‘What’s going on?’ Broward airport contractor said to owe millions may win millions instead

By Dan Christensen, FloridaBulldog.org 

Former Broward Aviation Department Director Kent George

Former Broward Aviation Department Director Kent George

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.

Auditors: feds failed to rein in billions over-billed by Medicare Advantage plans

By Fred Schulte, Center for Public Integrity 

Carol Berman, of West Palm Beach speaks with pedestrians about the need for policymakers to protect Medicare Advantage benefits during the Coalition for Medicare Choices' Medicare Advantage Food Truck stop on North Capitol Street in Washington on Monday, March 9, 2015. Photo: Bill Clark/CQ Roll Call

Carol Berman, of West Palm Beach speaks with pedestrians about the need for policymakers to protect Medicare Advantage benefits during the Coalition for Medicare Choices’ Medicare Advantage Food Truck stop on North Capitol Street in Washington on Monday, March 9, 2015. Photo: Bill Clark/CQ Roll Call

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…)

Tired of problems, Fort Lauderdale audits its community redevelopment agencies

By William Gjebre, FloridaBulldog.org cralogo

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.

Fort Lauderdale Commissioner Robert McKinzie

Fort Lauderdale Commissioner Robert McKinzie

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.

‘Inconsistent leadership’

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.”

Fort Lauderdale Commissioner Dean Trantalis

Fort Lauderdale Commissioner Dean Trantalis

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.

Problems found

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.

Broward Health CEO paid hundreds of thousands of dollars in hush money to fired execs

By Dan Christensen and Buddy Nevins, FloridaBulldog.org 

Broward Health Acting President/CEO Kevin Fusco, left, with Interim Chief Financial Officer Arthur Wallace III at a recent board meeting.

Broward Health Acting President/CEO Kevin Fusco, left, with Interim Chief Financial Officer Arthur Wallace III at a recent board meeting.

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.

Ex-Broward Health Medical Center Chief Executive Calvin Glidewell, left, and former Broward Health CFO Robert K. Martin

Ex-Broward Health Medical Center Chief Executive Calvin Glidewell, left, and former Broward Health CFO Robert K. Martin

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.

Fort Lauderdale federal grand jury subpoenas Broward Health’s purchasing records

By Dan Christensen and Buddy Nevins, FloridaBulldog.org gjpic

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.

Fort Lauderdale Assistant U.S. Attorney Neil Karadbil

Fort Lauderdale Assistant U.S. Attorney Neil Karadbil

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.

Sunshine law

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.”

FBI corruption probe at Broward Health allegedly blocked by hospital district’s lawyer

By Dan Christensen and Buddy Nevins, FloridaBulldog.org elsanadimemorial1

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.”

Broward Health general counsel Lynn Barrett at last weeks' board meeting

Broward Health general counsel Lynn Barrett at last weeks’ board meeting

“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.”

Miami investigator Wayne Black

Miami investigator Wayne Black

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.

Broward airport boss sought secret deal to drop county’s $34 million claim for delays

By Dan Christensen, FloridaBulldog.org 

Fort Lauderdale-Hollywood International Airport's expanded south runway looking east over the U.S. 1 and railway tunnel structures.

Fort Lauderdale-Hollywood International Airport’s expanded south runway looking east over the U.S. 1 and railway tunnel structures.

Two weeks before Broward County fired off a New Year’s Eve letter to contractor Tutor Perini demanding $34 million in damages for costly airport construction delays, Broward airport boss Kent George tried to secretly negotiate a nearly opposite deal with the company.

On Dec. 16, following weeks of meetings, George proposed that the county pay Tutor Perini nearly $21 million to settle the dispute over who was responsible for the lengthy delays, according to email obtained by FloridaBulldog.org.

Tutor Perini chief executive Jack Frost declined the offer as inadequate in a response emailed to George and seven other county and company officials two days later.

“As you are aware I have made a good faith proposal in the neighborhood of $25M +/- settlement (agreed to twice by your designated staff in the negotiations),” said Frost, noting that litigation may be necessary to resolve a dispute that George had also warned could deteriorate without a deal.

