wealth Management and Alan Baazar.

Carvalho’s contract “contrary to law” but Miami-Dade schools boss won’t fix it

By Francisco Alvarado, FloridaBulldog.org 

Miami-Dade Public Schools Superintendent Alberto Carvalho

Miami-Dade Public Schools Superintendent Alberto Carvalho

Nine months ago, a state audit concluded that Miami Dade Public Schools Superintendent Alberto Carvalho’s generous severance package violated state law. Despite the finding, Carvalho has refused to amend his employment agreement to fix one of the problems identified in the audit, claiming he doesn’t have to do so.

The Florida Auditor General’s report determined that “contrary to law” Carvalho’s contract with the school board does not “prohibit severance pay should the superintendent be terminated for misconduct.”

Carvalho would not be interviewed. Instead, he responded to questions via school district spokeswoman Daisy Gonzalez-Diego, who said changing Carvalho’s contract to prohibit severance pay should he be fired simply isn’t necessary.

“Pursuant to the Superintendent’s contract, he is bound by all current Florida laws,” Gonzalez-Diego said.

The law, enacted four years ago, says government employees who enter into employment agreements cannot receive more than 20 weeks of compensation as severance pay and that all employment contracts contain a provision that prohibits severance pay if an individual is fired for misconduct.

Douglas R. Conner, an audit manager for Florida Auditor General Sherrill F. Norman, handles inquiries about the Miami-Dade Public Schools audit. He declined comment, saying “Our follow-up procedures on the findings noted in our report will occur during our next audit of the district” early next year.

The Miami-Dade School Board approved a seven-year extension of Carvalho’s contract on March 20, 2013. The contract’s terms remained the same as when it was first signed in 2008, including a severance package that would pay Carlvaho a lump sum for one year of his $318,000 salary should he be terminated without cause, according to the January report.

The auditor, however, concluded the severance deal “did not appear to be consistent” with the 2011 state law prohibiting school district executives from getting more than 20 weeks of compensation if they are fired without cause.

“Also, contrary to law, the agreement did not prohibit severance pay should the Superintendent be terminated for misconduct,” the report states.


Auditors brought the illegality to the school district’s attention last October and Carvalho quickly responded with a memo to both the auditor general and school board members stating he was modifying his employment agreement.

“I further agree…that any severance payment that I may receive may not exceed an amount greater than 20 weeks of compensation,” Carvalho wrote.

However, neither Carvalho nor the school board fixed the issue of prohibiting severance pay should he be fired for misconduct.

Gonzalez-Diego told FloridaBulldog.org that Carvalho’s contract specifies that severance will only be provided for termination without cause. “If he gets fired for cause, he doesn’t get anything,” Gonalez-Diego said. “He doesn’t get paid.”

Furthermore, Carvalho was not obligated to modify his contract but did so anyway, Gonzalez-Diego added.

“The Superintendent’s contract was negotiated specifically to be prospectively and automatically adjusted in accordance with any and all changes to Florida State statutes without any requirement for the contract itself to be amended,” she said.

“In an abundance of caution, the superintendent voluntarily executed a memorandum confirming his concurrence with the limitations placed on any severance as specified in any Florida statute.”

Critics cite the auditor’s findings as evidence that Carvalho gets preferential treatment even as he demands that rank-and-file educators accept onerous labor contracts.

“He is constantly calling us excessive for demanding pay we were promised,” said Shawn Beightol, a science teacher at John A. Ferguson Senior High School. “Yet he negotiated a salary agreement that would pay him an excessive amount of money for work he won’t do and that the auditor general deemed was illegal.”

Trevor Colestock, a library media specialist at Miami Norland High School, echoed Beightol. “Alberto Carvalho always claims financial urgency every time he bargains with teachers,” Colestock said. “But here the auditor general cited him for attempting to obtain what a reasonable person may assume is a golden parachute. Go figure.”

Beightol and Colestock were among dozens of school district employees who attended the school board’s regular meeting earlier this month to protest the new labor contract negotiated by United Teachers of Dade and the school district. The teachers, many of who don’t have tenure, accuse the school district of failing to give them higher raises based on their work performance.

School Board member Raquel Regalado, who is running to unseat Miami-Dade Mayor Carlos Gimenez in 2016, called the criticisms unwarranted. She noted Carvalho voluntarily adjusted his severance package in response to the audit.

“Alberto has done a fantastic job,” Regalado said. “It was the superintendent who amended his contract to be in accordance with state law.”

Broward Health’s $70 million settlement leaves risk of criminal charges

By Dan Christensen, FloridaBulldog.org WhistleblowingDoctor

Court documents describe the massive healthcare fraud that led Broward Health to pay $69.5 million to settle a whistleblower’s lawsuit last week as an illegal “scheme of mutual enrichment” between the hospital system and its physicians.

Was it a criminal scheme?

Justice Department attorneys who handled the case aren’t talking. “As a general policy, the Justice Department does not confirm or deny the existence of an investigation,” said Nicole A. Navas, a department spokeswoman in Washington.

Still, the settlement agreement between the North Broward Hospital District, Broward Health’s legal name, and the government leaves open the possibility that the district and some of its past and present officers, commissioners, attorneys and physicians are the focus of a behind-the-scenes criminal probe.

For example, after releasing them all from civil liability the Justice Department specifically reserved its right to prosecute “any criminal liability” arising from the case. And Broward Health and its affiliates agreed to waive “any defenses they may have to any criminal prosecution” under the double jeopardy clause or the excessive fines clause” in the Constitution’s Bill of Rights.

Similarly, the settlement agreement left Broward Health on the hook for any tax liability under the Internal Revenue Service code. That could be a considerable sum given both the large dollar amounts involved and the duration of the fraud scheme, 14 years.

The chairman of Broward Health’s governing board, David Di Pietro, and the whistleblower’s Atlanta attorney, Bryan Vroon, both said they don’t know if a criminal investigation is underway. Vroon added that such a probe would be “rare, historically.”


Earlier this month, however, the Justice Department announced new rules for fighting corporate wrongdoing that emphasize holding individuals, not just companies, criminally accountable.

“One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing,” says a Sept. 9 memo to top-level prosecutors by Deputy Attorney General Sally Quillian Yates.

Dr. Michael Reilly, an orthopedic surgeon who blew the whistle on fraud at Broward Health

Dr. Michael Reilly, an orthopedic surgeon who blew the whistle on fraud at Broward Health

Should a criminal investigation be initiated, court records reveal an abundance of evidence describing how Broward Health and its individual administrators and physicians profited personally from the enormous fraud.

The $69.5 million settlement ended a five-year-old federal investigation that began with a 2010 federal False Claims Act lawsuit filed by whistleblower Dr. Michael Reilly, a Fort Lauderdale orthopedic surgeon. The government paid Reilly $12 million as a reward, or a bit more than 17 percent of the settlement amount.

Broward Health must pay Reilly an additional $860,000 for his attorney’s fees and costs, bringing the district’s immediate outlay in the deal to $70.4 million. That doesn’t include more than $10 million the district has already paid to an out-of-state law firm for legal advice in the matter.

Broward Health Chairman Di Pietro said the payout, while huge, wouldn’t require the district to cut services or hike taxes. He said that’s because the money will come from the district’s approximately $800 million in reserve funds.

