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

By Dan Christensen, FloridaBulldog.org 

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

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

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

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

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

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

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

Former Florida Sen. Bob Graham

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

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

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

Classified until 2039

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

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

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

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

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

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

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

Factual errors in FBI briefing

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

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

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

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

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

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

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

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

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

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

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

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

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

Saudis on a plane

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

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

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

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

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

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

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

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

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

By Dan Christensen, FloridaBulldog.org 

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

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

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

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

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

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

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

Payments to staff

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

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

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

FBI Director James Comey

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

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

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

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

The Sarasota Family

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

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

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

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

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

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

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

A heavily redacted Memorandum for the Record

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

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

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

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

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

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

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

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

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

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

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

By Dan Christensen, FloridaBulldog.org 

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

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

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

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

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

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

Leon County Circuit Judge Karen Gievers

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

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

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

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

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

‘We should have gotten a thank you’

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

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

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

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

The Aequicap Building in Fort Lauderdale

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

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

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

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

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

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

State has ‘misrepresented’

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

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

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

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

AequiCap Insurance Company logo

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

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

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

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

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

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

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

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

Why Florida settled most of case

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

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

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

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

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

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

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

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

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

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

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

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

Miami-Dade judge sent Shelborne Hotel case to judge with similar conflict

By Francisco Alvarado, Florida Bulldog.org 

Miami-Dade Circuit judges Beatrice Butchko, left, and Jennifer Bailey

The Miami-Dade Circuit judge who chose to quit presiding over the high-profile Shelborne Hotel case due to an apparent conflict of interest, funneled the case directly to a second judge with a similar conflict in a way that avoided the case being randomly reassigned.

Typically, judges recuse themselves from cases in which they have a disqualifying conflict or the appearance of a conflict. But in the Shelborne case, Judge Jennifer Bailey chose another path after disclosing that she briefly had attended a meeting with Chief Judge Bertila Soto at which prominent Miami Beach developer Russell Galbut presented preliminary plans to build a new civil courthouse on nearby property partially owned by one of his companies. Two other of Galbut’s companies were defendants in the Shelborne case.

“If I am a plaintiff and I read in the newspaper in a month that Russell Galbut is going to build a new courthouse, I might not be incredibly comfortable with Judge Bailey hearing my case,” Bailey said in open court during a Dec. 14 hearing.

But five days later, using her authority as administrative judge of the civil division, Bailey transferred the case to her associate administrative judge, Beatrice Butchko, who also actively campaigned in 2014 to convince voters to approve a bond referendum to pay for a new $350 million courthouse to replace downtown’s landmark courthouse built in 1928. The referendum did not pass.

Within weeks, Butchko tossed out the entire case that Bailey had set for trial in early January.

“Cases are randomly reassigned upon recusal,” said court spokeswoman Eunice Sigler. “This was not a recusal. This was a transfer.”  Transfers fall under the jurisdiction of the administrative judge, per 11th Judicial Circuit administrative orders adopted in 1979 and 2016.

For more than two years, Bailey had presided over the lawsuit filed by 40 investors who purchased rooms at the historic art deco Shelborne South Beach against the property’s condo association, condo board members, and companies tied to developer Galbut. The plaintiffs, who sued in 2012, alleged the condo association illegally assessed them $30 million in unnecessary repairs and renovations at the Shelborne, damaged their rooms and have tried to force them into foreclosure so the Galbut entities can acquire their units at a huge discount.

Butchko, however, made quick work of the investors’ case after she took over. She dismissed key parts in early January, days before jury selection was to begin.  She tossed the rest the following week. She did so while brushing aside a plaintiffs’ request that she recuse herself from the case and for a change of venue.

‘Dirty work’

“Obviously we were going to ask Bailey to remove herself once we found out about her involvement with Galbut,” Gia Hutt, one of the 40 investors, told Florida Bulldog. “But before any of that happened, she handed off the dirty work to Butchko, who destroyed our case.”

Hutt said the investors’ plan an appeal, but none was filed as of Tuesday.

