Federal corruption investigation

Palmetto Bay lobbyist tipped off FBI to Miami-Dade mayors, lobbyists arrested in corruption probe

 

pmazzei@MiamiHerald.com

On May 26, 2011, a South Florida lobbyist approached the FBI with a tip: He suspected that another lobbyist he knew was in bed with corrupt local politicians, and that they would be open to lining their pockets.

The informant was brought on board to make introductions. He hooked up undercover FBI agents with the suspect lobbyist, Richard Candia, and set up meetings between them and Miami Lakes Mayor Michael Pizzi.

Then the agents, who posed as Chicago businessmen, bluntly made their pitch: Let’s all join forces in a lucrative kickback scheme disguised as a legitimate federal grant program.

Thus began a two-year investigation that culminated Tuesday with the arrests of Pizzi, Candia and two others accused of involvement in the fraud: Sweetwater Mayor Manny Maroño and his close friend and business partner, lobbyist Jorge Forte.

The arrests rocked Miami-Dade politicians and the county’s robust lobbying corps, whose members spent days wondering: Who broke ranks and turned one of their own in to the feds?

The informant was Michael Kesti, a Palmetto Bay-based lobbyist with ties to the healthcare industry and a long history of civic engagement in South Miami-Dade, sources familiar with the investigation have confirmed to the Miami Herald.

Kesti, 52, played a far more significant role in the Pizzi investigation than the Maroño probe. In the Pizzi case, Kesti not only discussed the purported grant scheme with the Miami Lakes mayor and Candia but also vouched for the undercover FBI agents who said they operated a grant-application company called Sunshine Universal.

The FBI calls Kesti, who has no criminal record, a “reliable” informant who has been paid for his expenses and services to the agency, according to the criminal complaints charging Pizzi and Maroño with conspiring to commit extortion.

Doing his duty

Kesti is believed to have gone to the FBI not because authorities were holding illegal conduct over his head but because he wanted to bring to their attention influence-peddling among a network of Miami-Dade lobbyists and mayors.

“I’m just proud of him — it’s time for the people who are not involved in these things to step up,” said Cutler Bay Mayor Ed MacDougall, who has known Kesti for years. The lobbyist hosted the first fundraiser in May for MacDougall’s congressional campaign.

“When these things happen, this means we’re getting rid of the bad guys, and that’s important.”

Kesti did not return calls or an email Friday seeking comment.

Though not one of Miami-Dade’s most high-profile lobbyists, Kesti is well known in the county’s southern end, especially in Palmetto Bay, the village he used to represent. A longtime member of the Rotary, he is a past president of the Perrine-Cutler Ridge-Palmetto Bay Rotary Club.

He has hatched a series of businesses over the years, from raising money for a Wynwood rum distillery to working in government and public relations for a variety of small clients, including a dry-cleaning service and a South Dade flea market.

Part of his work involves helping clients apply for federal grants, Kesti told the Homestead City Commission last year, touting a $13.5 million grant he said he helped land for Community Health of South Florida, a South Dade nonprofit.

Kesti served in 2008 as executive director of the Miami Beach Health Foundation, the nonprofit fundraising arm of the Miami Beach Community Health Center. The center’s former leader, Kathryn Abbate, pleaded guilty earlier this year to stealing $6 million from the federally funded facility.

Kesti singled out Candia as a potential target for FBI agents after crossing paths with him in local lobbying circles. The informant believed Candia could provide a bridge to Pizzi, Maroño and Forte, Maroño’s “front man.” Candia has also operated in South Dade, as a lobbyist for Cutler Bay and Homestead.

A prominent South Florida lobbyist said Kesti approached him about two years ago for a suspicious-sounding deal.

“He was peddling a relationship or something,” the lobbyist said. “He might have been working for the feds. I never got a good feeling about the guy.”

Esther Nuhfer, a fundraiser for South Florida politicians ranging from U.S. Sen. Marco Rubio to Miami Mayor Tomás Regalado, said Kesti helped raise money for both candidates, and she has a favorable opinion of him.

However, she noted that Kesti rubbed some other lobbyists the wrong way: “He’s not a warm and fuzzy guy.”

Kesti handled lobbying for Palmetto Bay in collaboration with the Tew Cardenas law firm. He helped the village win approval from the U.S. House of Representatives for a proposed fire station on federally owned land.

