Miami Beach

He said he put residents first — then he scored secret cash from special interests

In October, former Miami Beach Commissioner Michael Grieco pleaded no contest to a misdemeanor criminal charge stemming from a campaign-finance scandal over secret fundraising.
In October, former Miami Beach Commissioner Michael Grieco pleaded no contest to a misdemeanor criminal charge stemming from a campaign-finance scandal over secret fundraising. cmguerrero@miamiherald.com

It was raining outside, so hotelier Marc Lawrence met then-Miami Beach Commissioner Michael Grieco in the parking garage of the South Beach condo building where they both live.

Lawrence handed the commissioner a $15,000 check.

“He told me he was running for mayor,” Lawrence later told state investigators probing Grieco’s campaign fundraising. “And he asked if we could contribute.”

The August 2016 donation never showed up in public records for Grieco’s campaign, which formally began several months later. That’s because — at Grieco’s instruction — Lawrence made the check out to People for Better Leaders, a political action committee with no apparent ties to the popular politician.

Now, hours of sworn testimony from the committee’s donors prove the PAC was meant to serve as a secret fund for Grieco’s upcoming campaign for mayor — raising more than $200,000 from Miami Beach business interests and residents between 2015 and 2017 — all out of public view.

The donor statements give an inside view of how a popular politician who said he put residents’ interests first secretly scored cash from developers, city vendors and lobbyists. A series of Miami Herald stories revealed the scandal in June, followed by his eventual resignation from the commission.

Grieco often accused opponents of bowing to special interests and claimed he was the only commissioner standing up for residents. But he turned to Beach businesses to raise money for People for Better Leaders. Donors included Lawrence, co-owner of South Beach’s Angler’s Hotel, who was seeking an upzoning before the City Commission. The largest donor, a company called Boucher Brothers, holds Beach contracts to rent out chairs and sell concessions on the sand.

grieco drop
Michael Grieco held a press conference on July 31, 2017, to announce he was dropping his bid for mayor amid a campaign-finance scandal. Emily Michot emichot@miamiherald.com

The number of people with business before the city contributing to the PAC led the Miami-Dade state attorney’s office to ask donors if Grieco demanded cash in return for legislative favors.

While no donors accused Grieco of a shakedown, their testimony adds to the mountain of evidence contradicting his public statements about the PAC.

For months, Grieco insisted the PAC was not raising money for his bid for mayor. Even after accepting a probationary sentence for funneling illegal foreign money into People for Better Leaders, Grieco stuck to his guns. The committee was set up by a friend to promote policy issues, he told the Miami Herald in October, hours after entering a no contest plea to the criminal misdemeanor charge.

“To say that [People for Better Leaders] was dedicated to or created for Miami Beach politics would be inaccurate,” Grieco said.

But more than a dozen donors to the political committee told a different story when questioned during the run-up to November’s election.

One Beach bigwig after another told investigators that Grieco solicited donations for the PAC to boost his political fortunes, often during meals at fancy South Beach restaurants, according to documents and audio recordings of their interviews. The files were obtained by the Herald through a public records request. The Miami-Dade ethics commission also participated in the investigation.

In January 2016, Grieco dined with Rustin Kluge, a medical marijuana entrepreneur, at Milos Restaurant in South Beach. Kluge handed him a $20,000 check for People for Better Leaders.

“Michael said he was forming a PAC and asked me to donate to the PAC,” Kluge told investigators. “I wanted to show him support. … He has strong political ambitions.”

The same day, Grieco asked that an item about locating medical marijuana dispensaries in the city be added to the commission’s agenda.

Kluge told investigators he had “no clue that [Grieco] did that nor did I ask him to do anything like that.”

Camilo Miguel, a luxury condo developer, also told the state attorney’s office that Grieco directly solicited funds for his mayoral campaign. Miguel’s $5,000 donation has not been reported before because the PAC failed to acknowledge receiving the money in state filings.

Kluge and Miguel did not respond to requests for comment Wednesday.

One donor who asked to remain anonymous said he felt “obligated” to contribute.

Grieco “was a sitting commissioner and he’s popular,” the donor told the Miami Herald this week. “I felt compelled to give.”

On Tuesday, Grieco chose not to explain the discrepancy between his public statements and what he told donors.

People For Better Leaders “spent no money for any political purpose whatsoever,” he wrote in an email in response to Herald questions. “Every contribution made by people interested in good government received a reimbursement of virtually their entire donation. … The committee is now disbanded.”

KNOW NOTHING

Although Florida has laws governing how campaign contributions can be raised and spent, Miami Beach has its own set of civil rules that are stricter than the state’s. They are designed to prevent the city’s powerful tourism and development industries from unduly influencing politicians — and to stop politicians from shaking down those who depend on city favor for campaign funds.

The rules, co-sponsored by Grieco in 2016, prevent Beach office-holders and candidates from soliciting lobbyists, vendors and certain developers for contributions to PACs.

In order to maintain his carefully cultivated image as a “pothole commissioner,” Grieco needed to run People for Better Leaders behind closed doors. He found the perfect figurehead in Brian Abraham, a friend and former strip-club manager who nominally chaired the PAC.

In a sworn interview with investigators, Abraham admitted he played almost no role in raising money or managing the committee, according to an audio recording. He also struggled to discuss any policy issues the PAC would promote.

When public corruption prosecutor Tim VanderGiesen asked Abraham if People for Better Leaders was formed as a “front” to support Grieco’s mayoral campaign, Abraham replied: “With the way it looks now, I’d be a fool to say no.”