Broward airport director Kent George

Broward airport director Kent George

The roughly $4 million difference between the two sides wasn’t the deal breaker. Instead, the main sticking point appears to have been George’s insistence that as part of the deal Tutor Perini Fort Lauderdale Hollywood Venture (TPFLHV) agree to pay the airport about $11 million in liquidated damages for contractual delays.

The payment of such penalties, however, would be tantamount to an admission by Tutor Perini that it was responsible for many delays. The company instead contends in documents filed with the county that the delays were caused by poor administration and dozens of countysought changes to the contract.

“It is my understanding that under Florida law, BCAD (Broward County Aviation Department) cannot enforce its liquidated damages provision for delays occasioned by BCAD’s own ‘active interference.’ It is indisputable that BCAD unilaterally directed TPFLHV to perform extra and changed work after the contract completion date,” said Frost’s email reply.

The contract completion date was nearly two years ago, Feb. 22, 2014. A significant amount of construction and administrative work continues amid growing rancor between the county and its contractor.

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 new expanded runway and parallel taxiway over U.S. 1, the Florida East Coast railroad tracks and East Perimeter Road. The venture also was responsible for other related construction, including the new southbound airport exit ramp to U.S. 1.

The original contract award for design-build services was $180 million. Various approved change orders, including one for $6.2 million executed just before Christmas, have raised the contract’s cost to $226.2 million, according to documents obtained by FloridaBulldog.org.

SETTLEMENT DISCUSSIONS ‘ONGOING’ 

Broward Aviation Director George did not respond when asked via email why he offered to pay the company millions of county dollars when the county insists that TPFLHV caused the delays. Aviation department spokesman Gregory Meyer said, “These were settlement discussions, which are ongoing, so I cannot discuss it or elaborate.”

Frost did not respond to a request for comment.

In an interview, Broward Commissioner Lois Wexler said she was unaware of George’s settlement offer.

“We were not in the mix on this, it goes deep in the bowels of the organization,” said Wexler. “It does suggest the county is responsible for the delays…and if (Tutor Perini) has what they say they have in writing it’s certainly incriminating.”

Nevertheless, George seemed confident in his email to Frost that he could quickly sell the deal to the full Board of County Commissioners.

“Upon acceptance by you,’’ the Broward airport director wrote, “I will proceed as indicated below, with issuance of checks. (Hopefully, prior to the end of this year.)”

At the same time, George had a double-barreled warning for Frost. Should Tutor Perini reject the settlement offer, Broward County would come after it to collect its $34 million claim for damages and withhold payment on $22 million in disputed charges.

“BCAD reserves the rights, under the contract and county ordinances, including the False Claims Ordinance, to pursue other claims and remedies not listed above,” George said.

Frost, in rejecting the deal, noted that Tutor Perini has pending several big money claims set to be heard by a non-binding Dispute Avoidance Panel in February and March. Those claims, which include allegations that the county has improperly withheld payment for work and provided deficient design criteria at the outset, total $77.5 million.

“I believe the outcome of the above noted DAP hearings and subsequent litigation, if necessary, will prove a far higher amount due TPFLHV,” Frost told George. “I again ask you to reconsider your position.”

Broward County seeks $34 million in damages for airport construction delays

By Dan Christensen, FloridaBulldog.org 

Fort Lauderdale-Hollywood International Airport. The new elevated south runway is on the left.

Fort Lauderdale-Hollywood International Airport. The new elevated south runway is on the left.

The ongoing construction saga at Fort Lauderdale-Hollywood International Airport hit an unpleasant, unannounced milestone with a New Year’s Eve notice to a major contractor that it owes Broward County more than $34 million in damages for costly delays.

The county’s stunning claim is contained in a three-page letter sent to the offices of Tutor Perini Fort Lauderdale-Hollywood Venture (TPFLHV) by the county’s construction project manager, Parsons Transportation Group.

The joint venture between California-based Tutor Perini Corp. and Ohio-based Baker Concrete Construction Contractors is the county’s prime consultant for the tunnel structures that carry the airport’s expanded runway and parallel taxiway over U.S. 1, the Florida East Coast railroad tracks and East Perimeter Road. The venture also was responsible for other related construction including the new southbound airport exit ramp to U.S. 1.