“You could never tell what circles he was in,” said Cardenas lobbyist Slater Bayliss. “He was a nice guy. He definitely seemed to know what he was doing.”

Former Palmetto Bay Mayor Eugene Flinn said Kesti, who has been married for 13 years to his wife, Maria, was known as a “great family man” who frequently had social gatherings at the couple’s Palmetto Bay home. But he was not overly gregarious.

‘quiet, reserved’

“He … was always very accessible and on top of the issues that the village had with the feds,” Flinn said. “He’s a pretty quiet, reserved person.”

As part of the undercover operation, Kesti’s first challenge was to introduce the FBI agents posing as Chicago businessmen to Candia and then have them all meet the two mayors. According to the complaint, Candia arranged for one of the agents and Kesti to meet Pizzi for the first time at the mayor’s Miami Lakes office in September 2011. The agent explained that his company, Sunshine Universal, specialized in applying for federal economic development grants for cities.

The company later wrote a $500 check to Candia’s business, Candia Solutions, for setting up the meeting.

In January 2012, the two undercover agents, along with Kesti and Candia, met with Pizzi a second time at a Miami Lakes restaurant to discuss going ahead with the “bogus” grant scheme in Medley, where Pizzi worked as the town attorney. Pizzi agreed to put a resolution on the Medley Town Council’s upcoming agenda to pursue a federal grant from AmeriCorps, a real federal agency.

Days after the meeting, Kesti met Pizzi at the mayor’s office, discussed the grant program and gave him three separate $250 checks made payable to “Reelect Mayor Michael Pizzi” in exchange for putting the item on the agenda.

The following month, Pizzi pushed the passage of the grant resolution through the Medley Council, authorizing Sunshine Universal to apply for the grant on behalf of the town. But Pizzi was upset that neither Kesti nor Candia showed up to the meeting.

“It passed unanimously because I forced them to do it,” Pizzi told Kesti, who recorded their conversation. “But, you almost lost it, because no one was there.”

Later in February, the undercover agents and Kesti met with Pizzi at the Miami Beach waterfront steakhouse Smith & Wollensky to ask the mayor to write an “endorsement” letter on behalf of Sunshine Universal. After dinner, the agents sat in a car with Pizzi and talked about the letter.

“I just want to be clear with you, mayor, so that there are not any hard feelings down the road,” one of the agents told Pizzi. “But, you understand a lot of this sh-t is just bogus. What we are doing here is just grabbing money.”

Pizzi responded: “I can’t do it if it’s just bogus. That I can’t do.” Pizzi insisted the agents produce a feasibility study for Medley as part of the grant application.

The mayor got out of the agents’ car and spoke with Kesti. He asked the informant for two more campaign checks for $250 each. “Would that be a hard thing to do?” Pizzi asked.

“That’s easy,” Kesti said. “That’s pocket change.”

The main man

Pizzi later told Kesti: “I met [the undercover agents] through you … Everything I do is through you. You’re the guy. I don’t do anything without you being involved in it.”

In mid-December 2012, Kesti finally got the Medley endorsement letter from Pizzi, through Candia. But Candia asked Pizzi to backdate the letter, which he did, to June 11, 2012.

According to the complaint, Candia said Pizzi wanted $1,000 for the letter. On Dec. 14, Candia delivered the cash to Pizzi at the mayor’s office.

Later, Kesti called Candia and asked: “Was [Pizzi] happy with … the gift?” Candia responded: “Abso-, absolutely.”

In February 2013, Pizzi met Kesti, Candia and the two FBI agents at a Miami Lakes restaurant, where the mayor agreed to introduce the same AmeriCorps federal grant proposal in Miami Lakes.

Later, Kesti texted Candia: “Great job today! Let me know what Pizzi wants.”

Candia’s response: “Our friend asked for 2.”

Kesti responded that one of the undercover agents “will deliver the 2k to Pizzi Thursday night.”

On Feb. 28, the two undercover agents met with Pizzi at a Miami Lakes billiard club. They put two cigars and $2,000 in an envelope inside a zip-lock bag on a pool table, according to the complaint.

Pizzi took the baggie into a bathroom, then returned with no sign of the zip-lock bag in his hands. One agent searched the bathroom for the zip-lock bag and envelope, but found neither.

Miami Herald staff writers Paradise Afshar and Marc Caputo and researcher Monika K. Leal contributed to this report.

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