Donors violate Miami Beach’s campaign finance laws, but face no discipline

By Francisco Alvarado, FloridaBulldog.org 

Former Miami Beach Commissioner Michael Grieco in court Oct. 24 when he pleaded no contest to a campaign finance law violation. Photo: CBSMiami

Former Miami Beach Commissioner Michael Grieco derailed his political ascent by getting involved with a committee secretly raising money for his failed mayoral bid. Yet, lobbyists and vendors that built up the PAC’s $200,000 war chest have not faced any consequences despite a city ban designed to stop them from contributing to local candidates and political action committees if they do business with Miami Beach government.

Over the past decade, the city commission has enacted legislation aimed at curbing the influence of special interests in Miami Beach elections and the appearance of a quid pro quo involving city contracts and zoning decisions. Lobbyists and vendors that violate the local law are subject to a $500 fine with the contribution forfeited to the city’s general fund. Vendors that give contributions to a winning candidate are also subject to being disqualified from city jobs for 12 months.

Last year, the city commission amended Miami Beach’s campaign finance laws to prohibit candidates from soliciting and accepting contributions from lobbyists and vendors to political action committees and electioneering communications organizations.

Proponents of the city’s campaign finance laws say Miami Beach should go after the donors that gave to People for Better Leaders and are doing business with the city. “These vendors and lobbyists are on the hook because they deliberately violated the law,” said Jose Smith, a former Miami Beach commissioner who wrote the city’s campaign finance legislation. “This was an indirect attempt to circumvent the ordinance prohibiting contributions from vendors and lobbyists.”

Ricky Arriola

Current City Commissioner Ricky Arriola concurred with Smith, who is now the city attorney for North Miami Beach, where he is spearheading an effort to pass a similar campaign finance law. “Lobbyists and vendors that donated to Grieco’s PAC should be restricted from coming before the city commission for a period of time and face fines,” Arriola said. “Otherwise, what good are our campaign finance laws?”

In late October, Grieco resigned from his city commission seat as part of a plea deal to a misdemeanor charge of accepting a campaign donation made in the name of another. He got probation for a year, during which time he will not be able to run for office. And he must pay $6,000 to cover the costs of investigations by the Miami-Dade State Attorney’s office and the Miami-Dade Commission on Ethics and Public Trust. He pleaded no contest, which means he accepts his sentence without admitting guilt.

Miami Herald broke the story

Both agencies opened probes into Grieco and People for Better Leaders following a series of Miami Herald articles detailing his involvement with the PAC despite his vehement denials. Over the summer, Grieco dropped his candidacy for mayor amid the bad press and instead filed to run for his seat again. He was forced to resign after prosecutors allegedly uncovered Grieco solicited a $25,000 contribution from Petter Hagland, a Norwegian millionaire who invested in Miami Beach real estate, according to the Herald. Since non-U.S. citizens are not allowed to make political contributions, the money was allegedly provided through a straw donor.

Campaign finance records for People for Better Leaders show that the committee was heavily financed by real estate developers, lobbyists and vendors with Miami Beach interests. For instance, Boucher Brothers, a Miami-Beach based company that has the city’s lucrative contract to rent chairs and umbrellas on public beaches, contributed $25,000 to the PAC through donations on Jan. 1, 2016 and Oct. 18, 2016. The same day, Orange Barrel Media, an Ohio-based firm vying for a deal to place interactive digital media kiosks on city sidewalks, cut the PAC a check for $3,500.

Attorney and lobbyist Alexander Tachmes

What’s more, lawyers representing Orange Barrel before the city also gave money to People for Better Leaders on Oct. 18, 2016. Shutts & Bowen partner Alexander Tachmes and his law firm each gave $1,000. Progress Miami, a political action committee chaired by Marc Sarnoff, a former Miami city commissioner who is also a Shutts and Bowen partner, contributed $2,000 to the PAC. Tachmes and Sarnoff are both registered to lobby for Orange Barrel.

Boucher Brothers president James Boucher and vice president Michael Boucher did not respond to two phone messages seeking comment. Tachmes ignored two emails and two phone messages requesting an interview. Reached on his cellphone, Orange Barrel CEO Pete Scantland declined comment.

Sarnoff told Florida Bulldog that he did not know about Grieco’s involvement with People for Better Leaders until he read the Herald articles. “I was asked by Alex Tachmes to make the contribution,” Sarnoff said. “He never told me it was Grieco’s PAC. And Grieco didn’t solicit me.”

Sarnoff said he should not face any sanctions since he was unaware of Grieco’s role with People for Better Leaders at the time Progress Miami donated the $2,000.

Audio shows Tachmes fully aware

However, an audio recording of an Oct. 6 interview Scantland gave investigators with the state attorney’s office indicates Tachmes was fully aware that the PAC and Grieco were intertwined. Scantland said Tachmes introduced him to Grieco shortly before his company made its $3,500 donation. “It was for support of a PAC for a candidate in Miami Beach: Grieco,” Scantland said. “I had an occasion to meet him and my attorney who I was with suggested that was a PAC he was [using] for mayor and I wanted to support his candidacy.”

When asked who his attorney was, Scantland replied, “Alex Tachmes with Shutts.”

Another witness, Gabriele Braha-Izsak, told investigators on June 23 that Tachmes recommended he support Grieco’s mayoral run by giving money to People for Better Leaders, according to an investigative report. Braha-Izsak’s company Red USA LLC donated $1,500 to the PAC on Oct. 18, 2016, the same date Orange Barrel, Tachmes, Shutts and Bowen and Progress Miami contributed to the committee.

Whether Miami Beach administrators will take action against the lobbyists and vendors that gave to People for Better Leaders remains to be seen. Marcia Monserrat, chief of staff for Miami Beach City Manager Jimmy Morales, said the city has not yet conducted an inquiry into whether any vendors and lobbyists on the PAC’s list should be disciplined. She noted that the city’s debarment proceedings apply only to vendors.

“If you are telling me there are vendors on the list, that is something we need to look at,” Monserrat said.

However, City Commissioner Kristen Rosen Gonzalez is willing to give the violators a one-time free pass because Miami Beach officials have not done an adequate job of explaining the campaign finance law to individuals and companies that do business with the city. “This should serve as everybody’s only warning,” she said. “I think now everyone doing business with the city will be more careful.”

Her colleague, Arriola, disagreed vehemently. “If you talk to many of the donors, they will say they felt conflicted and strong-armed into making donations,” he said. “Yet, they did it anyway. There has to be consequences for it. Otherwise, our campaign finance laws have no teeth.”