The letter, obtained by FloridaBulldog.org, cites a dozen “significant…deficiencies and unresolved issues” regarding work scheduled to have been completed nearly two years ago.

“TPFLHV’s apparent inability or unwillingness to provide the supervision, manpower, equipment and other resources needed to satisfactorily complete the project has resulted in substantial additional costs to the county, for which the county will expect full compensation from TPFLHV,” says the document sent on county letterhead from Parsons project manager Melvinsky Ramirez.

The letter goes on to assert that Tutor Perini also owes the county “liquidated damages” for failing to meet various contractual deadlines. Those damages are growing at $4,000 a day, plus another $5,000 per day for the company’s alleged failure to turn over “as-built drawings” that show all revisions made to the original project drawings.

“The total amount of accrued liquidated damages and direct damages incurred by the county exceeds $34 million,” says the letter sent to Tutor Perini project manager Damon Petrillo. “This amount, which continues to increase, far exceeds the retainage being held by the county…Therefore, the county has advised that it intends to withhold future partial payments to TPFLHV.”

Asked if the county was prepared to sue to recover those damages, aviation department spokesman Gregory Meyer said, “The county intends to enforce the terms of the contract, which may include and require litigation.”

TUTOR PERINI BLAMES ‘MALADMINISTRATION’

Petrillo declined to be interviewed. But in a written response issued late Monday, he offered a blanket “rejection” of the county’s allegations and instead blamed the construction delays on “maladministration” by the Broward County Aviation Department, Parsons and county program manager Los Angeles-based AECOM.

Petrillo said the county, in fact, owes Tutor Perini tens of millions of dollars in compensable costs due to delays caused by those administrative failures. He added the county has used “deceit for the improper withholding of over $20 million in retention.”

Broward Commissioner Tim Ryan

Broward Commissioner Tim Ryan

Tutor Perini’s hard-line appears to draw the battle lines for lawsuits and countersuits.

“We’ve always expected to wind up in litigation over this,” said Broward Commissioner Lois Wexler.

“Tutor Perini is as adept at litigation as it is at construction,” said Commissioner Tim Ryan, whose district includes the airport.

While the commissioners have been made aware of the potentially costly dispute in private briefings from airport officials and other staff, the public has been kept largely in the dark.

“There has not been much public discussion,” said Wexler. “The airport doesn’t put out negative press releases.”

The county’s claim is the latest financial surprise to arise out of the $800 million, south runway expansion project – the centerpiece of $2.4 billion in ongoing airport improvements including the redevelopment and expansion of Terminal 4.

An 8,000-foot elevated runway was opened to much fanfare in September 2014. It opened on time, but another major project element, the $261 million construction of the tunnel structures over U.S. 1, lagged seriously.

On Dec. 9, FloridaBulldog.org reported that a still secret Broward County Auditor’s report found a $24.5 million cost overrun involving another contractor in the runway expansion project, Brazilian-owned Odebrecht Construction and Central Florida Equipment Rentals.

The report attributed most of that overrun to county requested changes, but said $1.5 million were “excessive and avoidable costs” due to “inadequate oversight and review” by the two companies hired by the county as program and construction.

MATTERS TO BE RESOLVED

The letter from Parsons says Tutor Perini has failed to submit a plan or proposed schedule to complete the project despite “many meetings and much correspondence.” It also lists a dozen matters “which will have to be resolved prior to final completion.”

They include:

  • Uncompleted work by Tutor Perini to repair airfield drainage grates, replace sod and correct stagnating water.
  • Water leaks from the runway deck to the tunnel walls, which have caused “continuing malfunctions and damages to the tunnel lighting system and the fire alarm system.”
  • Incomplete electrical conduit work.
  • At least 18 prior notices of noncompliance to Tutor Perini remain unresolved and without a schedule submitted to indicate whether Tutor Perini has a plan to fix them.
  • Various punch list items – deficiencies – have not been addressed.
  • Credits due to the county for various failures and omissions by Tutor Perini have not been documented or negotiated.
  • The county has not received architectural tunnel portals design, review, procurement and installation information; or the as-built drawings for utilities on the Northeast Tenth Street and the fire hydrant loop.

