Homestead developer off the hook for accepting illegal contingency fee

South Dade developer Wayne Rosen is off the hook, despite illegally accepting $500,000 during the development of Keys Gate Charter High School, an ethics investigation shows.

Rosen was paid $500,000 for lobbying on behalf of the Homestead charter school, contingent on approval of the school. Contingency fees for lobbying are prohibited by Miami-Dade’s ethics code, but action can’t be taken against Rosen because time has run out on the four-year-old transaction, according to an investigation by the Miami-Dade Commission on Ethics & Public Trust.

In addition, according to the ethics commission’s close-out memo, Rosen’s admission that he accepted the money came during criminal proceedings against Steve Bateman, former mayor of Homestead, who was convicted in 2014 of two counts of public corruption. Rosen had been granted immunity against criminal prosecution for anything he said in his sworn statement.

The memo said Rosen entered into an “illegal contingency fee arrangement” with Red Apple LLC — a subsidiary of Charter Schools USA, the firm that created the charter school — in 2011 and 2012 while the project was up for approval in Homestead. Keys Gate Charter School is a tuition-free public charter elementary and middle school at 2000 SE 28th Ave. in Homestead.

Although audits confirmed that Rosen accepted two payments of $250,000 in exchange for lobbying before the Homestead City Council, the three-year period for filing a formal ethics complaint has run out since the last payment was made in August 2012. The complaint was filed in June 2016 by Walter Harvey, attorney for Miami-Dade Public Schools, about nine months too late.

Rosen was not available for comment Friday.

The county’s conflict of interest and ethics code prohibits the payment of contingency fees for lobbying. A contingency fee is defined as a fee, bonus, commission or other compensation contingent on any action, decision or recommendation by any city board, council or staff.

According to the investigation’s findings, Rosen assisted CSUSA and Red Apple in applying for and obtaining approvals from the city of Homestead, including meeting with staff and elected officials.

A 2015 audit conducted by the School Board confirmed that $500,000 had been paid to an “undisclosed party” in connection with the Keys Gate Charter High School project, which was developed in 2010 and 2011 using tax-exempt educational facilities revenue bonds.

Rosen’s sworn statement during the prosecution of Bateman confirmed that he was that “undisclosed party.” In the statement, dated Feb. 8, 2013, Rosen admitted that he had originally negotiated a $1 million fee with CSUSA, which didn’t pan out.

During that statement Rosen was asked “What was the contingency on?” His reply: “Approval of the charter school,” the ethics report said.

He added that he was expected to work with city of Homestead staff to submit the project’s application and seek all needed approvals.

When asked if the process included any lobbying, Rosen said “I presume so.”

“Rosen’s arrangement with CSUSA would appear to violate the Miami-Dade County ethics code with respect to the contingency fees,” said ethics investigator Karl Ross in his close-out report. However, he added, “It does not appear that [the ethics commission] can take any further action against Rosen or by extension, CSUSA.”

This story was originally published September 24, 2016 at 7:00 AM with the headline "Homestead developer off the hook for accepting illegal contingency fee."