By William Gjebre, FloridaBulldog.org
The Broward County Inspector General’s Office has launched another inquiry into Hallandale Beach’s Community Redevelopment Agency, three years after finding the city “grossly mismanaged” millions of dollars in CRA funds.
The first probe led to reform and a grand theft charge against the director of a local cultural program for misspending CRA grant money. What triggered the new probe, however, isn’t known.
“I cannot comment,” said Inspector General John W. Scott, who leads the independent watchdog agency that investigates allegations of fraud, corruption and gross mismanagement at the county and Broward’s 31 municipalities. He’s asked the city and the CRA to submit the requested information by July 1.
A key focus of the inquiry, however, is the city’s Community Benefit Program (CBP). The program seeks to encourage private development and city-funded projects to recruit, train and hire city residents and local vendors.
Tuesday’s letter to the city from the Inspector General’s Office requested a variety of CRA documents from Jan. 1, 2013 to the present. They include: all voting conflict memos submitted by city commissioners, who also serve for directors of the CRA; the minutes of all city commission and CRA meetings; a list of all bid solicitations with a Community Benefit Program component as well as documentation from vendors identifying specific partners to be engaged in the program.
In addition, Inspector General Scott’s office requested documents related to two groups that received grants from the city and the CRA: the Palms Community Action Coalition and the South Florida Educational Development Center.
The latest inquiry set off another disagreement among city officials.
“While the CBP has good intentions,’’ said City Commissioner Keith London, “it is my belief the program has been hijacked and abused by insiders who have used their power and influence to steer contracts and jobs to unqualified persons and companies for no other reason than their political connections.”
London said residents should “review the voting record of each commissioner who has blindly supported the CBP policy, every CBP expenditure and bid sheet awarding millions of taxpayer dollars to firms whose major qualification was their connection to city hall.”
But Mayor Joy Cooper, who has differed bitterly with London in the past, played down the significance of the IG’s records request.
“We have been in compliance”
Cooper cited the city’s Hallandale Opportunity Program that monitors grants and contracts. She said the program’s monthly reports have indicated compliance with city provisions, including by the Community Benefit Program. “We have tightened up” controls over grants and contracts, Cooper said. “We have been in compliance.”
City Manager Daniel Rosemond added the same internal group has monitored city funds going to South Florida Educational Development Center and there have been “no performance issues.”
Rosemond likewise sought to downplay the significance of the Inspector General’s inquiry, observing that he merely asked for some records.
“This is not an investigation,” Rosemond said in an interview, adding “I don’t believe there is anything substantive” to the inquiry, but rather that the IG has received some information and “has a fiduciary responsibility to look at it.”
In an email to commissioners, Rosemond said, “The nature of the [IG] request appears to center around the city’s Community Benefit Program, its administration and recipients.”
Palms Community Action Coalition members could not be reached; South Florida Educational Development Center members did not return calls for comment.
Palms Community Action Coalition (PCAC) is a group attempting to prevent and reduce crime, drug abuse and gang activity. The coalition came under scrutiny during the Broward Inspector General’s previous probe – although there was no finding of wrongdoing. Under a three-year agreement with the city, PCAC has received a total of $306,000.
According to state documents, the South Florida Educational Development Center, established six years ago, is a non-profit group that provides educational job training for youth and adults in underserved areas. It received $45,000 last year and again this year, and will receive the same amount next year under a three-year agreement ending Sept. 30, 2017.
City Commissioner Michele Lazarow said she and Commissioner London have questioned the effectiveness of the Community Benefits Program. In some instances, she said, city funds appeared to be going to only a few groups. There is also concern that some firms receiving city contracts may be having trouble fulfilling promised job slots because there are not enough qualified workers in the city.
A city ‘investigated twice’
“I wonder how many other Broward County cities have been investigated twice,” said Lazarow.
Commissioner Anthony Sanders could not be reached for comment. Vice Mayor Bill Julian said he could not comment because he hadn’t seen the IG’s letter.
In March 2013, after a 14-month investigation, the Inspector General’s Office found $2.2 million in questionable expenditures by the Hallandale Beach CRA between 2007 and 2012, including inappropriate loans and grants to local businesses and non-profits, as well as the improper use of bond proceeds.
The city, the report stated, improperly spent $416,000 in CRA money for parks outside the CRA boundaries. The spending, which was not always documented, was often done at what amounted to the whim of former City Managers Mike Good and Mark Antonio, the report said.
The Hallandale Beach CRA, like other similar agencies in other municipalities, was established under a state law that allows the agency to raise and spend a large portion of increased property tax dollars collected within the CRA’s boundaries on projects aimed at eliminating slum and blight. Nearly 50 percent of those funds come from Broward County, which approved establishment of the agency.
While city officials contended that all expenditures were permissible under state law, the Broward IG cited in its report a 2010 opinion by Florida’s Attorney General that CRA expenditures must be connected to “brick and mortar” capital projects.
At the conclusion of the last investigation, Hallandale Beach officials denied wrongdoing and challenged the authority of the Inspector General to oversee the city’s CRA.
Nevertheless, the city ultimately made changes as a result of the probe that included updating its CRA development plans and adopting procedures for awarding grants. The city also announced plans to repay the CRA for funds used for parks outside the CRA boundaries.