Nevertheless, Broward Health’s proposed operating budget expenditures for 2015-2016 are 6.8 percent more than last year, or $1.27 billion.

In addition to the penalties, Broward Health Chief Executive Dr. Nabil El Sanadi signed a 46-page Corporate Integrity Agreement with the Department of Health and Human Services (HHS) that requires the district to establish a compliance program. Among other things, the agreement imposes new duties on both commissioners and staff to monitor, report and certify that its financial arrangements with physicians and vendors meet federal requirements.

Dr. Reilly, who court papers say rejected an employment offer that would have required him to join Broward Health’s illegal scheme, blew the whistle in April 2010 when he sued the district on behalf of the U.S. alleging fraud under the False Claims Act. The case was filed under seal as provided by law.

Two years later, Reilly filed a third, highly detailed complaint under seal that was the basis for last week’s settlement.

The 118-page complaint contends that numerous doctors were paid in excess of $1 million even though collections for their personal work were much less. It also says Reilly alerted Broward Health’s leadership to the law breaking in 2003, 2004 and 2009, but was ignored.

U.S. District Judge Jose E. Martinez unsealed the complaint on Sept. 15.

The government’s investigation of Reilly’s claims, led by HHS agents, focused on what turned out to be numerous apparent violations of federal laws enacted to address abuses that occur when doctors have financial relationships with entities to which they refer patients.


The federal Stark Law, for example, generally bars physicians employed by hospitals from referring patients to their employers and prevents hospitals from presenting healthcare claims that flow from prohibited referrals. Exceptions exist for “bona fide employment relationships” in which a doctor’s remuneration takes no account of referrals, is “commercially reasonable” and consistent with fair market value.

Another law, the Anti-Kickback Statute, prohibits hospitals from paying and doctors from accepting “anything of value” as a reward for referrals. The law includes civil assessments of up to three times the amount of the kickbacks. 

Violators can also be barred from participation in federal healthcare programs and face up to five years in prison per violation.

Reilly’s third complaint says that instead of complying with the law “Broward Health has done the exact opposite.”

“In compensating its employed physicians from 2004 through the present, Broward Health has deliberately and repeatedly violated all three of these requirements,” the complaint says.

Assistant U.S. Attorney Mark Lavine

Assistant U.S. Attorney Mark Lavine

While Broward Health admitted no wrongdoing, it settled without challenge serious and embarrassing allegations about a long-hidden scheme involving the payment of kickbacks to doctors who referred their patients to Broward Health’s four hospitals and other facilities for expensive testing and treatment.

“I think paying $70 million without litigation says something,” said attorney Vroon.

Representing the government were Justice Department Senior Trial Counsel David T. Cohen and West Palm Beach Assistant U.S. Attorney Mark Lavine.

The settlement agreement, signed by Dr. El Sanadi and lawyers for the district, says the illegal scheme went on from 2000 until last year.

Nine staff doctors are identified in the settlement as having had “improper” contracts that the government contends violated the federal Physician Self-Referral Law. Specifically, it was alleged that Broward Health grossly overpaid those doctors to obtain larger referral profits in return.

The physician who benefited the longest from such overcompensation was cardiologist Michael Chizner, medical director of Broward Health’s Heart Center of Excellence. His contract was in effect from April 1, 2000 until May 31, 2014, the settlement says.


FloridaBulldog.org reported in January that Chizner accepted a pay cut from $1.2 million to a maximum of $867,000, and a requirement that he treat poor people after the district threatened him with termination. Broward Health acted to impose those terms after declaring Chizner’s contract illegal in the wake of pressure from federal authorities.

Broward Health cardiologist Michael Chizner Photo: WPLG-Channel 10

Broward Health cardiologist Michael Chizner Photo: WPLG-Channel 10

Many other doctors also accepted pay cuts and contracts modified to comply with federal law.

The other Broward Health physicians on the list are cardiologists Violeta McCormack, John Rozanski and Ashok Sharma; orthopedic surgeons George Caldwell and Erol Yoldas, team physicians for the Florida Marlins; Rudolph Roskos, chairman of the department of pediatrics at Chris Evert Children’s Hospital, and pediatrician Hector Rodriguez-Cortes; and Shazia Zafar, a hematologist now with Memorial Healthcare.

More than a half-dozen other doctors are mentioned elsewhere in the third amended complaint as having been paid excessively as part of Broward Health’s scheme to generate lucrative referrals.

Court documents estimate that from 2004 to 2011 Medicare and Medicaid suffered $147.5 million in damages due to improper claims filed as a result of “tainted” referrals by Broward Health physicians. If the case had gone to trial, Broward Health faced the possibility of being found liable for more than $700 million in actual and punitive damages.

The estimates did not include damages prior to 2004 or damages suffered by Tricare, the military’s health system, or other federal health insurance programs for federal employees.

Dr. Reilly’s complaint says Broward Health, a medical safety net that’s obliged to treat patients regardless of their ability to pay, used a secret accounting system to turn up the heat on doctors whose referrals lagged “even when patient care was compromised.”

“When employed orthopedic surgeons had significant concerns regarding the quality of Broward Health’s radiology and MRI imaging services and chose to refer patients to other facilities for such services, Broward Health’s financial strategists pressured the orthopedic surgeons to continue to make referrals of all radiology services to Broward Health,” the papers says.

Broward Health chairman Di Pietro denied that patient care was compromised in a statement released last week. He said the investigation was “focused solely on highly complicated contracts with physicians. This investigation was never about patient care.”

Broward Health Commission chairman David Di Pietro Photo: WPLG-Channel 10

Broward Health Commission chairman David Di Pietro Photo: WPLG-Channel 10

Vroon, however, said the probe “has everything to do with quality of care.” He said that if the case had not settled, government lawyers would have scoured physicians’ medical charts looking for unnecessary patient testing or procedures. “But Broward Health settled way before it got to that point,” Vroon said.

To obtain referrals, the district grossly overpaid doctors in each of its five physician practice groups – primary care, cardiology, hematology/oncology, orthopedics and “other,” the complaint says.

That excessive compensation generated approximately $160 million in losses for Broward Health from 2004 to 2012 alone, the complaint says.

In an interview, lawyer Vroon, said the estimated losses rise to $200 million for conduct dating back to the start of the scheme in 2000.

Thousands of Medicare and Medicaid patients referred to Broward Health for testing and treatment by its staff physicians more than erased those losses.


In 2009, for example, excessive compensation paid to employed physicians across the Broward health system was cited as the primary factor in a net operating loss of $17.5 million. But $28 million in doctors’ referral profits transformed that loss into an $11.4 million profit, the complaint says.

Doctors went along with the scheme because their pay was “more than fair market value and more than they can ever hope to collect for their personal services,” the complaint says.

Broward Health’s focus on bottom-line profit was part of a “deliberate” scheme in which administrators used what amounted to a second set of books to secretly track and conceal the fraud from Broward taxpayers and federal regulators.

“Broward Health’s physician compensation strategy has been a scheme of mutual enrichment in which Broward Health has paid its employed physicians far in excess of the value of their personal services while Broward Health has received massive profit in inpatient and outpatient referral from such physicians,” the complaint says.