Miami-Dade court spokeswoman Sigler said Bailey and Butchko would not comment on their rulings. She explained, however, that Bailey assigned the case to Butchko, who are both in the complex business litigation section, because Butchko was the only judge available to handle what was expected to be a 7-week trial for the Shelborne case that was set to start Jan. 9.

“The parties expressed their satisfaction with the transfer at the time, in the interest of keeping their specially-set trial date,” Sigler added.

But the case never got to jury selection. On Jan. 20, Butchko issued a summary judgment in favor of the Shelborne Beach Hotel Condominium Association and its board, as well as Shelborne Property Associates and Shelborne Operating Associates, two companies partially owned by Galbut. Butchko ruled that the plaintiffs had not presented any material facts disputing the defendants’ assertions that the repairs were necessary to address life safety issues.

Alice K. Sum, an attorney at the Fowler White Burnett law firm who represented the condo association, refuted Hutt’s claims that Bailey and Butchko were both compromised because of their public advocacy for a new courthouse and Galbut’s offer to build one.

“On the first day we appeared before Butchko, she said she didn’t know who Russell Galbut is and that her involvement in anything related to a new courthouse dated back to the prior initiative that was voted down in 2014,” Sum explained. “There’s no doubt lawyers and judges would like a new courthouse. But to imply no judge can be impartial because of that is to taint public servants unnecessarily.”

Kevin Malek, lead attorney for Hutt and the other 39 investors, declined comment.

Motions denied

Hutt, however, said that before Bailey disclosed her meeting with Galbut and transferred the case to Butchko, she had denied motions by the defendants to dismiss 8 of the 12 counts in their lawsuit, including civil conspiracy, breach of fiduciary duty and other wrongdoing. According to a Dec. 29 motion filed by the defendants, Bailey’s rulings were contrary to state law that required her to disclose her conflict before making a decision.

On Jan. 6, 19 days after she took over the case, Butchko granted the defendants’ request to reverse Bailey’s denials and dismissed the eight counts, according to court documents. By doing so, Hutt contends, Butchko crippled their case.

“You have a judge who is on the case for less than a [month] and throws out most of our lawsuit,” she said. “She took our rights away to go before a jury.”

Condo association attorney Sum said Butchko had sufficient time to process evidence presented by the defense that the repairs and renovations were not only necessary, but mandated by the City of Miami Beach. She claimed the plaintiffs’ counsel offered nothing to refute that.

“Judge Butchko explained she has been brought in again and again to take over cases,” Sum said. “So she had a lot of experience getting up to speed on cases dumped on her last minute. Butchko is well regarded among her peers and lawyers as a hard worker.”

Lenny Walder, another the 40 investors, doesn’t buy it.

“The same element of ‘eureka’ and awareness Bailey had on the new courthouse issue should have applied to Butchko, since she too is a courthouse advocate,” Walder said. “What is good for the goose is good for the gander. Butchko should have recused herself.”

Hallandale Beach halts advertising in local newspaper where mayor is a columnist

By William Gjebre, FloridaBulldog.org 

A column by Hallandale Beach Mayor Joy Cooper in the Sun Times

Hallandale Beach city commissioners have pulled the plug on city advertising in the local Sun Times newspaper featuring articles by Mayor Joy Cooper that drew fire from commission colleagues as “propaganda” for the mayor.

Cooper used the platform regularly before and after the weekly newspaper received a favorable — and controversial — $50,000 loan from the city’s Community Redevelopment Agency (CRA). The Sun Times, according to city documents, has been paid nearly $400,000 in city advertising to publicize events since 2003, most of the money coming after the loan was made during the 2008-2009 budget year.

The Florida Bulldog published a story about the loan, which later became a matter of interest to the Broward Inspector General’s Office in its 2012 probe. While the IG stated the Hallandale Beach CRA had “grossly mismanaged” millions of dollars, tallied $2.2 million in questionable expenditures and made inappropriate loans and grants to local businesses and non-profits, there was no finding of wrongdoing in the city’s Sun Times loan.

