by Randolph T. Holhut
Chief of AR Correspondents
April 12, 2013
MARGARET THATCHER: THE GODMOTHER OF AUSTERITY
BRADENTON, Fla., April 11, 2013 -- Every town is ripe for corruption.
Where there’s money, there’s temptation for officials to grab some of the millions of dollars municipalities dole out every year.
Residents of Wauchula, a sleepy central Florida town in Hardee County, recently awoke to a multi-million dollar scandal of fraud and conspiracy by county commissioners and respected leaders.
Hardee County borders Hillsborough County, home of Tampa, and once had the bragging rights as "the cucumber capital of the world;" it is now known for its Mosaic Corp. phosphate mining operations. Residents were stunned to discover that local leaders and lifelong acquaintances were being investigated for fabricating documents, setting up questionable companies and using their authority to pillage the county.
Allegations now hanging over local and state officials stem from wrongdoing that escaped detection for a decade, as with each election, local power remained in the hands of a local few. The loot was hidden in plain sight, sitting in the town treasury, and it seems elected officials couldn't keep their hands off it.
Bill Lambert is often called "the chairman," because he's been chair of the Hardee County Commission, the county's Economic Development Council (EDC) and Director of the Industrial Development Authority (IDA). No matter what position he holds, Lambert and his vote seems to carry much sway with the other powers that be. Lambert, it would seem, has a talent for following the money.
Local officials and business leaders are suspected of having run Hardee County as if it were their personal ATM. But what leads someone from awarding friendly contracts and accepting a few kickbacks to creating shell companies that appear to have funneled millions of dollars into private accounts?
The first big and fast money blew through town in 2004, following the devastation of Hurricane Charley, which hit Wauchula, a town of less than 5,000 people, with 140 m.p.h. winds and gusts up to 160 m.p.h., at about 5:30 in the afternoon on Friday, August 13, 2004, causing more than $750 million in damage. Power was lost for three weeks, school canceled for two weeks, and there was no running water for a week. The storm damaged or destroyed 85 percent of the buildings in Wauchula; some, like the local KFC and the wind-torn roof of a cattle arena where many residents huddled to wait out the storm, remained unrepaired for years to some.
For Hardee County,. Hurricane Charley was also a perfect storm of corruption, complete with unethical insurance adjusters ready to provide the means for any local officials willing to take care of the details and bury the bones.
It was the chaos brought on by two hurricanes (Charley and Francis), just weeks apart, and the displacement of thousands of residents, that presented an opportunity to toss in some phony damage with that of the storms. Millions of dollars in claims were paid to companies like Servpro and the Florida Restoration Team as compensation for county buildings that encountered little if any damage from the storm.
False claims, double billing, bogus repairs and phantom jobs dominated what should have been focused assistance for the thousands ousted from their homes by the storm. Hundreds of families that lost everything received no government assistance while a few deep pockets were lined with millions of dollars in emergency funds. Stores and local landmarks wrec ked by the storms remained unrepaired for years.
Lex Albritton has been Hardee County Manager for more than a decade. He was born in the county and received an MBA from the University of South Florida in Tampa. It appears that Albritton spearheaded the whole operation, hiring a crooked insurance agent, Doug Knight (son of Hardee County Commissioner Rick Knight), as the county adjuster in charge of handling all of the claims.
Without proper authority, Albritton and Knight ordered the insurance payouts go directly to the shell companies as payment for the phantom repairs instead of routing them through the "Clerk of the Court" as required by state law. Millions of dollars were paid without proposals, bids, purchase orders or job completion documents, often just on the basis of some falsified receipts.
In Wauchula, the tiny county seat, everybody knows everyone. Many are related to, or married into, one of the town's founding families. It's a place where they still bake pies, start everything from the ground up, and are neighborly. So what could turn well-respected pillars of society into bunko kings with practices that mirror those of Bernie Madocff?
Despite citizen complaints, Four of the five previous county commissioners - Dale Johnson, Rick Knight, Sue Birge and chairman Minor Bryant - refused to support or assist in any investigation, or to produce any documentation that disputed any of the alleged malfeasance. County manager Lex Albritton, as well the county attorney Ken Evers, blocked any inquires.
Many locals have long suspected something was wrong. All of the good jobs would be awarded to the same few companies. Construction, banking, insurance; it didn't matter. All jobs went to the well-connected few. But no matter where you're from, nobody wants to believe that those they grew-up with might cheat them or play them for a fool. Indeed, in the words of Mark Twain,“It's easier to fool someone, then convince them they have been fooled.”
