Florida Department of Law Enforcement probes Miami Mayor Tomás Regalado’s campaign finances
The mayor said Monday he had not been notified of the investigation, and repeated a promise to return any questionable contributions if necessary.
Miami Mayor Tomás Regalado is under investigation by the Florida Department of Law Enforcement for contributions made to his 2009 campaign. FDLE spokeswoman Kristi Gordon confirmed Monday that there is an ongoing investigation about the finances of Regalado’s campaign, but she did not go into further detail.
Two weeks ago, El Nuevo Herald reported that Regalado had received at least $8,000 in contributions from people and companies in Dominican Republic, which is illegal under election law. At that time, Regalado said that he thought those 16 contributions of $500 each were legal because the IRS had not informed his campaign of any irregularity. He added then that he would do everything possible to correct the situation, including returning the checks if necessary. Regalado said Monday he had not received any type of correspondence from FDLE notifying him of an investigation. The first he heard about it, the mayor said, was from El Nuevo Herald.
“After the initial story, our accountant spoke to the Federal Elections Commission, and they said if that's the case, the remedy is to refund the money. When they verify the address and corporation, we'll be sending cashier's checks,” Regalado said Monday.
The investigation was made public in the middle of a political crisis for the mayor, who has been under attack by union leaders over the past few days. With the city of Miami facing a deficit of $61 million for next fiscal year, Regalado is seeking union concessions to avoid increasing property taxes. Now representatives of three of the four city unions are calling for a recall referendum.
The mayor’s daughter, attorney Raquel Regalado, who was his campaign treasurer, said that last week the mayor sent letters to the Dominican contributors asking for more information to determine whether their businesses were based in Dominican Republic or in the United States. “We told them we needed to know as soon as possible,” she said.
According to Tomás Regalado, the contributions were delivered by Willy Bermello, a Miami architect involved in a luxurious real estate project in Dominican Republic. The contributions came from people and companies linked to that project.
These contributions represent less that 1 percent of the almost $850,000 raised by Regalado’s campaign. His opponent, former City Commissioner Joe Sánchez, raised about $500,000. Regalado won with more than 71 percent of the vote.
Campaign reports also indicate that at least three of the Dominican contributions were repeated. One check was returned for lack of funds, according to the mayor. The law establishes that a person or company can donate only a maximum of $500 per candidate. Two weeks ago Raquel Regalado said she had approached federal authorities to inform them about this. Spokespersons for the Miami-Dade County State Attorney’s Office said they could not comment on the case.
The city of Miami and its mayor have seen better days.
For the third consecutive year, the city faces a major budget shortfall. More than 200 new employees have been hired despite a freeze. And senior staff members check in and out like hotel guests, departing with hefty severance checks even as regular workers struggle to survive pay cuts. Now members of Miami’s powerful police and fire unions, frustrated at the mayor’s plan to plug the city’s swelling $61 million deficit with givebacks from employees, are contemplating a recall campaign.
Despite it all, Mayor Tomás Regalado, a weathered veteran of 15 years in Miami’s sharp-elbowed political world, shrugs. “I feel like Bill Clinton. Some people really hated him, and some people loved him. But I knew this was going to happen,” said Regalado, 63. “I knew I was going to have to decide which side I was going to take. Either the employees or the people — and I’m paying the price.’’
By virtue of his position, the mayor is being criticized more now than at any point in his political career. National publications have harped on the city’s financial woes, and a blundered attempt by Regalado to buy out his nemesis, Miami Police Chief Miguel Exposito. And city commissioners, who strive for displays of civility, have begun to take public jabs at the administration for what they are calling a lack of leadership.
“It just seems the city is headed in a constant downward spiral since Tomás took office,” said fire union President Robert Suarez. “There’s a big difference between being a commissioner and being a mayor. He never had the power and influence he has now.’’ Regalado, a Miami commissioner for 13 years, won a lopsided election in 2009 to become mayor. Though the city manager runs the city’s daily operations, it is the mayor who traditionally calls the shots.
Despite the criticism, Regalado says he has every intention of running for mayor again in 2013. He can do that because he has maintained support from his core constituents. Mariano Cruz, a City Hall regular who chairs the Allapattah Business Development Authority, said Regalado’s biggest flaw may be that too often, he just cannot say “No.’’ But Cruz contends the mayor got it right two weeks ago when he told commissioners any attempt to raise the city’s property tax rate would be met with an immediate veto.
“He’s doing the necessary evil,” said Cruz. “He is right to back the people.”
Braman in his court.
Regalado takes the criticism in stride. Last week he graded his first 21 months in office a “B+,” and laughed off the possible recall attempt. Then he slid his BlackBerry across a large wooden table in his office, showing a text message from someone who knows a thing or two about recalls: “Heard about recall. Be assured that I will do everything possible to help you. Best regards, Norman Braman.”
Braman is the billionaire auto magnate who spent more than $1 million bankrolling the recent Miami-Dade recall that ousted Mayor Carlos Alvarez and Commissioner Natacha Seijas. While Alvarez was tossed from office for raising the property tax rate and giving raises to associates and union members, Regalado is being threatened for doing the very opposite: taking on the union contracts that the administration believes are strangling the budget.
Another major difference between the two: Alvarez would bristle at any perceived insult, but Regalado lets it all slide and goes on with his life, in bed by 9 p.m. and up at 4:30 a.m. to read his email.
“The recall, I sleep like a baby. Budget problems, I sleep like a baby,” the mayor said.
