In Hialeah, money meant to feed poor kids pays for Las Vegas trip for city officials

By Francisco Alvarado, FloridaBulldog.org 

Hialeah Mayor Carlos Hernandez Photo: CBSMiami

Two years ago, Hialeah Mayor Carlos Hernandez signed off on spending $7,621 from a $10,000 corporate grant for feeding poor children. Instead, the money went to pay for airline tickets and posh hotel accommodations for himself, his chief of staff, a police detective and four  other city employees to attend a parks and recreation conference in Las Vegas.

News of Mayor Hernandez’s curious city spending surfaced in documents filed in a recently closed joint public corruption investigation by Miami-Dade’s State Attorney’s Office and Commission on Ethics and Public Trust.

Another strange finding: Hernandez never traveled to Las Vegas to attend the annual conference of the National Recreation and Park Association (NRPA) from Sept. 13-17, 2015, and his whereabouts for seven days remain a mystery.

Hernandez was the investigation’s focus, but he won’t face criminal charges. A close-out memo written by Assistant State Attorney Trent Reichling and obtained by Florida Bulldog concluded that the Sept. 13-19 trip – ending two days after the conference closed – was official city business authorized by a trio of high-ranking Hialeah bureaucrats. Further, authorities found no documentation that the grant provider, the National Recreation and Park Association, had prohibited the use of its corporate grants on travel expenses.

“The evidence contradicts any allegation that Mayor Hernandez intended to misappropriate NRPA funds for his personal benefit,” Reichling wrote. “Therefore, there is no evidence of criminal conduct that would substantiate the filing of charges.”

The June 26 close-out memo wasn’t made public until Aug. 31, along with an investigative report by the Miami-Dade Ethics Commission, which worked in conjunction with the state attorney’s public corruption task force.

Allies rewarded?

For Hernandez critics like former Hialeah Mayor Raul Martinez, the report and the memo indicate Hernandez rewarded two of his closest allies, chief of staff Arnaldo Alonso and Det. Felix Delgado with an all-expenses paid vacation while he disappeared from his official duties for seven days.

Arnaldo Alonso, the Hialeah mayor’s chief of staff

“In the 24 years I ran the city, if I would have just imagined doing something like this, I would have been indicted,” said Martinez. “Now, you can get away with anything.” Martinez was convicted federally in 1991 for extortion and racketeering, but after a new trial in 1996 was acquitted of extortion. The jury deadlocked on five other counts, and prosecutors subsequently dropped the case.

Martinez lambasted the ethics commission and the state attorney’s office for conducting what he said was a poor investigation. “The state attorney and local investigative agencies have decided that Hialeah is like Chinatown,” Martinez said, referencing the 1974 film about a corrupt scheme involving the Los Angeles Department of Water and Power. “They go in, but don’t really investigate anything.”

Specifically, Martinez pointed to witness statements, including testimony by Alonso and Delgado, that he contends shows they were less than forthcoming about where the mayor was during the week of the Las Vegas conference. “It is shameful of the ethics commission and the state attorney for allowing people to lie and doing nothing,” Martinez said, also noting that investigators apparently made no attempt to interview Mayor Hernandez.

Alonso did not respond to three phone messages requesting an interview. Messages left for Hernandez and Delgado, who works as a liaison between the mayor’s office and the police department, were not returned.

Ed Griffith, spokesman for Miami-Dade State Attorney Katherine Fernandez Rundle, declined to specifically address Martinez’s criticisms, but noted that a prosecutor cannot ethically file criminal charges unless there is sufficient evidence to prove guilt beyond a reasonable doubt.

“This matter was reviewed in great detail,” Griffith said. “The conclusion of our close-out memo best indicates the reasoning involved in determining that a criminal charge could not be filed.”

Perjury prosecutions ‘very rare’

Miami-Dade Ethics Commission executive director Joe Centorino, a former chief of the state attorney’s public corruption unit, defended his agency’s work.

“I think the inconsistent statements by the chief of staff are pretty well laid out in our report,” Centorino said. “Yet prosecutions for perjury are very rare because it is difficult to prove. Of course, the decision to pursue it as a criminal matter is made by the state attorney.”

Joe Centorino

The inquiry into the Las Vegas trip began March 1, 2016 when NRPA chief financial officer Anna Amselle told an ethics investigator that the conference concluded on Thursday, Sept. 17, 2015, and could not account for why the Hialeah delegation stayed an extra two days. She also said “nobody on the internal staff actually saw the mayor” and that the city’s NRPA grants, which are funded by corporate sponsors like Walmart, were intended solely for feeding children at Hialeah parks.

Moreover, Amselle said travel expenses to the annual conference would be an “inconsistent use” of grant funds, the investigative report states. “We would have never agreed that this is an allowable use of these funds,” she added. The Hialeah contingent stayed at the MGM Grand in Las Vegas, where the room rate was $219.52 per night.

On May 11, 2016, Hialeah parks and recreation director Joseph Dziedzic, one of the four other employees who went to Las Vegas, told investigators that Hernandez was expected to attend the NRPA conference because the department was “up for a big award,” but that the mayor canceled his participation in the trip prior to leaving. Dziedzic did not know why and that he was also unaware of any prohibition against using NRPA funds for travel expenses to the annual conferences, according to the investigative report.

Misspent money

Indeed, investigators discovered the city had misspent an additional $11,114 in NRPA funds to cover employees’ travel expenses for the organization’s conferences in 2012, 2013 and 2014. Another $3,541 in grant money for hungry kids was spent on two desktop scanners, an L-shaped workstation, three desks, six folding carts and a healthy-eating presentation at Milander Park.

A month after speaking to Dziedzic, investigators questioned Glenn Rice, an ex-Hialeah cop who was one of Hernandez’s most trusted political operatives until they had a falling out shortly after the Las Vegas trip. Rice said he drove Alonso to Fort Lauderdale International Airport on Sept. 13, 2015, according to the investigative report. “He said [Alonso] told him the mayor was going, but was vague as to any particulars of the trip,” the report states.

According to an Oct. 25, 2016 sworn statement, Delgado — whom Dziedzic described as the mayor’s bodyguard — said he only found out Hernandez was staying behind when he boarded their JetBlue flight. “He said Alonso told him that the mayor would not be going to Las Vegas but did not say why,” the report states. “Delgado said he normally speaks to the mayor on a daily basis at work. Delgado said the mayor did not call him during the week he was in Las Vegas and that he did not call the mayor.”

Delgado also explained that Hernandez had requested he go to Las Vegas in order to “keep everybody out of trouble” and that the mayor was particularly concerned that Alonso “might have too much to drink and do something to embarrass the city.” He noted that the chief of staff “did have a couple of drinks, vodka,” the report states.

Lissette Franco, Hernandez’s administrative assistant at the time of the Las Vegas trip, told investigators on March 30 that Alonso and the mayor are “extremely close” and that he “would be privy” to the Hernandez’s whereabouts when he was scheduled to be at the 2015 NRPA conference.

“I like to party”

On June 12, after being subpoenaed by the state attorney’s office and with his lawyer present for his sworn statement, Alonso said he had no direct knowledge of Hernandez’s whereabouts after the mayor decided not to go to Las Vegas. The chief of staff also said he could not recall any communication with Hernandez during those seven days. As far as Delgado’s claim about Hernandez’s concerns that Alonso had a drinking problem, the chief of staff said: “Listen, I like to party. I’m 38 and single.”

Investigators subsequently obtained text messages from Alonso’s city-issued phone which appeared to show him covering for Hernandez when City Attorney Lorena Bravo asked to have the mayor call her. “Okay, I will let him know,” Alonso wrote back. “Remember we are both out of town.”

In an Aug. 22 email to Reichling, ethics commission investigator Karl Ross broaches the possibility of subpoenaing cell tower data for the mayor’s phone during the week he was supposed to be in Las Vegas based on Alonso’s text messages. “I don’t know whether this rises to the level of possible perjury,” Ross wrote. “But it seems to suggest Alonso was not being truthful or forthcoming or whatever you want to call it while he was under oath.”

In his response to Ross, Reichling didn’t think there was enough to proceed with a perjury investigation against Alonso. “He certainly was not specific or forthcoming with his responses, but that is not a crime that I am aware of,” Reichling wrote, adding that the mayor’s cell phone location data would also not help proving a crime had been committed.

“With regards to an order for historic cell site data, our office’s policy is that there be probable cause to believe the cell site data would lead to evidence of a crime,” Reichling wrote. “Unless I am missing something, I do not believe I could proceed with charging Alonso with a crime, or applying for a cellular site order on the Mayor’s phone.’’