The IG’s finding also led Broward prosecutors to charge Palm Center for the Arts (PCA) director Deborah Brown with grand theft in May 2014. The IG reported finding probable cause to believe that Brown spent nearly $5,000 in CRA funds on herself and her family. The funds were designated by the city in 2010 to send children on a trip to Washington, D.C.
The criminal case remains pending in Broward Circuit Court, with the next hearing set for Sept. 22.
By Dan Christensen, FloridaBulldog.org
With little public discussion, the Broward County Commission has overwhelmingly approved an $18.9-million payout to airport contractor Tutor Perini to settle a bitter dispute about who was to blame for costly construction delays.
Paperwork filed in support of the deal, including the settlement itself, revealed that an unidentified whistleblower recently sued Tutor Perini in circuit court using the Broward County False Claims Ordinance. The whistleblower’s claims are not known, but sources said an unhappy subcontractor filed the complaint. Whistleblowers who help the county recover money lost to fraud or other schemes can recover a reward of up to 25 percent of the proceeds.
Tuesday’s settlement deal, approved in a 6-1 vote, marks an expensive flip-flop by the county from assertions earlier this year by then-Broward aviation department boss Kent George that, in fact, Tutor Perini owed the county more than $34 million for those delays.
George stepped down as aviation director in March, but remains on the county’s payroll until the end of the year. He negotiated the settlement approved Tuesday.
In January, FloridaBulldog.org reported that on New Year’s Eve George had a letter sent to Tutor Perini demanding those damages cover the costs of a dozen “significant … deficiencies and unresolved issues” that seriously delayed completion of the $800-million expanded south runway at Fort Lauderdale-Hollywood International Airport.
“You owe us millions of dollars and now I’m paying you millions of dollars in a settlement?” Commissioner Lois Wexler said Tuesday. “Unless there’s a real explanation as to how it morphed into something else, I’ll be a no vote today.”
County Attorney Joni Armstrong Coffey, who recommended approval of the settlement, offered a brief discussion about that. Coffey indicated the county was responsible for the delays because change orders expanding the scope of Tutor Perini’s work were approved without an appropriate expansion of work days in which to complete it.
A dissatisfied Wexler voted a lonely no.
Tutor Perini, (NYSE: TPC) has contended that the county was to blame for the construction delays. In fact, the county aviation department lost more than a dozen claims adjudicated before a “dispute avoidance panel” established at the project’s outset to resolve disagreements between the county and its runway contractors.
In recommending approval, Coffey warned the county could have as much as $80 million in liability without a settlement.
County ‘probably could win’
Nevertheless, Commissioner Dale Holness said that in private discussions with “our staff and attorneys” he’s been assured the county “probably could win” a lawsuit against the company.
“But they weren’t sure a hundred percent because we had some issues on both sides,” Holness said.
Wexler went further. She said her “lengthy briefings” with staff bore little resemblance to Tuesday’s outcome.
“When Ms. Coffey and Mr. [Michael] Kerr [deputy county attorney] came to my office, they said, ‘Don’t worry, commissioner, we’re going to recoup, we’re going to recoup,’ ” Wexler said. “Now all of a sudden something else comes forward.”
The settlement includes $6.1 million that was approved but never paid to Tutor Perini, plus an additional $12.8 million. No commissioners asked how that figure was arrived at, and county staff did not explain.
The settlement raises the “final” contract amount to $239 million. The original contract award to Tutor Perini for design-build services was $179.9 million. Change orders approved by the county raised that figure to $226.2 million.
The settlement is with the Tutor Perini Fort Lauderdale-Hollywood Joint Venture.
California-based Tutor Perini is the prime consultant for the tunnel structures that carry the expanded and elevated south runway and taxiway over U.S. 1, the Florida East Coast railroad tracks and East Perimeter Road. The venture was also responsible for related construction, including the new southbound airport exit ramp to U.S. 1.
The original contract completion date for the runway project was Feb. 22, 2014. In fact, the runway opened for air traffic in September 2014, and the project was declared “substantially complete” in January 2015.
Still, work at the airport goes on. Today, Tutor Perini is adding decorative and architectural features to the U.S. 1 tunnels – finishing work worth several million dollars. The settlement requires Tutor Perini to finish all remaining work by Aug. 31.
Friction between Tutor Perini and the county isn’t limited to the airport project.
The company is the prime contractor on the new downtown county courthouse, a project that’s a year behind schedule, but is expected to open this summer. The Sun-Sentinel reported last month that a county public works official said Tutor Perini contends the county owes it $11.3 million for extra work.
The airport and courthouse disputes also figure in the selection of a contractor to build a long-sought expansion of the Broward County Convention Center and a next-door hotel on port property. Texas-based developer Matthews Southwest Holdings was accepted for the job in April, but Matthews’ team includes Tutor Perini – a fact that did not go over well at County Hall.
By Dan Christensen, FloridaBulldog.org
In a stunning twist in a long-running Medicare fraud case, both the Miami U.S. Attorney’s office and the FBI stand accused of spying on a defendant’s lawyer by illegally and secretly obtaining copies of confidential defense documents.
