By Francisco Alvarado, FloridaBulldog.org
During the 2010s, Miami City Commissioner Jeffrey Watson was twice unsuccessful in securing bankruptcy protection, fell behind on more than $1 million on his home mortgage, couldn’t pay a $129,284 civil judgment and owed $26,933 in income tax to the Internal Revenue Service.
Now, the former Bill Clinton White House aide is poised to upend the Miami City Commission District 5 race after pledging not to run when he was appointed to the seat 11 months ago.
Last month, Watson surprised Miami City Hall observers and players by placing his name on the Nov. 2 ballot. He launched a final-inning campaign largely bankrolled by Miami philanthropist and auto dealership mogul Norman Braman.
Winning would also allow Watson to hold onto his first steady fulltime gig since his Clinton days. Miami city commissioners earn an annual salary of $58,200, plus fringe benefits worth $46,400, according to a 2018 Miami-Dade ethics commission report.
Much of Watson’s history has gone unreported, including his dire economic predicament in the last decade. Florida Bulldog reviewed his bankruptcy filings after obtaining a background check report that also listed the civil judgment and two tax liens against Watson filed in 2015.
‘WE WANT YOU’
In a phone interview, Watson told Florida Bulldog that his financial troubles ended three years ago when he was forced to sell his Washington, D.C. home to pay off his debts. District 5 voters will choose him based on his on-the-job performance, he added.
“I decided to run because people in the community wanted me to,” Watson said. “They told me, ‘you’ve been working hard and we want you to run.’”
Some of those constituents may find his financial setbacks as troublesome signs, according to good-government and ethics experts.
Robert Jarvis, an ethics law professor at Nova Southeastern University, said voters should consider Watson’s handling of his personal finances as part of their due diligence before casting their ballots. “For some voters, this could be a game changer,” Jarvis said. “They would never vote for someone who was irresponsible with money.”
Watson said he is not fazed about it, noting voters looked past Donald Trump’s six business bankruptcies to elect him president in 2016. Watson’s bankruptcy petitions in 2010 and 2017 shouldn’t hinder his chances in a city commission race, he said. “I don’t see why it should,” Watson said. “We just had a president who had a bankruptcy on more than one occasion.”
A GREAT RECESSION TAILSPIN
Watson has deep roots in Miami City Hall politics. In the 1980s, he was chief of staff for then-Miami Mayor Xavier Suarez and also held the position of chief financial officer for the city’s Department of Public Housing and Community Development. The following decade, he moved up to the federal ranks after working as a state field director for the Clinton-Gore presidential campaign. During the Clinton administration, he was a deputy assistant in the White House office for intergovernmental affairs.
At the turn of the 21st Century, Watson entered the private sector as an economic development consultant and real estate investor. Watson told Florida Bulldog he suffered huge financial losses as a result of the 2008 real estate market crash and, like many Americans, had a hard time getting his financial house in order during the Great Recession.
On July 17, 2010, he filed for Chapter 13 bankruptcy protection, which allows individuals to develop a financial plan to repay their debts within three to five years. In his petition, Watson listed assets of between $1 million to $10 million and liabilities between $500,000 and $1 million. He had four creditors, including his wife, Carmen Watson, according to filings in Washington, D.C. bankruptcy court. The couple owned a two-story brownstone townhouse in the nation’s capital. (Watson split his time between Washington, D.C. and Miami, where he’s rented a home near Miami’s Design District for 24 years, according to his candidate paperwork.)
“It’s a tool I could use to clear up my debts and move on,” Watson told Florida Bulldog. “I used it to satisfy the situation I was in.”
Three months later, U.S. Bankruptcy Judge S. Martin Teel Jr. dismissed Watson’s petition with prejudice based on a motion by the trustee that determined he was ineligible for bankruptcy protection and had filed it in bad faith.
According to the motion, the trustee could not verify Watson’s claim that his and his wife’s combined monthly income of $18,862 would leave them with $2,103 in disposable income after paying their expenses because the couple was self-employed. In addition, Watson had not filed tax returns for himself and various corporations he owned since 2003, the trustee’s motion states.
Watson also failed to timely commence his bankruptcy plan payments and failed to list all of his assets, including his ownership interests in multiple properties, according to the motion. “As a result, the debtor has failed to meet the burden of proving that the debtor has income sufficiently stable and regular to make plan payments,” the motion states.
In a separate motion, an unlisted creditor named Samuel Hollander accused Watson of omitting a debt owed to him. According to Watson’s background check report, Hollander won a $129,284 civil judgment against Watson in Washington, D.C. Circuit Court in 2009.
