Lobbysts chase grants, earn a share

12/11/1990 3:17 PM

08/12/2014 2:50 PM

When Dade County's Beacon Council wanted to study the South Florida economy, it hired two lobbyists to persuade the state to pay for it.

When the Legislature gave the group a $150,000 grant, the Beacon Council rewarded the lobbyists with $15,000 of the state money.

That's an improper use of taxpayer's dollars, according to the Comptroller's Office.

About one-third of the Dade County nonprofit groups that received state money in 1989 did the same thing, according to a Miami Herald sampling of contracts between nonprofit groups that got state money and the lobbyists who helped them get it.

The sampling showed about $100,000 in state money paid to lobbyists, but the dollar total could be much higher. Only a small portion of the hundreds of projects awarded in 1989 were surveyed.

Under the system in which the Florida Legislature gives away grants, the state has no way of discovering the payments to the lobbyists. That's because the grants are typically not audited by the state. When they are, the scrutiny comes after the money has been spent.

Lobbyists play a key role in deciding who gets state money. Organizations hire them to write grant proposals, convince legislators the items should be funded, then usher the projects through the complicated budget process. In some cases, lobbyists determine how much money a project needs -- then get a percentage of the appropriation as a fee.

A legislative committee tried -- but failed -- during the 1990 session to ban contingency fees to lobbyists. Between 1988 and 1990, 5,833 lobbyists registered in Tallahassee.

"Lobbyists are a part of doing business, unfortunately, " said Tom Ferguson, president of the Beacon Council. "I wish there was a better way."

Records show that while most nonprofit groups use private dollars to pay lobbyists who get them public dollars, some pay the lobbyists directly out of the state grants.

In 1989, for instance:

* The South Florida Economic Research Foundation, the Beacon Council group that got the grant, paid lobbyists Robert Levy and Fausto Gomez $15,000 from the grant. The foundation also paid grant writer John Adams $10,800.

Levy and Gomez never registered in Tallahassee, as required by state law. Both said they thought they had, but said it was an oversight if they hadn't. They estimated they spent three weeks at the end of the session on the item.

* The Hialeah Latin Chamber of Commerce paid Gomez $10,000 from a $100,000 grant for a "productivity improvement center." Most of the money went for travel and salaries. The group produced a directory of apparel businesses in Hialeah and sponsored a trip to Costa Rica.

* The Association for the Useful Aged, a Little Havana program for the elderly, paid Gomez $3,000 from a $50,000 state grant. The group said Gomez helped them draw up the proposal and the contracts, but did not lobby the Legislature per se. * The National Association for Crime Prevention, a Little Havana crime watch group, paid Rick Sisser $16,000 from a $160,000 state grant. The group used most of its money on salaries and repair and upkeep of its cars.

* The Delphi Foundation, which runs a Dade County dropout prevention program, paid Sisser $24,100 "right from" a $370,000 grant, its president said.

* The Municipios Trust Foundation, a project to build a community center for Cuban Municipal Officials in Exile, paid its lobbyist, Roberto Pelleya, approximately $15,000 from a $165,000 state grant in 1989.

* Youth Crime Watch of America, which trains students in crime prevention techniques across the state, paid lobbyist Beth Labasky $20,000 for lobbying and administrative work. Most of her fees came from a $200,000 state grant. The group thought the payments were allowed.

Jo Ann Levin, deputy general counsel for the comptroller's office, said "such payments constitute an improper use of state funds."

She cited a Florida statute that prohibits the use of state funds for lobbying and a 1977 attorney general's opinion that "public funds may not be expended by a county or district or other statutory entity for lobbying purposes unless expressly and specifically authorized by statute."

Levin also noted that another Florida statute prohibits extra payments to any contractor after the service has been rendered. Since the services of a lobbyist occur before a grant is even awarded, groups cannot lawfully charge the state for the work.

Others don't think the law is that clear.

"I don't think there's anything that restricts that as a matter of law, " said Peter Dunbar, the governor's legal counsel. "I'm not aware of it being illegal, but it would be unusual."

Gomez said he was unaware his clients were paying him with tax dollars.

"Do they pay me out of state money? No, " he said, adding that his contracts specifically ban his clients from using legislative funds to pay him.

He sent The Herald a blank contract that included that provision. However, that contract was different from the executed contracts examined by The Herald. None of those contracts had the restriction, even though some of the clients paid him from sources other than the grant.

"I'm basically a lobbyist. I don't delve into their accounting procedures, " Gomez said.

Levy, the lobbyist for the Beacon Council, a Dade County group of business leaders whose aim is to boost the South Florida economy, said the council "could have just as well paid us with private sector funds. It's not my place to ask."

Sisser also said he did not know his clients used tax dollars to pay him.

