2012-06-21 / Top News

We're #1 {In Public Corruption}



In sports, it’s usually cause for celebration. In sales, in earnings, in awards or accolades, ditto.

But in public corruption, the number-one ranking serves both as cause for despair and as a wake-up call to people who elect or appoint public servants. Their question should become, “Why, and how can we fix it?”

Now Florida, once the pioneer and preeminent champion of open government, has taken the number-one ranking for government corruption in the United States, ahead of California, Texas and New York, each of which contains a larger population.

Florida’s middle district, which includes Collier, Lee and Charlotte counties and stretches from south of Naples northward to the Georgia line, has played a significant role in spawning government corruption. Here, Florida Weekly offers a glimpse of that history in Southwest Florida, and the men and women who shaped it, dating back about three decades.

KRASSNER KRASSNER Ironically, that’s roughly the lifespan of the Sunshine State’s pioneering openrecords laws — laws making public the actions of elected and appointed government officials.

“It’s been (45 years) since Florida put in place government in the sunshine, and we once held the leading position in the country and maybe the world for giving the public the tools to hold government accountable,” says Dan Krassner, executive director of the nonprofit watchdog group Integrity Florida. “But that’s changed. Since that law was enacted, the legislature has weakened it with more than 1,000 exemptions, which shows Florida is moving in the wrong direction.”

Convictions of corrupt public officials show the same thing, perhaps.

Using numbers from a U.S. Department of Justice report detailing a decade of wrongdoing from 2001 to 2010, mostly in local government, Integrity Florida reported that federal prosecutors convicted 781 men and women for corruption and fraud, most of them working in local government.

ASKEW ASKEW In the Middle District, according to the report, there were 220 federal convictions alone.

That’s not all. The Florida Commission on Ethics, a relatively toothless arm of state government that cannot undertake investigations of officials unless complaints are filed formally first, and can only levy fines of up to $10,000, has done business in the region as well, says Cary Stillman, a spokeswoman.

In the last five years, 30 complaints of ethics violations by government officials were filed in Lee, 13 in Collier and six in Charlotte County. Of those, there were four total violations and three probable cause rulings, in which the Ethics Commission took no further action.

Neither officials for the U.S. Attorney’s office in the middle district or the state’s Ethics Commission were able to provide names and descriptions of the federal convictions or ethics violations by press time. But a glimpse at the past and the present suggests that even if history doesn’t repeat itself, its patterns and the tendencies of men and women who create it anew, do.

Among other things, the numbers of convictions and violations likely demonstrate that the more things change, the more they remain the same.

Which is why history may prove the best teacher.

When corruption meant death, drugs

Within the lifetimes of the oldest men and women who live in the region, corruption could mean blood and an early 20th century version of slavery, not just financial misbehavior. Across the South, including in Southwest Florida, conscript labor camps created a widely accepted form of official corruption unequaled since.

In an era before open-government laws, black males and some poor whites were regularly arrested on trumped up charges and used as conscript labor in turpentine camps — lumber camps where pines were cut and processed for turpentine. They led brutal lives, too frequently dying in the camps and being buried in nameless graves from El Jobean to Babcock Ranch in Charlotte County, and points south, historians report.

The perpetrators were never charged with any crimes, and authorities were well paid to provide the conscripts.

Almost everything official was done differently in those days.

Travelers found dead along roads or trails, for example, were sometimes simply disposed of in unmarked roadside holes, a solution that required no inquests, no paperwork, and almost no trouble or public expense.

“It was a fairly common custom,” recalled Vernon Peeples, the Charlotte County historian and former state legislator, in a conversation with Florida Weekly last year.

“If somebody was found dead, they’d have a coroner’s jury, and men from the coroner’s jury would go out and find the body and ask themselves if anybody recognized it. If no one recognized the body, it was buried on the spot by the side of the road.”

For decades, officials also used the poll tax to control votes, effectively preventing many blacks and some poor whites who couldn’t afford to pay it from entering the voting booth.

But Bartow native and United States Sen. Spessard L. Holland brought that corrupt exercise to a halt by sponsoring the 24th Amendment to the Constitution in 1964, which prohibited the poll tax. By 1966 it had become law in all 50 states.

As Florida grew and the population of the region began to swell beginning in the 1960s, people began to pay more attention to official corruption.