Much of those profits came via federal healthcare programs. Since 2004, Broward Health was paid more than $2 billion by Medicare and Medicaid.

“A significant portion” of those dollars “derived from inpatient and outpatient referrals by employed physicians receiving excessive compensation,” the complaint says.

Broward Health and its doctors weren’t the only ones to make money in the fraud scheme. The complaint cites district “financial strategists” who “personally profited from their scheme under a bonus compensation program based in part on revenues from inpatient admissions and outpatient visits to Broward Health hospitals and clinics.”

Broward Health’s first management incentive plan for executives was approved in 2003. Bonuses were as high as 20 percent of annual salary based on financial performance.

Besides the hospital district, the complaint lists 100 “John Doe” defendants identified only as “contractors, agents, partners and/or representatives” that were part of the conspiracy to submit false healthcare claims.

“The Broward Health defendants have knowingly and repeatedly violated federal Stark and Anti-Kickback laws (and) have knowingly submitted thousands of false claims to federal healthcare programs which arose through tainted referrals from employed physicians receiving excessive compensation,” the complaint says.

The case surfaced in May 2011 when HHS agents served a subpoena on Broward Health seeking records of its business dealings with 27 physicians, including information about compensation, hospital admissions and referrals dating to 2000.

Federal agents went on to build a case based on “extensive evidence” supplied by Dr. Reilly, including information that court papers say was derived from “secretive internal reports kept and concealed by Broward Health and from private communications and private admissions of Broward Health officers.”


The complaint says that before hiring a physician, Broward Health projected the value and volume of their anticipated referrals and used it to calculate compensation. After a doctor was hired, the district tracked their referrals in secret “Contribution Margin Reports,” Broward Health lingo for referral profits, the complaint says.

The complaint notes that those “CMR” reports and other evidence of Stark law violations were “deliberately concealed” from the public even though the hospital district is subject to Florida’s Sunshine and public records laws.

The CMR reports were also used to track physicians’ uncompensated referrals – that is, referred patients whose care is subsidized mostly by Broward tax dollars. Broward Health forced doctors who referred those patients to pay the balance due out of their income, the complaint says.

Similarly, the district tracked charity case referrals and “used such data to discourage employed physicians from making significant charity referrals” that would reduce Broward Health’s profits.

Indeed, the idea of giving back to the community appears to have been foreign to many of Broward Health’s staff doctors.

“The overall charity care numbers for employed physicians are extremely low,” the complaint says. For example, in 2009 25 employed physicians practicing at Broward General produced total revenue from compensated care of just over $13 million, but their total charity care was “a minuscule $88.”

The complaint cites former Broward Health Vice President of Physician Services Brian Ulery as having “touted” CMRs in private meetings and confirming they’d been “concealed and ‘not listed in our financials.’” Ulery resigned four months after the subpoena was served in 2011.

Likewise, the complaint refers to a similar admission by then-Broward Health Chief Executive Frank Nask during a private conversation with Dr. Reilly in May 2009. Reilly had asked Nask why sports medicine orthopedic surgeons were being paid at such high levels to cause operating losses each year.

“We are making money off these guys,” the complaint says Nask replied. “These numbers don’t include what they’re bringing in with labs, P.T. (physical therapy) diagnostics etc.”

Nask was pushed out last fall by the district’s board of commissioners, all appointees of Gov. Rick Scott, amid the pressure of the federal investigation. To get him to step down quietly, one knowledgeable source said, Nask was given a lucrative one-year consulting deal at his CEO salary of $617,000, plus benefits.

“These payments and benefits shall be provided to Nask regardless of whether a request is made for consulting services by the district,” his contract says.

In search of referrals, Broward Health boosted compensation to some cardiologists by awarding them what the complaint calls “sham” contracts as medical directors that required little or no work.

“One medical director does his personal exercise workout and counts such hours as his ‘medical director’ hours. One ‘medical director does not know how to read studies in the laboratory for which he is the director. Yet another ‘medical director’ counts hours doing procedures as ‘director’ hours,” says the complaint, which labeled the practice a “boondoggle.”

The cardiologists identified in the complaint as having gotten those sham medical directorships were Drs. Chizner, Sharma, McCormack, Rozanski and David Perloff.

Illegal kickbacks to doctors to cost Broward Health $69.5 million

By Dan Christensen, FloridaBulldog.org bhlogo

Taxpayer-supported Broward Health will pay $69.5 million in penalties to settle federal allegations that it paid illegal kickbacks to nine doctors who referred patients to its hospitals in a fraud scheme that went on for more than a decade.

The settlement made public Tuesday arose from a lawsuit filed by Fort Lauderdale orthopedic surgeon Dr. Michael Reilly, under the False Claims Act. Dr. Reilly will receive $12,045,655.51 for blowing the whistle, federal officials said.

The settlement comes as a relief to Broward Health’s current leaders, who have been forced to deal with a federal investigation that was triggered by the actions of Broward Health officials who have long since moved on.

“This is just a resolution of something that’s been on the table for the last four or give years and goes back as far as 2001,” said Dr. Nabil El Sanadi, Broward Health’s chief executive officer. “It’s always good to get things like this over with.”

According to Dr. Reilly’s complaint, filed in federal court, Broward Health improperly compensated its employed physicians at excessive levels that caused “net operating loses of $150 million” from 2004-2011, when the complaint was filed. Broward Health made sure, however, that Medicare and Medicaid referrals from those doctors more than offset those losses at its hospitals and clinics.

The complaint alleged that Broward Health “knowingly violated federal Stark and Anti-Kickback laws, and deliberately submitted “thousands” of false claims to federal health care programs arising from “tainted referrals.”

The federal Stark Law generally prohibits doctors from referring Medicare or Medicaid patients to hospitals with which they have a financial relationship. Likewise, it forbids hospitals from submitting claims from prohibited referrals.

The Anti-Kickback statute forbids offering, paying or soliciting or receiving anything of value to induce or reward referrals or generate federal healthcare program business. Criminal violators face up to five years in prion and a $25,000 fine for each violation.

No criminal charges, however, were announced with the unsealing of the whistleblower case.

More than two-dozen physicians were named in a federal subpoena that sought records about their business ties to Broward Health. The subpoena was served at the outset of the investigation in May 2011.

David Di Pietro, chair of the North Broward Hospital District Board of Commissioners, put out a statement Tuesday afternoon.

“The resolution of this matter and today’s agreement will enable Broward Health to move beyond the allegations that arose in the context of this investigation.  It is important to note that those allegations were focused solely on highly complicated contracts with physicians.  This investigation was never about patient care,” Di Pietro said.

Hollywood Beach CRA the target of moves to cut its funding, or kill it

By William Gjebre, FloridaBulldog.org 

Rendering of Margaritaville Hollywood Beach Resort. Photo: City of Hollywood

Rendering of Margaritaville Hollywood Beach Resort. Photo: City of Hollywood

Hollywood City Commissioner Peter Hernandez says the Beach Community Redevelopment Agency should be abolished because it has had increasing property tax funds for its use — at times exceeding its needs — while the “rest of the city is starving” to pay for operations and needed improvements.

