By Francisco Alvarado, FloridaBulldog.org
Like many politicians who leave public service, former Miami City Commissioner Marc Sarnoff is parlaying his credentials to lobby on behalf of companies seeking to do business with municipal governments in Miami-Dade.
One of those firms is Orange Barrel Media, a Columbus, Ohio-based information kiosk manufacturer that Sarnoff often taps for contributions to a political action committee he chairs and that has donated tens of thousands of dollars to committees supporting current Miami City Commissioners Joe Carollo, Alex Diaz de la Portilla and Keon Hardemon.
Companies like Orange Barrel contract with cities to place kiosks on heavily traveled sidewalks in order to provide residents and visitors with free emergency and local calls, free public WI-FI access, directions to nearby restaurants and information about public transit routes, among other applications. Kiosk firms make money by selling digital ads displayed on the kiosks and pay a percentage to local governments for permission to use the public right-of-way. As of now, the City of Miami does not allow for the placement of digital advertising kiosks.
But in recent months, Sarnoff, a partner with the Shutts & Bowen law firm, has been pushing for a change to city law that could give Orange Barrel’s subsidiary IKE Smart City the inside track to place its kiosks in public right-of-ways, while also freezing out potential competitors in what rival lobbyists claim would be a violation of state and federal communications regulations.
At the same time, Commissioner Diaz de la Portilla faces a possible conflict of interest as his brother, Miguel Diaz de la Portilla, is also a lobbyist for Orange Barrel.
Sarnoff’s involvement in the proposed legislation raises other concerns about him unduly influencing city officials behind the scenes.
Marc Sarnoff lobbying
J. Edwin Benton, a University of South Florida political science and public administration professor, said politicians who become lobbyists have an inherent advantage. “These people can make beaucoup money lobbying,” Benton said. “They know the right buttons to push and when to push them… On the ethical side, it stinks.”
Benton said Sarnoff, who left office in 2015, gives clients like Orange Barrel a distinct advantage over potential competitors. “I could imagine a competitor suing the city alleging that this process was rigged to help his client,” Benton said. “It would make for an interesting case for a judge and a jury to decide whether there was undue influence.”
As for Diaz de la Portilla, he should avoid discussing and voting on any matters in which his brother is lobbying to “erase any appearance of impropriety,” Benton said. “It definitely hits the radar screen as a potential conflict of interest.”
When reached for comment, Sarnoff requested questions be submitted in writing. On Jan. 13, he denied any wrongdoing in writing.
“IKE and I have conducted ourselves in the City of Miami with complete integrity and respect for the city’s rules of ethics,” Sarnoff said. “The company retained attorney Miguel Diaz de la Portilla in March, 2018, due to his legal expertise in the smart city space and his breadth of experience in this arena.”
Miami Beach PAC controversy
This is not the first time Sarnoff and Orange Barrel have been entangled in a controversy involving doing business with a city government and political campaign contributions.
In 2017, the Miami-Dade State Attorney’s office and the Miami-Dade Commission on Ethics and Public Trust opened probes into People for Better Leaders, a political action committee (PAC) that raised money from Miami Beach developers and vendors – including Orange Barrel – to support a mayoral run by then-City Commissioner Michael Grieco.
Grieco was forced to resign after prosecutors found he’d solicited a $25,000 contribution from Petter Hagland, a Norwegian millionaire who invested in Miami Beach real estate, according to The Miami Herald. Since non-U.S. citizens are not allowed to make political contributions, the money was allegedly provided through a straw donor.
Grieco, who pleaded no contest to a misdemeanor charge and is now an elected state representative, was also accused of circumventing a Miami Beach law that prohibits vendors and developers from making contributions to city commission candidates. The law also calls for any vendors and developers who make contributions to be banned from doing business with the city.
Campaign finance records for People for Better Leaders also show that Orange Barrel, which at the time was vying for a deal to place interactive digital media kiosks on city sidewalks, cut the PAC a check for $3,500.
Progress Miami, a political action committee then chaired by Sarnoff, contributed $2,000 to the Better Leaders PAC in 2017. At the time, Sarnoff was a registered lobbyist for Orange Barrel. Previously, however, he told Florida Bulldog that he was unaware of any connection between Grieco and People for Better Leaders when the contributions were made.
Another Sarnoff PAC
Since then, Sarnoff formed a new PAC, Truth is the Daughter of Time, that has raised nearly $300,000 since June 2017. Between Feb. 28, 2018 and Aug. 20, 2019, Orange Barrel and IKE Smart City contributed a combined $63,000 to Sarnoff’s Truth committee, according to campaign finance reports.
The Truth committee donated $11,000 to Miami First, a committee chaired by Carollo that helped his successful campaign for the District 3 city commission seat. Another $5,500 went to One Miami-Dade, a committee chaired by Barbara Hardemon, Commissioner Keon Hardemon’s aunt, to support her nephew’s campaign for a county commission seat. Commissioners Carollo and Hardemon did not return Florida Bulldog phone and email messages seeking comment.
