Airport firm feeds Dade's political machine

03/10/2002 2:57 PM

09/08/2014 5:33 PM

Miami-Dade politicians and lobbyists regularly asked the company managing Miami International Airport's massive expansion to contribute to a raft of political campaigns and pet charities, funneling money to causes of little or no benefit to the airport and its passengers. For $15 million a year, Dade Aviation Consultants is supposed to help transform county-owned MIA from crowded and dim disarray into a spacious showpiece, with wide passenger concourses and new brand-name retail shops.

But its own records show that the company serves an additional purpose: feeding Miami-Dade's political machine, primarily at the request of politicians, including Mayor Alex Penelas, and airport bosses charged with overseeing the company's work. The Herald obtained access to DAC's checkbook after a two-year public records lawsuit. The newspaper argued that the company's revenue - which comes primarily from landing fees paid by airlines - is public money and that taxpayers are entitled to know how it's spent. Judges agreed, saying the company had been "stonewalling" the newspaper's request for its lobby fees and expense records, and they forced it to disclose just how it spends the money it gets from MIA. Those records, about 25,000 pages of expense reports, show how business and politics intertwine at MIA and how one contract supplies a rich vein of support for both. Taken with dozens of interviews and hundreds of other documents, they bring to light a normally hidden circle of political influence: Lobbyists get paid millions to help the construction-management company stay in favor at County Hall. They raise funds for politicians, who also tap cash from the company's revenues. Airport bureaucrats overseeing DAC's contract snag free sports luncheons, rounds of golf and even consulting work. And in the end, when the firm comes under fire by county auditors who say it is costing too much, the decision on whether to make changes falls to those very same airport and elected officials, who opt to do nothing. "This is not the way for the county to be doing business, " said Gerald Kogan, former chief justice of the Florida Supreme Court and former president of the Alliance for Ethical Government in Miami. "As a politician, you should not be going to the people who do business with the county and ask them to make donations." In all, DAC spent $3.4 million for everything from political dinners and charity events to 1997 World Series tickets. DETAILS OF SPENDING $1.7 million goes to lobbyists in bid to gain political favor The records show: * The firm has spent $1.7 million for lobbyists to curry political favor at County Hall and protect its power and profits. The company, faced with a competitive threat in 1999, amassed a lobbying squad of seven men. Each has deep ties to Miami-Dade's most powerful politicians and played a role in pushing them into office. Each team member was paid well - nearly $25,000 every month in all - to padlock DAC's position as one of the highest-paid airport consultants in America. * Penelas, who as a commissioner in 1992 made the motion to give the airport contract to DAC, has asked the company for money more than any other politician. As a rising star in Democratic circles, he got the airport consultant to contribute $50,000 to Democratic National Committee events for Bill Clinton and Al Gore. He also got $20,000 for his failed 1999 "Transit Not Tolls" campaign. Altogether, $133,500 went from the company to causes connected to the mayor, including thousands for Penelas' charity golf tournaments and United Way balls. * Prodded by other politicians, DAC gave money for a wide array of causes that had little or no bearing on the airport. At the request of Pedro Reboredo, once chairman of the County Commission's aviation committee, it paid $2,500 to a 1996 fundraiser for Nicaraguan presidential candidate Arnoldo Alemán, with whom Reboredo had business ties. DAC also gave $1,000 to the James E. Scott Community Association Inc., noting that "Commissioner Dorrin Rolle is the President and CEO." * The consulting firm plied airport officials with perks, from golf outings to contributions to their favored causes. For Richard Mendez, the construction chief who approved every dollar DAC made during his tenure: $2,000 to the Lynn University baseball program, where his son was a star pitcher; four $100 tickets to attend a Florida International University basketball fundraiser; tickets to luncheons with the Miami Dolphins and Florida Panthers; and two years of consulting employment with one of DAC's joint-venture partners after he resigned from the airport. For airport telecommunications boss James Nabors: 18 freebie golf outings in 1997 and 1998. Both men refused to comment. Both have since been indicted in connection with their work at the airport. Mendez is charged with pocketing a quarter of a million dollars in bribes from contractors whom he prodded DAC and airport staffers to hire. Nabors pleaded guilty and served eight months in jail for taking meals, sports tickets, golf trips and other freebies from another contractor. DAC has been accused of no wrongdoing. * When one of DAC's most vocal critics staged protests, accusing the company of eating up too much airport money in the mid-1990s, DAC lawyers met with him and wrote a letter saying his group was risking a lawsuit. Two years later, they hired him. The critic, Roman Lannes, then an environmental consultant and point man for the Latin Builders Association, got $120,000 for "public affairs advice and services." DAC would not comment regarding his employment.