“The whole thing is a propaganda paper for the mayor,” said Commissioner Michele Lazarow, who moved at the Dec. 7 meeting to halt funding immediately.

While not voted on, the measure gained consensus support from the new majority of the five-member commission, and city staff said it would not place any more advertisements in the newspaper. Cooper had left the meeting before the item came forward.

In the past, the newspaper had the support of Cooper and commissioners who backed her. Lazarow, Vice Mayor Keith London, a long-time Sun Times critic, and newly elected Commissioner Anabelle Taub successful pushed the item to halt further advertising.

“The Sun Times is the mayor’s pulpit or podium for her to spin the truth,” Lazarow said at the meeting. “It has become a political rag during the political season.” Making matters worse, she added, the newspaper was unfair by not accepting or allowing “rebuttal.”

“I’m appalled that city funds go to the Sun Times,” Taub said at the meeting. “We should not fund the mayor’s political propaganda and personal vendettas and attacks.”

Taub said she was incensed during her recent election campaign when the Sun Times printed personal information about her that “could be used to commit fraud on me.”

“They have a one-sided view of city hall,” said London, adding that a reporter from the newspaper rarely attends a city commission meeting.

Mayor: ‘I will continue writing’

“They are entitled to their opinion,” Cooper told a reporter in response to the criticism from her commission colleagues. “I report on city business. I will continue writing. Everything I write is edited by an editor and it’s their choice to use it.”

Cooper began writing for the Sun Times in 2003, the year she became mayor. Her opinion piece last week was about Dr. Martin Luther King and political protest.

 

Sun Times officials said they were unfazed by the funding cutoff. “The commission has every right to do so,” said Craig Farquhar, president of the South Florida Digest, which publishes the Sun Times. As for the accusation that the newspaper has been a forum for the mayor’s propaganda, he said, “That’s their political opinion.”

The money paid by the city to the Sun Times, Farquhar added, “was to promote city events.”

City records showed that between 2003 and 2008, the city paid the Sun Times about $32,000 for advertising – an average of about $6,400 a year. But the relationship changed the following year.

That’s when the Sun Times became the first city business to receive a loan under a new program, funded through the CRA, to retain and to assist firms having financial difficulties. It received a 10-year $50,000 loan, with half of it forgiven, to be paid at two percent interest; the loan balance of approximately $7,500 is expected to be paid off in July 2019.

What raised questions about the newspaper’s financial problems was that Farquhar and another official of the newspaper, Cecile Hines, were each paid an average of over $200,000 in 2007 and in 2008, the years before the Sun Times received the city loan.

City advertising in the Sun Times, after the loan approval, also began to escalate. From 2008-2009 until the end of 2016, the city paid the newspaper $362,929, averaging more than $45,000 yearly during the past eight years, according to city documents.

 

New majority on Hallandale commission wants to know: Where did CRA millions go?

Update: Jan. 23 – Hallandale Beach city commissioners Monday night gave initial approval to hiring an accounting firm to conduct a forensic audit of the city’s long troubled Community Redevelopment Agency.

Sitting as directors of the CRA, the commission designated the firm of Stanley I. Foodman, CPA & Advisor, to work with newly appointed City Manager Roger Carlton to determine the audit’s scope and cost. Carlton will present their proposal to commissioners for approval at a meeting next month.

Vice Mayor Keith London, who presented the item that won unanimous approval, said the audit will determine the CPA fund balances dating back to 2012, when a CRA fund was first established. The audit will also review prior land purchases by the CRA that forced $7.4 million in cuts from the CRA budget.

By William Gjebre, FloridaBulldog.org  

The Hallandale Beach City Commission. From left to right: Anthony Sanders, Anabelle Taub, Mayor Joy Cooper, Vice Mayor Keith London, Michele Lazarow

The new majority on the Hallandale Beach City Commission will seek the first-ever forensic audit of all expenditures by its troubled Community Redevelopment Agency for the past five years, including finding out why $7.4 million had to be cut to balance the agency’s budget this fiscal year.