Hardee County isn't unique. In neighboring Hillsborough County, commissioner Kevin White was convicted of taking bribes and is serving three years in federal prison. In Polk County, just north of Hardee, city manager Frank Satchel and public works manager Tracy Harris are facing multiple forgery charges. The list of those willing to trade the trust of local voters for personal gain is long and sad.
Recently, a study by Integrity Florida, a nonpartisan, nonprofit research institute and government watchdog whose mission is to promote integrity in government and expose public corruption, found the state of Florida leads the United States in federal public corruption convictions. Of the 781 Sunshine State officials prosecuted between 2000 and 2010, personal gain and bribery topped the list of offenses. Florida, known for its sunshine, tourism and citrus, now has a new pejorative title: "Number One" in the country for corruption. That embarrassment joins Florida’s status as number 43 in ranking for its schools.
Power corrupts, and without sufficient oversight, stiffer and well-enforced ethic laws, all of the austerity and budget crunching you can push through the legislature could not save what corrupt lawmakers cost the taxpayer every year. Public office is founded on public trust, and without it, any governing body like a lie told in church.
Last July, authorities had their work cut out for them when they arrived in Hardee County to sort through the million-dollar connections in questionable land swaps and sales. They analyzed the private holding company accounts and scrutinized shell companies for suspect repair claims.
The questions that remain unanswered include how million-dollar ranches were bought, how the million-dollar contracts with start-up companies were let, and why the financial interests of the region's state legislators were hidden from public view. An examination by the general counsel to the state House of Represenatives, however, appears to clear the leguislators of potential conflicts of interest while seeming to question their propriety. On February 3, 2013, Florida's state auditors delivered their findings. The Auditor General of Florida issued audit report 2013-102 that questioned county leaders’ compliance with Florida statutes on the multimillion-dollar deals. The report scores the design of their grant agreements and the lack of required monitoring.
It also says acquisitions in some of the deals were improper, and that there were no financial recordings performed for them. It further states that county officials didn't follow the independent auditor's recommendations after it was discovered that the IDA hadn't filed a financial statement since its inception in 1986.
The state's top auditor claimed county leaders didn't handle their bank accounts properly - failing to save or present receipts for deposits and withdrawals - and said that what books they found were improperly stored. The findings even stated that those in charge had improperly constructed the contracts for building a broadband network, and that those in charge didn't supply the matching funds required, nor were the contracted companies located within the county - all in violation of state law.
The Auditor General's 12 probative findings charged that the Board of Hardee County Commissioners did not properly handle much of their financial reporting - another legal requirement. Those named in the report then had 30 days to provide answers to the many difficult questions that pertain to the numerous violations of the law the auditor identified.
Lately, breakfast conversation at the historic Pioneer Restaurant in downtown Waachula is more likely to be about subpoenas and depositions than tractors and orange groves. Some of the suspected law-breakers are changing their stories, spilling the beans in hopes of avoiding harsh sentences.
Local officials already are developing better memories. After many years of denying any connection to suspicious expenditures, during a commission meeting Albritton recently admitted to making one of the million-dollar "mistakes," but he denies any misconduct and is calling the error a “technical" one.”
For years, false documents submitted to FEMA, and corrupt adjusters who approved falsified reports and double payments, flew beneath law enforcement's radar. But in 2006, a subpoena from the State's Attorney office to Gallagher Basssett, a global firm that offers claims and information management, risk control consulting and appraisal services, and which covered much of the damage from Hurricane Charley, was answered by a GB assistant vice president named Terri Morris. When a State's Attorney investigator requested further information about GB's direct and double pay-outs, Morris claimed she had not received the requested documents. This reporter has obtained records that suggest otherwise.
The request from the State Attorney for additional information from the county and Gallagher Basssett was ignored, another violation of state law. In April of 2012, I presented 63 pages of documents to Assistant State Attorney Brian Haas in State Attorney Jerry Hill's office. I found out on one of my return visits that the investigator who presented the subpoena to Morris, chief investigator Jeanette Dugas, had just retired. Marshal Austin, Gallagher Basssett's adjuster, who was sent to Hardee County to work with Doug Knight, is also under investigation for profiting from ill-gotten gains and submitting false statements.
The State Attorney's Office in Florida's 10th Judicial Circuit seems to have dropped the ball by allowing many of the inquiries by Hardee's Clerk of the Court, Hugh Bradley, to remain unanswered. The fact that the State Attorney failed to continue investigating may be the most costly mistake of all: after bamboozling the authorities, the folks at the center of Hardee's woes grew even more brazen.