SPENDING IS DEFENDED Description of expenditures: general community support But the management company defends its overall spending as a legal and legitimate effort to spread goodwill. "We at DAC have always had a general community support program, " said Mark Massman, the firm's program manager. He and others say the spending came from the company's profits, not directly from the airport. They say the $3.4 million spent on lobbyists, political fundraisers, charitable contributions, sports tickets and other costs represents a fraction of DAC's spending. "It's not a lot of money, " Massman said. "Taken out of context, it might be seen as a big deal." While Massman made a point that much of the discretionary spending went to charity, the company's records show that it spent more than four times that amount on lobbyists. He called the lobbyists "an insurance policy, " explaining that in the event another company vies for its job, DAC would have ready support at County Hall. Penelas said his requests for money carried no threat to DAC's contract if the firm did not comply. Reboredo said the same thing. "I challenge anyone to say I told them, 'If you don't give to this, I'm going to pull your contract, ' " Penelas said. "That's not how I operate." Penelas' current authority over DAC's contract lies in his veto power and the influence he wields over commissioners. Self-described as a reformer, Penelas has pushed measures to take elected county commissioners out of the process of awarding contracts. But he said fundraising is simply something that modern politicians are required to do. "I think it all stinks, " he said. "I wish I didn't have to call for any contributions. But that's the way the system works." Critics say that the system needs an overhaul. They see a symbiotic relationship: The political machine drives a contract, the contract helps drive the machine, while the public pays the price. As airport expenses rise, so do landing fees paid by airlines, which pass costs to consumers. At the same time, lobbyists drive up the overall cost of government, experts say. They've beaten back county reformers pushing for disclosure of lobbying fees. The Herald's review of DAC's records provides a unique glimpse of how much they get from the system. "It drives up the cost of business in Miami-Dade, " said Robert Meyers, executive director of the county's Commission on Ethics & Public Trust. "Businesses submit higher bids because they have to pay for lobbyists." In Miami-Dade County, lobbying and fundraising have become interwoven, with the perception that businesses must hire these high-priced insiders to get government work. Meyers worries that politicians and regulators may be less apt to exercise oversight over contractors who pony up. DAC, its executives and corporate partners have disbursed about $150,000 in campaign contributions over the years. Penelas' chief fundraisers, Rodney Barreto and Christopher Korge, are DAC's principal lobbyists. And besides collecting - with their partner, Eli Feinberg - $1.3 million in fees, they often turned to DAC to bankroll causes. "The requests would come in, and they wanted an answer right on the spot, " said John Read, DAC's former program manager, now working at John F. Kennedy Airport in New York for one of the firm's partners. "I was constantly under the pressure, 'Give me an answer, give me an answer.' "

POLITICS AND MONEY Lobbying is needed more in Miami than in New York While he said the firm's use of funds in Miami-Dade was proper, he acknowledges that politics helped drive up the bill. Read said he has not hired a single lobbyist in New York, where he is overseeing construction of a light rail system. "There's less political involvement at this project in New York than there was in Miami, " he said. "Miami is generally twice as high as my budget up here." With the same lobbyists working for the firm, the mayor and their own causes, DAC's current manager, Massman, said he sometimes has trouble distinguishing who is making requests for its money. "That's hard to sort out sometimes, " he said. "Sometimes I have to check: Is this request real?" But the records portray more than a company passively complying with requests from politicos and lobbyists. DAC emerges as aggressive in its own right, willing to spend freely to keep critics and competitors at bay. From the start, the contract to become the airport's main consultant - "the mother of all contracts, " in the words of one commissioner - had more than 130 lobbyists pitching for their clients. In 1992, the commission voted to award it to DAC, a partnership of eight major firms, including Bechtel Corp., Spillis Candela & Partners and Day & Zimmermann. The initial contract was for 10 years, with options to renew for up to 20. So far, the company has earned $125 million. This year, DAC's future falls on the desk of Aviation Director Angela Gittens. She says she is happy with the firm's work, but is reviewing the contract details with the help of the county auditor.