SECOND FAILED SHOT AT BANKRUPTCY
Less than a decade after his first petition was denied, Watson again filed for Chapter 13 bankruptcy protection on Sept. 27, 2017. In December of the same year, he had it converted to a Chapter 11 bankruptcy, which doesn’t require a trustee to disburse payments to creditors.
In this go-round, Watson listed assets of $1.4 million, liabilities of $1.5 million and his creditors were Hollander, his home mortgage lender and the IRS, according to the bankruptcy court filings. Watson and his wife generated a combined monthly income of $2,600, but the couple had $8,199 in monthly expenses, his financial statement shows.
In a motion filed by the mortgage note holder U.S. Bank, Watson was in arrears by 105 payments and owed roughly $1.39 million in unpaid principal, accrued interest, late charges and property taxes the lender paid.
Uncle Sam was also seeking its pound of flesh. According to Watson’s background report, the IRS filed two liens against his house in 2015 for $22,719 in income taxes he owed for 2004 and 2005 and $4,214 that he didn’t pay in 2013.
Yet, for the second time in seven years, Watson could not complete the bankruptcy process. The same federal judge, Teel, dismissed the case on Feb. 21, 2018 after Watson filed a motion explaining that he did not have any ongoing business operations and as a result, he did not “possess the wherewithal to maintain the Chapter 11 case and cannot propose or confirm a Chapter 11 plan.”
Watson agreed to sell his Washington, D.C. pad, which was worth $1.46 million, per a market value appraisal attached to his motion.
When Florida Bulldog pressed Watson about his past debts and the failed outcomes of his two bankruptcies, he noted that he had sold the brownstone in March 2018 and “that took care of everything.”
Jarvis, the law professor, said Watson could have gotten in front of questions about his money problems by simply being open about them when he went into public office. “He could positively spin this by stating, ‘I’ve taken proactive steps to pay off my debts and get square with my creditors,’ ” Jarvis said. “Voters would appreciate the candor.”
A WATSON TSUMANI?
Watson’s late entry threatens the ascendency of Christine King, the head of a Liberty City-based economic development agency who’s been groomed as the successor to Keon Hardemon, the previous District 5 office holder. Hardemon gave up the seat when he was elected Miami-Dade county commissioner last year.
King, with a campaign war chest of $239,480 and Hardemon’s political consultant relatives Billy and Barbara Hardemon running her campaign, is considered the front-runner in the District 5 race that features six other lesser-known candidates. But Watson’s incumbent status could sway enough voters outside the Hardemon’s Liberty City power center. He could land in second place and prevent King from securing more than 50 percent of the vote to avoid a runoff.
Watson also has a powerful ally throwing money at his Hail Mary campaign. Braman is the Watson campaign’s primary benefactor even though the billionaire car dealer lives in Miami Beach’s Indian Creek neighborhood and can’t vote in the Miami election. And his business, Braman Motors, is located in District 2, which is represented by Miami City Commissioner Ken Russell.
Watson’s only campaign report shows that 20 out of 23 contributions he received were from Braman, his wife, and 18 Braman-related companies. Each of the Sept. 24 donations was for the $1,000 maximum, accounting for $20,000 of the $22,250 Watson has raised. Watson also loaned his campaign $1,000.
“The number of candidates will likely create a runoff,” said a Miami lobbyist and political fundraiser who requested anonymity. “The week between an election and a runoff gives an incumbent a huge advantage. King is the presumptive frontrunner, but he could tsunami her.”
Another anonymous source told Florida Bulldog that Watson has been telling people around city hall that his colleagues, City Commissioners Joe Carollo and Alex Diaz de la Portilla, are going to raise money for him, too.
Watson said the Hardemons are nervous, pointing to a small controversy over a recent campaign mailer sent to District 5 voters. The slick flyer depicts President Joe Biden and Vice President Kamala Harris on one side and the other side has images of King and Miami Mayor Francis Suarez, a registered Republican who is running for re-election.
The mail piece, produced by a political action committee chaired by Barbara Hardemon, states “Attention all Democrats” and “Democrats’ absentee voter’s guide.” Miami-Dade Democratic Party Chair Robert Dempster disavowed any involvement with the mailer and said the only Miami election candidate to receive a party endorsement is District 3 candidate Quinn Smith, according to the Miami Herald.
Miami holds nonpartisan elections, but District 5 neighborhoods such as the Upper Eastside, Little Haiti, Liberty City and Overtown are predominantly Democratic strongholds. With the exception of Liberty City, constituents in those neighborhoods urged him to run and fight to keep the seat, Watson said.
“They tell me, ‘you have been the guy who answers our calls and you have been responsive,’” Watson said. “They are tired of being ignored. And they say I am offering a new voice.”