Assuming the suspicions about FEMA and insurance crimes were forgotten, Hardee officials shifted into high gear. The resurrection of Hardee County's EDC and the IDA by Lambert and Albritton brought a new dynamic to their milking of the Hardee County cash cow; these became the focval points of the Auditor General's report.
Soon after leaving the county commission, Lambert was appointed chairman of the IDA and director of the EDC. In those positions, he and his board members dished out millions of dollars in incentive packages and grants. The funds to promote these programs were publicly-owned proceeds generated primarily from a phosphate severance tax and other revenues earmarked for economic development.
It is not always clear for what, or to whom, these millions of dollars in grants are going. What is clear is that some of the recipients are are public officials with potential conflicts of interest.
LifeSync Technologies LLC (referred to as the "technology grant" in the Dec. 19 report) originally asked for a $7.2 million Industrial Development Authority grant. LifeSync first filed for their Florida corporate status on Sept. 19, 2011, 18 days after their grant application. Within 30 days, they brought their projected contract before the IDA and saw their proposal approved for the full amount.
In October, LifeSync Technologies started receiving installments of $167,000 a month, with only one stipulation: that they return to the board for approval for each $2 million increment. After a $400,000 payment, and the agreed $167,000 a month, the company received a total of $2,657,813 by May 2012.
One of the many alarming aspects of the grant deal is that LifeSync is largely owned by members of the Florida House of Representatives, along with other elected officials.
According to county and state records, both Rep. Ben Albritton (R-66), and his brother, Joe Albritton, Hardee's current IDA Chairman, had financial interests in LifeSync Technologies. J.W. Grant (R-47) also had a stake, as did Jason Brodeur (R-33) and Republican consultant Jennifer Lux. Jim See, who was Hardee's Economic Development Council Chairman, and an IDA board member, voted to approve the grant. Mr. See is an uncle to the Albritton brothers and even shares office space with Joe Albritton, a local insurance agent. Mr. See’s son was hired by LifeSync Technologies, as was the son of Sue Birge, then Chair of the Hardee County Commission.
On October 28, 2011, George Levesque, general counsel for the Florida House of Representatives, provided Opinion 12-04 on the legal conflict of interest statutes as they apply applies to the LifeSync Technologies matter. In it, Levesque says his opinion is based upon the facts provided with the request he was asked to review.
In the opinion, Levesque cites Florida statutes which prohibit a member of the legislature from having a contractual relationship with any business entity doing business with or regulated by their agency. Levesque added that the state's Code of Ethics states that no member "shall corruptly use or attempt to use his official position or any property or resource which may be within his trust, or perform his official duties to secure a special privilege, benefit, or exemption for himself or others."
In May 2012, I asked Levesque who made the request for his opinion. His response: "That information is not available." Many suspect the request was made by the elected officials involved with LifeSync Technologies.
Earlier in 2012, House members Ben Albritton and J.W. Grant introduced H.B. 7087 on Economic Development. It is a general bill from the Finance and Tax Committee. The bill provides exemption from "intangible" taxes for lessees performing governmental, municipal, or public purposes or functions. It also revised excise tax rates levied upon each ton of phosphate rock severed (removed during mining).
That tax is designated to go directly to the IDA - the same IDA collecting the current severance (which has received $10 million to date) of a compensation package from the giant Mosaic Mining, one of the state's most powerful corporations, to mitigate the damage radioactive phosphate mining perpetrates upon the county and its people. It is also the same IDA that is writing the $167,000 checks each month (a total of $2.65 million) to LifeSync Technologies. The same House members who proposed the bill creating the revenue had financial interests in the company receiving money from it.
H.B. 7087 passed and was signed by Republican Governor Rick Scott on March 28, 2012. With that signature, the well into which the same House Representatives and fellow associates were dipping got a refill. The obvious conflict of interest was ignored.
In December 2011, The online Bradenton Times first introduced LifeSync Technologies to the general public in an investigative report thast featured some of the same concerns included in this article. Also in that report, the daily introduced Waste Generated Products (WGP), a start-up company with no previous experience in the waste industry.
There too, within weeks of filing for corporate status, WGP convinced Hardee County officials to co-sign a $40 million loan to build a trash-to-fuel WGP plant - at least until WGP's letter of intent was exposed to Hardee's suspicious public.
In February 2012, the online daily published a follow-up article that cited other instances of perceived malfeasance by Hardee County officials. That report gave details of the method county officials used to pillage emergency and insurance relief funds following two catastrophic hurricanes, and revealed the process by which most jobs were funneled to the well connected.