Current Vice Mayor Keith London and Commissioner Michele Lazarow had been frustrated in seeking such an audit by the previous commission majority headed by Mayor Joy Cooper.

The November city commission election resulted in London and Lazarow gaining the backing of new City Commissioner Anabelle Taub. Cooper was reelected, but failed to gain another commissioner to back her and her ally, Commissioner Anthony Sanders. They’re expected to vote on the audit, aimed at determining whether any wrongdoing occured, later this month.

“Let’s see where the money went,” London said. “We are going to get to the bottom of this.”

The new commission trio already has flexed its power in a remake of city hall.

It was responsible for the ousters of City Manager Daniel Rosemond and City Attorney Lynn Whitfield, and replacing them with long-time South Florida government administrator, Roger Carlton, and a new city attorney, Jennifer Merino. Merino was general counsel for the Broward Inspector General’s Office, which investigated and severely criticized the spending practices of the city’s CRA four years ago.

“It’s time to clean house of the city manager and the city commission … the collusion,” Lazarow said.

Now the new commission majority will be seeking answers about the spending of the much-troubled CRA.

‘We need to find out’

“We need a full forensic audit [of the CRA],” London said. “We need to find out about the $7.4 million, and we need to know what we have left.”

London was referring to last August when city commissioners, who are also directors of the CRA, were forced to cut $7.4 million from the proposed $25.9-million CRA budget for this year after being told by the city administration that the agency had counted land purchases by the agency as cash.

At that meeting, then City Manager Rosemond said an “adjustment” had to be made — the city commission had no choice but to approve the budget cut.

Prior to that, London said the city manager had given commissioners assurances that cash was available to the CRA, only to learn that the value of the city-purchased land by the CRA cannot be counted as cash.

Both London and Lazarow lobbied for a forensic audit of expenditures at that time, but lacked a third vote. The commission instead voted to seek a forensic audit that delved only into CRA land purchases.

Making matters worse, London said, Rosemond later came back and told commissioners that he was unable to engage any firm willing to conduct the forensic audit of land purchases — and, therefore, no firm was hired.

That all changed, however, with the November city commission election. Lazarow was reelected, along with newcomer Taub. London was not up for reelection.

Now in the majority, London said he wants audit to cover CRA spending back to 2012, the first year city commissioners established a separate funding account for the agency.

“We need to know what we have,” he said.

“We have to inquire about the $7.4 million,” said Lazarow, adding she plans to back London’s request for a forensic audit when he brings it up for a commission vote. Taub, who was not available for comment, is also expected to back the request.

City co-mingled CRA funds

Prior to 2012, the city had co-mingled CRA funds with city funds. That practice started in 1996, when the CRA was established under state law. The agency has been funded through property tax increases in the CRA boundaries.

It was only when the Broward Inspector General’s Office began its probe and issued a scathing report that some changes were made, including separating CRA-collected funds from other city tax revenues. Florida Bulldog had reported about questionable loans to local businesses and land purchases through the CRA nearly a year before IG investigators descended on city hall in April, 2012 seeking records and questioning officials as the probe became public.

After a 14-month investigation, the Inspector General’s Office in 2013 stated the Hallandale Beach CRA had “grossly mismanaged” millions of dollars in funds between 2007 and 2012. It found $2.2 million in questionable expenditures by the CRA, including inappropriate loans and grants to local businesses and non-profits, as well as the improper use of bond proceeds.

Before and after that report, London asked for a forensic audit of agency funds, but was outvoted by his commission colleagues.

Mayor Cooper denied the city had done anything wrong. The city commission majority at that time then ousted the agency’s recently appointed CRA executive director, Alvin Jackson, who won praise by the Inspector General for efforts to improve the CRA.

The city commission, over the objections of London, placed the agency once again under the direct management of the city manager. Except for Jackson’s short tenure, city managers have had full control of the CRA since 1996, during which the agency failed to keep adequate records, including changing loan and grant policies in violation of existing rules.