That means Grieco was running People for Better Leaders even as he told the Herald in June that he had neither “set up” a political committee nor “solicited for one.”

IMG_grieco_abraham_9_1_1LCH36VM_L345991663
Michael Grieco, left, attends an event with Brian Abraham, right. Between them are Christine Klingspor, center left, and Jelena Lovric.

Abraham’s testimony also showed he was not being truthful when he sent the Herald an angry letter in response to its initial coverage.

“I have solely led this political committee, informed people and organizations in the community about it, and solicited contributions for it,” Abraham wrote days before his sworn interview with investigators. “This is my First Amendment right to do so. It is my protected free speech.”

Reached on his cell phone, Abraham said, “I just want to be done with this,” before declining further comment.

While the terms of Grieco’s probation prevent him from running for elected office for a maximum of one year, the ex-commissioner is already telling associates that he’s planning a comeback. His ban will end before the next Beach election in 2019.

On social media, where Grieco maintains a devoted following, he is freely dropping hints about the future.

Why are traffic and construction projects causing slowdowns on Collins Avenue?

“Because I’m not [at city hall] minding the store,” Grieco told an aggrieved Beach resident on Facebook.

When another local fretted about crime in South Pointe Park, Grieco, who lives in South Beach and formed a potent political base there, pointed out that no current members of the commission call the area home.

As an elected official, Grieco prided himself on populist stances on issues including anti-Zika insecticide spraying, a potential Cuban consulate in the Beach and a proposal for a light-rail train.

“Moving forward I worry that there will be too few voices in city hall that are honest and strong, and the few good ones who remain are being silenced by special interests, power players and transactional politics,” Grieco wrote in a farewell email to constituents after his October resignation.

BEHIND CLOSED DOORS

To raise his secret war chest, Grieco turned to one of Miami Beach’s most visible vendors.

Boucher Brothers holds lucrative city contracts to rent out beach chairs and sell concessions on the sand. The company gave more cash to People for Better Leaders than any other donor: $25,000.

In a confounding interview with investigators, Steve Boucher, one of the owners, said he contributed at Grieco’s recommendation. The then-commissioner told him the PAC supported environmentally friendly initiatives. Soon after, a stranger called asking for money on behalf of the PAC.

Boucher cut a $12,500 check.

Two months later, Boucher said the unknown man called again. He said the first donation had been “short.”

Boucher gave another $12,500.

“I never would have given it to him, but Grieco said a person was going to call me who had a PAC and that it would be a good idea to give something to him,” Boucher told investigators.

Prosecutors pressed him for the identity of the man, but Boucher said he couldn’t remember.

“Do you understand my confusion? You were asked for $25,000 by a person you can’t identify,” said VanderGiesen, head of the state attorney’s public corruption unit.

grieco zika
Former Miami Beach commissioner Michael Grieco spoke out frequently against the use of the insecticide Naled to prevent the spread of Zika. It was one of many populist causes he championed.

Other interviews also focused on suspicions of quid pro quo.

For instance, roughly three months after Lawrence, the Beach hotelier, contributed to People for Better Leaders, Grieco sponsored an upzoning proposal for a parcel of land Lawrence’s company controlled.

At a city meeting in June, other Beach commissioners questioned whether there was a connection between the proposal and People for Better Leaders.

Lawrence, who did not respond to a request for comment, claimed ignorance.

“As far as donating to a PAC, I don’t even know what you’re talking about,” Lawrence told the commission, although he would soon discuss that donation in great detail with investigators when placed under oath. “I don’t know if there was a donation.”

Grieco soon withdrew the legislation.

Ultimately, state prosecutors concluded Grieco did not break pay-to-play laws when soliciting money for the committee.

Most of the donors said they had a straightforward reason for giving: To help the career of a popular politician who could make a powerful ally.

In February 2016, Grieco lunched at Joe’s Stone Crab with Steve Kassin, a New York-based real estate investor whose firm wanted to open a CVS on Ocean Drive. The commission was considering a ban on chains opening in parts of South Beach. Kassin needed a friend. He found one in Grieco.

The commissioner, Kassin told investigators, was someone who could be “impactful” in shaping municipal affairs. Soon after the meeting, Kassin cut a $10,000 check to People for Better Leaders.

Lobbyist Alexander Tachmes, who represents Ocean Drive property owners and other influential Beach interests, also steered donations from clients to People for Better Leaders.

Peter Scantland, whose Ohio-based company hopes to win a Beach contract installing informational kiosks, said Tachmes told him the PAC was “a supporting entity for … Grieco’s mayoral election bid,” according to investigators. Scantland’s company gave $3,500.

Tachmes said he had no comment. Scantland did not respond to a phone call.

While prosecutors didn’t find evidence of pay-to-play, they stumbled upon another scheme. During an interview, Miami Realtor Tony Rodriguez-Tellaheche confessed that he accepted $25,000 from Norwegian real estate investor Petter Hagland and donated it to the PAC in his own name. Foreign nationals aren’t allowed to contribute to American elections — and using straw donors is a violation of Florida law. Grieco masterminded the plot, according to both Rodriguez-Tellaheche and Hagland.

The commissioner, who had already dropped his bid for mayor at the insistence of prosecutors, was charged with knowingly accepting a campaign contribution made in someone else’s name. He resigned from office two weeks before the election and pleaded no contest.

Nicholas Nehamas: 305-376-3745, @NickNehamas

Joey Flechas: 305-376-3602, @joeflech

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