Court papers filed last week by attorneys for Dr. Salo Schapiro contend the secret practice was not the action of “just one rogue agent or prosecutor.” Rather, it was apparently an “office-wide policy” of both the U.S. Attorney’s Office and the FBI that’s gone on for “at least 10 years.”
The unwritten policy involves “surreptitiously copying defense counsel’s work product through the government-contracted copy service that the government requires defense counsel to use to obtain the discovery documents’’ needed to properly prepare for trial, according to court papers that seek either the dismissal of Schapiro’s indictment or the disqualification of the entire prosecution team.
Miami attorneys Howard Srebnick and Rossana Arteaga-Gomez represent Schapiro and filed the motion, which asserts that the U.S. Attorney’s Office has for several weeks been investigating itself in the matter.
Miami U.S. District Judge Marcia G. Cooke held an initial hearing Tuesday that was continued until June 8 at 1:30 p.m. The judge, in an order, has asked both parties to respond to this extraordinary question: “What remedies, if any, are available to the court were the court to find that the described conduct in defendant Schapiro’s motion is a systemic, consistent and/or pervasive practice of or on behalf of the United States Attorney’s Office?”
A spokeswoman for Miami U.S. Attorney Wifredo Ferrer would not be interviewed. However, late Thursday night prosecutors filed court papers confirming that an internal probe is underway and asserting that defense arguments are “based on erroneous accusations and insinuations.”
“Despite the charged language this is not a case about intrusion into the attorney-client relationship, eavesdropping or sneaking into the defense camp,” wrote Assistant U.S. Attorney James V. Hayes and Justice Department fraud attorney Lisa H. Miller.
Defense attorney Srebnick did not return a phone call seeking comment.
Specifically, the court papers allege that Fort Lauderdale-based copying service Imaging Universe and president Ignacio E. Montero provided the government with CDs containing duplicates of documents Schapiro’s defense team culled from 220 boxes of evidentiary records in preparation for trial. Federal agents had seized those records from the mental-health clinic Biscayne Milieu, where Schapiro worked.
“Covertly cloning defense counsel’s work-product to obtain a tactical advantage is nothing short of ‘shocking to the universal sense of justice’ mandated by the Due Process Clause of the Fifth Amendment,” Srebnick and Arteaga-Gomez wrote. “To the extent that the prosecution team can infer from Dr. Schapiro’s selection of discovery documents his thought process, the government has violated his Fifth Amendment right not to be compelled to be a witness against himself. This intrusion into the attorney-client relationship has also violated Dr. Schapiro’s Sixth Amendment right to the effective assistance of counsel.”
The government responds
The government’s Thursday night response acknowledged that Imaging Universe did supply the FBI with duplicate CDs of what the company had copied for Schapiro’s defense team, but said the discs “were never requested by any agent, prosecutor or anyone else on the government’s behalf.”
Prosecutors Hayes and Miller also stated that they were unaware of the duplicate CDs until an FBI agent disclosed their existence in late April. They said that when they found out they immediately told “Montero to stop and began an internal inquiry.”
“To date it has found that there was simply no pervasive practice of receiving or recording defense discovery, and that it was not a widespread or institutionalized practice,” says the government’s response.
Nova Southeastern University constitutional law professor Robert Jarvis was skeptical of the defense’s sensational claims, but said that if the allegations prove true it could upend hundreds of criminal cases, free untold defendants and potentially result in criminal charges against government officials responsible for violating defendants’ rights.
“This opens a huge can of worms,” Jarvis said. “It’s potentially catastrophic for the government and I would think that the [U.S.] Attorney General would be swooping in on this. There are 95 judicial districts. If it happened in this office, you have to wonder if it’s happening in any others.”
Schapiro, 70, Sonia Gallimore, 74, both Broward residents, and Marlene Cesar, 64, of Allentown, PA., were indicted on charges of health care fraud and conspiracy and making false statements in September 2014. According to the indictment, they and other alleged co-conspirators submitted more than $55 million in phony Medicare claims through the Miami clinic, Biscayne Milieu, collecting more than $11 million. Previously, about 25 other owners and employees of the clinic pleaded guilty or were convicted of healthcare fraud.
On Tuesday, attorneys for Gallimore and Cesar filed paperwork seeking dismissal of their charges, claiming their clients’ rights were similarly violated by the alleged scheme.
The defense motion says that between late 2014 and last month, Schapiro’s lawyers repeatedly visited an FBI warehouse in Miramar where discovery documents are kept for review. During Arteaga-Gomez’s first visit to the warehouse federal agents told her that if she wanted to copy any documents she would have to use Imaging Universe, the motion says.
Since the indictment, Imaging Universe has charged Schapiro $8,200 to produce nine sets of discovery documents to his defense team. The motion identifies those records to include a dozen CDs containing approximately 1,140 PDF files, many with multiple pages.
The motion contends that company president Montero “lied” to Arteaga-Gomez about the copying process, and instead of making sure the government did not see the defense’s hand-selected files, provided FBI case agent Deanne Lindsey with duplicate copies.
Montero did not respond to a detailed voicemail message seeking comment.
Prosecutor discloses FBI received defense CDs
Hayes, the federal prosecutor on Schapiro’s case, first informed Srebnick and his associate that agent Lindsey “had been surreptitiously receiving the CDs” on April 22, according to the defense motion.