Still, it wasn’t always white-collar crime. During the famous drug busts in Everglades City in 1983, for example, about 80 percent of the town’s male population found itself behind bars for helping transport “square grouper” — bales of marijuana. Nobody, including local officials, seemed to care that since the 1970s many residents had been illegally taking in hundreds of thousands or even millions of dollars in drug money until the arrests, which were part of President Ronald Reagan’s war on drugs.

Then everything changed except white-collar corruption in local government.

Sunshine and shadow

The key moment that would later help prosecutors convict some Southwest Florida officials for corruption was probably actually several key moments, the first of which came in 1967. That year, the state legislature passed a law requiring open meetings of elected officials.

The law was championed by then State Senator and later (from 1971to 1979) Gov. Reubin Askew.

“You’ve got to remember in government whose business you’re doing: the people’s,” he told the Florida Society of Newspaper Editors in a 2009 reminiscence. “And if you’re doing the people’s business, you’ve got to give them the tools to judge the product.”

In spite of that 1967 state law, many officials in local governments continued to resist providing information to reporters and other members of the public, recalled Lee Melsek, a 32-year, award-winning investigative reporter now retired from The News- Press in Fort Myers.

Mr. Melsek would later be instrumental in using Sunshine Laws to expose corrupt local government officials, who were then charged and convicted by prosecutors.

“By the early to mid-1970s you still had a big fight — there were thousands of records officials didn’t want to open to anybody,” he said.

Aggressively supporting the work of Mr. Melsek and others, The News- Press sued Lee County officials in a precedent setting 1975 case called Wisher vs. News-Press Publishing Co.

County Administrator Lavon Wisher tried to keep personnel records, including pay records, out of the public eye — and failed.

“We got the courts of Florida to rule that those are public records,” Mr. Melsek said.

That battle helped Gov. Askew create Florida’s 1976 Sunshine Amendment — another key moment — that required elected officials, government employees and candidates to make full financial disclosures. When that didn’t happen later, when some sought to hide their financial connections to investors asking and receiving their votes, some of them went to jail.

Lee: for love or money?

Among the most brazen champions of financial malfeasance in the last three decades were Lee Commissioners Ernie Averill, Mike Roeder and Wade Scaffe. The three allegedly were wined and dined in Fort Lauderdale and on a party boat with prostitutes by contractor Louis Stramaglia.

“I’m a good-timer, I like to party, I ain’t no Ivy Leaguer — I’m a little rough around the edges,” Mr. Stramaglia said at the time.

Although the contractor was only indicted (and chased by federal officials for a variety of other breaches in and out of Florida), the commissioners were convicted of trading their influence, or perjury. All three spent time in jail.

Another corrupt official was Dick Steele, the Lee County tax collector.

In 1992, Mr. Steele finally pled guilty to theft, money laundering, income tax evasion, and embezzlement, not only in Lee but in several other Florida counties, including Putnam and Clay.

In Lee, he allowed taxpayers to spend $80,000 to buy him recreational vehicles, and he funneled county checks to a private citizen, who then cashed them and returned $78,000 to Mr. Steele.

At roughly the same time — 1990 — Vicki Lopez-Wolfe was elected to the county commission. In the course of her service, she maintained personal relationships with more than one lobbyist to the commission, voting repeatedly in favor of deals that would benefit her friends.

The most prominent of those was Sylvester Lukis, a Washington, D.C.-based lobbyist who pushed the interests of several clients in Lee County.

Under pressure, she resigned in 1993, then married Lukis in 1994 — but not before denying her relationship with him. That relationship was exposed graphically by Mr. Melsek and thenreporter Pete Winton, now Lee’s assistant county manager. The two reporters traveled to Washington, found Mr. Lukis’s house, and observed her kissing Mr. Lukis goodbye in the doorway as he left for work one morning.

In 1995, Mr. and Mrs. Lukis were charged with honest services mail fraud and bribery, and she was ultimately convicted of honest services mail fraud, spending 15 months in prison on a 27-month sentence before President Bill Clinton commuted her sentence late in 2000.

Last year, her conviction was overturned and expunged from her record by a middle district judge after a Supreme Court ruling (in a different case) that such a conviction could be legitimate only if bribes or kickbacks had occurred.