FBI probe of tie between Saudi ambassador, al Qaeda leader put on ice

By Dan Christensen, FloridaBulldog.org 

Saudi Prince Bandar bin Sultan, right, and Guantanamo detainee Abu Zubaydah

For 14 years, the FBI kept secret that a top al Qaeda leader captured in Pakistan in 2002 possessed the unlisted phone number of an offshore company tied to Saudi Arabia’s U.S. ambassador, Prince Bandar bin Sultan.

The news got out last year after President Obama ordered the release of the “28 pages,” a long-suppressed chapter of a 2003 congressional report on 9/11. Also disclosed: FBI agents in Denver were assigned to investigate the company, ASPCOL Corporation, which the FBI described as “the umbrella corporation that manages the Colorado residence of Prince Bandar.”

But agents assigned to investigate ASPCOL, whose unlisted number was found in the phone book of “high-value” Guantanamo detainee Abu Zubaydah, quickly suspended the probe.

“The Denver office did not attempt to make any local inquiries about ASPCOL, as they believed that any inquiries regarding ASPCOL would be quickly known by Prince Bandar’s employees,” the 28 pages said. “Due to the sensitivity of this matter, they decided to hold the investigation of ASPCOL in abeyance until they received additional guidance from FBI headquarters.”

The guidance Washington gave its Denver agents is not known, and FBI spokesmen won’t discuss it. It now appears, however, that the FBI never restarted its suspended investigation. Two witnesses told Florida Bulldog the FBI never contacted them to inquire about ASPCOL.

Witnesses not interviewed

One witness owned a company identified in the 28 pages of Congress’s Joint Inquiry into 9/11 as having provided security at Bandar’s magnificent 15- bedroom, 16 bath residence in Aspen known as the Hala Ranch. The other is a well-known Washington attorney who helped incorporate ASPCOL and served on its board of directors.

Prince Bandar’s Hala Ranch in Aspen, Colorado

The FBI’s Denver office identified the company as Scimitar Security, but provided no other details about it. Colorado corporate records identify Scimitar’s president as Hans Marschler. In an interview, Marschler, who now resides near Houston, confirmed that he owned the now-closed Scimitar Security and that the company had worked at Hala Ranch.

“It was a very small operation, one person during the day and one at night. We spent time watching the house. People came to work, we kept an eye on them,” Marschler said. “The FBI never contacted me.”

Marschler added that when Bandar was present he was accompanied by additional heavy security. “They brought in their whole teams,” he said. “Whoever was head of security, I don’t know.

Another Scimitar Security, this one a still active company based in San Diego, CA., has a connection to allegations of terrorism, but owner Abdul Halim Mostafa said his firm never worked for ASPCOL, Bandar or anywhere outside California.

Mostafa’s son is Jehad Serwan Mostafa, who is wanted by the FBI “for his alleged terrorist activities and acting as an operating member of al-Shabaab, a Somalia-based terrorist organization” with ties to al Qaeda. An indictment charging Mostafa, a U.S. citizen who was licensed as a security guard from 2000 to 2006, with conspiracy to provide material support to terrorists and providing material support to a foreign terrorist organization was unsealed in 2010. The U.S. has a $5 million bounty on Mostafa’s head.

The Duttons of Arabia

The second person with information about ASPCOL the FBI never contacted is Washington attorney Nancy Dutton. Dutton represented the Saudi embassy for several decades until last year. Similarly, she represented the Saudi foreign ministry from 1975 until about two years ago.

Dutton and her late husband Fred Dutton, an attorney and key strategist to many big-name Democrats in the 1960s and 1970s who later became a counselor to Prince Bandar and a lobbyist for Saudi Arabia, incorporated ASPCOL in Curacao, Netherlands Antilles in December 1988 and later served on its board of directors.

Photo: CSPAN

“No, the FBI never called me and I doubt whether they called Fred or I would have known it,” said Dutton, a White House aide under President Kennedy. She declined further comment.

Another person involved with ASPCOL is Aspen attorney William “Willy” Jordan III, who would not be interviewed. Jordan represented Bandar’s interests in the area and served as APSCOL’s managing director for many years before it was liquidated and closed in January 2014.

The island of Curacao is a financial center in the Caribbean known for strict bank secrecy that has facilitated drug related crime. The U.S. currently lists the tiny country that’s part of the Kingdom of the Netherlands as a “jurisdiction of primary concern” where “money laundering occurs through real estate purchases and international tax shelters.”

Records show that a month after ASPCOL N.V. was incorporated it paid $3.5 million for 90 acres in Aspen. The mansion was constructed in 1991. Pitkin County property records show that ASPCOL sold the property for $49 million in May 2012.

Bandar, 68, was Saudi Arabia’s ambassador to the U.S. from 1983 to 2005.

He was close to President George W. Bush, earning him the nickname Bandar-Bush. A White House photo taken two days after 9/11 shows Bandar on the White House’s Truman Balcony with Bush, Vice President Dick Cheney and National Security Advisor Condoleeza Rice.

Bandar interview secret

The 9/11 Commission interviewed Bandar on Oct. 7, 2003. The government continues to keep secret the interview citing national security.

Zacarias Moussaoui

In October 2014, imprisoned 9/11 conspirator Zacarias Moussaoui gave a deposition to attorneys representing victims of the September 11, 2001 terror attacks on New York and Washington. He talked about how his superiors in al Qaeda had tasked him with creating a digital database of the group’s donors. “Shaykh Osama wanted to keep a record [of] who give money…to the jihad,” Moussaoui said, according to a transcript.

He went on to name numerous contributors he said were on the list. They included Bandar and other members of the Saudi royal family such as Prince Turki al-Faisal, Prince al-Waleed bin Talal and Prince Mohammed al Faisal.

Questions have long been raised about Bandar’s possible ties to 9/11. More than a decade ago it was reported that his wife, Princess Haifa, had for some time sent a monthly check of $2,000 to the wife of Osama Bassnan, a suspected Saudi agent and alleged al Qaeda sympathizer who FBI records identify as a “close associate” of Omar al-Bayoumi, another apparent Saudi agent who provided financial and other support to two 9/11 hijackers in San Diego in 2000.

The 28 pages included new information about that matter, saying that FBI agents who searched Bassnan’s home found copies of 31 cashier’s checks payable to Bassnan’s wife totaling $74,000 that were “drawn on the Riggs Bank account of Prince Bandar’s wife.” The checks, from February 1999 to May 30, 2002, were supposed to be for nursing services, but “there is no evidence that Bassnan’s wife provided nursing services.”

The pages also said that Prince Bandar himself sent checks directly to Bassnan and his wife. Those checks, cashed in 1998, were for $15,000 and $10,000. FBI Executive Assistant Director Pasquale D’Amuro told Congress on Oct. 9, 2002, “What the money was for is what we don’t know.”

Florida Zika emergency funds went to partner of Ann Scott’s aerial spray businesses

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott and First Lady Ann Scott

Gov. Rick Scott has used his emergency authority to spend $33.3 million to combat Zika, some of which went to pay for aerial spraying done by a company that is partnered with his wife’s mosquito spraying businesses in another state.

Florida Bulldog reported in August 2016 that Scott, via First Lady Ann Scott, had an undisclosed financial interest in Mosquito Control Services (MCS) of Metairie, LA. The company describes itself on its website as a “fully-certified team of mosquito control experts – licensed throughout the Gulf Coast, including Louisiana, Georgia, Mississippi, Alabama and Florida.”

Further examination of Louisiana corporate records, however, shows the Scotts are also tied to eight other active mosquito control firms all at the same Metairie address. Several have lucrative, multi-year contracts to provide aerial spraying and other services to local parishes and cities.

The nine are not on Florida’s list of state vendors. Records show, however, that at least four of them, including MCS, conduct aerial spray operations in Louisiana using planes owned by one of Florida’s largest Zika-fighting subcontractors, Dynamic Aviation Group of Bridgewater, VA.

Dynamic Aviation contracts with the Scotts’ companies to handle their aerial bug spraying because those companies have no planes of their own, according to Federal Aviation Administration records.

Dynamic is partnered in Florida with Illinois-based Clarke Environmental Mosquito Management, the principal vendor to more than a dozen Florida counties, cities and independent mosquito control districts, including Miami-Dade. FAA records list Dynamic or its affiliates as the registered owners of dozens of aircraft, including a fleet of turbine-powered Beechcraft King Air spray planes.

