Miami Beach official, hotel executives charged with corruption
When detectives began exploring allegations that Miami Beach’s top building official doled out favors in exchange for free stays at a well-known international hotel chain, they found a treasure trove of evidence.
It was all on emails.
Authorities say the correspondence shows longtime public employee Mariano Fernández, who surrendered Tuesday to face corruption charges, blatantly traded his influence and work for luxury rooms in South Beach, Mexico and the Dominican Republic.
“Wherever he went, he received VIP treatment and never paid for accommodations, food or beverages,” Miami-Dade State Attorney Katherine Fernández Rundle said during a Tuesday afternoon news conference.
But prosecutors aren’t going after only Mariano Fernández. They filed unlawful compensation charges against executives of the RIU Hotels & Resorts, which owns more than 100 hotels in 19 countries, including a resort on South Beach that needed building permits from Fernández’s department.
Others charged: Luis Riu Guell Jr., the chain’s owner, as well as the company itself, along with RIU’s regional vice president, Alejandro Sanchez del Arco.
“What he has done for us, it has not been a small thing,” Luis Riu Guell Jr., the chain’s owner, wrote in one email while approving a deeply discounted rate for Miami Beach employees to stay at the company’s resort in Punta Cana in the Dominican Republic.
The charges were long expected for Fernández, who was fired late last year by Miami Beach after four years on the job. The allegations stem from a major renovation of the RIU Plaza Hotel between October 2013 and June 2016. Once known as the Sans Souci, the Morris Lapidus-designed property at 3101 Collins Ave. became an RIU property in 1996.
As the top building official at City Hall, Fernández had significant power over inspections and permitting for construction and renovation projects in the resort city — crucial functions that determine the timeline for completion of big projects.
He is charged with unlawful compensation and conspiracy to commit unlawful compensation. Defense lawyer Jeffrey Weiner insisted his client will be cleared.
“My client never shirked his responsibility to the city and there was no quid pro quo,” Weiner said Tuesday afternoon. “He didn’t look the other way. He insisted on full compliance with all the rules and regulations of the city of Miami Beach.”
Barry Wax, Riu’s defense lawyer, also criticized the case. “There has been no crime committed here. The prosecution is trying to manufacture a quid pro quo out of nothing. Luis Riu and all of the employees of his international hotel corporation have not violated any laws and we’re confident they will be vindicated.”
Prosecutors believe that Fernández regularly solicited free and comped rooms for him and his employees, even helping to organize “team-building” department retreats at deeply discounted rates. In all, at least five of Fernández’s employees got outright free stays through Fernández, and dozens more got discounted rates — amounting to over 200 nights.
One of those team trips was in September 2015 to the RIU Palace Bavaro All-Inclusive Resort in Punta Cana. There, Fernández and his wife got a free suite — and a birthday bottle of Johnny Walker Black Scotch placed in their room, plus a VIP night at the Coco-Bongo nightclub.
In an email obtained by prosecutors, the hotel’s sales director told a company executive that Fernández was “delighted” by the perks. “By the way, he has said that is not paying for his room. We left it for free so there wouldn’t be any issues. Regards,” the sales director wrote.
“I talked to him this afternoon and he was drunk hehehehe. He says you are the best!” replied the executive, Ricardo Luque Ferrandez. “Yes, his room is already set for free … He told me he will send a photo from the jacuzzi with his wife and 4 girls.”
One week after the trip, Fernández extended one of the hotel’s permits by another two months, according to an arrest warrant by prosecutor Trent Reichling.
Combing through hundreds of emails, detectives Ricardo Arias and Matthew Ambre learned that Riu himself was instrumental in approving gifts and stays. In one email, Riu profusely thanked Fernández, saying “we will never forget it” and “RIU is your home and if you want to organize another trip to any destination, where we are, we would feel very flattered.”
In another series of emails, Riu complained about Miami Beach fire inspectors, at one point calling them “Caribbeans,” while instructing his executives to lean on Fernández to help the building pass inspections. “Mariano yesterday he said … he will do everything so that we can open the hotel,” Riu wrote.
Fernández was accompanied on some stays by his wife, Maria Ortiz, a Miami-Dade judge who told investigators she had no idea the rooms had been given to her husband for free. In all, according to an arrest warrant, Fernández and his wife accepted 10 free nights at resorts in Miami, Mexico and the Dominican Republic.
The charges are an embarrassment for City Manager Jimmy Morales, who prioritized revamping the Beach’s reputation tarnished by scandal and corruption. He hired Fernández away from a similar position at the city of Miami, and then fired him in November after the investigation became public.
Morales told reporters he was aware of the team-building trips, which he said were popular among building department staffers who were known for having a “bad attitude” and low morale. He said employees returned from the retreats happier. But he said he did not make the connection to the recently renovated RIU property on South Beach, even though fliers circulated within City Hall advertised the discounted rates for the chain.
“I didn’t pay attention to what hotel they were staying at,” he said. “Even if I saw RIU, I would not have made a connection because I don’t necessarily know the owner of every hotel in Miami Beach.”
Morales first learned of the allegations from an anonymous tip inside City Hall, which he said concerned him enough to take the issue to the police department, which turned the matter over to the state attorney’s public-corruption task force.
The impact of the charges against Fernández is expected to continue to ripple through City Hall. Morales said he plans to launch an internal review to question employees who went on the trips — and why no one raised any red flags at the time.
Morales on Tuesday defended the 2013 hiring of Fernández, who received high marks for improving customer relations for residents eager to begin work on their properties faster.
“He did a very good job of running the department and of raising morale in the department,” Morales said. “Unfortunately, he took it a step too far.”