In another mid-1990s case of local government corruption that made for a riveting Wall Street Journal story, three Cape Coral Hospital officials hoodwinked a blind-eye board of directors by bankrupting the hospital.

J. Michael Ward, the CEO, and two other top officials, Daniel Edgar and Jay Murphy, used hospital money to build themselves fancy homes, buy jewelry, take a golf trip to Scotland, buy into island resorts and strip malls, and even melt the silver from radiology strips into bars, which were then spirited out of the hospital and used to buy cocaine.

Mr. Ward and Mr. Edgar were convicted of such charges as money laundering, bank fraud, conspiracy to defraud the United States and tax evasion, and sentenced to more than seven years in prison.

Where an S-storm didn’t blow over

Dwight Brock, a former white-collar crime prosecutor and now clerk of courts in Collier County, was instrumental in putting a stop to the biggest fraud case in the history of Naples, known as Stadium Naples.

That began about 15 years ago when he sought to audit the elaborate $100 million plan of ESPN founder Bill Rasmussen.

Mr. Rasmussen harnessed investors and public officials in an attempt to build a glittering and opulent golf arena in North Naples. But 10 people, including three county commissioners, a county manager, a lawyer and five investors, were ultimately charged with crimes, including a conspiracy to defraud Collier citizens of honest service by trading money, votes and influence for services and benefits.

One of them, Collier Commissioner John Norris, who sought a multimillion dollar stake in the business in exchange for his votes, was quoted telling his colleagues that the brouhaha would blow hard “like an Oklahoma S-storm” and then disappear in a few days. He later went to jail.

Since then, Mr. Brock has had to fight county commissioners who sued to stop him from conducting audits of departments and official spending, stalling that process for almost seven years, until just eight months ago, he says.

In a landmark statement, a statewide grand jury concluded that county clerks must audit local governments to create “a constitutional check on spending that serves our counties’ citizens as a fiscal watchdog.”

After all that, he remains skeptical that corruption in local government is on the decline, or that its heyday is behind us.

“When I look at what I deal with on a daily basis now, if it was any worse back in the day of Gov. Reubin Askew, then they were really in sad shape,” he says.

Commissioners “tried to go to court to stop me from auditing what they’re doing. They failed. They tried to cut off my money supplies to pay employees. That failed. And now they may try to get somebody else elected.”

In the case of Stadium Naples, commissioners did what a newer crop of elected leaders seems intent on doing also: stop him from auditing how they make deals and spend public money. But eventually his complaints helped bring down Mr. Norris, Commissioners Tim Constantine and Tim Hancock, County Manager Neil Dorrill, and several business promoters, including David Mobley, and real estate attorney Lee Salvatori.

The Rasmussen plan enjoyed a couple of at-bats. After striking out amid controversy and legal challenges the first time, he sought funding a second time with A.S. Goldman & Co., but dropped that when the firm was investigated by federal authorities.

Then-State Attorney Joe D’Alessandro, based in Fort Myers, investigated officials and entrepreneurs in the case after Mr. Brock filed a complaint. But Mr. D’Alesandro was ultimately removed from any further contact with the case and sharply criticized by a judge because he had stock investments in A.S. Goldman & Co.

Defendants ended up doing community service, paying fines and submitting to house arrest.

One financier, David Mobley, was sentenced to five years in prison.

“People were closing their eyes, the whole society was rupturing with corruption,” Judge Mike Carr told the Naples Daily News recently. At the time, Judge Carr was a Republican state committeeman and a vocal critic of what was happening in Stadium Naples.

For Mr. Brock, it’s still happening, he says. He discovered some months ago that a contractor doing housing work in Collier County with money from two federal grants administered by the county was billing the county for work that hadn’t been done.

“That vendor’s request included a bill for stucco on a home, and one of my employees got the silly idea that we should drive by and look,” Mr. Brock says.

“There had not been one trowel of stucco put on that home.”

County officials are supposed to check the work before they sign a check — and when he asked, they told him falsely they had done the checking.

Now, he’s discovering other work for which the county has been billed and paid — work that remains undone, he notes.

How it will end, is anybody’s guess.

“I used to prosecute people for whitecollar crime,” Mr. Brock says. “Last time I checked, when you falsify information for purposes of extracting remuneration, that’s called a crime.” ¦

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