A Dynamic Aviation spray plane

“The Clarke and Dynamic Aviation Partnership is the leading provider of mosquito control application services to federal, state and local governments throughout the United States,” Clarke boasted in a bid document submitted to Ocala in August 2015.

Today, the Florida Department of Health reports that there are “no areas of ongoing, active transmission of Zika by mosquitos in Florida.” In February 2016, however, public anxiety in the state about Zika was on the rise.

Public health emergency

That month, Gov. Scott declared a Zika public health emergency in 23 counties and directed Florida’s surgeon general to decide how long the emergency declaration should last. It has continued this year in a hodge-podge of counties across the state, including Miami-Dade. Late last month, Surgeon General Dr. Celeste Philip re-declared a Zika public health emergency in Broward and Palm Beach counties citing travel-related cases. Emergency spending also carried over into 2017 in Miami-Dade and Broward.

 Gov. Scott led last year’s high-profile anti-Zika campaign. He also politicized it. From August through early November, during the height of the presidential campaign, Republican Scott’s office issued a dozen press releases attacking Washington, specifically the Obama administration and Florida Democratic Sen. Bill Nelson – who many believe Scott will run against next year – about the lack of immediate Zika funding.

Florida Surgeon General Dr. Celeste Philip

On Sept. 22, Gov. Scott wrote an op-ed article for USA Today in which he denounced Obama, called the “entire” federal government” incompetent and alleged that federal inaction against Zika was “sad, sick proof that Washington isn’t just broken, it must be completely overhauled from top to bottom.”

Scott’s article doesn’t mention how under Scott state money for mosquito control programs was cut 40 percent – from $2.16 million to $1.29 million – in 2011. Politico had reported that in a story published one month earlier. Likewise, Scott didn’t mention that he’d cut a special $500,000 appropriation for a public health “mosquito lab” in Panama City Beach, effectively shutting it down and “causing the state to lose half of its mosquito researchers,” according to Politico.

In response to an inquiry by Florida Bulldog, Florida Department of Health spokeswoman Mara Gambineri said the state has to date expended $52.8 million in Zika emergency funds, including nearly $9 million this year. Of that, Scott’s emergency order caused $33.3 million to be sent to 69 counties and mosquito control districts “to increase their capabilities and to prevent and respond to Zika,” she said.

State records also show the Department of Health paid Clarke $783,572 directly to supply mosquito traps and monitoring services in 2016-2017.

How much emergency money went to pay for aerial spraying is not known. “Decisions on the mechanism for vector control, whether it be aerial, truck, etc. were made by the mosquito control districts. We do not track the funding specifically each method,” Gambineri said.

Tracking spending on the county level is problematic.

For example, Miami-Dade spokeswoman Gayle Love said the county has paid Clarke/Dynamic $175,000 for aerial spraying since the governor’s February 2016 emergency order. Yet in May the county commission ratified its acceptance of $1.2 million in state emergency funds to pay for last year’s aerial spraying services. The balance was diverted into another pot of $22 million in emergency funds that paid for truck spraying, Love said.

‘Aviation solutions’

Privately owned Dynamic provides what it calls “special-mission aviation solutions” to customers that include “national defense, military intelligence, federal agencies, state and local governments, nonprofit research organizations and private companies.”

Records show the Scott’s nine mosquito control companies – all Louisiana limited liability companies with names like Mosquito Control Services, Mosquito Control, Terrebonne Mosquito Control and St. John Mosquito Control – are led by two officer-managers, Gregory Scott and Steven Pavlovich. The companies make most of their money exterminating mosquitos for local governments in Louisiana.

Gregory Scott, CEO of G. Scott Capital Partners

Gregory Scott is also the managing director of G. Scott Capital Partners, the Connecticut private-equity firm in which Ann Scott is a substantial investor-owner. Its investment program “aims to generate high financial returns by making direct control investments in established, U.S.-headquartered lower middle market companies,” according to paperwork filed with the Securities and Exchange Commission.

Also known as Scott Capital, the firm boasts on its website of its ownership of MCS as well as investments in other companies owned or formerly owned by Gov. Scott, including Continental Structural Plastics. Florida Bulldog reported in June that Gov. Scott apparently pocketed $200 million earlier this year after the $825 million sale of CSP to the Japanese conglomerate Teijin Ltd.

Gregory Scott has said he is no relation to Gov. Scott, but SEC records show that from 2000 to 2012 he led the private-equity group at the governor’s Richard L. Scott Investments. He previously told Florida Bulldog that Ann Scott is a “passive investor” in Scott Capital.

The governor and other Florida state officers are not required by law to disclose assets held in the name of their spouses or other close relatives.

Gov. Scott, a multimillionaire, maintains his personal investments in a state “qualified blind trust” that’s ostensibly independent, but is in fact overseen by another of the governor’s former business cronies, Alan Bazaar of New York’s Hollow Brook Wealth Management. Bazaar also serves as an advisory board member of Scott Capital, according to SEC records filed last year.

The governor’s office regularly cites the blind trust in declining to answer questions or comment on the known business dealings of Gov. Scott and the First Lady.

“After Governor Scott took office in 2011, he put all his assets in a blind trust so they would be 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,” the office said on Friday.

Dynamic Aviation was likewise silent in response to written questions.

“Dynamic Aviation declines to comment on the questions below,” said company spokeswoman Avis Foster in an email last week.

MCS manager Steven Pavlovich did not return phone messages seeking comment.

A lucrative business

The business of spraying mosquitos from the air can be lucrative. For example, MCS has a five-year mosquito abatement contract with Louisiana’s Jefferson Parrish that’s worth $4.3 million a year – or $21.5 million in total. The latest contract runs until Jan. 31, 2023.

A screenshot from MCS’s home page showing what it says is its “fleet” of mosquito spray planes

A bid document submitted by Scotts’ company in January shows how it cultivated goodwill with local politicians. An affidavit by company manager Pavlovich says MCS contributed $25,000 to the campaigns of 15 Jefferson Parish elected officials in 2015-2016.

Bid documents also disclosed that MCS passes its aerial spraying work in the parish to Dynamic Aviation, the same subcontractor that sprays in Florida.

MCS’s home page features a photo of what its literature calls “our fleet of Beechcraft King Air” spray planes. In fact, the photo is at least six years old, and FAA records show that the planes it depicts were owned or formerly owned by Dynamic Avlease, a member of the Dynamic Aviation Group.

Some agencies in Florida’s decentralized mosquito control scheme, like Broward County, own their own planes or helicopters and do their own aerial spraying. The Clarke/Dynamic partnership has mosquito control contracts with Miami-Dade, Orange, Osceola, Seminole, Martin, Henry, Volusia and Alachua counties, among others.

In its bid for a multi-year contract with the city of Ocala in 2015, Dynamic identified five planes that it said were “registered here in the State of Florida to perform mosquito control services.”

Online flight records indicate that the Scotts’ Terrebonne Mosquito Control, in addition to using the same aerial spraying subcontractor, may also have used that Florida-registered mosquito control plane.

In July one of those planes, tail number N72J, flew back and forth four times between Sarasota/Bradenton International Airport and Houma-Terrebonne Airport in Houma, LA, the records say.

Hidden audit shows big budget hole at union for Miami Dade schools lowest-paid workers

By William Gjebre, Florida Bulldog.org 

Miami-Dade Superintendent of Schools Alberto Carvalho and AFSCME, Local 1184 President Vicki Hall at a meeting in November 2016.

An embattled union representing the lowest-paid Miami-Dade public schools employees is facing new problems that include a $210,000 budget deficit, possibly driven by compensation paid to a handful of top union officials.

The shortfall at the American Federation of State, County and Municipal Employees Local 1184 is a huge hole in a budget that in past years has typically ranged from $200,000 to $250,000 – funding primarily collected from union dues.

The large deficit was disclosed in an audit by AFSCME international headquarters in Washington, D.C. that’s dated May 2, yet only made public this month.

A former union official who ran for president of the local said the suppression of the audit could have cost him the May 18 election.

“Why did the international allow someone to run for office with a $200,000 deficit?” said Terry Haynes, a former union vice president who was defeated by incumbent Local 1184 president Vicki Hall.

Aside from the union’s budget issues, Haynes said, there was a lack of disclosure of information by Local 1184 regarding union finances as well as failure by the union to obtain approvals of the full executive board. Increased expenditures in light of the union’s precarious financial problems are not justified, Haynes added.