Tutor Perini’s response letter sought to refute those bullet points. Still, it did not provide the “required planning and scheduling information to close out the project” sought in the New Year’s Eve letter.

The deadline to provide that information: Friday, Jan. 15.

Broward auditors find $24.5 million runway project overrun

By Dan Christensen, FloridaBulldog.org 

Fort Lauderale-Hollywood International Airport and its expanded south runway. Image: Broward County

Fort Lauderale-Hollywood International Airport and its expanded south runway. Image: Broward County

A secret Broward County Auditor’s report has found a $24.5 million cost overrun in the construction of the new south runway at Fort Lauderdale-Hollywood International Airport.

The June 18 draft report obtained by FloridaBulldog.org attributes most of those additional costs to “county requested changes in the scope and timing of the work” intended to keep the project on schedule.

Still, the report says $1.5 million were “excessive and avoidable costs” due to “inadequate oversight and review” by two companies hired by the county as program and construction project managers, AECOM Technology and Parsons Transportation Group.

The report recommends that County Attorney Joni Armstrong Coffey’s office consider suing AECOM and Parsons to recover the $1.5 million, plus “fees paid for their inadequate oversight and review.” It also suggests that County Administrator Bertha Henry require Aviation Director Kent George to ensure AECOM and Parsons “provide adequate oversight and review” going forward.

No lawsuit has been filed to date, and the audit report remains officially confidential. Both companies have vigorously denied any impropriety in discussions with the county that have been going on quietly for months.

County Auditor Evan Lukic declined to discuss the report’s findings, but said, “It is likely that the findings in the draft report you have will be significantly modified given additional discussions, explanations and information provided by AECOM.”

Los Angeles-based AECOM, a publicly traded company that acquired rival engineering and construction giant URS last year, did not respond to requests for comment over two days. Parsons Transportation, a subsidiary of Parsons Corporation of Pasadena, California referred questions to Broward’s aviation department.

Broward Aviation Director Kent George

Broward Aviation Director Kent George

Aviation Director Kent George declined to comment Tuesday, saying he had not read the auditor’s draft report.

Amid the behind-the-scenes controversy, Broward commissioners voted in April to give Parsons more work on its runway management contract and pay an additional $2.5 million. The hike brought the value of Parsons’ contract, set at $10.3 million in 2011, to $33.5 million.

The new $800 million, 8,000-foot south runway opened on schedule in September 2014, giving the airport two parallel commercial runways and the capacity to handle thousands more flights per year.

The audit reviewed the costs of “compacted embankment material” used to elevate the eastern end of the runway 52 feet to allow traffic on Federal Highway and railroad freight cars to pass underneath aircraft taking off or landing.

In April 2012, the county commission awarded a $226 million contract for site preparation and navigational aids infrastructure to a joint venture of Brazilian-owned Odebrecht Construction and Central Florida Equipment Rentals (OCJV). Site preparation included the placement of 8 million cubic yards of dirt and construction of a mechanically stabilized earth wall system.

Thirteen months later, the audit report says, commissioners approved “Change Order Number 7,” which decreased the contract amount by nearly $5 million and transferred a portion of the work to another contractor to keep the project on schedule.

The auditors wanted to know why the bid price for the fill material increased from an original price of $12 to $24.11 per cubic yard, “resulting in an additional cost to Broward County of $24.5 million.”

To understand, auditors interviewed county and company staff and reviewed bid documents, contracts, change order records, invoices and documentation supplied by AECOM and Parsons.

“We found that the unit price increase was primarily driven by the requirement to compensate OCJV for additional costs they incurred in obtaining material as a result of county requested changes,” says the report. The county officials who authorized those costly changes are not identified.

The report, however, goes on to point the finger at AECOM and Parsons for $1.5 million in added costs that it says were unnecessary.

“AECOM and Parsons did not prepare a required independent estimate in order to ascertain and adequately negotiate the material costs. Instead, AECOM and Parsons compiled documentation provided by OCJV.”

