Marc Caputo

Marc Caputo: Rivera’s ‘marañas’ exposed in state ethics case

To an observer of the many investigations into David Rivera, it came as little surprise that a judge earlier this month rapped the former Florida lawmaker and current congressional candidate for giving “non credible” testimony and displaying “corrupt intent” while breaking state ethics laws.

A big shocker that the judge didn’t notice or mention: Rivera actually testified that he might have planned to subvert federal campaign-finance law in 2010 when he successfully ran for Congress.

Rivera didn’t come out and say “I planned to break the law” and, to be clear, he ultimately didn’t go forward with the alleged plan.

Yet his testimony showed he has either a disregard for campaign finance laws — at the heart of three criminal investigations and the ethics case against him — or a stunning level of ignorance in light of his otherwise keen intellect and deep political knowledge.

The ethics case, in which Rivera is accused of filing improper state financial disclosure and reimbursements, highlights what one Republican friend of his privately called “another one of David’s marañas” (a Spanish word for “tangle” or “thicket” that’s used as Cuban slang for something like “a complicated web of schemes”).

In this instance, Rivera wove his tangled web with the company now known as Magic City Casino to lead a successful 2005 Miami-Dade gambling referendum.

Rivera made sure the consulting money, $132,000, wasn’t paid to him directly. The payments were routed over time through a company called Millennium Marketing that was owned by his mother, now deceased, and her friend.

Claiming publicly he wasn’t receiving “a penny” from Magic City, Rivera didn’t list the payments on his public disclosure forms as a sitting state legislator. He then publicly changed his story — and his disclosures — amid investigations launched in response to a series of Miami Herald articles.

Rivera’s new story: He did get gambling money after all. But it wasn’t income that had to be reported, he claimed, because it was from a “contingent liability loan” package exempt from public disclosure.

To show it was a “loan,” Rivera started paying it back. And when he did, he got money from his mom and her friend, Ileana Medina, who gave him $49,000 in a single check from her home-equity line of credit.

“So an officer of Millennium Marketing gave him the money to give back to Millennium Marketing,” Kelly Kimsey, a Florida Department of Law Enforcement senior crime intelligence analyst supervisor, testified in the case.

“He did not have the money to repay those loans at the time. He had spent the money on his living expenses,” she said, underscoring that she thought the arrangement was bogus.

Rivera denied all this. He said the money from the owners of Millennium Marketing wasn’t to help pay back Millennium Marketing. He testified that the $49,000 from Medina was for his successful 2010 congressional campaign.

“There are always, I would call them ‘nervous nellies’ in a campaign that think much more needs to be done, and we start getting nervous about the upcoming election day,” Rivera testified. “And some of those advised me that perhaps I would want to spend more money above and beyond what had been budgeted for media time.

“And I was very hesitant to do that,” he said. “But just in case, I secured a loan that I may or may not utilize, and I ended up not utilizing it.”

Had Rivera used that money, it probably would have violated federal campaign laws.

Congressional candidates in 2010 were limited to receiving $2,400 from each contributor. Candidates, then and now, can’t borrow money from others then use those funds as if it’s their own money for a campaign.

“A personal loan from a friend would be considered a contribution from the friend and [$49,000] would be over the contribution limit,” Brett G. Kappel, a federal campaign finance-law expert and Washington-based attorney with Arent Fox LLP said via email.

“A loan against the candidate's share of a business, however, could be structured so it was a legal use of the candidate's own assets — but it would have to be disclosed before the election.”

Rivera’s loan wasn’t structured like that.

If it weren’t for this no-loans law, there would be no real finance disclosure at all because contributors could privately inject money into a candidate and no one would know.

In 2012, a little-known congressional candidate named Justin Sternad learned this the hard way when he received about $82,000 in illegal payments, some deposited into his personal bank account, to run against fellow Democrat Joe Garcia and bash him on behalf of Rivera. Garcia beat Sternad in the primary and defeated then-Congressman Rivera in a general election matchup.

Under investigation in the Sternad case, Rivera now wants a rematch and has filed to run for congress in District 26.

Sternad pleaded guilty to campaign-finance crimes. His de facto campaign manager, Ana Alliegro, has been indicted and awaits trial in federal jail. She’s a gal pal of Rivera’s who was extradited from Nicaragua where she fled to get away from the feds.

Another maraña to be sure.

Administrative Law Judge W. David Watkins didn’t get into any of this when he issued an opinion in the state ethics case. Watkins, saying he didn’t believe Rivera in some instances, found that he unlawfully double-billed taxpayers and his campaigns for travel, filed incomplete financial disclosure reports and appeared to live off campaign money.

The ethics commission must decide whether to find guilt ultimately. The Florida House would be in charge of levying a penalty if any.

Watkins said the “greater weight of the evidence” indicates Rivera used the gambling money as income, but he couldn’t find a violation because it couldn’t be proved by a “clear and convincing” evidence standard.

The IRS and FDLE examined the $132,000 worth of consulting payments made to Rivera but didn’t charge him criminally.

Maintaining his innocence, Rivera had a momentary slip about his “income” while he was being grilled by an assistant state attorney general in the ethics case about his disclosures.

Question: “Those speak to Millennium Marketing income; is that correct?”

Rivera: “Yes.”

Question: “So these were…..”

Rivera: “No, no, no, sorry. I retract that. They do not speak to Millennium Marketing income. They speak to contingent liabilities related to Millennium Marketing.”

That’s Rivera’s new story and he’s sticking to it. But if he’s not careful, he could get stuck in his own maraña.