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10/31/03 Miami Herald

Overtown agency may have wasted millions

By Oscar Corral

The agency charged with redeveloping Miami's Overtown neighborhood apparently misspent money on limousine rides, rent for never-used office space, a slew of questionable business deals -- even on a report on bus benches in the Bahamas, a city audit has found.

The report, released Thursday by the city's Office of Internal Audit, is the latest blow to the city's troubled Community Redevelopment Agency, already under investigation by the Miami-Dade state attorney's office and the FBI.

The CRA, created to revitalize one of the city's poorest areas, apparently squandered hundreds of thousands of dollars on consultants, the report found.

According to the audit:

 The agency doled out $1.8 million in 15 separate deals for different goods and services without bids, requests for proposals and/or written contracts.

 Civil CADD, a firm hired by the CRA for consulting, may have double- or even triple-billed the agency for tens of thousands of dollars by submitting multiple invoices for the same job.

 The CRA paid $720 to a limousine service for a ''back-to-school event'' sponsored by the agency. CRA Executive Director Frank Rollason said CRA Chairman Arthur Teele Jr., a city commissioner, and CRA staff were among those riding in the limousines, waving during a parade in Overtown. Rollason didn't know when the parade took place.

''They told me those limousines were donated,'' Teele said Thursday.

 The agency paid a consultant $125,000 to study bus stops and routes in Miami, without board approval and without a written contract.

 The CRA paid $76,800 in federal funds to the law firm of Holland & Knight for ''lobbying activity.'' Federal law does not allow its funding to be used for lobbying, the audit states.

 The CRA has spent $13,000 to rent a run-down building in Overtown -- the Masonic Lodge at 941 NW Third Ave. -- that it has never used.

 One CRA employee who had to travel to the Bahamas to renew his U.S. work permit was paid $4,250 to photograph bus benches while he was there. The audit states that the employee may have also been collecting a paycheck from the agency during at least part of his trip.

''An employee on CRA payroll who also engaged in a contract with CRA appears to constitute conflict of interest,'' the audit states. ``Other than a picture of bus benches and designs of computer animated gazebo drawings, there is no identifiable tangible benefit resulting from this disbursement.''

CRA board members said the audit confirms their worst fears.

''It provides hard evidence of what I feared for more than two years: mismanagement, wrongdoing, lawlessness,'' said CRA board member and Miami Commissioner Joe Sanchez, who has become a leading critic of the agency and its past practices.

``There are so many rules that were violated. The CRA was operating far outside the bounds of good governance.''


The audit's findings also confirm much of The Herald's own investigative reporting on the agency over the past year.

In recent articles The Herald has reported that the agency has spent $35 million over the past 10 years and has little to show for it. Only five of 36 projects planned by the agency during the last five years have been completed, and four of those are controversial.

CRA Vice Chairman and Miami Commissioner Johnny Winton took responsibility for some of the problems at the agency but said that there are many questions that only Teele could answer. Teele has been the CRA's chairman since 1997.

''I think the audit makes us all look pretty bad,'' Winton said. ``I can't answer all these questions directly. The chairman has to answer many of these questions because I don't know.''

In an interview Thursday, Teele said he had not yet reviewed the audit but had been briefed on it by Auditor General Victor Igwe.

''There is a total impression . . . that I am hands-on, when in fact I am not there as an executive chairman,'' Teele said. ``I am prepared to sit down with the city attorney, the executive director, and the manager to ensure that safeguards are put into place to prevent this from occurring in the future.''

One of the consultants paid by the CRA without board approval was Vernon P. Clarke, a former employee of the Metro Dade Transit Authority, the audit states. Clarke was paid $125,000 without a written agreement over the course of about 18 months.

Clarke told The Herald on Thursday that Teele called him, asked him to come to a meeting, then put together the assignment. Clarke submitted a detailed report to the CRA on bus stops around the city.

Teele asked me would I do that assignment for him,'' Clarke said. ``In terms of it not being a written contract and not having board approval, I felt there were enough bigwigs in the room that it wouldn't be a problem.''


The CRA also gave $42,557 to the now-defunct Club Exile without an executed loan agreement or a promissory note, the audit states. The audit states that the club's owners contend that the money was a grant, not a loan. Auditors could not find paperwork at the agency to back up the club's claim.

The audit also found that the CRA misused money that should have gone to redevelop the area within its defined boundaries.

About $96,000 was paid by the agency for festivals that were held outside the agency's boundaries, the audit found.


The audit also confirmed a deal reported in The Herald in which TLMC Enterprises, a firm with ties to the CRA's former director, won a contract to build parking lots in Overtown as the low bidder, despite submitting a proposal that left out major work, CRA records show.

The company later submitted change orders that added tens of thousands of dollars to the contract, records show. TLMC Enterprises said it did nothing wrong.

It ''gives the appearance of some degree of impropriety,'' the audit said of the TLMC deal.


Auditor General Igwe said the audit took almost six months to perform. He said he found the worst abuses he has seen in his four years at the city.

''Fiscal accountability/integrity are necessary to ensure public trust/confidence in the process used to disburse public funds,'' Igwe wrote in his final report.

Former CRA Executive Director Annette Lewis could not be reached for comment.

Current Director Rollason said the audit may have blown some problems out of proportion, but he said he was glad to have the information.

''It's made some mountains out of some molehills for sure,'' Rollason said. ``But to me it has pointed out the lack of managerial and procedural controls over the administration of the CRA.''

CRA board member and Miami Commissioner Tomás Regalado said the next question is who will pay for all of this.

''If an elected official did just one-tenth of what's in that audit, they'd strangle us on Flagler Street,'' Regalado said. ``The question now is, what are the state attorney and the U.S. attorney going to do about it?''