Both London and Lazarow said they are pleased with the new appointees, in particular Merino, 36.

“She has knowledge of our city,” said London, referring to Merino’s work with the agency that investigated the city’s CRA.

“Merino has a history [with the city],” Lazarow said. “She has been watching our meetings.”

Carlton, 69, has held several key positions with public agencies, among them: Miami Beach city manager (1992-1995), executive assistant Miami-Dade county manager (1977-1981).

A curious search for justice amid Miami-Dade judges’ desire for new civil courthouse

By Francisco Alvarado, FloridaBulldog.org 

Miami-Dade Circuit judges Beatrice Butchko, left, and Jennifer Bailey

The effort to build a new civil court building to replace the historic, but crumbling, Dade County Courthouse in downtown Miami recently took a bizarre turn that prompted a local judge to remove herself from a high-profile case involving prominent developer Russell Galbut and another local landmark, the Shelborne Hotel in Miami Beach.

Miami-Dade Circuit Court Judge Jennifer Bailey took herself off the case on Dec. 19 after disclosing she briefly attended a meeting with Chief Judge Bertila Soto at which Galbut presented preliminary plans to build a new civil courthouse on nearby property that’s partially owned by one of his companies.

Bailey transferred the case to Miami-Dade Circuit Judge Beatrice Butchko, who like Bailey had actively campaigned to convince voters to approve a 2014 bond referendum to pay for a new $350 million courthouse.

Butchko quickly dismissed eight of 12 counts against the Shelborne Ocean Beach Hotel Condominium Association and five companies owned by Galbut, his brother Abraham and other relatives. The counts alleged civil conspiracy, breach of fiduciary duty and other wrongdoing.

“This is so shocking, you can’t believe it’s happening,” said David Kraus, a plaintiff in the Shelborne case.

Miami attorney Kevin Malek represents four-dozen Shelborne Hotel room owners who claim that Galbut’s companies and the condo association illegally tried to force them out. Malek told Florida Bulldog that his clients would appeal Butchko’s rulings, which he said severely weakened their case a week before the beginning of the Jan. 9 trial period. The trial on the remaining counts had not begun as of Thursday.

“This case is not over,” Malek said. “We will be back.”

A fair shake?

His clients, however, have little faith that they will get a fair shake as long as the case remains in Miami-Dade. Several of the unit owners, including Kraus, told Florida Bulldog they don’t believe any Miami-Dade judge can rule impartially on their case while Galbut is talking about building them a new home.

“Pretty much every judge wants a new courthouse,” said plaintiff Mark Shemel.

The Shelborne was converted into a condo hotel about a decade ago, allowing individual investors to buy rooms that are rented to tourists. In 2012, 40 of those investors sued alleging that the five Galbut entities – three of which own units in the hotel and two others that run the hotel’s operations – and the condo association broke Florida law by authorizing nearly $30 million in illegal assessments, or roughly $107,142 per room, for renovations at the Shelborne.

In court documents, the unit owners accuse Galbut of stacking the association’s board with flunkies and trying to force them out by foreclosing on their rooms because they refuse to pay the assessments. They also allege their rooms were demolished without their consent during the renovations, resulting in the City of Miami Beach revoking their certificates of occupancy until they fixed their units.

Their lawyer, Malek, sought unsuccessfully last week to remove Butchko from the case due to her advocacy for the 2014 bond referendum. She declined to recuse, while also rejecting a motion that sought to move the case outside of Miami-Dade County.

Nevertheless, Judge Butchko’s dismissal of the eight counts against the Galbut entities and the condo association was a jolt to plaintiffs in the long-running case.

“This lawsuit has been going on for years and Butchko dismissed our entire case within days,” said Kraus, who owns two rooms at the Shelborne. “How could she have reviewed so much evidence in such a short amount of time?”

Judges Bailey and Butchko declined comment through court spokeswoman Eunice Sigler, who said state law bars judges from publicly commenting on their rulings. Still, Sigler said Butchko had not been influenced by Galbut’s interest in developing a new courthouse.