“Hayes proposed to immediately destroy the CDs,” but the lawyers asked instead that he give them to the defense, “which he did,” the motion says.
Hayes declined to be interviewed about the matter.
Arteaga-Gomez phoned Montero on April 25 to ask who had told him to provide copies of the CDs to the government. Montero, the motion says, answered that an “agent” told his office manager to do it. “Mr. Montero then stated that he had been providing to the U.S. Attorney’s Office for the past 10 years duplicate copies of the discovery documents selected by defense counsel in other cases.”
Montero also forwarded to Schapiro’s defense an April 21 email he sent to a healthcare-fraud paralegal in the U.S. Attorney’s Office, stating that he’d provided the Justice Department with duplicates of defense records “since 2006.” Montero added that both his old company, Xpediacopy, and Imaging Universe had done it.
If so, the alleged government misconduct spanned the administrations of three Miami U.S. Attorneys – Alex Acosta, who served from 2005-2009, Jeffrey Sloman acting U.S. Attorney from 2009-2010 and Wifredo Ferrer, who took over in May 2010.
Srebnick and Arteaga-Gomez wrote that they’ve recently had “multiple conversations” about the matter with Miami federal prosecutors and their supervisors.
“The U.S. Attorney’s Office has admitted that Agent Deanne Lindsey had been receiving copies of the CDs and had been keeping the duplicate CDs in a folder as she received them,” the motion says. Lindsey also “confessed to opening four of those duplicate CDs” looking for files, copying and pasting files onto her own CDs and providing “those new CDs to the government’s expert witness for trial preparation,” the motion says.
The prosecutors’ response sought to cast Lindsey’s contact with the records in less threatening way.
Prosecutors notified the defense last week that Montero had “confessed to lying to Rossana Arteaga-Gomez about the discovery process” in order to hide what was happening, the defense lawyers wrote.
“That the government-contracted copy service misled Ms. Arteaga-Gomez in order to cover-up the office-wide policy makes this case especially egregious,” the motion says.
Details about the size, terms and duration of Imaging Universe’s contract were not immediately available. The prosecutors’ response, however, said the contract is between Imaging Universe and the Government Publishing office.
By Dan Christensen, FloridaBulldog.org
Five months after demanding that contractor Tutor Perini pay Broward more than $34 million in damages for costly airport construction delays, ex-county aviation boss Kent George instead wants the county to pay Tutor Perini $18.9 million.
George and new aviation boss Mark Gale will ask Broward commissioners to approve the big payout on Tuesday as part an about-face settlement negotiated by George with the Tutor Perini Fort Lauderdale-Hollywood Venture (TPFLHV).
The proposed settlement would end a bitter, behind-the-scenes fight over who is to blame for numerous pricey construction holdups during the airport’s $800-million south runway expansion project.
George stepped down as aviation director in March and today is a county consultant/negotiator on the matter.
In January, FloridaBulldog.org reported that on New Year’s Eve George’s representative had dispatched a blunt letter to Tutor Perini demanding in excess of $34 million to cover costs incurred by a dozen “significant…deficiencies and unresolved issues” that had seriously delayed completion of the project.
Tutor Perini’s position: the delays were caused by the aviation department’s “maladministration.”
As recently as three weeks ago, George told the Sun-Sentinel, “We feel they owe us money.”
Out the window
George’s tough public stance went out the window Thursday with the disclosure of his expensive settlement proposal.
An angry County Commissioner Lois Wexler said in an interview Friday that she won’t vote to approve it.
“This has gone from them owing us money to now I’m supposed to pay them money,” said Wexler. “The last I heard was that we’d be recouping all this $34 million in court…What’s going on?”
George hung up on a FloridaBulldog.org reporter seeking comment about the proposed settlement.
The county, however, capitulated to Tutor Perini after the aviation department lost more than a dozen claims adjudicated before a “dispute avoidance panel” established at the outset of the project to resolve disagreements between the county and its runway contractors.
George’s giveaway of the county’s huge claim has come as a shock, however, because it followed repeated assurances to Commissioner Wexler and others that the county would go to court to enforce it.
Nevertheless, George was inclined to settle on terms favorable to Tutor Perini as early as mid-December when he emailed Tutor Perini Chief Executive Jack Frost offering to pay $21 million to settle the dispute if Tutor Perini would pay the airport about $11 million in liquidated damages for contractual delays.
FloridaBulldog.org reported in January that Frost declined the deal, which would have been tantamount to an admission that Tutor Perini was responsible for many delays in the airport project.
The current settlement proposal requires no payment of liquidated damages.
A local Tutor Perini representative declined comment, and Frost did not respond to an email requesting comment.
A prime consultant
California-based Tutor Perini, with venture partner Ohio’s Baker Concrete Construction, is the prime consultant for the tunnel structures that carry Fort Lauderdale-Hollywood International Airport’s expanded and elevated south runway and taxiway over U.S. 1, the Florida East Coast railroad tracks and East Perimeter Road. The venture was also responsible for related construction, including the new southbound airport exit ramp to U.S. 1.
