One year ago this week, Miami Beach’s mayor and city manager held shovels and posed for pictures in a rejuvenated botanical garden blossoming just a short walk from their offices at city hall.
Looking back, it appears they were unwittingly celebrating a breath-taking monument to a new era of Miami Beach corruption, in which tainted contracts were reshaping the city under their noses.
According to police and prosecutors, the overhaul of the garden was completed by a shady contractor in bed with a senior city official who rigged the award of the $1.4 million contract. Former purchasing director Gus Lopez is believed to have received a piece of the action on that and more than a dozen other contracts during the past seven years.
Seawalls, bike paths and restrooms were all laid or built by contractors that together paid more than half a million to a consultant, who in turn gave roughly half to Lopez, according to a criminal affidavit. Other allegedly tainted contracts covered everything from security services and lawn care to food concessions.
Corruption is nothing new in South Florida’s glitziest community, a city that seems to have hanky-panky embedded in its DNA. In the ’20s, it was Prohibition-era speakeasies. In the ’30s and ’40s, when casinos were illicit, Beach Commissioner Art Childers owned one in Miami and the S&G Syndicate ran bookmaking operations from Miami Beach hotel tobacco stands and cabanas.
The Beach is where mobsters Al Capone and Meyer Lansky lived in their golden years and where Alex Daoud sold his votes to a local banker in the ’80s before he was shipped off to federal prison — after which he wrote a book bragging about his exploits.
Despite this dubious pedigree, interim City Manager Kathie Brooks this week called Lopez’s arrest a “low point in our city, particularly after the year we’ve had.”
The allegations against the city’s former purchasing director can’t be viewed with blinders. His arrest Monday comes as Miami Beach City Hall is still reeling from a year-plus of controversy. A sampler:• The FBI in April arrested seven fire and code inspectors who were charged with shaking down a nightclub owner and running “sham” cocaine for undercover federal agents. At the time the arrests were announced, agents said their investigation would continue.
• The police department is still repairing an image damaged by former top brass’ relationships with Ponzi-schemer Nevin Shapiro, an ongoing probe into the questionable use of money by a police-related charity and the September arrest of a cop on racketeering charges related to a ring that used straw buyers to resell leased cars or secure bogus loans on cars that had already been bought and shipped overseas.
• Investigators began looking this month into a parking enforcement officer’s letter alleging that his supervisors were giving a free pass to the illegally parked cars of customers at iconic restaurants.• Two city commissioners were under investigation until May, when a probe cleared them of colluding before a vote to fire the then-city manager, who himself had recently been cleared of trying to extort the New World Symphony.
Concerns linger that Lopez was looking to score big by rigging bids for Miami Beach’s ambitious convention center redevelopment project, the genesis of the investigation that led to his arrest Monday. Prosecutors said early this month that they had not found evidence “at this time” that bids were tainted, but would not comment on the convention center project Monday.
The probe remains ongoing, and progress on the convention center project is moving at a snail’s pace.
Former City Manager Jorge Gonzalez, who resigned in July several months after asking for the Lopez investigation, said during his last days as top administrator that corruption was so often on peoples’ tongues it was like they were casually talking about “ice cream.”
Lopez’s arrest, and allegations that he was receiving kickbacks for half a decade, won’t change that.
“This is the most depressing thing I’ve seen happen since I’ve been here,” said Commissioner Jonah Wolfson, who since his election in 2007 has seen everything from building inspectors accepting bribes to a sanitation worker illegally dumping lawn clippings in exchange for cash from landscapers.
In the annals of petty Miami Beach corruption, the 2005 arrest of a meter maid who admitted to stealing thousands in coins and small bills and exchanging them for cash at a Publix occupies a special place. There was also the police officer fired in 2010 for admitting that he had participated in a dog fighting ring after his girlfriend gave investigators a 2002 film called Mississippi Dog Rolls.
But Lopez’s arrest “rises to the highest level,” Wolfson said.
Lobbyist Eston “Dusty” Melton said the severity of the allegations facing Lopez could be described as the actions of one “bad apple.”
“On the other hand, the person in charge of that entire purchasing operation, to be facing charges both serious and long-running, does certainly invite questions about a broader governance and oversight in Miami Beach,” said Melton. He has represented Trans Florida, one of the companies that hired Pierre Landrin, the consultant who allegedly kicked back money to Lopez
When Gonzalez stepped down this summer and Brooks took control of the city, she talked about restoring faith in local government and rooting out corruption. But if anything, the latest allegations against Lopez have raised more questions about the depth of the city’s problems.
The city is now in the troubling position of doing business with companies that are implicated in a bid-rigging scheme through their payments to Landrin, who admitted to sharing roughly half of his $600,000 in consultant fees with Lopez, an old friend, since 2005, according to an affidavit.
None of the contractors has been charged, but Brooks and elected officials are concerned that the companies may have known they were engaged in bid-rigging.
In the case of Harbour Construction, which received the $1.4 million botanical garden job and has been paid more than $3.6 million for an ongoing Dade Boulevard seawall and bike path project, police say company employees admitted to falsifying a letter of credit and receiving leaked information about other companies’ bids.
On Wednesday, the City Commission directed police to investigate every company mentioned in the affidavit and rescinded the award of an unsigned security contract recently awarded to a company that police said paid Landrin $22,000 going back to September 2011.
“We need to figure out what went wrong,” Mayor Matti Herrera Bower said this week.
For Alex Daoud, the infamous former Miami Beach mayor who detailed how he sold his vote for years in his book, Sins of South Beach, the answer isn’t terribly complicated.
“It’s the environment,” said Daoud, who served 18 months of a five-year sentence in 1993 for tax evasion, obstructing a federal jury and accepting bribes. “You’ve got tremendous nightlife, tremendous money being involved, and you have a phenomenal need to keep the cash cow alive.”
After he got out of prison, Daoud remarked that “people say Alex Daoud was corrupt. Well . . . yeah! So were a lot of other people. I got caught. A lot of other people haven’t been.”
A number of businessmen and politicians implicated in his book remain regulars at City Hall and say Daoud is a liar, though the former mayor likes to point out that he’s never been sued.
Daoud, who still lives in South Beach and is writing a fiction novel — his movie was never made — said the latest allegations about bid-rigging top anything he ever did.
“They’ve outdone themselves,” he said. “Rigging bids? I didn’t even do that. It was too horrific for me.”