Terry Haynes, former senior vice president of Local 1184 of the American Federation of State, County and Municipal Employees

Hall, Local 1184 president since May 2015, did not respond to an email and phone calls for comment on the audit and related issues. Jeffrey Taggart, director of accounting and auditing, AFSCME international in Washington, whose office conducted the audit under his signature, also did not respond to a request for comment. Andy Madtes, executive director of Florida Council 979, which oversees AFSCME locals in the state, maintained that the audit is a matter between the international and Local 1184 and does not fall under the council’s purview.

AFSCME international “does not comment on an internal issue,” said Mark McCullough, a spokesperson for both the international and Local 1184. He would not discuss what measures have been taken by Local 1184 to address the financial and other issues referenced in the audit.

‘A deficit of $210,667’

“The 2016 and 2017 annual budgets approved by the Executive Board do not provide the net income/net loss,” the audit stated. “Total budgeted income for 2017 less the total budgeted expenditures for 2017 results in a deficit of $210,667. Additionally, the expenditures on the annual budgets do not total correctly.”

Audit information, as well as an apparent union tentative budget document for 2017, provides some answers to the funding imbalance.

“The 2016 budget for payroll was $121,620 and the 2017 budget payroll is $146,820,” the audit stated. Those numbers, however, appear to be far less than the actual union payrolls for 2016 and apparently for 2017.

The audit stated that Hall’s total compensation and payments for 2016, funded by union dues, were $116,572, including $50,915 in union salary (called “allowance”) and another $10,276 in reimbursements; $43,443 from her district annual salary as a bus driver, and $11,938 for fringe benefits, unused sick time and vacation pay. The union’s agreement with the Miami-Dade public schools system calls for the union to reimburse the district for Hall’s district salary and other benefits so she can do union business.

During 2016, Haynes, at the union’s request, was also on full-time release from his district job as a custodian, and his total compensation and payments were $68,944, including $44,373 from his district salary and another $12,958 for fringe benefits, unused sick and vacation time; $11,150 in his union salary, and another $463 in union reimbursements.

In addition to the $185,516 in compensation for Hall and Haynes, the union in 2016 paid allowances to 12 other union officials for about $50,000 — or a grand total of $235,516.

Local 1184’s budget totals for 2017 were not identified in the audit. But Haynes provided a document he said was a working tentative union budget for this year that showed the union’s income from dues, normally the main funding source, would amount to only $159,523 for the year. Haynes said that as far as he can recall the 2017 union payroll was not reduced from the previous year.

A drop in membership dues coming?

The tentative budget document Haynes provided projected that Local 1184 would collect a total of $974,590 in dues for the 2017 budget. Most of that is sent up to the Florida Council and AFSCME international. Local 1184’s $159,523 share of the total is 16.4 percent of the total.

In the last reports to the state of Florida regarding yearly dues from members, Local 1184 stated it collected $1.128 million in 2015 and $1.182 million in 2013. This indicates Local 1184 is facing a drop in membership dues for 2017.

The audit report was also critical of Local 1184 in other areas, noting that certain cash allowances and increases for officers were not approved by the membership and that the local bought 14 new cellphones for its executive board members at a price that was higher than what had been approved.

The issue of union finances is the latest controversy surrounding the union. Haynes had criticized Hall for failing to challenge the school system when the School Board approved two contracts totaling $1.8 million outsourcing lawn service work usually done by union employees.

Haynes also was critical after it was learned that the school district gave Hall a $16,000 pay hike, raising her base annual salary to $42,000 from $26,000, two months before the November 2015 outsourcing contract was approved.

Controversy continued at the end of the May 18th union election when member votes were being counted. Haynes said his unofficial count had him leading when an election committee official left the area and returned with papers in hand. Shortly afterward, he said, Hall was declared the winner. “They stole the election,” he said.

Haynes contested the election, but AFSCME international denied it saying he filed the appeal too late.

Haynes said he believes that the international, despite its claim of opposing outsourcing, did not support his call for a new election because “they want her [Hall] there” rather than someone like himself who speaks up about problems.

Broward chief judge leads push to release from jail nonviolent poor who can’t make bail

By Dan Christensen, FloridaBulldog.org 

Broward Chief Judge Jack Tuter Photo: J.A.A.B Blog

Concerned that poor people charged with minor, nonviolent offenses who can’t post bond are clogging the jail at taxpayers’ expense, Broward Chief Judge Jack Tuter is spearheading a push to release more of them before trial.

“If you are in jail more than a couple of days on a low bond, you are probably there because you can’t afford to post the bond. People shouldn’t be waiting in jail simply because they are poor,” Tuter said in an interview last week. “It’s a multi-faceted problem, but my goal is to get out those with ties to the community and some degree of assurance they’ll show up in court.”

Tuter, who took over as chief judge on July 1, said recent Broward jail statistics showed that 321 people were being held on bonds of under $5,000. Low-risk individuals in that group with no other pending charges are the focus of Tuter’s concern.

Broward’s County Court judges serve on a rotating basis as first appearance, or Bond Court judges. Earlier this month, Tuter and representatives from the Broward Sheriff’s pretrial diversion program met with those judges for a refresher about the options for judges when dealing with incoming defendants, including less costly electronic monitoring and releasing defendants on their own recognizance.

“Most judges knew this, but I reemphasized it,” said Tuter. “Is there an alternative to jail?”

The chief judge’s action was warmly met by Broward Public Defender Howard Finkelstein, who has long accused local judges of fostering a “double standard” of justice by ignoring the disparate treatment of minorities and the indigent.

“Broward County is taking its first steps to end the institutionalized racist justice system that has existed in our county for the past 50 years,” Finkelstein said. “We have a chief judge who’s trying to figure out the right thing.”

Broward’s jails have a troubled history that led to decades of federal monitoring to protect the constitutional rights of inmates. In 1976, inmates sued alleging a variety of constitutional violations stemming from overcrowding, abuse and inadequate medical care. The case was largely settled last December – 40 years later.

Chronic overcrowding is not currently a problem, with the inmate population under 4,000 and about 77 percent of the system’s 5,144 bed capacity.

More reductions sought

Still, Tuter wants to see that number lower. “I’d like to see it under 70 percent,” he said.

The cost to house an inmate in Broward is about $150 a day. The cost to taxpayers to keep 30 inmates who can’t meet a small bond in jail for 30 days is about $135,000. In contrast, Tuter said it costs $5 a day to put an ankle monitor on a defendant.

The question of who should be released is complicated by several factors, not the least of which is how to deal with defendants who don’t have a permanent address. An address is required for pretrial release. It allows the court system to notify defendants when they must appear in court so judges don’t have to order deputies to go out and pick them up.

When low-bond defendants remain in custody for more than five days or a week judges typically take a “second look” to see if a reason exists to let them out. But if the courts are not successful in further reducing the jail population, Tuter will consider instituting a “third look docket” that will have judges go to the jail to make “a more refined approach” to finding pretrial release.

The court has a lengthy schedule of “convenience bonds” that offer defendants preset amounts they can post to get out of jail, depending on the charge, without even seeing a judge. The bond range is from $25 to $500,000.

Public Defender Finkelstein wants to end the use of convenience bonds, which he says are convenient to judges and the well-to-do, but not his typically indigent clients. Tuter, who was appointed to Broward’s circuit court bench by Gov. Jeb Bush in 2005, has no plans to scrap the schedule.

Still, change that promises to address old grievances has begun.

“Broward seems to be coming out of its constitutional slumber,” said Finkelstein. “It’s like the lights went on and everybody realizes we haven’t been doing things right.”

Hallandale Beach commissioner says she’s victim of identity theft, blames political foes

By William Gjebre, FloridaBulldog.com 

The Hallandale Beach City Commission, including Anthony Sanders, left, who resigned August 11 amid allegations of wrongdoing. The others, left to right, are Commissioner Anabelle Taub, Mayor Joy Cooper and Commissioners Keith London and Michelle Lazarow

Hallandale Beach City Commissioner Anabelle Taub has become the victim of credit card fraud and blames her political opponents for playing a part in publicizing her personal information during last year’s bitterly contested commission election.

She made a fraud report July 12 with the Hallandale Beach Police Department. Taub also met with an FBI agent who specializes in identify theft at the agency office in Miramar. She had expressed concern about possible credit card theft when her personal information, including the last four digits of her Social Security number, was publicized.

“My identity has been stolen,” Taub said at the Aug. 2 city commission meeting where she talked about the credit card fraud amounting to nearly $4,000 and her lingering bitterness involving dirty campaign activities.

“I have had to deal with thousands of dollars [in credit card fraud], tracking devices on my car and a P.I. [private investigator] following me around,” Taub added. “I have had to deal with someone who bought a car in my name.”

Among those she singled out for her problems was former City Commissioner Bill Julian, who Taub unseated from the commission in last year’s election.