"My contracts say they pay me a proportion of whatever dollars I get for them, " Sisser said. "I assume they're coming from private funds."

After The Herald disclosed the crime prevention payment to Sisser last summer, a state auditor ruled it was an improper use of public funds. The state recommended that the $16,000 be deducted from the remaining grant money due to the crime watch group.

"Nobody is supposed to pay me out of state funds, " Sisser said. "When I got the check from the National Association for Crime Prevention, I thought they were paying me out of private funds. That's the law. They should know that."

Pelleya did not return phone calls. Although he is registered as the lobbyist for Municipios, the group said his payments were also for legal and administrative work.

Had the House and Senate appropriations committees known that state money was being used to pay lobbyists, the grants probably wouldn't have been funded.

"If that information were made available to us, I don't believe we'd be recommending an expenditure, " said Peter Mitchell, acting staff director of the House Appropriations Committee. "We'd be had under that type of deal."

Said John Andrew Smith, staff director of the Senate Appropriations Committee: "If it's not illegal, it probably ought to be."

Lobbyists play such a crucial role in the appropriations process that they sometimes recommend to a group how much money to request.

That's what happened when Informed Families of Dade County contacted Tallahassee lobbyist Labasky last year in April, as the session convened.

"We wanted to get a legislative appropriation to expand our program. We can't spend our time in Tallahassee, " said executive director Lees Baldwin.

Labasky agreed in writing to try to get the group money:

"Regarding my services for this session, my consulting fee will be 10 percent of the total appropriations obtained for Informed Families of Dade. My personal recommendation is that we request $250,000 this year, as this is the tightest budget year the state has had for some time."

Labasky was successful. The group paid her out of discretionary funds.

Miami lawyer Ron Book, considered by many to be one of the most successful lobbyists in appropriations, said he never has taken a fee from a state grant.

"I have always believed -- and always made it a condition of representation -- that there would be a bad perception if you got your fee out of government monies. It's wrong, " Book said. "I believe there is a section of the law that implies it's illegal."

Last session, the House Committee on Ethics and Elections tackled the issue of lobbyists' contingency fees. Chairman Norm Ostrau, D-Plantation, said he thinks high contingency fees leave a bad impression "that someone is buying their way through legislation."

The committee did not address payments directly from appropriations.

"We should take an absolutely strong look at that, " Ostrau said.

Rep. Ron Glickman, D-Tampa, had introduced the bill to ban contingency fees. He said that large contingency fees give lobbyists the incentive to offer kickbacks.

Glickman also was troubled about state money being used to pay lobbyists.

"That's not what we're supposed to be using state money for, " he said. "For a part of an appropriation to be siphoned off to pay for a lobbyist, that's sad."

He said he did not think nonprofit groups should have to hire lobbyists to get appropriations. That job, he said, should fall on the legislators themselves.

A lobbyists' success often rides on access to the legislators who have power.

Book and Sisser, for instance, are close friends with Senate President Gwen Margolis, the former chairman of the Senate Committee on Appropriations.

Last year, after the session, Book sent Margolis 10 dozen lavender roses. It was his way of congratulating her for the presidency -- and thanking her for his clients' appropriations.

Gomez is close with Dade's Hispanic delegation. He vacationed in Europe for several weeks this summer with Rep. Luis Morse, R-Miami, who as the chairman of Dade's Cuban- American Caucus helped several of Gomez's clients get appropriations.

"He paid his way. I paid my way, " Morse said. "He is a good friend of mine. If somebody is a friend of mine from way before I'm a legislator, I don't think under any ethical rule or law that anyone can tell me not to continue a friendship."

Morse said he sponsored some of Gomez's appropriations because they were projects in his district. CAMACOL, the Latin American Chamber of Commerce, for instance, received a $300,000 state grant with Morse's help for a trade and exhibition center. The chamber paid Gomez $30,000.

Lobbyists also try to have cozy relationships with the staff members who actually write the budget.

Toni Riordan, a lobbyist for the Miami Film Festival, charged the festival $222.34 in 1988.

The expense: Dinner for the House appropriations staff.

Secretary of State Jim Smith, whose office administers grants to arts and cultural groups, doesn't think it's right that nonprofit groups pay top dollar to lobbyists, then seek limited state money.

If they can afford to pay a lobbyist, he argues, then they don't need the state money.

"We have a serious question if they use grant money to pay a lobbyist, " Smith said. "We feel we do an adequate job of lobbying the Legislature."

Smith now requires applicants to list how much money they plan to spend on lobbying.

The Discovery Center, a museum in Fort Lauderdale, said it doesn't need a lobbyist. It got $427,000 in the 1990 budget.

Explained Hilary Winiger, who is in charge of grants and government support for the museum:

"Tom Gustafson sits on our board. I think that's how things get rolling."

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