Most of the criticism being tossed at Regalado has come from union employees. Miami closed a $105 million budget gap this year by invoking a rarely used state statute that allowed commissioners to cut into union contracts, slashing some salaries as much as 20 percent but saving the city more than $80 million. The mayor is pushing for the same solution this year.
But employing the tactic has come at a cost: “Mayor Regalado’s only solution has been to cut employee benefits. We are not to blame for the mayor’s mismanagement of the city of Miami,” Fraternal Order of Police Vice President Javier Ortiz wrote members last week in a bid to rile up support for Tuesday’s vote on a possible recall attempt.
The mayor’s decision to side with residents over workers has allowed the city to lower property taxes despite successive budget gaps totaling $166 million. And that, says the mayor, is the highlight of his tenure.
“I think he’s paying the price for keeping taxes down,” said Braman. “He took the hard way, not the easy way.”
Other highlights, according to the mayor, include finding private donors to help pay for the city’s 115th birthday party at Mary Brickell Village, handing out hurricane preparedness kits to residents, and awarding back-to-school kits to 800 kids at Coconut Grove’s Peacock Park recently.
So far Regalado has been politically wily enough to keep the commission on his side. He hasn’t vetoed any legislation, though he threatened to if commissioners raised the property tax rate. Most votes on his issues pass 5-0 — the mayor doesn’t have a vote — though a slight fissure surfaced in June when Commissioner Frank Carollo voted against Regalado’s choice of Johnny Martinez for city manager.
Another criticism often leveled at the mayor is his string of questionable hires.
Regalado won his first battle as mayor by forcing out Police Chief John Timoney. But the decision to replace him with Exposito, an old-guard cop the mayor knew well, proved disastrous. The two first butted heads over a series of blundered public corruption arrests the state attorney refused to sanction. The fight escalated over a video-gambling ordinance Regalado backed but that Exposito opposed. By the end of the summer, Miami police were taking heat for the shooting deaths of seven black men in the inner city.
At first Regalado supported the chief, but he backed off as public opinion swayed. In October, after police seized more than 400 video-gambling machines in coordinated raids, Exposito complained to federal authorities that Regalado tried to interrupt the initiative. By then, Regalado was calling for Exposito’s removal and their nasty public fight had become a focal point of commission meetings and Spanish-language radio.
Though the chief has held onto his job, the mayor candidly acknowledges that he now considers hiring Exposito a mistake. “That would be my biggest regret,” Regalado said. Opinions of the mayor’s judgment also took a hit when he named Tony Crapp Jr. as city manager.
Against the recommendation of departing city manager Carlos Migoya, Regalado named his longtime chief of staff to the post in January. Crapp, whose entire 16-year career had been as Regalado’s top commission aide, was unprepared to deal with Miami’s 4,100 employees and $500 million operating budget. By June he was gone, bolting for a prominent lobbying firm. Left in his wake: A lot of unfinished business.
Important union negotiations that began under Migoya had been put aside. Commissioners grumbled they had little information to work with about the impending budget. Despite the city’s financial woes, department heads were leaving with generous payouts. Under Crapp’s watch, 55 employees were hired despite a freeze that had been in place for 18 months. And the police chief still had a job.
Regalado critic and former City Manager Joe Arriola blasted the mayor for hiring “his cronies,” especially Crapp. “He was chief of staff of what, two people?” Arriola said of Crapp’s experience level.
Regalado, while acknowledging promoting Crapp might have been a bad move, was still sad to see him go. “I didn’t know any chief of staff but Tony. It’s like family leaving town,” he said.
Fuzzy Facts
Another issue that has plagued Regalado: He occasionally strays from the facts. When word leaked in June that the city had offered Exposito $200,000 to leave, at first Regalado denied he had any role in the offer, then later admitted he knew about it and supported the idea.
The mayor’s message was just as fuzzy about $8,500 in contributions he received from an American donor living in the Dominican Republic during the 2009 mayoral campaign. At first he said he checked with the Internal Revenue Service and the contributions were legal, but later admitted he never spoke with the IRS, he had simply assumed since he hadn’t heard from them that there was no issue.
Grace Solares, president of Miami Neighborhoods United and a strong supporter of the mayor’s, said sometimes his judgment leaves her a little befuddled. She has “no idea” why every so often Regalado makes outlandish statements. “I wish I knew. I guess whatever comes to his mind, he says,” she said. Still, Solares said Regalado was dealt a poor financial hand when he entered office, and has done well for the taxpayers considering what he’s had to work with.
To be fair, not all the news in Miami has been bad.
Home sales are slowly climbing, tourism is rebounding and several large, mixed-use developments have been approved around town. Even with the large budget shortfalls, services haven’t been cut to homeowners who, for the most part, have seen their property tax bills drop. Last month the Wall Street Journal posted an online photo essay called “Downtown Miami Rebounds” filled with pictures of young professionals sitting poolside at condos and sipping lattes on Flagler Street.
Regalado’s ability to keep smiling and move forward, his daughter says, is a product of being in the spotlight for so long. Before his first election in 1996, Regalado spent 27 years doing Spanish-language radio and television news. His mayoral victory two years ago was his fifth run for office.
“My dad has really spent his entire adult life in the public eye,” said Raquel Regalado, a Miami-Dade School Board member. “He has the perfect temperament for this kind of craziness. He’s such an even-keeled person. He doesn’t take these things personally.
“When he took on the unions, he knew this was going to happen,” she added. “This isn’t his first rodeo.”
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