But “most of all,” Taub stated at the commission meeting, she blamed Mayor Joy Cooper. “I hold Mayor Cooper responsible for what I’m going through. You, Mayor Cooper have done all you can to destroy my life. You are drunk with power.”

Anabelle Taub

Asked why she identified Cooper, Taub referred to a Sun Sentinel editorial, “The Dirtiest Election in Broward County,” published in November 2016. It stated Cooper had sent the newspaper a licensed investigator’s report on Taub that included her Social Security and credit card numbers. The information stated that another person uses Taub’s Social Security number and has two different dates of birth, the editorial stated.

The newspaper editorial said Cooper at first denied having seen or sent such documents. But after the newspaper revealed an email Cooper sent to the Sun Sentinel, Cooper stated, the newspaper said, “I feel like a total idiot. I didn’t remember sending it. I did send it… My bad.”

The mayor did not return calls for comment.

But responding at the Aug. 2 meeting, Cooper said, “I had nothing to do with trackers and private investigators… There was plenty of mud thrown on both sides” in the past election. Cooper did say, however, she had a background check done on Taub to make sure she lived in the city.

Taub, City Commissioner Michelle Lazarow — who defeated former commissioner Alex Lewy and frequent commission candidate Ann Henigson last November — and Commissioner Keith London reported tracking devices on their vehicles during last year’s campaign.

The new majority

The trio has formed a new majority on the commission, taking control from Cooper. Julian, who backed Cooper in previous years, would have allowed the mayor to retain control of the commission if he had been reelected. Commissioner Anthony Sanders generally backed Cooper. However, Sanders recently resigned following a critical investigative report by the Broward Inspector General’s Office.

As for Julian, Taub showed handbills and information published in the Sun Times newspaper, located in Hallandale Beach, which revealed the last four numbers of her Social Security number, questioned where she lived, publicized various addresses and questioned her date of birthday.

“Shame on all of you,’’ Taub said, referring to those who distributed her personal information, including Julian.

Contacted, Julian said he found information about Taub placed in his mailbox. “It was anonymous,” he said, refusing to answer questions about whether he checked out the information and what part he played in the newspaper advertising and distribution of the handbills.

“I don’t want to talk about last year,” Julian said. “I don’t want to talk about all that stuff.” He also said he didn’t want to talk about a report that he was caught on a recording saying he was promised hundreds of workers by an attorney for a prominent local business group. “That was London trying to kill my election,” Julian said.

Despite the controversy surrounding Julian, he says is considering seeking the commission seat vacated by Sanders, in either a special election or when Sanders’ full term expires in November 2018.

During the hectic election last year and the current fraud activities, Taub said she has been dealing with cancer issues, which has required her to go to a Georgia treatment facility. She said she is cancer free now but is receiving follow-up treatment.

The July 12 report by the Hallandale Beach Police Department stated, “Taub explained she had discovered charges on her CapitalOne Credit Card Account she did not authorize.”

“Taub was able to provide a printout of twenty-four [24] charges she did not authorize,” the report stated. “The purchases on the credit card account … were in multiple municipalities including Hallandale Beach. The charges in Hallandale Beach were done at Walgreens located at 1300 E. Hallandale Beach Blvd. on 7/6/17 for $69.00 and a vending machine on 7/9/17 for $0.85.”

Taub said the credit card was issued in her name.

Since she filed the report, the list of fraudulent charges has grown to about 135, totaling $3,862.19 – absent the purchase of a car.

State Sen. Lauren Book seeks restraining order to silence protester

By Francisco Alvarado,FloridaBulldog.org 

Derek Logue protesting in Tallahassee during Lauren Book’s rally for the charity Lauren’s Kids on April 22, 2015

As Broward State Sen. Lauren Book prepares for her annual walk to raise awareness about child sex abuse, she wants to make sure one of her harshest critics is nowhere near her.

On July 26, Sen. Book filed a petition in Broward Circuit Court seeking a restraining order against Derek Logue, a 40-year-old Ohio man convicted of sexually assaulting an 11-year-old girl in 2001. Logue today is an advocate for registered sex offenders.

You won’t find Sen. Book’s petition at the county courthouse. A clerk in the Broward court’s domestic violence division told a reporter it is confidential. The reason: Florida Statute 119 says that any documents that reveal the identity, address or phone numbers of a potential crime victim are exempt from Florida’s liberal public records law.

Florida Bulldog obtained a copy of her petition from Logue.

Sen. Book claims she fears for her and her family’s safety following physical threats Logue allegedly made against her online and in person during two public events in 2015 and 2016. In addition to seeking to bar Logue from showing up at her annual walk events, she wants to keep him from coming within 500 feet of her home and her offices.

But Broward Circuit Court Judge Michael G. Kaplan rejected Sen. Book’s request for a temporary restraining order on Aug. 9, noting there was insufficient evidence showing she was in immediate danger. A hearing on her request for a permanent restraining order is scheduled for Sept. 1.

Sen. Book declined comment, but her father, prominent Tallahassee lobbyist Ron Book, told Florida Bulldog Logue has been harassing him and his daughter for roughly four years. “We had ignored his harassment because we don’t believe he is terribly relevant,” Book said. “He has little credibility.”

However, Book said the last straw occurred on July 8, when Logue tweeted “I think I found the official Laura Ahearn/ Lauren Book theme song” next to a link to a YouTube video for a song titled, “You Are A C—,” by Australian singer and comedian Kat McSnatch. Ahearn is executive director of Parents for Megan’s Law, a New York-based advocacy group for victims of sex crimes.

Ugly lyrics

Among its provocative lyrics is this ugly line: “Why don’t you shut that scabby c— mouth before I f— up your face.” The crude video also features an image of a tombstone that reads, “R.I.P. Annoying C—.”

According to Ron Book and Sen. Book’s petition, officials from several New York law enforcement agencies advised that Logue’s tweet was a credible death threat. “We were advised to contact local law enforcement and take steps to make sure that the encounters we’ve had with Mr. Logue don’t happen again. When you cross the line and threaten to f—k up someone’s face followed by ‘R.I.P.,’ that is a credible threat,” said Ron Book.

Lauren and Ron Book in Times Square in March 2015 promoting her child sex abuse education book. Photo from the documentary “Untouchable” by David Feige

Logue dismissed the Books’ accusations as “a load of hogwash.” He claims the petition is an attempt to stop him from exercising his First Amendment right to speak out against their lifelong campaign against registered sex offenders.

“It is easy to make me look like the bad guy because I am a registered citizen,” Logue told Florida Bulldog. “You may not like my choice of words. I do cuss and I do call people the C word. She is offended by it, but I don’t care. It’s protected free speech.”

He added, “She is simply trying to prevent me from raining on her little parade.”

Sen. Book is the founder and $135,000-a-year chief executive officer of Lauren’s Kids, a non-profit agency that has collected more than $10 million in grants from the Florida Legislature to fund an array of educational programs to convince victims and children advocates to report child sex crimes. However, the effectiveness of the programs have come under fire as Sen. Book has used Lauren’s Kids to elevate her public profile.

The Plantation Democrat, who was sexually abused as a teen by her former nanny, also makes an annual trek on foot from Key West to Tallahassee to raise awareness for child sex victims. This year’s walk is scheduled to begin on Sept. 9.

In her petition, Sen. Book claims that in 2015 Logue traveled to Tallahassee and organized a group of sex offenders in an attempt to disrupt the final mile of her annual walk. “The workers were warned in advance and they were able to keep the walk peaceful with the help of the Capitol Police, the Tallahassee Police Department and the Florida Department of Law Enforcement,” the petition says.

A year later, Logue traveled to New York City to attend a screening of the documentary Untouchable at the Tribeca Film Festival to harass Sen. Book during a question and answer session, the petition alleges. The Books are prominently featured in the movie about the impact of sex offender laws on individuals convicted of sex crimes.

“During the question and answer segment, he became unruly enough that his microphone was cut off and petitioner was surrounded by New York Police Department officers to protect her,” the petition states. Sen. Book claims she learned of Logue’s July 8 tweet after being contacted by an advocate for Parents of Megan’s Law who saw it and who filed a report with the New York field office of the FBI.

A rally planned for Miami

The petition also noted that Logue’s website OnceFallen.com and a Facebook page he is affiliated with is promoting a rally planned for Miami in September: “The coincidence is palpable.”

In his response to the petition and during an interview with Florida Bulldog, Logue said he has participated in and helped organize demonstrations across the country against sex offender registry laws and other legislation he believes discriminate against sex offenders who have done their time. He has also been interviewed on the topic by CNN, HLN and Russia Today, as well as local and regional news outlets, Logue said.

