Florida: Crime and Corruption

Congressman-elect being investigated

MIAMI (AP) _ The Miami-Dade state attorney's office is investigating more than $500,000 in secret payments from the owners of the Flagler Dog Track to a company tied to Congressman-elect David Rivera, The Miami Herald has learned.

Most of the money was paid in early 2008, weeks after Rivera -- then a member of the Florida House of Representatives, helped run a political campaign backed by the dog track to win voter approval for Las Vegas-style slot machines at parimutuel venues in Miami-Dade County.

The dog track, now called the Magic City Casino, made three payments totaling $510,000 to Millennium Marketing, a company currently co-managed by Rivera's 70-year-old mother. Investigators are still trying to determine if Rivera himself received any of the money, or if anything about the transaction was illegal, according to sources close to the inquiry.

Rivera, a Miami Republican elected to Congress on Nov. 2, has previously denied working for the dog track, though he played a public role in supporting the pro-slots referendum campaign. Rivera never reported receiving any money from Flagler during his eight-year tenure in the Legislature.

Rivera, who is scheduled to be sworn in as a member of Congress on Jan. 5, declined to be interviewed for this article, but he released a statement saying that he never received any money from the dog track or from Millennium.

In the statement, Rivera said he was ``designated by Millennium'' to work on the slots campaign after the firm was hired by Flagler, and added he has not been contacted by investigators. At the time the contract was signed, Millennium's sole corporate officer was Rivera's godmother, Ileana Medina.

But Roberto Martinez, an attorney for the dog track, said it was Rivera who first approached the track owners in 2006 asking to manage the slots campaign, and it was Rivera who suggested that the contract go through Millennium, rather than to Rivera directly. Flagler's contract with Millennium was signed by both Rivera and Medina.

Flagler's owners ``wanted to make sure they retained David's personal services,'' Martinez said. Flagler's owners never dealt with Medina or Rivera's mother, Daisy Magarino, who was named a corporate officer of Millennium days after the Flagler contract expired.

In a later statement to The Herald, Rivera confirmed that he suggested the contract with Millennium after Flagler's owners ``expressed interest'' in pursuing the referendum.

In October, while campaigning for Congress, Rivera told The Herald he only ``helped'' with the slots vote, and denied having a management role in the parimutuel campaign or receiving any payment.

But under the October 2006 agreement with Flagler, Rivera was described as the ``strategic director'' of the pro-slots campaign, and its ``Top Leader of Chain of Command of All Campaign Consultants and Campaign Activities,'' according to the contract, which was reviewed by The Miami Herald.

Martinez said Flagler did nothing wrong, and the company's owners are cooperating with the investigation.

Rivera ``was very good at what he did, at directing the political campaign. He worked very hard,'' Martinez said. ``Our clients haven't done anything wrong. They have nothing to hide.''

But in an interview with The Herald earlier this year, a Flagler official denied any contract with Rivera. Flagler's vice president, Isadore Havenick, told the newspaper: ``He gave us advice, but he was never hired by us.''

Martinez said Havenick's statement is not inconsistent, because the payments from the company went to Millennium, not to Rivera directly. ``We don't know where the money went,'' Martinez said.

The payments from the track to Millennium were never publicly disclosed. Millennium was paid directly by Flagler, not through a political action committee Flagler established with two other Miami-Dade parimutuels to finance the campaign. The committee's expenses, which totaled more than $6.7 million, were disclosed under campaign finance laws.

The track first paid $50,000 to Millennium on Nov. 1, 2006, when the contract began. Millenium received another $210,000 on Feb. 26, 2008, and $250,000 on March 31, 2008.

According to records reviewed by The Herald, the track also agreed to pay Millennium another $500,000 in monthly installments of $20,000 -- the remainder of a ``success fee'' owed to Millennium after the referendum passed in the Jan. 29, 2008, vote. But neither Rivera nor Millennium ever collected on it.

Rivera did not report receiving any income from Flagler Dog Track or Millennium Marketing between 2006 and 2008 in financial disclosure forms filed with the state Ethics Commission.

In the forms, Rivera first reported that he worked during those years as a consultant for the U.S. Agency for International Development. The Herald reported in October that USAID had no record that Rivera worked for the agency; Rivera then amended his disclosure forms, omitting any reference to USAID _ but without listing any other source of income except his $30,000 annual salary as a state lawmaker.

Rivera did report working as a consultant through Millennium for other clients from 2002 to 2005. At the time, however, Millennium was not an active company, state records show.

Magarino, Rivera's mother, first founded a company called Millennium Marketing Strategies in 2000, but it was dissolved a year later. In 2006, a new Millennium was founded by Medina, a longtime business partner of Magarino's, records show.

Magarino reappeared as a Millennium officer in April 2008, four days after the final payment from Flagler. Rivera himself has never been an officer of the company.

Medina and Margarino could not be reached for comment.

On Sept. 27, 2006 -- two days after Millennium was re-formed, Rivera paid $15,000 to the company from his legislative campaign account for ``campaign consulting,'' records show. After winning reelection, Rivera paid another $15,000 in campaign funds to Millennium for organizing a ``thank you campaign,'' records show.

Under the contract with Flagler, Rivera promised to spend 75 percent of his time managing the campaign to win voter approval for slot machines, a proposal that Miami-Dade voters had defeated in 2005.

At the time, slot machines were a politically delicate issue within the Florida GOP. Then-House speaker Marco Rubio, one of Rivera's closest allies, was publicly opposed to slots, as was outgoing Gov. Jeb Bush.

Under the Flagler contract, Rivera's duties included gaining support of city leaders and unions, and the ``identification and neutralization of opposition,'' including animal rights groups, competing gambling operations, and the ``Hispanic community,'' the contract said.

In April 2007, Flagler teamed with the owners of Calder Race Course and Miami Jai-Alai to form a political action committee called Yes For A Greater Miami-Dade.

The parimutuels pumped more than $6.7 million into the committee to pay for political consultants, advertising, phone banks and get-out-the-vote efforts.

Among those hired by the PAC: Esther Nuhfer, a lobbyist with strong ties to Rivera, and Al Lorenzo, a former Rivera campaign aide.

On Feb. 6, 2008 _ only eight days after Rivera successfully led the campaign to bring slot machines to Miami-Dade _ Rivera filed a bill in Tallahassee that would have nullified the referendum results, disallowing slot machines in Miami-Dade and Broward counties.

Millennium received the bulk of its payments, $460,000, in the weeks after Rivera proposed this bill, which later died.

Asked about the bill at the time, Rivera told The Herald that he wanted to get rid of slots and the Lottery, and put both issues to a statewide vote.

Martinez, the lawyer for the track, said Rivera never discussed these bills or any other legislation with the track's owners. Rivera was hired only to manage the referendum campaign, he said.