“Judges rule based on the facts presented and applicable law,” Sigler said. “And their rulings can always be appealed to a higher court.”

‘A far-fetched theory’

Ron Lowy, Galbut’s personal attorney, said the 40 Shelborne owners are pursuing a “far-fetched” theory as to why Butchko dismissed the eight counts.

“I don’t believe any judge in Miami-Dade is going to give up their view of justice and doing what’s right simply because [Galbut] may in the future submit a formal proposal which may result in the construction of a new courthouse,” Lowy said. “The plaintiffs were simply unable to prove their case.”

Both Lowy and Sigler also noted that Miami-Dade County government, not the 11th judicial circuit, is the actual owner of the current courthouse and it is that body which would negotiate with Galbut for any deal for a new building.

Still, it was Bailey’s concern about a perception of possible impropriety and conflict of interest that caused her to remove herself from the Shelborne case, according to a transcript of the Dec. 14 hearing.

Bailey explained that two weeks before the court hearing, she was invited “out of the blue” to participate in a meeting with Galbut and Chief Judge Soto because she is the only local judge who is familiar with national courthouse standards and guidelines.

Three years ago, Soto, Bailey and Butchko were among a group of judges and high profile lawyers who led a public awareness campaign to tell voters that the downtown courthouse, built in 1926, had fallen into a state of disrepair and was no longer safe for the people who work there. Their goal: to convince Miami-Dade voters to approve a bond referendum to pay the nearly $400 million cost to build a new courthouse, plus repair the existing building, which was listed on the U.S. National Register of Historic Places in 1989. Voters, however, rejected the referendum.

“I was very involved in public appearances with all that,” Bailey said during the Dec. 14 hearing. “Suffice it to say I am very involved in the campaign to get a new courthouse for my judges and the people I work with.”

Bailey relayed that when she showed up for the meeting with Soto, Galbut was also there. She said the plans Gabut presented were very preliminary and that she did not believe his proposal would go anywhere. However, she soon realized that his plan is gaining steam and that she needed to address it with the lawyers involved in the Shelborne litigation.

A judicial ‘epiphany’

“I had the epiphany that it might be a potential issue in this case,” Bailey said according to the transcript. “If I am a plaintiff and I read in the newspaper in a month that Russell Galbut is going to build a new courthouse, I might not be incredibly comfortable with Judge Bailey hearing my case.”

Five days later, Bailey transferred the case to Butchko. However, the plaintiffs’ don’t believe they got a fair shot in court.

“I don’t think there is a conspiracy between Galbut and Butchko,” said owner Mark Shemel said. “But she is very sympathetic about getting a new courthouse. So it’s certainly possible she is sympathetic to the defendants.”

Shemel noted that Galbut has been involved in new courthouse talks for quite some time. He cited statements made by Greenberg Traurig attorney Ron Rosengarten, who represents two of the Galbut entities.

In a Jan. 3 motion, Rosengarten admitted that Galbut has been communicating with Soto, Miami-Dade Mayor Carlos Gimenez’s office, Clerk of Courts Harvey Ruvin, members of the Dade Heritage Trust and retired judge Scott Silverman for more than a year about getting involved in a possible deal to develop an “expanded courthouse project.”

Silverman, who declined comment, was the court appointed mediator in the Shelborne case. Galbut’s lawyer, Lowy, said his client only met once with Silverman and that the encounter took place after the mediation had ended with an impasse.

“That bothers me,” said plaintiff Shemel. “Silverman made the plaintiffs feel doomed. The whole thing stinks.”

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

By Dan Christensen, FloridaBulldog.org 

FBI Tampa Field Office

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

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

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

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

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

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

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

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

Censored on the CIA’s orders

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

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

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

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

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

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

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

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

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

Claim of privacy hides names of FBI agents

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

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

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

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

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

Miami-Dade union leaders fear more outsourcing of members’ work at district schools

By William Gjebre, FloridaBulldog.org   

Miami-Dade Public Schools Superintendent Alberto Carvalho Photo: NBC6 South Florida

The Miami-Dade School Board has agreed to spend up to $1.8 million to outsource lawn service maintenance long done by unionized workers, and union leaders now say they fear Superintendent Alberto Carvalho is eyeing more privatization that could lead to additional work cuts for its members.