The original contract completion date for the runway project was Feb. 22, 2014. In fact, the runway opened for air traffic in September 2014 and the project was declared “substantially complete” in January 2015.
Still, work at the airport goes on. Today, Tutor Perini is adding decorative and architectural features to the U.S. 1 tunnels – finishing work worth several million dollars.
The cost of the runway expansion project, the centerpiece of $2.4 billion in in ongoing airport terminal and other improvements, continues to rise.
County records say the original contract award to Tutor-Perini for design-build services was $179.9 million. Subsequent approved change orders, including one for $6.1 million executed just before Christmas, raised the contract’s cost to $226.2 million.
The latest “final” contract amount with the settlement: $239 million.
The negotiated settlement includes the $6.1 million that was approved but never paid to Tutor Perini, plus an additional $12.8 million. The county’s agenda item for Tuesday’s meeting does not explain how that figure was arrived at.
The six-page settlement requires Tutor Perini to complete all remaining work by Aug. 31. The county is also required to “promptly” pay what it still owes and to quickly release money, possibly millions of dollars, that it has retained to cover claimed damages.
By Fred Schulte, Center for Public Integrity
Private Medicare Advantage plans treating the elderly have over-billed the government by billions of dollars, but rarely been forced to repay the money or face other consequences for their actions, according to a new Congressional audit.
In a sharply critical report made public Monday, the Government Accountability Office called for “fundamental improvements” to curb overbilling by the health plans, which are paid more than $160 billion annually. The privately run plans, an alternative to traditional fee-for-service Medicare, have proven popular with seniors and have enrolled more than 17 million people. The plans, which were the subject of a Center for Public Integrity investigation, also enjoy strong support in Congress. (more…)
Fed up with project failures, management problems and possible city overcharges, Fort Lauderdale commissioners have ordered an extensive audit of the city’s Community Redevelopment Agencies.
In a little-noted action, commissioners directed the audit of three CRAs at a conference meeting earlier this year.
The audit was triggered by the million-dollar failure of the Sixth Street Plaza project. Some commissioners expressed additional concerns about the findings of a city auditor’s report on CRAs that they said indicate the city had unfairly overcharged the CRAs for services during the past five years.
Commissioners ordered “a full audit” of the Northwest/Progresso/Flagler Heights (NWP) Community Redevelopment Agency, the Central Beach (CB) CRA and the Central City (CC) CRA, City Auditor John Herbst said in an interview. He said the audit, now under way, may be completed in two months.
Herbst said the audit was undertaken because the city wants to get in front of the matter, knowing the Broward Inspector General’s Office has been investigating CRAs around the county for some time.
Herbst said he expects the audit to determine whether CRA spending was “in compliance with state law and CRA bylaws,” and whether the CRAs were properly managed and contracts adhered to the CRAs’ limitations.
“We want to make sure money was spent in accordance with governing legislation,” Herbst said. The audit will cover the past three years – a reasonable time period, the auditor added.
Herbst said the troubled Sixth Street Plaza project is a key factor in the ongoing audit. Last May, the city auditor’s office criticized the CRA for poor oversight of a taxpayer-supported office and retail plaza that was to be the centerpiece of the city’s ambitious plans to revitalize the Sistrunk Boulevard corridor.
But the 23,000-square-foot building at 900 NW Sixth St. filed for bankruptcy, jeopardizing the repayment of $1 million in taxpayer loans.
Following that finding, Vice Mayor Robert McKinzie’s staff asked Herbst in a memo to conduct “a complete audit of the day to day operations of the CRA.” Herbst said Mayor Jack Seiler and his fellow commissioners backed the call for the audit in a consensus vote during a city commission conference meeting in January.
Herbst said the city’s CRAs have had problems because of frequent management shuffling. “There was inconsistent leadership due to transfers,” he said.
A report by his office noted that the Northwest/Progresso/Flagler Heights CRA, in a less-affluent area, was charged $1.7 million for city services over the past five years, while the Central Beach CRA, in a wealthier area, was charged $909,000 during that same period.
The finding upset City Commissioner Dean Trantalis, who said an “excessive amount of money is charged for administration, denying the neighborhood that is suffering blight and neglect and so much money being used for staff.”
Trantalis said he has asked City Manager Lee Feldman about correcting CRA allocation issues, but “he hasn’t been responding. We need to change the practice. We discovered that the city manager, to shore up the budget, has been attributing staff time to the CRA.”
Feldman did not respond to requests for comment before deadline after promising to make himself available for an interview.
At the city commission meeting in January, others expressed their concern about the auditor’s findings.
Minutes of the meetings say McKinzie “questioned why such a large portion of funds was allocated [to] the [Northwest/Progresso/Flagler Heights] CRA for administration and resources when the CRA did not have a director.”
Commissioner Bruce Roberts suggested the matter be referred to the State Attorney’s Office or some other investigative agency for a criminal probe.
“Many feel CRA funds have been drained for administrative services, and there is a lopsided disparity,” Trantalis said at the January meeting. The mayor and the city’s four commissioners also serve as directors of the CRAs.
Herbst’s audit report mainly delved into the current fiscal year salary allocations of the two CRA offices, Northwest/Progresso/Flagler Heights and Central Beach. But it found problems.
