Beach politician under investigation raised $500,000. What will he do with the money?

Miami Beach Commissioner Michael Grieco still has more money in his campaign war chest than any other candidate for elected office on the Beach — even though he dropped his bids for mayor and re-election to the commission after becoming the target of a public corruption probe.

To date, his official fundraising haul of $550,944 outstrips every other candidate in the Nov. 7 municipal election, including his former opponent and now-leading mayoral candidate Dan Gelber.

Some donors are wondering what Grieco will do with the money that was donated directly to him, which he isn’t required to give back.

Grieco didn’t respond to the Miami Herald’s request for comment on Wednesday, but in an emailed statement, an accountant hired by Grieco said he is “now working to ensure that the campaign termination is done timely in accordance with Florida’s Campaign Finance Laws,” adding that donors will receive refunds proportional to their contributions.

“I am currently determining the pro rata return of funds to the campaign contributors,” said Jose A. Riesco, the accountant. “Although the campaign is not required to return the funds to contributors, doing so is consistent with Commissioner Grieco’s service to the public and his appreciation for those who helped him in that remarkable opportunity to serve the community interest.”

One donor, who requested anonymity to speak freely, said he was frustrated with Grieco over the implosion of the campaign, but he felt assured after the commissioner told him the money would be returned.

Other donors, like North Beach resident Tom Richerson, said they were more worried about losing a politician who seemed to care deeply about his constituents, and less concerned with receiving a refund check.

“I didn’t always agree with everything, but at least you could get him on the phone,” he said. “I was disappointed when he quit the commission race.”

According to Florida election law, Grieco has 90 days from the date of his withdrawal to dispose of his funds. He’s permitted to pay off any outstanding bills, reimburse himself for any personal loans he made to his campaign, and then return the money to donors on a pro-rated basis or donate the funds to a 501(c)(3) charitable organization. He can also donate up to $25,000 to his political party. Grieco is a registered Democrat.

Campaign-finance records showed Grieco loaned his campaign $40,000. As of August, he had spent nearly $142,000 out of his campaign account. Nearly half went to the firm of his political consultant, David Custin. The remaining balance of $409,015 is more than any of the other candidates have in their accounts.

The bulk of Grieco’s donor list is a mix of residents from different neighborhoods in Miami Beach and several Beach-based businesses. The strong fundraising from Beach-based sources was a point of pride for Grieco when he was on the campaign trail.

Supporters said they are disappointed to see a commissioner they consider reliable and accessible walk away from municipal politics under the cloud of a criminal inquiry that could lead to charges related to funneling illegal political contributions from a foreign donor into a political committee.

Several donors told the Miami Herald they would’ve liked to have seen Grieco, at one time a formidable candidate for mayor, at least remain a commissioner because he was approachable and easy to reach when residents had concerns. Few commented on the investigation.

South Beach resident John Deutzman and his partner each gave Grieco $1,000, the maximum amount allowed by law, because he said Grieco was “one of the most receptive politicians I’ve ever dealt with.”

“Michael’s always been unique in that he’s been very responsive to my concerns about crime,” Deutzman said.

With the Nov. 7 election looming, Grieco ended his re-election campaign last week in the midst of an investigation into his involvement with a separate political committee that has come under scrutiny for its ties to the commissioner. That committee, called People for Better Leaders, collected $200,000 from Beach interests that include city vendors, real estate developers and lobbyists. Following a series of Miami Herald articles revealing Grieco’s relationship with the committee — a relationship the commissioner strongly denied at first — the Miami-Dade State Attorney’s Office began investigating in June.

He could face criminal charges after investigators unexpectedly uncovered evidence that Grieco helped conceal the source of illegal political contributions from at least one foreign national by funneling the donations through Tony Rodriguez-Tellaheche, a local real estate agent. Rodriguez-Tellaheche’s attorney told the Herald last week that his client is not the subject of the investigation and he is cooperating with investigators.

People for Better Leaders shut down following the Herald stories this summer. But it dragged its feet in returning the money, leading powerful donors to complain publicly. Grieco said he had no control over the committee’s money.

As for the money that Grieco received directly to his official campaign account, donor Ronald Starkman isn’t worried about getting a check. Starkman, who lives in the South of Fifth neighborhood where Grieco resides, said he gave to Grieco’s campaign last year because he considers him an effective commissioner with a good sense for the concerns of the average resident.

“He did a great job serving our neighborhoods, and I hope he is proven innocent,” he said.

Grieco’s campaign was funded by many small donations and a few larger contributors who include prominent Beach property owners and business interests. Nearly one in 10 dollars Grieco received was from a single source: landlord Adam Walker, who owns hundreds of rental apartments on the Beach.

Walker contributed more than $40,000 through a network of companies he controls. The tactic, called bundling, allows donors to get around the individual limit of $1,000 per candidate in local elections.

Walker did not return a request for comment from the Miami Herald this week.

In 2017, Grieco’s top donors included:

▪ A group of executives and their relatives at New York-based Infinity Real Estate who gave more than $8,400. Infinity is building a CVS on Ocean Drive. The firm also contributed $10,000 to People for Better Leaders.

▪ Miami real estate investor Sam Herzberg, who gave at least $5,000 through corporations.

▪ Companies tied to Nadim Ashi, the developer of the Surf Club Four Seasons condo in Surfside, gave at least $4,000.

▪ Companies tied to developer Russell Galbut or his relatives, which gave $3,000.

Mark Herron, an elections lawyer in Tallahassee, said it’s rare for such a well-funded candidate to drop out.

“It’s uncommon, but the circumstances under which he has withdrawn his candidacy are uncommon as well,” Herron said. “This doesn’t happen every day.”

Herron said the law is clear as to how Grieco must distribute the remaining money.

As a general rule, he said, candidates who drop out tend to pay their outstanding campaigns bills, refund any personal loans they may have made to the campaign and then donate the rest to charity.

Grieco’s situation could be different because so many donors contributed.

“Most people when they drop out,” Herron said, “there’s usually not this much money involved.”

This story was originally published October 4, 2017 at 5:57 PM with the headline "Beach politician under investigation raised $500,000. What will he do with the money?."