While his proposal has yet to gain support from his colleagues, Hernandez and other city commissioners, who also serve as directors of the CRA, have directed the city’s staff to explore options that would redirect the Hollywood Beach CRA funds left over at the end of the year to the city. Such a revenue give back would mark a first for a CRA in Broward.

In the past, the Hollywood Beach CRA has been accused in a state audit of circumventing state law by rolling over end-of-the-year funds to the next year, a large part of which in recent years has backed the $147 million Margaritaville hotel-entertainment complex in the redevelopment area. The complex is expected to open in October.

In suggesting that the Beach CRA should be abolished, Hernandez said the district — which encompasses less than a square half-mile at 293 acres — “is not really blighted and a slum.’’ Those conditions, he said, are to be met to qualify for redevelopment funds under state law.

The city, Hernandez said, has been operating on “bare bones budgets” while the CRA has given $28 million in incentives to the private developer of Margaritaville. In addition, the city gave developer Lon Tabatchnick valuable, city-owned beachfront land for the project and endorsed construction of a $38 million parking garage project using bonds to be paid back with parking revenues over 30 years.

Peter Hernandez

Peter Hernandez

The CRA district was established in 1997. According to city documents, property values there have jumped since the initial assessment of $546 million. Property in the district is now assessed at about $2.7 billion, which will bring in about $27 million in tax revenue, according to the city’s new annual budget that starts Oct. 1.

Abolishing the Beach CRA and redirecting its tax revenues to the city, Hernandez said, could result in Hollywood being able to cut its citywide property tax rate, the highest among municipalities in Broward County, by 1.5 mills — or $1.50 for every $1,000 of assessed property value.

CRA executive director Jorge Camejo did not respond to repeated calls for comment.

With the city in need of funds for operations and other purposes, city officials, at the urging of some commissioners, have presented a variety of proposals aimed at shifting to the city a sizeable portion of an estimated $5 million in anticipated unused end-of-year CRA funds for the coming year.

The Beach CRA gets is revenue from tax increment funds levied on property within its redevelopment boundaries. The $5 million in anticipated unused funds are drawn from four sources: Hollywood, $2.7 million; Broward County, $2 million; Children’s Services Council, $179,000 and the South Broward Hospital District, $54,000.

Unless the city finds a way to shift the money, the funds must be spent on redevelopment within the CRA’s boundaries.


City officials are examining a variety of options to obtain the CRA funds – from having the CRA proportionally refund unused tax dollars as outlined above, with the city receiving only $2.7 million, to reducing the percentage of tax increment funds earmarked to the Beach CRA, resulting in the city receiving $4.7 million, or even abolishing the CRA.

Abolishing the Beach CRA, however, would endanger $116 million in projects in the CRA district, including installing underground utilities, the reconfiguration of the Hollywood Boulevard Bridge over the Intracoastal Waterway, and street flooding/drainage improvements, according to a city document.

Two other options require county approval: one calls for Broward to agree to give up its $2 million to the city, resulting in the city receiving a total of $4.7 million; the other calls for removing the Diplomat Hotel from the CRA, resulting in $3.3 million going to the city rather than the CRA.

Hernandez said he expects city officials to begin discussions with the county soon regarding about how best to proceed.

Ralph Stone, director of the Broward County Housing Finance and Community Development Division, said it “would be a first” should a CRA seek to return unused end-of-the year funds to its municipality for citywide uses.

About a year ago, the county said it planned to monitor and take action against CRAs that hoarded funds at the end of the year rather than spending on needed projects. Under state law, CRAs that have funds at the end of the year must spend that money on projects to be completed in three years or pay down debt. If not, CRAs must return the money to the agencies that contributed those public tax dollars.

The county’s concern followed findings by the Broward Inspector General Office that the Margate CRA deliberately mishandled $2.7 million in funds, rolling it over for several years without specific purposes. The Inspector General also found that the Hallandale Beach CRA had $2.2 million in questionable expenditures—an allegation denied by the agency.

In February 2013, the Florida Auditor General cited the Hollywood Beach CRA for failing to report $36.2 million in unspent year-end funds from year 2009-2010 and $34.2 million from 2010-2011.

The Beach CRA, Hernandez said, had “rolled over the funds for Margaritaville.”

Frank Schnidman is a community redevelopment expert/consultant and professor of urban and regional planning at Florida Atlantic University. In an interview, he said that over the years the Hollywood Beach CRA has complied “with the spirit of the law” in its use of end-of-year funds, but added it “has been rolling (funds) over and built up quite a bank account” that was a key funding tool for the city-backed Margaritaville project.

Schnidman said city officials seeking funds for citywide expenses and projects should also consider talking with the county about the option Hernandez has suggested: abolish the Hollywood Beach CRA.

A stonewall of secrecy hides many 9-11 records on 14th anniversary of terrorist attacks

By Dan Christensen, FloridaBulldog.org 

Osama bin Laden, left, with his successor as al Qaeda chief Ayman al-Zawahiri

Osama bin Laden, left, with his successor as al Qaeda chief Ayman al-Zawahiri

Seven weeks after the end of the massive cleanup at Ground Zero in lower Manhattan in 2002, a legal investigator for the families of 9/11 victims requested a copy of an arrest warrant issued by Interpol for fugitive al Qaeda leader Osama bin Laden.

Here’s the reply she got from the Justice Department’s Interpol-U.S. National Central Bureau:

“Release of information about a living person without that person’s consent generally constitutes an unwarranted invasion of personal privacy in violation of the Freedom of Information Act. You must submit an authorization (privacy waiver) signed by Usama bin Laden, consenting to the USNCB’s release to you of any record that it may have pertaining to him.”

The Justice Department’s assertion of privacy rights for bin Laden is a small rock in the stonewall of official secrecy that continues to hide 9/11 documents held by the FBI, CIA and other government entities on the 14th anniversary of the terrorist attacks.

Lately, the public focus has been on the 28 blanked-out pages in Congress’s 2002 Joint Inquiry into the attacks regarding “foreign support for the hijackers” – read Saudi Arabia. The pages, withheld by President George W. Bush and kept hidden by President Obama, have been the subject of recent stories in The New Yorker, The New York Times and others. On Capitol Hill, pending bills in the House and Senate seek to open those pages to the public.

Yet hundreds, likely thousands, of significant records about what the 9/11 Commission called “a day of unprecedented shock and suffering in the history of the United States” remain off limits in whole or significant part. The result: an incomplete public understanding of events behind the attacks, and a denial of evidence to 9/11 victims still seeking a measure of justice in the courts.


“Thousands of pages, photographs and tangible evidence have been withheld, much of which from my personal knowledge has nothing to do with keeping America safer but rather protects incompetence or relations with perfidious foreign governments,” said former Sen. Bob Graham, the Florida Democrat who co-chaired Congress’s Joint Inquiry into the attacks and helped write the 28 pages.

Bob Graham

Bob Graham

“The United States has paid a high price in justice to injured Americans, national security and confidence in government by this secrecy. It is time to let our people know,” Graham said.

Many hidden 9/11 records are years, even decades old. But some like the classified files and memoranda of the FBI’s secretive 9/11 Review Commission were produced in 2014 and 2015.

The Review Commission, charged with investigating the FBI’s performance and evaluating new information about the attacks, went out of business in March after issuing a 127-page report. The FBI has yet to release any other commission material – transcripts, memos and the like – sought in a Freedom of Information request filed by FloridaBulldog.org in April.

