By December 2010, the investigators had learned that Rivera arranged a $1 million consulting contract with the Flagler Dog Track to run a political campaign to win voter approval for slots machines in 2008 — a deal Rivera had publicly denied in the past.
Under the contract, the money went not to Rivera, but to his mother’s company, Millennium. (At the time the deal was uncovered, only $510,000 of the $1 million had been paid.) When asked about the arrangement, Rivera told The Herald he was “designated by Millennium” to work on the slots campaign.
But Rivera’s mother, Daisy Magarino, refuted him in a sworn statement to investigators. She said Millennium was “almost a non-existent company” she helped create at her son’s request. And Flagler officials refuted him as well. They said it was Rivera’s idea to make the payments to Millennium.
Rivera insisted he was never paid as part of the Millennium deal. But he actually received about $132,000 from Millennium. He and his mother later described the money as loans. However, Rivera had never disclosed any such loans — as required by law — in his legislative financial disclosures.
“He needed the money,” Rivera’s mother told investigators examining the loans. “I don’t know for what.”
The state probe by the FDLE and the State Attorney’s Office reached beyond the dog-track deal and also examined Rivera’s campaign and personal spending. Investigators found that Rivera routinely used campaign money to repay his personal credit card bills. According to a July 2011 memo, FDLE agents believed Rivera had spent as much as $65,000 in campaign money on personal expenses.
Though they believed that Rivera had “essentially live[d] off” campaign contributions for years, Miami-Dade prosecutors ultimately concluded they could not charge Rivera with any crimes. The state’s campaign-finance laws were too vague and weak, and some potential crimes were too old, exceeding the statute of limitations, prosecutors said in a memo closing the case.
Investigators also found that Rivera had raised about $175,000 in undisclosed, unregulated donations — much of it from corporate donors with big business in Tallahassee — in his effort to be a Republican Party “committeeman.” But under state law, Rivera could spend this money virtually any way he pleased.
They also could find no crime in the dog-track deal, because Rivera actually did the work he was asked to do in the contract. However, the state Ethics Commission later accused Rivera of violating state ethics laws for failing to disclose the deal.
Rivera insisted he did nothing wrong, calling the state investigation a politically-motivated “wild-goose chase.” At one point, Rivera said he didn’t have a lawyer amid the state probe. But records show that his attorney had been in contact with investigators for weeks before he made the false statement about not having an attorney.
He said he commonly used his personal credit cards to pay for campaign expenses and then reimbursed his credit-card accounts from the donations — and said he is still owed money for past campaign costs.
When Miami-Dade prosecutors finally dropped their investigation in April, it seemed to remove a major potential hurdle to Rivera’s re-election chances in the fall. But other problems remained: The Internal Revenue Service and the FBI had opened an investigation tied to the dog-track deal, examining whether Rivera should have paid taxes on the Millennium money. That investigation is still ongoing.
Rivera has denied being the target of federal scrutiny as well, but emails from state prosecutors show they told Rivera’s lawyer about federal interest in the case.
Rivera’s ability to seemingly come out unscathed earned him the nickname “David ‘Nine Lives’ Rivera” on the Political Cortadito blog.
But then, this summer, Rivera got snagged in another controversy involving a political newcomer named Justin Lamar Sternad, a Cutler Bay Democrat who decided to run in the crowded primary to challenge Rivera in the newly drawn Congressional District 26, which extends from Kendall to Key West.
Sternad began spending tens of thousands of dollars for campaign mailers, one of which echoed an attack line against the congressman’s rival, Garcia. But Sternad never disclosed the expenditures or the source of the funds. It’s a federal crime to conspire to intentionally hide the sources and expenditures of campaign money.
The Miami Herald and El Nuevo Herald learned that Sternad used two vendors Rivera had used in the past, Rapid Mail & Computer Services and Campaign Data, to help with his mailers. Both company officials told The Herald and then the FBI that Rivera was involved in ordering the mailers and targeting the recipients, and one said that Rivera helped steer the cash to his firm.
Rivera denied wrongdoing or knowledge of the case. Sternad acknowledged he hired a Rivera friend, Ana Alliegro, to be his campaign manager. Sternad has hired a criminal defense attorney. Alliegro failed to show up for an interview with prosecutors and the FBI. She’s now in contact with an attorney, who won’t discuss her whereabouts to the Herald.
The Herald’s reports about Sternad, the mystery money and Rivera’s potential involvement helped doom Rivera’s campaign.
Even Rubio kept his distance, despite a friendship that stretches back two decades. Rivera, who met Rubio during Rep. Lincoln Diaz Balart’s 1992 congressional race, brought Rubio into Bob Dole’s presidential campaign four years later and then helped him win a seat as a West Miami City commissioner and then state legislator, in 2000. With Rivera always at his side, Rubio won the House speakership and then Senate.
In the last election, Rubio cut a robo-call ad for Rivera and his wife, Jeannette Rubio, showed up a precinct on Election Day to support Rivera.
Rubio avoided asking Rivera about the case.
“I only know what I’ve read in the press,” Rubio said in August. “I just hope none of it is true. I continue to give him the benefit of the doubt on all these things. I just hope none of it is true.”