Raises Questions About Future Corruption Cases
By Joe Mozingo, The Miami Herald
Disagreement over a critical corruption investigation at Miami International Airport has prompted the Miami-Dade Police Department to cease working with the U.S. attorney’s office, signaling the possible demise of a potent partnership that has sent several public figures to prison in recent years.
The case at the center of the fallout is a probe into the airport’s food and beverage concessions. For three years, a task force of police and federal agents has been investigating whether the prime contractor, HMS Host, used minority-owned front companies to channel money to political friends of Miami-Dade Mayor Alex Penelas and county commissioners.
Host’s attorney in Miami, Alvin B. Davis, said the company did nothing like this. He said investigators are on a ``misguided and destructive campaign to find criminal liability where none exists.’'
Few public-corruption cases have larger implications for the county. It involves some of the biggest political power brokers in town.
The prime contractor in the case bills itself as the world’s largest provider of airport concessions, with $1.6 billion in revenues and contracts at 71 airports worldwide.
And its lead consultant is lobbyist Christopher G. Korge, a Democratic fundraiser and a driving force behind Penelas’ rise atop County Hall’s 29th floor.
Host managers have told investigators they relied on Korge to, among other things, tell them which lobbyists and politically connected minority partners would get the deal approved by the County Commission. In return for his services, the company gave him 10 percent of the profits.
The company gave another 10 percent to one of its minority partners, a Coral Gables businesswoman named Paula Gomez, who is married to an influential lobbyist.
While there is nothing illegal about a person getting paid solely for his or her political connections, doing it under the guise of minority participation could fall in the realm of fraud, experts say.
A COMMON FRAUD
Bob Ashby, an attorney in the U.S. Department of Transportation who writes the federal legislation, said a common fraud occurs when a contractor hires minority partners or subcontractors to do a share of the work but behind the scenes does the work itself.
''The [minority business] basically gets a certain amount of money for lending its name and little else to the project,’' he said.
For months, investigators have been urging the U.S. attorney to seek indictments of the company, Gomez and her husband, Eliseo ''Tito’’ Gomez.
But Miami-Dade Police Director Carlos Alvarez pulled his detectives out in November, frustrated by what he said were needless delays and a general reluctance on the part of U.S. Attorney Marcos Jimenez to prosecute cases involving such powerful players.
''It is my opinion that the last two U.S. attorneys put a higher priority and were much more aggressive in confronting these cases,’' Alvarez said in an interview.
Jimenez, appointed by President Bush in 2002, slammed Alvarez’s move to withdraw his investigators as irresponsible.
''Director Alvarez’s decision to pull Miami-Dade detectives from public corruption cases and sever their working relationship with the FBI is regrettable and indefensible,’' he said in a statement. ``No agency can justify abdicating its responsibility to work with federal agencies in rooting out public corruption.’'
QUESTIONS EMERGE
The rift between Miami’s top federal law-enforcement officer and the police director, who is running for county mayor, raises serious questions about how corruption -- in a town perpetually racked by political scandal -- will be fought in the future.
Since the two agencies began to work regularly together in 1998, they locked up former Miami police chief Donald Warshaw for stealing from a children’s charity, put away the airport’s building chief for taking bribes, nabbed United Teachers of Dade President Pat Tornillo for ripping off his own union, and secured the indictments of 13 Miami police officers for bad shootings.
Jimenez emphasized that the U.S. attorney’s office is still vigorously pursuing all government corruption cases with his best attorneys. In the Host case, his office has brought testimony to a grand jury, granted immunity to three witnesses and traveled to Washington, D.C., to consult with top fraud experts, The Herald learned.
PUBLIC CORRUPTION
First Assistant U.S. Attorney, Thomas Mulvihill, who has been in the office for 17 years and worked with eight U.S. attorneys, said there has been no change during Jimenez’s tenure.
''Mark Jimenez has focused on public corruption as much as any other U.S. attorney I ever worked for,’' said Mulvihill, who has worked with Miami-Dade police detectives for years. ``He asks about the public-corruption program on a constant basis and is willing to devote any amount of resources we need to address the problem.’'
Sources familiar with the probe say prosecutors plan to decide shortly whether they will seek indictments.
Former prosecutors say corruption cases routinely take a long time. ''A lot of the difficulty is that before you take the step of charging a public person, you want to be sure you have a full and complete investigation,’' said Bruce Zimet, a former chief assistant U.S. attorney now in private practice.