“The method used to allocate personnel costs may lead to excessive General Fund expenses being allocated to the CRA, a violation of Florida Statute 163.370(3)(c),” the report stated. The state provision prohibits the tax-increment funds that CRAs receive from covering general government operating expenses unrelated to planning and carrying out a CRA plan.
The report goes on, “We determined that the Department of Sustainable Development (DSD) and the Budget Office were not able to provide adequate support for the percentages used for personnel cost allocations to/from the CRA fund and the sub-funds. Additionally, they are allocating charges to the CRA for personnel positions which are vacant for either a portion of the fiscal year or the entire fiscal year.
“The budgeted allocations are then charged to the CRA throughout the year without reconciling those estimates to actual costs incurred, resulting in an excess of allocation over actual cost,” according to the report.
The faulty allocations can negatively impact the CRAs’ ability to achieve their goals, the report aid.
The city charged the CRAs for hours city employees spent working on agency matters.
In one instance, the report said the Northwest/Progresso/Flagler Heights CRA was “overcharged” $30,000, which should have been charged to the Central Beach CRA. That happened after an employee was promoted from assistant to the city manager to the position of economic and business development manager in charge of the Central Beach CRA. For three months, he was paid from funds allocated to a vacant position in the Northwest/Progresso/Flagler Heights CRA, the report said.
A correction was later made, but “the prior overcharging was not corrected timely” and ate into how much funding was available to meet the CRA’s goals.
Since the report, the city has begun making changes.
Trantalis said in an interview that city commissioners have removed the CRAs from reporting to the Department of Sustainable Development and made them separate entities with their own managers to oversee day-to-day operations. State law requires CRAs to operate independently of other departments.
City Manager Feldman, however, will continue to function as executive director of the CRAs.
Other changes call for improved financial oversight from the city finance director and the city auditor, identifying a separate CRA funding and accounting structure, and allocating additional funds for the two CRAs to implement changes during the current fiscal year.
By Dan Christensen and Buddy Nevins, FloridaBulldog.org
Acting Broward Health President/CEO Kevin Fusco apparently exceeded his spending authority last month when he signed a deal to pay more than $400,000 in hush money to a district executive who was fired after publicly criticizing a proposed $71.4 million, no-bid advertising contract.
The same day, Fusco signed a second deal to pay the fired chief executive of the district’s Fort Lauderdale flagship, Broward Health Medical Center, $537,000 to go away quietly.
The taxpayer-supported public hospital system’s chief executive is authorized to spend $250,000 on his signature alone; anything above that amount requires the approval of Broward Health’s governing board.
Approval for the costly agreements with ex-Broward Health Chief Financial Officer Robert K. Martin and medical center Chief Executive Officer Calvin Glidewell, however, was neither requested by Fusco nor granted by the board, according to minutes and coverage of board meetings.
Fusco did not respond to requests for comment made over several days.
Fusco inked 10-page separation agreements with Martin and Glidewell on Feb. 5, nine days after being named acting president/CEO in the aftermath of the Jan. 23 suicide of Broward Health boss Dr. Nabil El Sanadi. The contracts bear El Sanadi’s name, but his name was crossed out by Fusco when he signed them following El Sanadi’s death.
Martin’s agreement says he was “terminated” Jan. 7, when El Sanadi was in charge. El Sanadi and a majority of the board supported the proposed contract with Fort Lauderdale’s Zimmerman Advertising.
Under the contract, Broward Health will pay Martin his regular salary of $407,930, or about $196 per hour, through Jan. 7, 2017. Martin also got a lump sum payment of more than $17,000 for approximately 87 hours of accrued personal leave, plus a job-hunting service paid for by Broward Health.
In exchange for the money “to which Martin would not otherwise be entitled,” the agreement required Martin to release Broward Health from any legal claims he might have. He also agreed not to “disparage or adversely affect…or work to the detriment of Broward Health.”
The agreement broadly defines Broward Health to include not just the North Broward Hospital District, its legal name, and all related entities, but “current and former commissioners, directors, officers, employees, successors in interest, attorneys, representatives and agents.”
“Martin hereby represents that he has no knowledge of wrongdoing on the part of Broward Health or conduct that might adversely affect Broward Health or any issue of potential liability to Broward Health,” the agreement says.
BREACHES WOULD END PAYMENTS
“Any breaches by Martin will therefore cause Broward Health to immediately cease further payment to him.”
Martin declined to comment.
Glidewell was fired the day after Martin. The district has not publicly discussed why Glidewell was let go.
Glidewell’s deal specifies he’d continue to be paid his regular salary of $445,432, or $214 per hour, through Jan. 8, 2017. He’d also get a lump sum payment of $92,313 for 431 hours of accrued personal leave time, plus up to $10,000 in job search assistance.
To get the money, Glidewell signed the same gag terms as Martin. Any breaches by Glidewell would cause Broward Health to shut off further payments.
Glidewell did not respond to a phone message seeking comment before deadline.
The Broward Health public health system was subsidized last year by about $140 million in property tax revenues. Nevertheless, administrators have repeatedly inserted so-called “non-disparagement clauses” into separation agreements with its executives. The result has been not only a lack of transparency but, in the cases of Martin and Glidewell, a lack of accountability.