Perhaps the largest untapped source of information about events leading up to 9/11 is the raw intelligence files about al Qaeda and terrorist threats gathered by the eavesdropping National Security Agency.

In his 2008 book “The Commission: The Uncensored History of the 9/11 Investigation,” former New York Times reporter Philip Shenon said Commission investigators neglected to examine that “gold mine” of NSA 9/11 data until days before the commission’s final report was due.

Found in that limited time, and noted in the commission’s report, was “strong evidence that Iran facilitated the transit of al-Qaeda members into and out of Afghanistan before 9/11, and that some of these were future 9/11 hijackers…We believe this topic requires future investigation by the U.S. government.”

“There’s a massive amount of information,” Shenon said in an interview last week. “That’s always been on the top of my list of documents I’d like to see.”

Suppressed records are plentiful and easy to locate in the reports of the Joint Inquiry and the footnotes of the follow-up 9/11 Commission. Aside from the notorious 28 pages, the Joint Inquiry’s report contains numerous other blanked-out parts, including six heavily censored pages regarding covert action ordered against bin Laden by President Clinton.

The National Archives manages the 9/11 Commission’s files and maintains an online list of about 1,200 fact-finding interviews, nearly 200 of which the public cannot access because they are classified. Hundreds more released documents have redactions ranging from minimal to heavy.

911datasets.org, a group that makes available raw information obtained by 9/11 researchers, says the National Archives has released about a third of the commission’s files. Many records within those files are nevertheless withheld citing national security.


The 9/11 Commission reported finding “no evidence that the Saudi government as an institution or senior Saudi officials individually” had funded al Qaeda. The official veil of secrecy over its records, however, continues to obscure how it reached that controversial conclusion.

Hidden from public view are commission interviews with White House staff, FBI agents, CIA employees and officials with other agencies including the Defense Intelligence Agency, State Department, Treasury Department and Federal Aviation Administration. Also secret: interviews with government officials from Great Britain, Canada, Afghanistan and Saudi Arabia.

From left to right: Dick Cheney, Prince Bandar, Condoleezza Rice, and George W. Bush, on the Truman Balcony of the White House on September 13, 2001. [Source: White House via HistoryCommons.org]

From left to right: Dick Cheney, Prince Bandar, Condoleezza Rice, and George W. Bush, on the Truman Balcony of the White House on September 13, 2001. [Source: White House via HistoryCommons.org]

One intriguing 2003 interview was with Prince Bandar bin Sultan, the Saudi ambassador to the U.S. who met with President George W. Bush and Vice President Dick Cheney at the White House two days after 15 of his countrymen helped carry out passenger jet attacks on New York and Washington.

Bandar’s wife, Princess Haifa, made payments to a man the Joint Inquiry identified as a “Saudi extremist and a bin Laden supporter.” The man, Osama Bassnan, also apparently had contact with 9/11 hijackers Nawaf al Hazmi and Khalid al Midhar, who were aboard American Airlines Flight 77 when it slammed into the Pentagon.

Time Magazine reported that from January 1999 to May 2002 the princess made monthly payments of $2,000 to Bassnan’s wife, who was said to suffer from a severe thyroid condition. The payments totaled as much as $73,000, The New Yorker reported last year.

Key documents by the CIA and the Treasury Department’s Office of Foreign Assets Control relating to terrorist financing are also under wraps.

For example, while representing 9/11 victims, New York’s Kreindler & Kreindler law firm filed a Freedom of Information request for a copy of a May 2000 memo about a meeting OFAC officials had with two of Osama bin Laden’s half-brothers, as well as a subsequent letter about the meeting from the Saudi Binladin Group, the large construction conglomerate founded by Osama bin Laden’s father. Both documents are cited in the 9/11 Commission’s report.

OFAC denied the 2009 request saying, among other things, that the release of those records would constitute “a clearly unwarranted invasion of personal privacy,” presumably of the bin Ladens.

OFAC also asserted personal privacy and national security considerations in 2006 when refusing to release nearly 700 pages of records about the International Islamic Relief Organization, a Saudi charity whose branches in Indonesia and the Philippines were specially designated by OFAC as terrorist entities for funding al Qaeda.

Another 600 OFAC pages were likewise withheld about the al-Haramain Islamic Foundation, a Saudi charity designated by the Treasury Department in 2008 for having provided “financial and material support” for al Qaeda.


“The wholesale redaction of any relevant detail is a problem we’ve seen across the board when we’ve asked for documents that address specific details of Saudi-based support for al Qaeda in the pre-9/11 era,” said Sean P. Carter, a victim’s attorney with Philadelphia’s Cozen O’Connor law firm. “At the end of the day this is immunizing those people from the consequences of their actions.”

Al Rajhi Bank headquarters in Riyadh, Saudi Arabia

Al Rajhi Bank headquarters in Riyadh, Saudi Arabia

The CIA took a different tack in its July 2013 response to a FOIA request by another plaintiff’s lawyer seeking intelligence reports about Saudi Arabia’s al Rajhi Bank that were cited in a Wall Street Journal story, “U.S. Tracks Saudi Bank Favored by Extremists.”

The front-page article said CIA documents described al Rajhi Bank, which describes itself as one of the world’s largest Islamic banks, as a “conduit for extremist finance” that once obtained a visa for a money courier working for Osama bin Laden’s second-in-command, Ayman al Zawahiri. The CIA replied that it “can neither confirm nor deny the existence or nonexistence” of the requested records.

CIA documents cited prominently in the 9/11 Commission Report and requested by plaintiff’s lawyers have been released in recent years, often with heavy redactions and assertions that the information was exempt by presidential directive or U.S. law.

Examples include:

In June, the CIA released a 10-year-old report by the agency’s Inspector General regarding criticism leveled by the Joint Inquiry. The 490-page report is riddled with redactions, including nearly all of a 29-page section titled “Issues Relating to Saudi Arabia.” A sentence that remains states that the CIA found no “reliable reporting confirming Saudi government involvement with and financial support for terrorism prior to 9/11.”

The National Security Archive, a private research group based at Washington’s Georgetown University, has identified key 9/11 information that remains classified.

“Hundreds of cited reports and cables remain classified, including all interrogation materials such as the 47 reports from CIA interrogations of [alleged 9/11 mastermind] Khalid Sheikh Mohammed,” the group’s website says.


The FBI posts 72 documents about the 9/11 Commission on its website. Many contain extensive redactions and none involve allegations of Saudi financing for terrorists, the most controversial aspect of the 9/11 case.

The FBI’s sprawling 9/11 investigation, code-named PENTTBOMB, was the largest in its history. More than half of its agents worked the case, following more than half-a-million investigative leads, the FBI has said.

U.S. District Judge William J. Zloch

U.S. District Judge William J. Zloch

How many documents is that?

The FBI’s Tampa field office alone holds 80,000 classified pages in its 9/11 file, according to papers filed by the Justice Department in ongoing Freedom of Information litigation brought by FloridaBulldog.org.