The two, five-year outsourcing contracts stand to eliminate tasks generally assigned to maintenance workers and custodians represented by the American Federation of State, County and Municipal Employees (AFSCME), Local 1184.

“It’s work the employees are supposed to be doing,” said AFSCME local president Vicki Hall. AFSCME workers are generally the lowest-paid union members working for the school district; they include custodians, maintenance employees, bus drivers and food service personnel.

“It weakens the union when they outsource and take away jobs from the employees who should be doing the work,” said Terry Haynes, the AFSCME local’s senior vice president. He estimated the two contracts cost 10 to 15 school district jobs.

Both pointed the finger at Superintendent Carvalho for the outsourcing. “He’s aware of it; all falls under him,” Haynes said, adding the superintendent “backed the first two” contracts.

“I believe this is the start of outsourcing of all of lawn service,” Haynes said.

“He’s trying to outsource lawn service. He’s trying to privatize,” said Hall.

District officials did not respond to calls for comment on the issue, so reasons for the outsourcing were unknown, including whether they claim it was for cost reasons. Carvalho also would not discuss the matter when a reporter attempted to talk with him at the Dec. 14 board meeting.

A day after the meeting, however, district spokeswoman Daisy Gonzalez-Diego released this statement: “Recently, there was misunderstanding regarding the District’s procedures for contracting out. In an effort to provide clarity, the District and the Union are working on an agreement to ensure that all parties understand the process and protocols to be followed.”

Outsourcing a management right?

Union officials Hall and Haynes complained that in recent years district officials have taken the position that outsourcing is a management right that can be invoked unilaterally and they do not have to confer with the union.

But Haynes said the district is overlooking a ruling in a case years ago in which the union prevailed in arbitration. The ruling in that matter stated the district had to notify the union if it sought to outsource work that could be performed by union employees and the parties had to negotiate the impact of the proposed work. If the parties did not come to an agreement, the union could move ahead with arbitration.

After that case, the district generally followed that ruling, until recently, Haynes said, adding the two contracts are indicative of the district’s changing policy.

The first of the two contracts was approved by the School Board on Nov. 18, 2015 for up to five years for 11 companies to provide lawn service totaling up to $1 million. The type of work includes tree, palm and shrub trimming, pruning and stump removal, according to board records.

The contract was approved two days after the union withdrew a grievance and the request for arbitration. The union had filed the grievance in June 2014 after discovering that a private firm was doing lawn service work at Krop Senior High School in North Dade.

According to documents provided by the school district, approximately $273,000 has been paid to the companies as of Nov. 29, 2016. The union did not file a grievance at the time the contract was approved, according to Haynes.

The other contract, for up to five years, was approved by the School Board on Feb. 3, 2016. Thomas Maintenance Service will be paid up to $800,000 to mow vacant lots and clear fence lines.

According to documents provided by the school district, nearly $82,000 was paid to Thomas Maintenance as of Nov. 21, 2016.

Haynes said the union filed a grievance related to the Thomas Maintenance contract in April regarding work done at the district’s North Dade maintenance facility. Two more grievances were filed in September after the union learned about other outsourced lawn work at a high school and an elementary school, both in the northwest section, Haynes added. All three grievances remain pending.

Critics: Miami-Dade wants to make it harder for land owners to fight assessment hikes

By Francisco Alvarado, FloridaBulldog.com 

Miami-Dade Property Appraiser Pedro J. Garcia

Miami-Dade Property Appraiser Pedro J. Garcia

Miami-Dade property owners will find it much more difficult to contest their annual property assessments under a new guideline being considered by the Value Adjustment Board, a semi-governmental agency that mediates disputes between landowners and Property Appraiser Pedro Garcia, critics of the proposal claim.