Former Broward Health procurement director Brian Bravo, fired in December amid an FBI corruption investigation, got a similar separation agreement on Jan. 7 in which the district agreed to pay his $159,000 salary through next June 14. Bravo also was given a $17,000 lump sum payment for accrued personal leave.
El Sanadi signed the deal on Jan. 7. It included a non-disparagement clause containing the same language as Broward Health’s agreement with Martin and Glidewell.
Wayne Black, a Miami private investigator hired last year by El Sanadi to look into alleged corruption at Broward Health, told commissioners in a January e-mail that Bravo “was bragging about getting $75,000” from the district “to pay his criminal defense attorney.”
Fusco isn’t the first Broward Health president/CEO to apparently exceed his signing authority. As FloridaBulldog.org reported Monday, El Sanadi signed an initial, $2.1 million no-bid annual contract with Zimmerman Advertising on May 5.
Like Fusco, El Sanadi’s authority to sign contracts was limited to $250,000. A review of the minutes of every public Broward Health board meeting in 2015 revealed no indication that Zimmerman’s initial contract was every brought to the board for its consideration.
A Fort Lauderdale federal grand jury has slapped a subpoena on Broward Health, demanding records related to an ongoing FBI investigation focused on its purchasing practices, two knowledgeable sources have told FloridaBulldog.org.
The subpoena, served earlier this month, is said to seek information about former hospital district procurement officer Brian Bravo and 16 companies that do business with Broward Health. They include MedAssets, a Georgia-based group purchasing organization for the Broward system and other hospitals (NASDAQ: MDAS) with a market capitalization of $1.87 billion.
The subpoena seeks those records going back 10 years. The name of veteran Assistant U.S. Attorney Neil Karadbil is on the subpoena.
“I’m told the (administrative) staff is on shutdown, spending hours finding all these documents,” one source said.
Broward Health’s attorneys declined to release a copy of the federal grand jury subpoena, saying it is exempt from disclosure under Florida’s public records law.
Commissioner Joel Gustafson, asked if he was aware of the grand jury’s subpoena, said, “I don’t know if I’m allowed to answer that question. We’ve been admonished not to talk about any alleged investigation. If I find that I can, I’ll call you back.”
At the same time, FloridaBulldog.org has learned that top Broward Health staff – chief executive Kevin Fusco, general counsel Lynn Barrett and security director and ethics officer Carlos Perez-Irizarry – have phoned board members to privately update them on the status of the criminal investigation. The move avoided a public discussion of those details.
Commissioners were told that district administrators, criticized in Miami-based investigator Wayne Black’s email for having blocked the FBI’s investigation, are cooperating and turning over requested records, although no time frame for compliance was given. They were also told that general counsel Barrett has waived a claim of privilege to certain documents, facilitating their production.
One of the items turned over: Bravo’s laptop.
The decision by Fusco and the others to brief commissioners individually, thus possibly outside the Sunshine Law, is problematic.
Florida’s Government-in-the-Sunshine Manual, compiled by the attorney general’s office, cites a 1979 appeals court ruling that held a series of private meetings between a school board superintendent and individual members of the school board were subject to the Sunshine Law.
“While normally meetings between the school superintendent and an individual school board member would not be subject (to the Sunshine Law), these meetings were held in ‘rapid-fire succession’ in order to avoid a public airing of a controversial redistricting problem,” the manual says.
Joe Jacquot, a lawyer with the Foley Lardner law firm that represents Broward Health, said private updates for commissioners don’t violate the Sunshine Law. “As you say, staff appears to be updating individual board members in the normal course,” said Jacquot.
Broward Health officials have said Bravo was fired in December. On Sunday, hospital district board chairman David Di Pietro told This Week In South Florida that Bravo received an “unbelievable” severance package while he was under investigation by the FBI. The deal included a $17,000 payout for personal leave time, plus Bravo remains on Broward Health’s payroll until June.
Black, the private investigator hired last year to look into corruption allegations at Broward Health, told commissioners in a recent email that Bravo “was bragging about getting $75,000 BH (Broward Health) to pay his criminal defense attorney.”
Bravo did not respond to detailed requests for comment. Joel Hackney, chief executive officer of MedAssets, also did not respond to a detailed voicemail requesting comment.
Broward Health spends tens of millions of dollars on medical supplies every year. The district hired MedAssets in December 2007 in an effort to reduce the cost of supplies.
An undated company press release quotes Bravo: “MedAssets has been very effective in working with our leadership team, departments and physicians to review utilization and to implement strategies to reduce physician preference item supply costs while maintaining the quality of patient care.”
Supply costs can represent as much as 31 percent of a hospital’s cost per case, according to a 2006 academic study cited by the Milbank Quarterly, a healthcare journal.
“Gaining control of the hospital’s supply chain – the flow of products and associated services to meet the needs of the hospital and those who serve patients – presents special challenges,” the journal reported. “This is because the most expensive materials – up to 61 percent of the total supply expenditures – are for items about which physicians have a strong preference.”
Broward’s Health’s general counsel failed to cooperate with the FBI, withheld evidence and protected an executive accused of attempting to rape several employees, according to an explosive e-mail sent last week by a private investigator hired by the late Dr. Nabil El Sanadi to look into alleged corruption at the public hospital system.