“The compilation not only did not constitute an independent estimate, but was overstated by $727,465 in miscalculated costs,” the report says. “Using the compilation as a basis for negotiation, AECOM and Parsons then negotiated a final cost that was approximately $790,600 in excess of their overstated estimate.”

The seven-page report went on to note that county auditors were troubled by “the inability of AECOM’s and Parsons’ staff” to explain the details of the change order when interviewed.

U.S. settles case against Broward Health for millions less than it lost in alleged fraud


By Dan Christensen, FloridaBulldog.org 

Broward Health Medical Center in Fort Lauderdale

Broward Health Medical Center in Fort Lauderdale

The U.S. Justice Department settled a massive healthcare fraud case against Broward Health last month for millions of dollars less than the government lost as a result of the alleged fraud, records show.

Broward Health paid the government $69.5 million to end a vexing investigation begun in 2010 after Fort Lauderdale orthopedic surgeon Michael Reilly blew the whistle on improper financial relationships between the hospital system and its physicians dating back more than a decade. The scheme allegedly cheated American taxpayers, Medicare and Medicaid.

Documents released to FloridaBulldog.org by the North Broward Hospital District under Florida’s public records law add new perspective to the deal that Justice Department attorneys touted as an unqualified achievement.

The records show that even after significantly narrowing the scope of the alleged fraud to facilitate settlement, the government accepted $2.1 million less than its claimed losses, and $5.5 million less than the $75 million in losses that Broward Health itself had calculated.

Likewise, Broward Health was not required to reimburse the government for the costs of the five-year probe by attorneys and agents at both the Justice Department and the Department of Health and Human Services.

“The government’s goal is to change behavior,” said Patrick Burns, co-director of the Washington-based Taxpayers Against Fraud Education Fund. “If in fact you only recover what was stolen, then you have not sent a deterrent message, and when you have a recovery less than what was stolen, you have sent the opposite message.”

Mark Lavine, the South Florida assistant U.S. attorney who helped lead the case against Broward Health, said he was not authorized to respond to media inquiries. He forwarded a request for comment to the public information office, but no response was received before deadline.

Broward Health Chairman David Di Pietro said the $1.27 billion hospital system paid the settlement with funds drawn from its $800 million in reserves.

INCENTIVES TO SETTLE

The documents, including a 115-page transcript of a confidential Aug. 20 meeting between Broward Health’s seven-member board of commissioners and its lawyers, show that a favorable payout number wasn’t the only incentive for Broward Health to settle.

Without an agreement, Broward Health faced the chilling prospect of prolonged and embarrassing litigation with the government seeking excess of $500 million in actual and punitive damages under the False Claims Act. Other risks included a possible expansion of the investigation to include more doctors and exclusion from federal health care programs – the so-called corporate “death penalty.”

Broward Health's healthcare lawyers, Linda Baumann and D. Jacques Smith

Broward Health’s healthcare lawyers, Linda Baumann and D. Jacques Smith

“The vast majority of cases settle. They don’t want to run the risk of being kicked out of Medicare and Medicaid. Exclusion is just too big a threat,” Linda Baumann, a healthcare attorney with Washington’s Arent Fox law firm, told commissioners at the two-hour Aug. 20 meeting.

Commissioners, each appointed by Gov. Rick Scott, voted unanimously to settle that day after viewing a PowerPoint presentation outlining settlement talks and listening to Baumann’s colleague, attorney D. Jacques Smith, call the proposed $69.5 million penalty and a requirement that Broward Health establish a corporate integrity program, “very reasonable.”

The whistleblower investigation kicked off by Dr. Reilly’s False Claims Act lawsuit looked at alleged Medicare and Medicaid fraud that arose from overly generous contracts Broward Health gave to doctors who referred patients for tests and procedures. The federal Stark Law limits financial relationships hospitals may have with referring physicians.

In May 2011, federal agents subpoenaed 10 years of Broward Health’s records from 27 staff physicians. Over the next few years, the inquiry focused on nine doctors the Justice Department was “most interested in,” according to Smith.

Broward Health produced a total of 1.7 million documents. Included were internal emails that attorney Smith told commissioners “weren’t what Linda and I would call ‘best practices,’ okay?”