He said the 2015 demonstration in Tallahassee was peaceful even though Lauren’s Kids officials tried to report him for not registering with the state of Florida for the event. “I am free to travel anywhere in the United States of America,” Logue’s response states. “In fact, I made it a point to contact the Leon County Sheriff’s office to confirm that I would not need to register as a sex offender to visit for less than 48 hours to engage in a peaceful demonstration.”

Logue said he attended the 2016 Tribeca Film Festival because he had been interviewed for Untouchable, but the footage did not make into the documentary. He did make a brief appearance halfway through the film during scenes of the demonstration in Tallahassee. He said he only learned the Books were also in attendance when he arrived for the screening.

Logue said the documentary’s director David Feige asked him not to be too nasty to the Book family and he obliged. He denies disrupting the question and answer session. “I asked her why she preaches that sex offenders don’t deserve second chances when her father is also a convicted criminal that got second and third chances,” Logue said. “She made a snarky remark, I laughed and sat back down.”

On Sept. 21, 1995, Ron Book pleaded guilty to four misdemeanor charges and was fined $2,000 following a criminal investigation that found he violated state law by funneling more than $30,000 in illegal campaign contributions to at least a dozen county and state politicians.

Logue, who isn’t shy about owning up to his sex crime conviction, claims when he went to register in his home state in July, his registration officer told him someone claiming to be a state senator called to complain that he called her a c— and that she was offended by it. “I call a lot of people c—s,” Logue said. “I understand not everyone appreciates crude language. Yet, we elected a president that uses crude language and what not.”

Logue’s lawyer, Jamie Benjamin, did not respond to a phone message seeking comment. Sen. Book’s lawyer, Fort Lauderdale’s David Bogenschutz, said her role as a public official makes her a vulnerable target to threats of a violent nature.

“She and several law enforcement agencies believe [Logue’s behavior] crosses the line between what is protected by the First Amendment and threats that cause individuals to have legitimate concerns for themselves and their family members,” Bogenschutz said. “If it continues, and it has continued, we need the court’s intervention to draw the line for us.”

Hallandale commissioner Anthony Sanders resigns amid allegations of wrongdoing

Hallandale Beach Commissioner Anthony Sanders and Jessica Sanders

UPDATE, Aug. 11 By William Gjebre, FloridaBulldog.org:

Hallandale Beach City Commissioner Anthony Sanders resigned his commission seat today on the heels of a scathing report from the Broward Inspector General’s Office that said he “engaged in a pattern of misconduct” in the awarding of city grants and other funding.

“To the residents of Hallandale Beach and Mayor Joy Cooper…I have decided to end my term as Commissioner of the City of Hallandale Beach effective today,” Sanders said in his resignation letter. He said in his letter there was “toxicity” on the current commission.

Sanders, a commissioner for nine years, had generally supported Cooper in controlling the commission majority until the most recent election.  He denied any wrongdoing in his formal response to the IG report, which was finalized earlier this week.

City commissioners next week are expected to call a special election to fill Sanders’ seat because there is more than a year remaining on his four year term.

By William Gjebre, FloridaBulldog.org 

July 11 – A preliminary report by the Broward Inspector General’s Office says Hallandale Beach City Commissioner Anthony Sanders “engaged in a pattern of misconduct” when he “failed to disclose payments” made to him and other family members by a community group which Sanders voted to give thousands of dollars in city grants and other funding.

The July 7 report obtained by Florida Bulldog also said that Palms Community Action Coalition Inc. (PCAC) made contractual payments to Higher Vision Ministries, where Sanders is the pastor and the only paid full-time employee. The report adds that Sanders solicited and received contributions for the church from developers seeking to do business with the city.

PCAC is a Hallandale Beach-based nonprofit organization that provides job training and community development services to local residents.

The various payments occurred during a three-year period in which Sanders voted in favor of PCAC, according to the report.  “Commissioner Sanders continued taking a salary from his employer, continued accepting significant payments from PCAC on behalf of his employer, failed to abstain from voting, failed to disclose the voting conflicts to the voting body either verbally or in writing, directly and indirectly solicited developers to give contributions to his employer, and accepted those contributions on behalf of his employer,” the IG report stated.

The report said the Inspector General plans to refer the office’s findings about Sanders to the Florida Commission on Ethics and the Hallandale Beach city commission “for whatever action those entities deem appropriate.”

“We are filing against Commissioner Sanders an ethics complaint charging a violation of the Broward code of ethics to be tried by an administrative hearing officer,” the report said.

If sustained, the allegations would violate provisions of state, county and municipal codes that prohibit elected officials from receiving anything of value to influence their vote, take any action that provides undue benefit to family members and require refraining from voting to avoid conflict and disclosures in such cases.

The report apparently stems from an investigation opened by the IG’s office, as reported by the Florida Bulldog in June 2016, involving the city’s Community Benefit Program (CBP). The program requires contributions from private developers vying for city projects over $1 million to help fund recruitment, training and hiring of city residents and purchasing from local vendors.

PCAC partnerships

According to the IG documents, it was Sanders who “initially promoted the idea that local workers should be included in city development.” The city requirements made it difficult for developers to win a city contract without a program partner, which had to be named in bidding documents. The IG said PCAC was frequently designated as “partner” in bid documents.

The Bulldog story said investigators were looking for voting conflicts in their review of city commission and Community Redevelopment Agency (CRA) minutes. The inquiry came three years after the IG found the city “grossly mismanaged” millions of dollars in CRA funds. Sanders was investigated and cleared of any wrongdoing in the IG probe four years ago, but did not escape criticism in the latest probe.

Sanders did not return calls seeking comment on the Inspector General’s latest assertions.

The new investigation of Hallandale Beach covered a period from January 2013 through December 2015. During that time city commissioners, including Sanders, approved direct grants to PCAC three times and development contracts that included the group as a “benefit plan partner” seven times, according to the report.

The city requires companies seeking contracts above $1 million to set aside funds for things like job training programs.

The 10 grants and development contracts ultimately “benefited PCAC a total of approximately $893,320,” the report said. Funds collected from successful bidders were later transferred to PCAC, amounting to $695,870; the balance came from city grants.

The report outlined the connection between the commissioner and the community group. “The OIG [Office of Inspector General] substantiated that PCAC made contractual payments to Higher Vision Ministries…, that PCAC employed his [Sanders’] son; and that PCAC also made other consulting and employment payments to the commissioner’s wife and another son.”

Payments to Sanders’s wife

According to the report, PCAC paid Sanders’ wife, Jessica, for consulting and grant writing and paid two of Sanders’ adult sons for part-time employment. Jessica Sanders had been involved with PCAC in 2011. “We found that PCAC directly paid the commissioner’s immediate family a total of approximately $7,588 between January 2013 and December 2015,” the report stated.

In addition, the report said that PCAC made monthly $1,000 payments to Higher Vision Ministries to transport job trainees to classes. But, it added, neither the church nor PCAC documented any rides. The IG said it determined PCAC paid Higher Vision approximately $27,000 for 613 miles of transportation service – or about $44 for “each accountable mile” under the agreement.

“In all,” the report said, “PCAC paid Commissioner Sanders’s employer and immediate family a total of approximately $38,688 during this three-year period.”

“Following one of Commissioner Sanders’s votes in November 2013 for a Hallandale Beach multi-million public workers project that included PCAC as a community benefit plan partner, PCAC paid an extra (that is, over and above $1,000 per month) $2,000 to Higher Vision Ministries with a memo notation of Donation/Pastor’s Appreciation,” the report stated.

In another instance, the report said, “…following city commission approval for direct city funding to PCAC between October and November of the following year [2014], it [PCAC] made extra payments totaling another $2,100 to Higher Vision Ministries.”

“As described in this report,” the IG report stated, “the commissioner was well aware of the nature of these conflicting relationships and their bearing on the propriety of his voting. Yet, Commissioner Sanders admitted that he did not disclose these relationships or payments to the public at any time during the period he voted to benefit PCAC.”

The IG report said investigators “also established that, while they were at city hall for a commission meeting involving one of the development votes, Commissioner Sanders solicited one of the project awardees to make a direct contribution to the Higher Vision Ministries church, who then asked a second developer to do the same. Their companies’ two donations to the church totaled $1,100.”

 

Saudi Arabia cites FBI’s Meese Commission in asking judge to toss 9/11 victims’ lawsuit

By Dan Christensen, FloridaBulldog.org 

New York City’s annual 9/11 memorial tribute to the fallen.