The email, obtained by Floridabulldog.org, is from Wayne Black, a noted Miami-based investigator, and was received at Broward Health’s headquarters on Friday, just hours after El Sanadi’s memorial service. El Sanadi had been president and chief executive of taxpayer-supported Broward Health for 14 months.
Black’s email blasted Broward Health General Counsel Lynn Barrett.
“I can no longer sit quietly while needed evidence and information is being withheld from the corruption squad at the FBI,” Black told Barrett.
Black wrote that Barrett had shut him out of “various investigations” and accused her of wrongfully asserting a claim of legal privilege to block law-enforcement access to a laptop used by a suspect executive.
“I was complaining in writing that it may appear you were potentially obstructing justice and that the FBI needed to image and take a look at the suspect’s hard drive, owned by BH (Broward Health),” he said. “I understand that even today, the FBI does not have access to that laptop. This is outrageous and the public deserves better.”
“I also hope that after all these months, that executive’s laptop didn’t get ‘lost’ or damaged or wiped. You know very well that there is no possible attorney/client privileged information on the laptop,” Black said. “Even if there was a privilege, the DOJ/FBI has experienced taint teams to deal with any issues.”
Barrett did not respond to requests for comment by phone and email. Black declined comment because the matter is pending.
Black’s scathing email was sent to Barrett, with copies to members of Broward Health’s board of commissioners. The day it arrived, Florida’s chief inspector general also informed Broward Health that she has opened an inquiry into millions of dollars in contracts that the hospital district has awarded since July 2012.
Special meeting expected next week
Broward Health’s board is expected to hold a special meeting next week to discuss the inspector general’s investigation. No date has been set.
Black’s email explains that El Sanadi hired him in April 2015 at the direction of board chairman David Di Pietro to investigate “information and allegations of corruption at Broward Health” given to him by El Sanadi.
“I discovered the irregularities in the security RFP [request for proposals] and Nabil put a hold on the RFP process at my request. There was obvious corruption and the matter is still not resolved to this day. I later developed witnesses regarding kickbacks and other crimes and immediately referred the matter to the FBI corruption squad,” Black wrote. “We (myself and FBI agents) promised witnesses that they would not be known unless they testified. We kept that promise and will continue to do so.”
El Sanadi was informed and told Black to keep working.
“Nabil and I met several times at his home or at a local restaurant to discuss my findings as he felt his office was bugged. We used Nabil’s wife’s email to communicate most of the time because we didn’t know who would have access to sensitive emails,” Black said.
Black’s frustrations with Barrett, who was hired last summer, began shortly after her arrival when “one of your outside attorneys demanded that I turn over the names of FBI witnesses in the ongoing federal investigation. I refused, of course.”
The two “bumped heads” again later, Black wrote. “You had no experience with evidence handling in ongoing criminal investigations and I wrote you about that several times. Rather than turning over potential evidence to me for the FBI, your outside law firm, under some privilege argument, made copies and did their ‘privilege research,’ which I am sure, resulted in huge billings to the taxpayers of Broward County. I then wrote you that long memo about obstructing justice appearances.”
Black and Ryan Stumphauzer, a former Miami federal prosecutor working with him, asked El Sanadi “to simply make a decision on who was doing the corruption investigation internally … us or you and your Tampa law firm” – identified by Broward Health officials as Foley Lardner. “He told me it was Ryan and me but that never materialized, even after I organized an off-site meeting with Nabil and the FBI.’’
El Sanadi’s change of heart?
The email suggests a possible change of heart by El Sanadi for the corruption investigations he’d initiated.
“What Nabil promised the FBI about evidence turnover at that meeting never happened. For months, I would call Nabil and ask why the FBI still didn’t get the laptop of the suspect – he would say that the attorneys were researching something,” Black wrote.
Black continued, “Recently, much to everyone’s surprise and after the FBI contacted one suspect employee, it was decided that BH would terminate the employee and give him six months severance pay.” Black said a witness who heard about it said, “it must have been hush money.”
The former executive, identified by Broward Health officials as former purchasing boss Brian Bravo, “was bragging about getting $75,000 from BH to pay his criminal defense attorney,” Black wrote to Barrett. “I texted you and you responded you knew nothing about it. This was untrue according to Nabil. I called him immediately thereafter and he told me that you and HR [human resources] had approved the ‘settlement’ and that there was some confidentiality agreement with the former executive, now suspect.”
Black continued, “The same executive (and you were briefed about this) who according to eyewitnesses drugged and attempted to rape several employees, had sex with female employees in his office at BH, took kickbacks from vendors, created companies to sell goods to BH, had relatives working at BH in violation of policy and was generally uncooperative with internal audit in the past. And there is more from witnesses about which you were not briefed. Imagine what our cooperating witnesses must think.”
Bravo could not be reached for comment.
Black indicated that he’s surprised the FBI has yet to serve subpoenas in the case. “If this were Miami and I was still at the Public Corruption Unit and someone dragged their feet for even days, let alone months, turning over critical evidence … I would long ago [have] served a search warrant. I pray that you will take my advice just this once and immediately give that suspect’s laptop” to the FBI.