LOBBYISTS SIGN ON Payments to trio grow to about $16,000 a month After winning the deal, DAC struck a contract with lobbyists Barreto, Korge and Feinberg. Their role: to keep DAC abreast of political twists, provide rumor control, and help fend off competitors. Payments to the three lobbyists have grown to about $16,000 a month. And DAC is just one of their many clients. Last year, for example, Barreto represented 30 county clients, from local towing companies to AT&T and Verizon. The lobbyists refused to comment. Their invoices give no clue to what they've done for the $1.3 million. The three have not detailed any aspect of their behind-the-scenes services. But memos show one thing: The lobbyists routinely tapped the firm for their own pet causes, from United Way fundraisers to political committees. "The pattern I see is that DAC is a vehicle to channel money to certain lobbyists, who happen to be the biggest fundraisers for the mayor, " said state Sen. Alex Diaz de la Portilla, who chairs the Senate committee that oversees airports. His brother Miguel ran against Penelas for mayor. The requests to support the Democratic National Committee came from Penelas via Korge, one of the party's biggest fundraisers. An e-mail to DAC's partners notes: "The Mayor's office and Chris Korge have requested that the Joint Venture make a contribution to the subject matter in the amount of $50K." That's $50,000. When Barreto chaired the host committee for the 1995 U.S. Conference of Mayors, he asked DAC for $25,000. The firm could give only $15,000, noting in a memo, "We should be able to tell him simply this is what we have available." The lobbyists flexed their power that year, when a coalition of local architects and engineers complained that DAC was excluding them from a bigger share of the $5 billion airport expansion. At the time, another engineering firm was maneuvering to pick up the contract if DAC got ousted, sources said. But ultimately, DAC's lobbyists helped keep its lucrative work. And two years later, the company hired Lannes, one of the leaders of the coalition that challenged DAC. He has since died. The next big threat emerged in 1998, when whispers surfaced again throughout the tight aviation community that Parsons Aviation, part of an engineering firm with contracts at 30 airports worldwide, was eyeing a challenge to DAC's empire. At the time, DAC was under fire in Herald articles and a county audit for its high fees. DAC acted quickly. By 1999, it added four lobbyists: * Michael Benages, a veteran lobbyist and former campaign strategist for Commissioner Jimmy Morales, who had just launched meetings to look at DAC's profits. Price tag: $3,000 a month. Benages declined to comment. * Dewey Knight III and William Perry, close allies of Penelas and partners in airport retail contracts. Price tag: $2,000 a month. They declined to discuss their lobbying activities for DAC. * Armando Muñoz, a Penelas friend and fundraiser, who joined the team in November 1999. Penelas has appointed him to the county Sister Cities committee, and Muñoz and his wife traveled with the mayor on missions to Spain in 2000 and Uruguay last year. Price tag: $3,000 a month. "I am a marketing expert, " Muñoz said. "I do studies." He is not registered as a lobbyist, nor is he well known around County Hall. He has submitted no studies or memos to the firm in writing. "I submit to them my presence when it's required, " he said. The company would not comment on why it hired each lobbyist, with one exception: It says it got Benages, in part, to lobby The Herald's editorial board. With this dream team intact, DAC weathered the critical articles and the county audit, which had concluded that the company's contract was costing the county too much and should be renegotiated.

DEFENDER OF COMPANY Former construction chief 'championed their cause' Richard Mendez, the airport's construction chief who accepted gifts from DAC while overseeing its spending, helped defend the consulting firm. "He championed their cause by helping them develop a response to the auditor's findings, " said former Aviation Director Gary Dellapa. "He believed the [profit] was not portrayed accurately." When the issue came to debate in Morales' committee meeting, Dellapa said he defended the company and its revenues based on Mendez's advice. With airport staff saying everything was fine, Morales did not pursue the matter further. The consulting firm trimmed its fees slightly, and the issue vanished from public scrutiny. Mendez resigned that month in a cloud of suspicion over other deals that ultimately led to corruption charges he is now fighting. A month later, he began work as a two-year consultant for one of DAC's principal partners, Spillis Candela & Partners. The firm will not say how much it paid him.

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