Opponents argue the change, submitted to the board by Garcia’s office, violates both state law and rules set down by the Florida Department. Their reason: The appraiser’s office would no longer have to present evidence to back up how it arrived at a particular property’s assessed value. The higher the assessment the more taxes an individual or company has to pay even when the tax rate remains flat.

“It’s very important for taxpayers to have a process that protects their rights,” said Sheila Anderson, a Realtor who also specializes in property-tax appeals across the state. “If the property appraiser is allowed to write the rules, it tilts the scale in its favor. And it doesn’t comply with state law.”

Rafael Millares, the recently appointed general counsel for the Value Adjustment Board, or VAB, told Florida Bulldog that he is evaluating Garcia’s proposed rule change, as well as opinions submitted by attorneys who represent property owners before the board. Millares said he will likely issue his opinion on the matter after the New Year.

“I am new here so I have been doing a lot of research and going over what was left over from the previous VAB counsel,” he said. “So it is going to take a while. My plan is to produce a memo that conforms to the law.”

Lazaro Solis, Miami-Dade’s deputy property appraiser, dismissed critics’ concerns. “We are not doing anything that we believe is legally incorrect, unfair or unjust to a property owner,” Solis told the Bulldog. “Our attorneys say we are within our rights [to propose the change]. We don’t believe that this negatively impacts property owners in any way.”

In order to figure out each property owner’s annual tax bill, the property appraisers in every Florida county are bound by law to assess the market value of every parcel. An owner who believes a property has been given a higher value than it is worth can appeal directly to appraiser or skip right to the VAB.

Over the last two months, Anderson and real estate tax attorneys have been lobbying Millares to reject the property appraiser’s assertion that it only has to submit a property record card, which contains general information about a parcel such as sales history and appraisal values, and provide general comments about its assessment techniques.

State law violation?

In a Nov. 22 letter to Millares, Miami lawyer Jeffrey Mandler argued the property appraiser’s conclusion violates state law and administrative rules as well as Florida Department of Revenue guidelines and the statewide uniform 2016 VAB training manual. “Since 2009, the property appraiser had to provide written evidence demonstrating how it utilized and relied on income and sales and how it arrived at its value conclusion for the specific property,” Mandler wrote. “This would include the actual income analysis for the property and the sales it relied upon to assess the subject property.”

Mandler, who did not return two phone messages and an email seeking comment, claimed the property appraiser’s office now wants authorization to submit only “cursory” evidence to establish a “presumption of correctness” in arriving at a property’s market value. “This change is both detrimental to taxpayers and fundamentally unfair,” Mandler wrote.

In a Dec. 6 response to Mandler’s letter, Jorge Martinez-Esteve, a Miami-Dade County assistant attorney representing the property appraiser, disputed the real estate tax lawyer’s assertions. Martinez-Esteve said Garcia is only asking that Millares follow a guideline that his two previous predecessors accepted as sufficient for defending against owners appealing assessments.

“At any VAB hearing, the property appraiser’s office is only required to introduce evidence regarding the mass appraisal techniques used by the property appraiser’s office to arrive at the assessment,” Martinez-Esteve wrote. “The property appraiser is not required to introduce any evidence regarding the single appraisal of the subject property.”

Since Miami-Dade has more than a million properties, conducting single appraisals for every parcel would be impractical, Solis told the Bullldog. So the property appraiser’s office conducts mass appraisals, a process of valuing a group of properties through a mathematical analysis of market data, to determine a specific parcel’s fair market value, Solis said.

He added the property appraiser is not looking to make property owners pay more in property taxes. “If a reduction is warranted when we are reviewing a case, we offer it,” he said. “We are always looking out for the property owner. We don’t have a reason to go against them unless we believe the assessment is correct.”

Nevertheless, Anderson said the property appraiser is making it harder for owners to appeal assessments by pushing Millares to adopt its request. “Miami-Dade is a big place so they will make mistakes,” she said. “Now they want to come into a VAB hearing, wave a piece of paper in the air and claim they did everything correctly. That’s not showing evidence. It is empty rhetoric.”

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