The records include details of a once-secret FBI investigation of a Saudi family with apparent ties to the 9/11 hijackers who gained attention after they abruptly moved out of their Sarasota area home two weeks before the attacks, leaving behind their cars, clothes, furniture and other belongings. FloridaBulldog.org working with Anthony Summers, co-author of the 9/11 history “The Eleventh Day,” first reported the story in 2011.

Fort Lauderdale U.S. District Court Judge William J. Zloch is currently reviewing those 80,000 pages for possible public release.

The continuing secrecy about 9/11 has not sat well with the former leaders of the 9/11 Commission.

At an event last year marking the 10th anniversary of the release of its report, former Vice Chairman Lee Hamilton urged transparency, saying he was “surprised and disappointed” to learn that documents remain hidden.

“I assumed, incorrectly, that our records would be public. All of them, everything,” Hamilton said. “I want those documents declassified. I’m embarrassed to be associated with a work product that is secret.”

Pipeline foes ask DEP to deny key permit; Cite ‘conflict of interest’ by Gov. Scott

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott

Gov. Rick Scott

Opponents of a proposed natural gas pipeline in North Florida are asking Florida regulators to reject the project, citing both dangers to the environment and a “conflict of interest” by the regulators’ boss, Gov. Rick Scott.

The Florida Department of Environmental Protection announced in July its intention to award a crucial environmental permit and rights to drill beneath riverbeds that would allow Houston-based Spectra Energy (NYSE:SE) to construct the controversial, $3-billion Sabal Trail Transmission.

State records show Spectra Energy’s investors have included Gov. Scott.

On Friday, the nonprofit WWALS Watershed Coalition, an affiliate of the Waterkeeper Alliance, filed an amended petition asking the DEP to deny the permit or “at the very least” re-route the underground pipeline to avoid “the sensitive karst terrain that underlies north central Florida…especially drilling under the Withlacoochee, Suwannee and Santa Fe rivers.”

“The risk is not just to these waters…it is to the entire State of Florida whose growing population relies on the Floridan aquifer for much of its drinking water,” says the 34-page petition filed by WWALS president John S. Quarterman. The Floridan aquifer underlies all of Florida and parts of Alabama, Georgia and South Carolina.

Spectra Energy spokeswoman Andrea Grover, however, noted that DEP’s notice of intent to issue the permit followed nearly a year of discussions and review. “The permit requires full mitigation of all wetland impacts and protects water quality,” she said.

deplogoIf accepted as legally sufficient by DEP, the petition would put the brakes on the department’s plans to issue the permit and trigger an administrative hearing before any permit could be awarded. A DEP spokeswoman said Monday that the department’s lawyers are reviewing the petition.

The 474-mile Sabal Trail Transmission LLC is a joint venture of Spectra Energy Partners and Florida Power & Light parent NextEra Energy. It is intended to supply fracked natural gas to fuel a new generation of gas-fired power plants across the state, including Port Everglades.

Sabal Trail is to run across Alabama and through southern Georgia where it will enter Florida in d County. The Florida leg, 257 miles long, will push south through a dozen counties to a hub in central Florida south of Orlando. Along the way, the pipeline would be installed beneath several rivers.


In the July 10 notice of intent, DEP Central District Director Jeff Prather wrote that Sabal Trail had provided DEP with “reasonable assurance” that pipeline construction would comply with state laws and rules. Likewise, Prather wrote, the department determined that “construction and operation” of the Sabal Trail pipeline would not violate state water quality standards.

“The applicant has also demonstrated that the construction…is clearly in the public interest,” Prather said.

The Federal Energy Regulatory Commission is the lead federal agency responsible for reviewing the Sabal Trail proposal and preparing an environmental impact statement. FERC’s decision could come as early as November.

The WWALS petition argues that the project is “clearly not in the public interest of the citizens of Hamilton and Suwannee counties who will be affected…without any benefit whatsoever.”

The petition describes the lands in north Florida along Sabal Trail’s proposed route as a rich habitat for native wildlife – including threatened species like the gopher tortoise and the eastern indigo snake.

The area is honeycombed with sinkholes and sensitive underground springs and caverns at special risk from the proposed, 36-inch natural gas pipeline. Forested lands will be cleared and wetlands filled to make way for the pipeline, substantially reducing wildlife habitat, a plan that is “not acceptable,” the petition says.

Schematic showing cross-section of the proposed HDD crossing of the Withlacoochee River and hypothetical karst features that could result in a hydrofracture (frac-out), significant loss in drilling fluid and potential loss of the borehole. Source: August 2014 report by geologist Robert Brown

Schematic showing cross-section of the proposed HDD crossing of the Withlacoochee River and hypothetical karst features that could result in a hydrofracture (frac-out), significant loss in drilling fluid and potential loss of the borehole. Source: August 2014 report by geologist Robert Brown

Drilling through the area’s karst terrain, formed by the gradual erosion of Florida’s limestone or dolomite rocks, could cause new sinkholes that could cause pipeline failure, property damage or even human injury, the petition says.

More ominously, the petition says the proposed use of Horizontal Directional Drilling (HDD) to bore through karst limestone in order to lay underground pipe at river crossings increases the risk of “frac-outs” that happen when a drill bores into an underground spring. The result can be a new sinkhole “resulting in potentially catastrophic effects on spring and river flows and water quality in both rivers and private wells.”

“This month another sinkhole opened just across the state line in Lowndes County, Georgia, threatening to absorb a road, as another did a few years ago,” the petition says. “Such sinkholes can form years after a pipeline is installed, as happened in Assumption Parrish, Louisiana in 2013 when Florida Gas Transmission had to move its pipeline.”


The petition calls for more study before such drilling “destroys underground caverns and spring conduits that may cause the extinction” of exotic species living in those caverns and springs.

Further, the petition cited the possibility of a pipeline failure and an explosion that would damage the underground karst terrain and springs and kill designated or threatened species like the alligator snapping turtle, American alligator and Suwannee cooter turtle.

The petition points out that a Spectra Energy pipeline exploded beneath the Arkansas River in Little Rock on May 31. It goes on to note that Spectra has been repeatedly fined by federal regulators in the U.S. and Canada for “failing to properly maintain and repair their pipelines and for failing to clean up contamination” when their pipelines leaked.

“Why is Florida DEP trusting this company with our valuable natural resources?” the petition asks.

With the Clinton Presidential Center in the foreground, this photo shows a Spectra Energy pipeline blowout beneath the Arkansas River in Little Rock on May 31. Photo Courtesy: Tony Cassady

With the Clinton Presidential Center in the foreground, this photo shows a Spectra Energy pipeline blowout beneath the Arkansas River in Little Rock on May 31. Photo Courtesy: Tony Cassady

Spectra Energy presents a different picture.

“Our safety record is better than the industry average,” said spokeswoman Andrea Grover. “Our reportable incidents were approximately half the rate of the industry average during the past five years.”

During the same period, Grover said, Spectra Energy operates about four percent of the nation’s natural gas transmission pipelines, yet received only two percent of the enforcement actions initiated by U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration.

Florida’s Department of Environmental Protection serves as staff to the Board of Trustees of the Florida Internal Improvement Fund, which owns the submerged lands beneath the rivers where Spectra Energy wants to run the pipeline. The DEP is delegated decision-making authority to issue an easement to allow construction under the Florida Administrative Code.