Forced back into court by an act of Congress and faced with tens of billions of dollars in potential civil liability, oil-rich Saudi Arabia is asking a U.S. judge again to throw out a lawsuit brought against it by thousands of 9/11 victims.

Lawyers for the kingdom moved last week to dismiss the massive case pending in federal court in New York City, citing “baseless accusations that Saudi Arabia conspired to commit a horrific crime against its longstanding ally the United States by knowingly funding the terrorist attacks of September 11, 2001.”

The plaintiffs are survivors of the attacks, family members of the dead, businesses and insurance companies.

Saudi Arabia’s filing responded to their 100-page amended complaint brought in March against the kingdom and its official charity, the Saudi High Commission for Relief of Bosnia and Herzegovina. The complaint followed Congress’s passage last year – over a veto by President Obama – of the Justice Against Sponsors of Terrorism Act (JASTA), which allows Americans to sue foreign states for acts of terrorism that occur on U.S. soil.

Earlier, a federal judge and a U.S. appeals court had dismissed Saudi Arabia and the Saudi High Commission from the case after determining they were protected by the Foreign Sovereign Immunities Act. JASTA removed that protection.

The new court filings show the Saudis are relying heavily on the findings of the FBI’s secretive 9/11 Review Commission to discredit the plaintiffs’ claims that the kingdom is liable for the deaths, injuries and destruction caused by the September 2001 terrorist attacks. Nearly 3,000 people died in the attacks and thousands more were injured.

The 9/11 Review Commission – also known as the Meese Commission after its most prominent member, Reagan-era Attorney General Ed Meese – was authorized by Congress to conduct an “external review” of the FBI’s post-9/11 performance, and to assess new evidence. As Florida Bulldog has reported, however, the commission held no public hearings, had no subpoena power and was largely spoon-fed information by the FBI. Meese and the two other commissioners were chosen and paid by the FBI.

Meese Commission discredits report

The Meese Commission issued a 127-page report in March 2015, which among other things sought to discredit an April 2002 FBI report that said agents had found “many connections” between Saudis living in Sarasota and individuals involved in the 9/11 plot and requested further action be taken.

The April 2002 report, released to Florida Bulldog by the FBI in 2013 amid ongoing Freedom of Information litigation, corroborated a September 2011 Florida Bulldog story that disclosed the existence of the FBI’s Sarasota investigation and reported the FBI had kept it secret from Congress. The story was co-reported by Irish author Anthony Summers, who obtained the initial information about the Sarasota probe.

FBI Director James Comey, second from right, is flanked by 9/11 Review Commissioners Tim Roemer, right, Ed Meese and Bruce Hoffman, far left, on March 23, 2015. Photo: FBI

The FBI told the Meese Commission the 2002 report “was ‘poorly written’ and wholly unsubstantiated.” The commission’s report, however, offered no explanation of the basis for that conclusion. Likewise, the commission apparently never heard directly from the agent who wrote the report, relying instead on the FBI’s characterization of what he had to say.

“The FBI told the Review Commission that the (report) was apparently based solely on unsubstantiated reports from others and there was no documentation supporting its allegations,” the commission’s report says.

No other FBI records to support or explain the commission’s work were made public.

Florida Bulldog sued the FBI and the Department of Justice in June 2016 for access to all Meese Commission transcripts, reports and the like after the bureau failed to respond to a Freedom of Information Act request. The lawsuit forced the FBI to review 1,858 pages of records and to release parts of 713 pages. The FBI withheld 1,145 pages.

Florida Bulldog and its attorneys believe the FBI has not acknowledged the existence of many additional pages of commission records.

Among the released records was a heavily censored Oct. 5, 2012 FBI report emblazoned with a logo that depicts the World Trade Center’s Twin Towers inside a pentagon against a backdrop of an American flag. The FBI considered the report so sensitive that even its title was classified “in the interest of national defense or foreign policy.”

The 2012 FBI report

Declassified portions, however, show that at that time federal prosecutors and FBI agents in New York were zeroing in on an apparent U.S. support network for Nawaf al-Hazmi and Khalid al-Mihdhar, two of the five 9/11 hijackers who were aboard American Airlines Flight 77 when it crashed into the Pentagon. Among other things, the report discusses how in June 2012 a team of New York investigators traveled to London “to exploit evidence seized in 2001 in New Scotland Yard’s searches of Omar al Bayoumi’s residences and offices.”

At the time of its release in December, Sean Carter, a Philadelphia attorney for the plaintiffs, called the 2012 report “a powerful and important disclosure.” Carter appended a copy to the 9/11 victims’ amended complaint when it was filed March 17.

Attorneys Michael K. Kellogg, left, and Sean Carter.

The 91-page Saudi response memorandum filed last week by Washington, D.C. attorney Michael Kellogg attacks the 2012 FBI report as unreliable, noting that the names of its authors are redacted.

The memo says the FBI report “contains hearsay statements” about a pair of Saudis – Omar al-Bayoumi and Fahad al-Thumairy – who are identified as “main subjects” of the probe of  “individuals known to have provided substantial assistance” to Hazmi and Mihdhar in Southern California following their arrival in the U.S. in January 2000.

The FBI report says Bayoumi, a suspected Saudi agent; Thumairy, a Saudi diplomat and imam at the King Fahd Mosque in Los Angeles, and a third person whose name was kept secret on grounds of national security “provided (or directed others to provide) the hijackers with assistance in daily activities, including procuring living quarters, financial assistance, and assistance in obtaining flight lessons and driver’s licenses.” The investigation was seeking to prove the trio knew that Hazmi and Mihdhar “were here to commit an act of terrorism.”

“A statement that an investigator ‘seeks to prove’ a legal conclusion is neither an appropriate allegation nor competent evidence,” the Saudi memo says. “That is especially so here because the investigator’s attempt failed: the 9/11 Review Commission later found as of March 2015 that new evidence available to the FBI was ‘not sufficient’ to support the conclusion that plaintiffs advocate.”

But the commission did not release the 2012 report when it issued its report, nor does its report assess the 2012 disclosures except to note it said al-Thumairy “immediately assigned an individual to take care of al-Hazmi and al-Mihdhar during their time in the Los Angeles area.”

Status of 2012 probe unknown

Likewise, the outcome of the 2012 investigation is not known. No other documents released by the FBI address it.

Said former Florida Sen. Bob Graham, who co-chaired Congress’s Joint Inquiry into 9/11: “If the decision was not to proceed, why? And if it was to proceed, what’s the status?”

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]

The Saudi memo also attacks as unreliable and insufficient two other documents about 9/11 the plaintiffs rely on, “the 28 pages” and “Document 17.”

The 28 pages refers to a long-suppressed chapter of the Joint Inquiry’s 2002 report about apparent Saudi support for the 9/11 hijackers. The 28 pages were ordered released last summer by President Obama. Among other things, they showed that Saudi Prince Bandar – who on 9/11 was his country’s ambassador to the U.S. – had connections to a major al-Qaeda figure now detained in Guantanamo Bay and others suspected of helping hijackers Hazmi and Mihdhar.

Document 17 is a set of 2002 work plans for staffers of the original 9/11 Commission detailing issues and outstanding questions regarding possible Saudi links to the attacks. It was declassified and released by the National Archives in 2015.

Among other things, Document 17 disclosed that when Guantanamo detainee Ghassan al-Sharbi was arrested in Pakistan in March 2002, FBI agents found a buried cache of documents that included “an envelope from the Saudi embassy in Washington that contained al-Sharbi’s (U.S.) flight certificate.”

Huge debt-relief fraud in Pompano Beach bilks $70 million from thousands of victims

By Joseph A. Mann Jr., FloridaBulldog.org 

Jeremy Lee Marcus, accused of bilking thousands of consumers in a $70 million fraud, as pictured in a February 2016 press release by his Helping America Group.

In a debt-relief scheme that affected about 15,000 people across the country, three telemarketing executives headquartered in Pompano Beach and using a branch in Panama bilked victims out of an estimated $70 million, according to the Florida Attorney General’s Office, the Federal Trade Commission (FTC) and the attorney working to retrieve assets in the complex case.

A civil complaint filed recently in federal court in Fort Lauderdale by the Attorney General’s office and the FTC alleged that telemarketers at several of the companies managed from the Pompano Beach office building offered to consolidate personal debts for customers, pay off, settle or obtain dismissals for these obligations and improve their credit ratings.

Customers were allegedly convinced to pay from a few hundred to more than a thousand dollars per month to one of the so-called debt-relief companies that were part of the scheme, according to the complaint.