Alex Diaz de la Portilla’s Proven Leadership for Miami-Dade PAC was also a beneficiary of Sarnoff’s Truth committee. Proven Leadership received its first contribution for $5,000 lastMay 17. It collected another $10,500 between Oct. 18 and Nov. 6. Also on Nov. 6, Sarnoff’s Truth Committee gave a maximum gift of $1,000 to Diaz de la Portilla’s candidate committee.
Diaz de la Portilla was elected to the District 2 city commission seat in a run-off election on Nov. 19.
Sarnoff did not respond to questions about his Truth PAC.
Miami kiosk legislation
While Sarnoff was busy giving money for city commissioners’ PACs, he was also beginning to lay the groundwork for Ike Smart City to place its digital advertising kiosks in Miami. Florida Bulldog obtained emails he sent to City Attorney Victoria Mendez and other members of her staff inquiring about the city’s regulations over placement of kiosks in the public right-of-ways.
Early last month, Miami’s Public Works Department placed the proposed kiosk legislation on the agenda for the city commission’s Dec. 13 meeting, which raised alarms for representatives of a potential Orange Barrel competitor.
Keith Donner, a lobbyist for First American Telecommunications Corp., which has provided public pay phones in the city since 1988, said his client has been unsuccessful in getting city approval to upgrade its phone stations already in public right-of-ways into digital advertising kiosks equipped with 24/7 cameras, free public Wi-Fi access, real-time public transit information and other technological improvements.
“My client has not had any input in the drafting of this ordinance,” Donner said. “Nothing has happened except Orange Barrel has inserted itself into City Hall determined to put us out of business and to secure a monopoly. Even by Miami standards, this is pretty outrageous.”
Pete Scantland, CEO of Orange Barrel and its IKE Smart City subsidiary, did not return two Florida Bulldog messages left on his cellphone seeking comment. Based on Sarnoff’s Jan. 13 letter and information on the company’s website, IKE Smart City would place digital advertising kiosks that have similar, if not the same, applications and technology as those contemplated by First American.
“IKE is the leading smart city kiosk platform in the nation, with deployments in Denver, San Antonio, Baltimore, Cleveland, Columbus, and in various states of deployments in many other cities across the nation, including our neighbor city, Coral Gables,” Sarnoff wrote. “It is anticipated that IKE would receive significant usage in Miami and would generate millions of dollars in revenue for the City, once deployed.”
In a Dec. 10 letter to City Attorney Victoria Mendez, First American lawyer Thomas Julin argued the city had no valid legal basis to withhold permit applications his client submitted to place the upgraded phone kiosks in the city. “First American has made a significant investment in the engineering, design and development of these new units,” Julin wrote, “and has entered into long term contractual relationships and devoted substantial resources, in good faith reliance upon longstanding city policy, current law and the city’s own request for this new public telecommunications technology upgrade.”
(Disclosure: Attorney Julin represents Florida Bulldog on litigation matters, including a pair of federal lawsuits the publication filed against the FBI to force the release of documents related to its 9/11 investigation.)
During the public comments portion of the Dec. 13 city commission meeting, Julin, who specializes in free-speech issues and constitutional law, warned that Miami could not provide an exclusive contract for the kiosks while at the same time denying his client the ability to upgrade its payphone stations. “Those kiosks are there pursuant to state and federal law, and city code allows them to be there,” Julin said. “Our concern here is that you may be considering a procurement process which would result in an exclusive contract for a single provider.”
City Attorney Mendez assured Julin that his client and other companies providing similar kiosks would have the opportunity to compete for any future contracts.
Sarnoff makes changes
The same day, Mendez received an email from Sarnoff that stated, “attached is the redline in both Word and PDF that reflect our changes to the administration’s initial draft ordinance.”
Two weeks later, Julin found out about Sarnoff’s email after First American submitted a public records request. On Jan. 10, Julin emailed Mendez to notify her that the changes submitted by Sarnoff “appear to be tailored to assist his client in obtaining a city contract to provide communications kiosks and provide the city with the very same services which my client has been attempting to provide to the city through its facilities for the past couple of years to no avail.”
Julin added that awarding a contract to Orange Barrel’s subsidiary while freezing out First American “would cross a constitutional line, becoming unlawfully unreasonable and discriminatory.”
Mendez would not comment on Julin’s criticisms, but she denied that allowing Sarnoff to propose changes to the kiosk legislation gave his client an edge. She also denied that she sought his changes and input. “Not the case,” she said. “Many attorneys and citizens send suggested revisions to items they are working on or interested in. It is a normal occurrence… It’s just a courtesy to listen to any legal points or public input.”
If anyone has an unfair advantage, it’s First American, Sarnoff said in his Jan. 13 response. “Through their lobbyist and without city procurement process, they are attempting to use state law to force the city to permit the conversion of these temporarily installed payphones to digital advertising platforms,” Sarnoff wrote. “Despite generating only $15,240 in revenue for the city in 2018 and $10,968 in revenue for the city in 2019, they continue to pursue this franchise without a contract.”