For months, commissioners denied all of the allegations published in both of the articles. They announced publicly that this reporter was a “liar,” a “criminal” and “belonged in jail” for writing them, but wouldn't produce any documentation that contradicts the claims in my reports even as a disgruntled public repeatedly asks for explanations.
On May 17, 2012, I attended a Hardee County Commission meeting and indicated that I had all of the supporting documents for both articles with me, and I offered them to the commission. I got no response. I followed up with a question about the LifeSync Technology payments. Then the public comment microphone was turned off.
Soon the meeting adjourned, and this reporter was informed by a police officer, he would be arrested if he did not leave. The packed meeting room erupted with the roars of disapproval from outraged and concerned citizens. At the next commission meeting, on June 7, 2012, board members approved a gag order on any discussions pertaining to "storm related repairs, and personal issues."
But denying public access to public information can be an ethical and civil rights violation, depending on the circumstances.
Hardee County Commissioner Grady Johnson doesn't run with the crowd he's asked to work with. His frustration comes from witnessing pranks like the gag order and turning off a public-microphone.
"For months," Commissioner Johnson said, they've called Mr. Rehill a liar and a criminal, and when the man comes here and says he brought all of the documents to back up his articles, they turn off the public microphone. No one even asked him to leave the documents with the clerk. Something's wrong here."
Johnson, a fifth generation Floridian, retired after 30 years on the job from law enforcement, and now operates a cattle ranch in Zolfo Springs, a small community south of Wauchula. A gregarious country boy with a white beard and the build of a defensive lineman, Johnson is the last guy you'd expect to have his own website dedicated to getting out public information that's being ignored by the local press. He wears a cowboy hat, as most locval ranchers do, and it seems to suit his fighting stance.
If the State Attorney is unwilling to complete an investigation into material evidence of fraudulent and corrupt public activity, and the local press is averse to reporting any wrongdoing, criminality will continue to flourish in the fertile soil of Hardee County government. When lawmakers create covert, self-serving agendas, rather than the interest of the public, there is no oversight.
In 2002, when then-county commissioner Bill Lambert said, "In Florida, Hardee county is number one in poverty," he was right. Today, that sad fact remains for most people who live in one of two phosphate-mining capitals of the state. Only the small circle of power brokers who have enriched themselves at the expense of public coffers have benefited from these public funds.
Hardee County's citizens are not alone in their struggle to better lives in the face of public corruption. Many towns across the country are up against the same strong headwinds. But when government officials get on their podium to speak about how American culture has deteriorated, and how they are going to do something about it, ask them to first look in the mirror.
Hardee County's woes may seem unique, but the truth remains that every town is ripe for corruption. Democracy is a high-maintenance form of government and it is up to the people to make sure their officials walk the straight and narrow. In this sense, Hardee County is Anytown, U.S.A., because anywhere crime goes unpunished, it becomes contagious.
Author's note: The Bradenton Times has been investigating and exposing many of Hardee County's follies for nearly two years. The suspects in question were recently asked to appear before the Auditor General in Tallahassee, Florida's capital. After little scrutiny, they were not indicted, cited or even scolded for criminal activity, but instead given 16 more months to put their house in order - or bury the bones and build a virtuous facade.
It has been more than a year since the two TBT Hardee articles were sent to law enforcement, local TV and news agencies. Recent reports by Mike Deeson at Tampa's CBS affiliate, Channel 10, and others, have failed to movde law enforcement officials to explore the depth and magnitude of the crimes committed.
As Carl Sagan once wrote, “One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It’s simply too painful to acknowledge, even to ourselves, that we’ve been taken. Once you give a charlatan power over you, you almost never get it back.”
My heartfelt thanks go out to Hardee County Commissioner Grady Johnson for being the one Hardee County official willing to put it all on the line to uncover the truth, and to David W. Martin, AFlorida's uditor General and his staff, for kicking the ball into the court, and to the great Joe Kane for being a pillar of information and strength.
Not enough can be said for The Bradenton Times Editor Dennis Maley, who worked with me on sorting through the terrific volume of documentation for these stories. But most of all, credit goes to the people of Hardee County who love their community enough to stand up and fight for it, even when they're so terribly outgunned by the powers that be. Here's to hoping that being armed with the truth, will help them see the day when justice is served.
John Rehill is a county government reporter for The Bradenton Times, an online daily based in Bradenton, Fla. Write him at firstname.lastname@example.org. He was assisted in this article by Joe Kane, Dennis Maley and Joe Shea.