The WWALS petition says Gov. Scott, in his role as a member of the fund’s board of trustees, has a “conflict of interest” due to his “financial interests in Spectra Energy, the parent company of Sabal Trail Transmissions, as well as in Williams Company, the owner of the Transco pipeline from which Sabal Trail plans to get its gas.

“The governor and other public officials are prohibited by state ethics laws from owning stock in businesses subject to their regulation or that do business with state agencies,” the petition says.

In response, Scott’s office issued a statement saying the public is protected from conflicts of interests because his assets are in a blind trust “under the control of an independent financial professional. As such, the governor has no knowledge of anything that is bought, sold or changed in the trust.”

As FloridaBulldog.org has reported, however, the blind trust has not prevented public disclosure of Gov. Scott’s personal stock holdings. On June 25, for example, Scott and the trust reported to the U.S. Securities and Exchange Commission that Scott had sold 122,653 shares of Argan (NYSE:AGX) earlier that month for $4.87 million. Argan’s Gemma Power Systems subsidiary builds and operates power plants in Florida and elsewhere.

In March 2014, the Bulldog also reported that longtime Scott crony Alan Bazaar runs Hollow Brook Wealth Management, the trustee. Bazaar, who also manages another large Scott trust and family partnership, was a principal and a portfolio manager at the governor’s Naples-based investment firm for nearly 11 years before Scott ran for office.

Convicted thief sets up South Florida super PAC with Federal Election Commission’s OK

By Francisco Alvarado, FloridaBulldog.org unum

Four years after being convicted of stealing $35,000 worth of textbooks from Ohio State University’s law school library, Christopher Brian Valdes set up a super PAC this month in South Florida with the blessing of the Federal Election Commission.

Valdes, 28, of West Palm Beach, filed a “statement of organization” for Rescue Our Future with the FEC on Aug. 9 and listed himself as treasurer. The 28-year-old felon says he wants to use the political committee to raise unlimited amounts of money to help elect Jeb Bush president in 2016.

While convicted criminals may legally start and operate a super PAC, there’s no way for the public or prospective donors to know it if they do. The FEC, which regulates campaign finance, does not require PAC officials to disclose their criminal history.

Last month, FEC Chairwoman Ann M. Ravel issued an unusual public warning about the rise of what she called “scam PACs” – fundraising groups run by con artists who prey on small donors unhappy with their elected officials.

“It is assumed the money raised will go to help elect or defeat a candidate. In reality, the money raised largely gets funneled into the pockets of the political operatives who set up these organizations,” she wrote in in a July 13 commentary published by Roll Call.

Valdes did not want to discuss his crime in detail with FloridaBulldog.org. “It was bad decision that is in the past,” he said. “I have moved forward.”

He said in an interview, however, that he wants to raise money to pay for mailers and radio ads touting the former Florida governor.

“Even if Bush gets on the Republican ticket, it is not a sure fire thing that he will win Florida in 2016 just because he is a former governor,” Valdes said. “The state has voted for a Democrat in the last two presidential elections. I believe Rescue Our Future can do a lot to help him.”

Valdes said he is not affiliated with the Bush campaign and is going to campaign for Bush on his own. Whether the campaign wants a convicted thief trolling for dollars on Bush’s behalf remains unclear. Bush’s press office did not respond to an emailed request for comment.

According to a Sept. 6, 2011 story in the Columbus Dispatch, authorities accused Valdes of pilfering more than 200 books that he then advertised for sale online between November 2009 and October 2010. At the time, Valdes was a student of the Moritz College of Law.

Campus police initiated an investigation after receiving an e-mail from a Brazilian lawyer who had bought a volume online and found a crossed-out Ohio State University ink stamp on its inside front cover, according to court documents. Investigators arrested Valdes after setting up a sting involving a hidden camera and a marked book.

To avoid prison, Valdes agreed to plead guilty to a felony. He was placed on five years probation and ordered to pay $34,600 in restitution for books he sold online. Valdes also agreed that he “will not have or pursue employment or education in the field of law,” according to the details of his guilty plea in Franklin County Common Pleas Court.

Valdes claims he has completed his probation and that his voting rights were recently restored. “I have not gotten into any trouble since then,” he said. “And there is nothing on my record before that. It was an unfortunate incident that I’ve put behind me.”

FEC Commissioner Ravel could not be reached for comment. But in her commentary last month she said her agency is powerless to stop “scam artists” intent on ripping off donors.

“The FEC has, for many years, unanimously approved recommendations to Congress that would have taken small steps toward addressing scam PAC activity,” Ravel wrote. “After all, a role of the FEC is to protect consumers, the American voting public, from those who don’t use money contributed to campaigns for proper purposes.

She added: “Unless Congress takes action and gives the FEC the tools to regulate scam PACS, we can expect this problem to grow.”

Powerful medicine: Broward Health offers nearly $70 million to settle federal fraud probe

By Dan Christensen, FloridaBulldog.org bhpowerful

Taxpayer-supported Broward Health offered Thursday to pay $69.5 million to settle a four-year-old federal investigation into allegations of massive Medicare and Medicaid fraud.

The proposed payout is on top of more than $10.2 million the North Broward Hospital District – Broward Health’s legal name – already has paid an out-of-state law firm for legal advice about how to deal with the probe.

Broward Health’s executive boardroom was packed with as many lawyers as commissioners when the unanimous vote was made to approve the offer. The vote followed a two-hour non-public meeting about the case between the seven-member commission and defense counsel.

Commissioners offered no public explanation for their decision or how, if the government accepts the offer, it might impact Broward Health’s operations.  The enormous offer, however, signaled a collective belief that federal agents and prosecutors have turned up substantial evidence of wrongdoing that could prove much more costly if the matter is not settled soon.

Official silence followed an announcement, as the 7-0 vote was taken, that Justice Department attorneys had instructed Broward Health to make no public comments until the case is concluded. Citing the government’s muzzle, Broward Health president and chief executive Dr. Nabil El Sanadi, hired in December, and new in-house general counsel Lynn Barrett, hired last month, declined to comment.

The investigation surfaced in May 2011 when U.S. Department of Health and Human Services agents subpoenaed Broward Health records about the public healthcare system’s connections to more than two dozen doctors, including medical directors at Broward Health’s lucrative orthopedic, sports medicine and cardiology practices.

Millions of documents were ultimately turned over.

Details of the government’s case against Broward Health, the county’s largest provider of healthcare services, remain largely secret.


But the investigation and subpoena are known to stem from a complaint brought by an unidentified whistleblower. Private individuals with knowledge of fraud against the government can blow the whistle, and seek a reward of up to 25 percent of whatever the government recovers, by filing a lawsuit under the federal False Claims Act.

The person who filed the suit is called a relator. If the government accepts Broward Health’s settlement, the relator could collect a reward of up to $17 million.

Such lawsuits are initially kept sealed to allow the Department of Justice time to investigate and decide whether to help prosecute the lawsuit. If the settlement offer is accepted, and a judge approves it, the case is unsealed and further details become public.

Leading Broward Health’s defense are False Claims Act specialists Linda Baumann and D. Jacques Smith, of the Washington, D.C. office of the Arent Fox law firm. Baumann attended Thurday’s meeting. Smith participated by phone.