In most cases, no payments were made to reduce these debts. Moreover, customers ended up becoming victims: They incurred even greater indebtedness thanks to fake loans obtained from the companies, loans that were supposedly being used to pay their pre-existing debt. Some customers were sued by their old creditors or were forced into bankruptcy.

Running since 2013 with a headcount reaching around 150 managers, telemarketers, administrative staff and others, this South Florida-based operation was shut down in May by a federal judge who issued a preliminary injunction and asset freeze order affecting the individuals and companies involved.

The court also appointed a Receiver, Jonathan E. Perlman, a shareholder at the Miami-based law firm Genovese Joblove & Battista and an attorney with extensive experience in receivership roles. His formidable task is to sift through the maze of companies, accounts and financial operations to recover funds for defrauded customers.

Defendants – human and corporate

On May 8, the FTC and the State of Florida filed a complaint seeking an injunction with the U.S. District Court of the Southern District of Florida. (Case No. 17-cv-60907-Altonaga) The defendants in the case were Jeremy Lee Marcus, who was described by the Receiver as the CEO and an owner of the group of companies in the debt relief operation; Craig Davis Smith, the COO and also an owner; and Yisbet Segrea, an executive who ran the office in Panama, plus dozens of corporate defendants controlled by the individual defendants. These included 321Loans Inc., Financial Freedom National Inc., Helping America Group, Marine Career Institute Sea Frontiers Inc., Instahelp America Inc. and Breeze Financial Solutions.

Receiver Perlman believes there could be more than 80 companies involved as corporate and related defendants, but that 23 are currently investigation targets since they offer the best potential for recovery, he told the Florida Bulldog.

The Pompano Beach office building described by authorities as the headquarters for the multi-million dollar fraud. Photo: Joseph A. Mann Jr.

The companies operated as a “common enterprise” through an interrelated network with commingled funds, all allegedly controlled by the three defendants, the complaint says.

According to the FTC and Florida Attorney General’s complaint, these are the basics: The defendants made their money by promising customers large debt consolidation loans at attractive rates, or by telling customers they were taking over the task of servicing consumers’ pre-existing debt relief accounts. In both cases, customers paid the defendants millions of dollars under the false premise that these alleged debt-relief companies would pay off, settle or obtain dismissals of consumers’ debts and improve their credit ratings.

In fact, there were no actual loans. Defendants kept most of the loan payments and paid very little or nothing toward reducing their customers’ debts. Eventually, the victims found out that no one was paying their original debts, their accounts were in default and their credit scores had suffered. In some cases, original creditors filed lawsuits against the consumers and some were forced into bankruptcy.

One scam victim, Derek S. from Vero Beach, told about his experience with the debt-relief group in an April affidavit.

Two years ago, he said, he did a Google search for a debt consolidation firm and found Helping America Group (HAG), one of the corporate defendants. “At that time, I was current on my debts and was making the minimum payments monthly,” he said in the affidavit. “I was looking for a company to consolidate my debt and to make one lower monthly payment.”

A fake loan

After calling HAG and learning about their services, Derek was told that another defendant firm, 321Loans, would be making the loan to him and would pay off his creditors. The loan, a fake, was for a total of $10,835 plus interest at 9.99 percent. He was also told to stop paying his creditors, not to talk to them and that another group firm, Breeze Financial, would help improve his credit score.

He started making monthly payments to Paralegal Support, still another firm in the group, and subsequently called several times to ask for a progress report. He was told “it would take time to negotiate the debt.”

A few months later, he called two of his creditors, who said they never heard of HAG or 321. He tried to cancel his agreement but was not allowed to do so until after he had filed complaints with the Florida Attorney General and the Better Business Bureau. Last December, 321Financial – another element in the scheme — issued a cancellation letter and a refund of $200.13.

“I paid thousands of dollars to HAG/321 and they did not do anything they promised,” he said. “My debt effectively had been doubled.”

The joint state-federal complaint filed last May states that the defendants were in violation of the Federal Trade Commission Act, the FTC’s Telemarketing Act (covering consumer fraud and abuse) and the FTC’s Telemarketing Sales Rule (TSR). The Florida Attorney General brought the action under the state’s Deceptive and Unfair Trade Practices Act and the Telemarketing Act.

The defendants, who are free, have denied any wrongdoing. While the current case against the defendant group is a civil action, a criminal suit could be filed in the future, according to an attorney familiar with fraud actions.

The FTC and the Florida Attorney General’s office declined to comment on the progress of the case, since it is still open.

Finding customers and making the pitch

The scheme attracted potential victims by using Internet advertising and websites, direct mail and unsolicited phone calls. The defendants also bought presumably legitimate debt-relief firms and acquired their clients’ names as well as personal and financial information. Here’s how it allegedly worked:

  • Companies in the group used ads on their websites or sent personal letters to the potential client’s home address. Sometimes falsely identifying themselves as nonprofits, they offered low-interest loans so a consumer could combine all debts and make one payment at a more favorable interest rate. For example, a typical letter sent by one of the group companies, 321Loans, offered up to $35,000 at 4 to 7 percent interest to cover debts from credit cards, private student loans, accounts in collection, medical bills, etc. The letter said the credit was pre-approved.
  • The group supplied its Pompano Beach telemarketing staff with training manuals that taught “The Art of the Sale.” Some nuggets from the manuals: “The more time you spend qualifying (researching) the prospect, the less time you will waste pitching unqualified people for hours only to find they HAVE NO $$$,” and “so remember your ABC’s – Always Be Closing!”
  • When people called a “customer approval center” (or when sales staff made unsolicited phone calls), prospects were told that a loan would be made to cover the full amount of their debt, plus interest. The loan would be used to pay off all indebtedness, and the lucky consumer would only have to make monthly payments that were much less than what they were paying. The companies told consumers they could provide low-interest loans because their nonprofit status allowed them to borrow at favorable rates.
  • While potential clients were still on the phone, telemarketers emailed them a link to a document designed to look like a loan agreement. Consumers clicked on highlighted areas to initial and sign the agreement, which committed them to pay back the loan and fees, wherever applicable. The 50 to 75 page document in fact contradicted the sales pitch made by the telemarketers.
  • Consumers agreed to have their bank accounts debited immediately for their first loan “repayment” or for a processing fee. Then monthly “repayments” were automatically taken from their accounts, ranging from $200 to over $1,000.  Few or no payments were made to creditors, and a consumer with, say, $8,000 in old debts, would owe the pre-existing amount, plus the $8,000 “loan” taken out from a defendant company.
  • When consumers were told by original creditors that none of their bills had been paid, dismissed or settled, the defendant companies strung them along with false explanations, such as more time was needed to validate the consumers’ debts or to confirm payoff amounts. Clients who called to complain were given excuses and treated badly. Sometimes, the only contact number available was disconnected.
  • In another aspect of this scam, the group, using mostly outside legal counsel, worked with some clients who were sued by creditors before the operation was shut down in May, according to the Receiver’s Amended First Interim Report filed in June. In these cases, the group’s attorneys ironically won large claims for clients related to supposed violations of the Telephone Consumer Protection Act or the Florida Consumer Collection Practices Act by credit card companies. But clients only received a small portion of the damages. For example, one client received $1,000 from a law firm working with the group after a credit card company paid a total of $80,000. Many cases followed a similar pattern, and some customers apparently were not aware of the amount of the total settlement.

Recovering assets for victims

“I’m essentially the CEO of this defunct enterprise,” Perlman, the court-appointed Receiver, told the Florida Bulldog. “My main goal is to conserve and protect all the assets of the receivership.”

Assets – cash and a wide range of real estate – include a 50,000 square foot headquarters building at 1410 SW 3rd St., Pompano Beach. Other tenants in the building who were unrelated to the defendant group continue to provide revenue to the receivership.

So far, the receivership has served over 30 banks with orders for records, and continues to look for other financial institutions that might be a source of assets.

Perlman told a Florida Bulldog reporter that the information his office has gathered so far indicated that “the amount taken from customers has been $70 million, and continues to rise.” It will increase as more bank records come in. The estimate in May was $50 million.

“We come in unannounced and serve papers to all the institutions we know about,” he said. “We try to obtain money and other assets voluntarily. If not, you take it to the judge.”

While the receivership is identifying and seizing assets related to the case, reimbursement to victims will come after the asset search is completed and the current civil proceeding resolved.
Perlman’s team has set up a website, www.321loansreceivership.com, to inform victims and the public about developments in the receivership process. Currently, he is the Temporary Receiver, but has petitioned the court to be named Permanent Receiver.

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