He said corruption cases come with a range of obstacles: scant witnesses willing to come forward, vast amounts of records to analyze, the need to prove intent in fraud and bribery cases, and the need to prove a crime even occurred.
Alvarez agrees -- to a point. ''These cases do take time, but there comes a point you have to make a decision,’' he said. ``You can investigate for years and years and years, and never come to anything.’'
Because of the dispute, prosecutors must now rely on the FBI for the bulk of its public-corruption investigators. Alvarez said his detectives will help when requested, but will no longer take a lead role on federal corruption probes. He said he could no longer ''afford to spend so much manpower’’ on cases that don’t have clear ``parameters.’'
Friction over the Host case began building more than a year ago. Then hostilities flared up on another corruption front in August, when Alvarez opposed Jimenez’s move to offer Tornillo, Florida’s biggest union boss, a plea deal for admitting to stealing $650,000 in teachers’ union dues.
And their relationship snapped in November when several prominent defense attorneys complained to the U.S. attorney about media leaks for this story. Jimenez, who would not comment on that issue, reportedly blamed Alvarez’s troops, an accusation Alvarez disputes, saying there is no evidence.
HOST’S CLAIMS
The case at the center of all this has involved the U.S. attorney, FBI, Miami-Dade police and the U.S. Department of Transportation. Investigators are looking at whether claims Host made to the county to get the food contract in 1998 were knowingly false.
At the time, the county required that Host work with ''disadvantaged business enterprises.’' The program’s goal is to ensure that minority-owned businesses earn a piece of lucrative government contracts like the airport job.
Host pledged to give 35 percent of the work to two minority-owned companies.
MAKING THEIR CASE
Prosecutors and investigators are attempting to prove the minority partners’ prime role was to just collect cash and curry political favor at County Hall. Authorities suspect the minority-owned companies did little, if any, work for at least several years, undermining the intent of the program. They are most closely focused on Host’s partnership with Paula Gomez.
Host pledged to county officials that Gomez’s company ``will be responsible for the full scope of all activities associated with day-to-day decisions and operations of all Burger King restaurants.’'
For this, her company, PARG Concessions, was given 10 percent of Host’s profits -- up to $339,000 a year.
But PARG would never manage a single Burger King.
Investigators suspect the money was really meant to secure the political influence of her husband, Tito Gomez, a vice president and lobbyist at BellSouth who has been a fundraiser and close confidante to commissioners and Mayor Penelas. While Penelas could not vote on the contract, he had a slate of commissioners who could.
The Gomezes attorney, Peter Prieto, insists they did nothing wrong.
''We believe that after all of the information and evidence have been thoroughly and carefully reviewed by the United States Attorney’s Office, the investigation will be closed,’' Prieto wrote in an e-mail.
Prieto said Host made PARG’s duties more general than the Burger Kings.
He said the company -- either Tito Gomez, his wife or both -- regularly attended meetings with Host general manager Ed Wilcox, ''provided advice on a myriad of issues involving the joint venture’’ including input on budgets, the operation of the Burger Kings, and labor and theft issues.
But Wilcox told investigators that he only saw Paula Gomez four times in almost a decade, and mostly dealt with Tito Gomez. Wilcox has been granted immunity from prosecution and testified before the grand jury.
ROLE IN COMPANY
Tito Gomez’s role was not disclosed to the county. Paula Gomez signed at least one affidavit swearing she was the only officer, employee and shareholder in PARG Concessions, records show. In December 2002, days after Tito Gomez discussed the federal investigation with a reporter, he sent an amendment to the state naming him an officer in the company.
Tito Gomez, 57, BellSouth’s main in-house lobbyist in Miami, conducts extensive political polling, and he commands vast resources to help political allies. In 1999, for instance, when former County Commissioner Miriam Alonso’s aide asked for money for two groups in her district, Gomez quickly wrote company checks worth $20,000.
The financial arrangement Host made with the Gomezes and Korge sent a vast amount of airport proceeds -- nearly $2 million in just four years -- to political power brokers. In 2002, they each made $220,000 in just five months. (Since the investigation became public, Host bought the Gomezes out of the deal.)
Korge, 48, known nationally for his fundraising, regularly hosted receptions for former President Bill Clinton at his Pinecrest estate. His clients have won dozens of county contracts under his guidance, including the duty-free and retail concessions and the massive contract to oversee the airport expansion.
Korge said his involvement in the Host contract was completely above board. ``I have always maintained the highest level of professionalism, integrity and ethics in my representation of clients before the city and county, including Host Marriott and its Disadvantaged Business Enterprise tenants.’'