Baumann is also an expert regarding a pair of other laws that records show figure prominently in the Broward Health case: the federal Stark Law and the Anti-Kickback Statute.

The Stark Law generally prohibits doctors from referring Medicare or Medicaid patients to hospitals with which they have a financial relationship. Likewise, it forbids hospitals from submitting claims from prohibited referrals. Violators face stiff civil penalties.

The Anti-Kickback statute forbids offering, paying or soliciting or receiving anything of value to induce or reward referrals or generate federal healthcare program business. Criminal violators face up to five years in prison and a $25,000 fine for each violation.

If its settlement offer is accepted, Broward Health would become the second large hospital system in Florida in recent years to pay big for having improper financial relationships with its physicians. Last year, the Halifax Hospital Medical Center and Halifax Staffing in Daytona Beach agreed to pay $85 million to resolve allegations they submitted Medicare claims that violated the Stark Law’s self-referral rules.

On Thursday, Broward Health’s commissioners also authorized El Sanadi to enter into any integrity agreement that might be required by the government to close the deal.

Whether or not the government accepts the settlement offer, however, the investigation has already had a substantial impact on the district’s business practices.

For example, last year the governing board approved a new compensation scheme that seeks to make its physician compensation practices “commercially reasonable.”

More than a dozen Broward Health doctors have signed agreements under the new rules intended to assure compensation based on “fair market value.” One of those doctors who took a substantial pay cut was Michael A. Chizner, chief medical director of Broward Health’s Heart Center of Excellence.

The district, whose flagship facility is Fort Lauderdale’s Broward Health Medical Center, is the medical safety net providing services regardless of the ability to pay for the northern two-thirds of the county.

You don’t need X-ray vision to see through Gov. Rick Scott’s blind trust

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott, right, and blind trust executive Alan Bazaar

Gov. Rick Scott, right, and blind trust executive Alan Bazaar

Governor Rick Scott keeps his $127.8 million stock portfolio in a blind trust intended, by law, to prevent him from having knowledge or control of his investments and to eliminate conflicts between the governor’s public responsibilities and his private interests.

But Florida’s qualified blind trust statute, a little-noticed part of the large 2013 ethics reform bill signed into law by Scott himself, isn’t doing its job. While veiling the governor’s assets from the public, the blind trust fails to keep him blind to his investments.

There are at least two reasons why: disclosure requirements in federal securities law that can undercut blind trust secrecy, and weak conflict-of-interest rules in Florida that don’t require public officers like the governor to disclose assets they own or control when held in their spouse’s name.

For example, on June 25 Scott and the trustees of his blind trust told the U.S. Securities and Exchange Commission that Scott had sold 122,653 shares of Argan (NYSE:AGX) earlier that month for $4.87 million. Argan is a publicly traded holding company whose Gemma Power Systems subsidiary builds and operates power plants in Florida and elsewhere.

The report filed by Scott and his trustees at New York-based Hollow Brook Wealth Management also disclosed that the governor continued to own 4.2 percent of Argan – or 606,124 shares – worth nearly $23.7 million at Tuesday’s closing stock price of $39.06.

The public report says, “No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of common stock that are the subject of this filing.”

This wasn’t the first time Scott made millions on a private stock deal while in office.

In March 2014, FloridaBulldog.org reported that the governor and First Lady Ann Scott recently had collected $17 million selling hundreds of thousands of shares of Argan held by the blind trust and other entities. The story also reported about other large transactions involving several other companies whose stock Scott owned.

Scott’s Argan stock sales included at least 140,000 shares held by the blind trust – then worth $2.5 million – which also retained 523,000 shares. The two other selling entities: the F. Annette Scott Revocable Trust and the Richard L. and F. Annette Scott Family Partnership, in which Scott has acknowledged he was a beneficial owner.

Scott’s June filing does not break down the number of Argan shares sold then by each entity in five trades made June 15-19. But on more than one occasion the blind trust, the first lady’s trust and the family partnership have coordinated transactions – buying or selling large numbers of shares on the same day, at the same price or in similar proportions.


Scott’s office would not elaborate. Spokeswoman Jackie Schutz released a statement Tuesday saying the blind trust is “under the control of an independent financial professional” and that the governor “has no knowledge or control of anything that is bought, sold or changed in the trust.”

Nevertheless, trustee Hollow Brook Wealth Management’s chief executive is Alan Bazaar who worked for Scott from July 1999 to January 2010 as managing director and portfolio manager at Richard L. Scott Investments. Hollow Brook is also an “investment adviser” to the Scott family partnership and the revocable trust in Mrs. Scott’s name.

Further, Scott and Bazaar were partners in a company that in 1999 invested in Cyberguard, a Deerfield Beach computer security firm. The company’s board of directors included then-Broward Sheriff Ken Jenne, who later went to prison for corruption, and Fort Lauderdale lobbyist and Scott confidant William D. Rubin.

To date, Gov. Scott is the only public officer in Florida to use a state qualified blind trust to shield his assets and obtain the safe harbor it provides from prohibited conflicts of interest, according to the Florida Commission on Ethics.

Keeping his securities portfolio in the blind trust means Scott does not have to identify his individual securities on his annual financial disclosure form. Instead, his form describes his biggest single asset as simply “Governor Richard L. Scott 2014 Qualified Blind Trust.”

While the state form does not detail his blind trust holdings, mandatory reports he must make to the SEC about his large stock transactions do. But they aren’t the only way information about Scott’s stock holdings have gone public.

Companies must file reports identifying their biggest shareholders. For example, Argan’s May 16, 2015 report to the SEC in advance of its annual meeting listed Richard L. Scott as a principal stockholder who then owned 965,255 shares, or 6.6 percent of the company.

pipelineGov. Scott also has made public information about the contents of his blind trust.

In June 2014, while qualifying to run for re-election, Scott closed his original blind trust, made public a list of his blind trust assets, then immediately put those assets back into a new blind trust.

The maneuver presented a snapshot of Scott’s stock holdings as of Dec. 31, 2013. Among other things, it revealed Scott was heavily invested in energy companies, including those that control the two existing natural gas pipelines serving Florida.

Also disclosed was Scott’s $108,000 investment in Spectra Energy and its affiliate DCP Midstream Partners.

Spectra is currently seeking regulatory approval to build the $3 billion Sabal Trail Transmission, an approximately 500-mile pipeline to run from Alabama and Georgia into North Florida and south to Orange County. The underground pipeline would supply fuel to the state’s new gas-fired power plants.

The Florida Public Service Commission, whose five members were appointed by Scott, unanimously approved Sabal Trail in the fall of 2013, before Scott’s stake in Spectra was publicly known.

Last month, the Florida Department of Environmental Protection said it intended to award a key environmental permit and easement for the controversial Sabal Trail project that’s majority-owned by Spectra Energy.

FP&L and Duke Energy, also partners in the project, have contributed $1.4 million to Let’s Get to Work, the political committee branded with Scott’s campaign slogan, according to federal records. They also gave a combined $5.8 million to the Republican Governors Association in 2013-14, which in turn contributed $18.3 million to Let’s Get to Work last year.

Page 1 of 3012345»102030...Last »


Notify me by email when new stories are published.

Bulldog Archives