“Some of the documents we turned over, and some of the things we saw, frankly were troubling,” Smith said.

‘SMOKING GUNS’

But those weren’t Broward Health’s only problematic records. There were thousands of additional documents the government never saw because Broward Health’s lawyers claimed they were privileged due to attorney-client relationships or for other legal reasons.

If the case had continued, government investigators may have been able to get a look at those records. Here’s how attorney Baumann characterized them before the board: “You have documents that are on the privilege log that are not the greatest, but I really didn’t see a huge number of smoking guns.”

A page from the PowerPoint presentation shown to Broward Health's board of commissioners on Aug. 20.

A page from the PowerPoint presentation shown to Broward Health’s board of commissioners on Aug. 20.

The law firm’s PowerPoint presentation provides a breakout by physician of the losses they caused to the government and the liability that resulted for Broward Health. The top five: cardiologist Violeta McCormack, $30.1 million; pediatrician Hector Rodriquez-Cortes, $11.2 million; pediatrician Rudolph Roskos, $9.2 million; cardiologist Michael Chizner, $8.5 million; and hematologist Shazia Zafar, $5 million. Dr. Zafar now works for Memorial Healthcare.

The nine doctors faced no regulatory action or penalties as a result of their involvement in the allege fraud scheme. “The irony of the Stark Law is that all the penalties are directed at the organization and not the doctors,” Baumann explained to Broward Health’s board.

Broward Health doctors with contracts that paid them annual salaries in excess of a million dollars took pay cuts last year when their contracts were renegotiated to make them “commercially reasonable.” Still, a bad taste remained for some commissioners.

“So what do we say, though, when somebody says that Dr. Chizner cost us $8.5 million and is still making $860,000 a year?” asked board chairman Di Pietro.

“Well, you have to be very confident that your current contract is totally squeaky clean,” replied Baumann.

Will Broward Health seek to recover those lost millions by filing clawback lawsuits against its physicians?

“We have not formally considered that option, but likely no,” said Di Pietro, citing legal reasons.

NO ADMISSION OF WRONGDOING

Broward Health, which received $146.1 million in property taxes last year, admitted no wrongdoing in the board-approved settlement. Still, Di Pietro and several other commissioners expressed concern about public accountability – with Di Pietro noting for the record that physician contracts used to be handed out in secret by the board chair, the chief financial officer and the chief executive officer.

“Is there any responsible party still at the district on an executive level?” Di Pietro asked.

“Not that I’m aware of, said Baumann. “To me, the fault lay in an inadequate legal staff to be honest…You just didn’t have hardly any lawyers. And this is a huge organization.”

Meanwhile, Broward Health, a medical safety net for Broward County, faces the prospect of having to pay extra millions for additional misconduct outside the scope of the settlement.

For example, attorney Baumann told the board that a coding audit of Broward Health’s medical records, apparently done by the Department of Health and Human Services, found “a 53 percent error rate” and “no indication of follow up.”

Overpayments to Broward Health from federal healthcare programs now must be returned.

“You know, that’s a million or two. It’s relatively small,” Baumann told commissioners.

Baumann added that Broward Health also is liable for various failures to make required disclosures to the government under the federal Stark Law. “There is going to be money that has to be paid under the Stark self-disclosure,” she said, without elaborating.

Broward Health Chief Executive Officer Dr. Nabil El Sanadi and Di Pietro declined to comment on the coding audit or the district’s other outstanding liabilities saying they were unfamiliar with those matters.

Further, the lawyers warned, Broward Health could face having to pay Florida millions of dollars if state Attorney General Pam Bondi decides to sue under the Florida False Claims Act to recover the state’s Medicaid losses from the scheme.

The Justice Department discussed the case with Bondi’s office in June, but Broward Health has not heard back from the state.

“I don’t think it’s likely,” said Baumann. Still, she said, it’s possible if Florida needs “some extra money, because it’s a relatively easy way.”

Asked Tuesday about Attorney General Bondi’s intentions, spokesman Whitney Ray said, “We plan to review the settlement for any needed action.”

Page 1 of 3123»

Newsletter

Notify me by email when new stories are published.

Bulldog Archives